Federalize BP

President Obama’s declaration that the federal government is in charge of the response to the oil disaster in the Gulf of Mexico is apparently meant to deflect Katrina comparisons and show that his administration is fully engaged. With that p.r. mission accomplished, Obama now needs to turn to the question of what to do about BP.

As a helpful Congressional Research Service report points out, the Oil Pollution Act of 1990 gives the federal government three options: monitor the efforts of the spiller, direct the efforts of the spiller, or do the clean-up itself. So far, the Obama Administration has followed the second path and resisted growing pressure to “federalize” the response.

This was said to be necessary because the feds do not have the technical expertise to handle a deepwater leak. As Coast Guard Adm. Thad Allen, the National Incident Commander, put it: “To push BP out of the way would raise the question of: Replace them with what.”

The idea that the government is completely dependent on BP to stop the leak is a dismaying thought. But even if it’s true, it no longer applies once the gusher is brought under control. When the center of attention shifts from 9,000 feet below the surface to the clean-up, there is no reason why BP should continue to run things.

The simple fact is that the company cannot be trusted. As Obama himself noted, the company’s interests diverge from those of the public when it comes to assessing the true extent of the damage and deciding what is necessary in the way of remediation. Keep in mind that BP’s total liability will be determined at least in part by the final estimate of how much oil its screw-ups caused to be released into the ocean. It has every incentive to obscure the full magnitude of the catastrophe.

The company’s motivation in employing massive quantities of the controversial chemical Corexit may have had more to do with dispersing evidence of the spill than with helping the ecosystem of the gulf recover. BP had to be pressured to back off from a plan to have clean-up workers sign confidentiality agreements to prevent them from disclosing what they observed. The company resisted making public the live video feed showing the full force of the oil spewing out of the wrecked well and then delayed making a high-definition version of that video available to federal investigators.

For BP, job one is now not clean-up but cover-up. Allowing it to manage the ongoing response would be akin to allowing the prime suspect in a mass murder to assist in processing the crime scene.

Taking operational control of the clean-up away from BP should be a no-brainer, but it is not enough. This is a company that has repeatedly shown itself to be reckless about safety precautions. The gulf disaster comes on the heels of previous incidents—a 2005 explosion at a refinery in Texas that killed 15 workers and a 2006 series of oil spills at its operations in the Alaskan tundra—in connection with which it pleaded guilty to criminal charges and paid large fines. It was also put on probation that has not yet expired.

An individual who violates probation can be deprived of liberty through imprisonment. A giant corporation that violates its probation—as BP undoubtedly has done by breaking various federal and state laws in its actions precipitating the Deepwater Horizon explosion—cannot be put behind bars, but it can be deprived of freedom of action.

Federal sentencing guidelines (p.534) allow probation officers to monitor the finances of a business or other organization under their supervision. In BP’s case, the issue is safety. One way to ensure that the company acts responsibly is to station inspectors inside all of its U.S. operations (at BP’s expense) to oversee any operational decision that could impact the safety of workers and the environment. Those inspectors would also make it harder for the company to cover up the full extent of what it has done to the Gulf Region.

In other words, the Obama Administration should federalize not only the Gulf of Mexico clean-up but BP itself. That would show that the government really is in charge until we can be sure that the oil giant is no longer a public menace.

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