Thanks to my John Locke Foundation colleague Roy Cordato for calling attention to an article by Sheldon Richman of The Freeman about the Gulf oil spill, and how things could/should have been different in a real free market:
It took the Deepwater Horizon tragedy to bring out the fact that a single federal agency, the Minerals Management Service, is “responsible for both policing the oil industry and acting as its partner in drilling activities,” writes the New York Times. “Decades of law and custom have joined government and the oil industry in the pursuit of petroleum and profit. The Minerals Management Service brings in an average of $13 billion a year. Under federal law, even in the case of a major accident, the company responsible for the oil well acts in concert with government in cleanup activities.”
The coziness between government and the oil industry is also apparent in the cap on liability for damages – a paltry $75 million — from offshore oil spills (not including cleanup costs). The interesting question is whether BP’s dubious conduct would have been different without the cap. Hayward, the Wall Street Journal reports, “admitted the U.K.-based oil giant had not had the technology available to stop the leak, and said in hindsight it was ‘probably true’ that BP should have done more to prepare for an emergency of this kind.” Transocean, owner and operator of the rig, is petitioning to limit its own liability to $26.7 million....
The free market will undoubtedly take the rap — but it’s an unjust rap. According to Reuters, “Like BP, both Transocean … and Halliburton, a contractor, also pumped money into the campaign war chests of senators who sit on the Energy and Natural Resources Committee and the Environment and Public Works Committee.”
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