Lacking Leadership


“It’s the greatest environmental disaster with no end in sight! Eleven workers dead. Millions of gallons of oil gushing for months to come. Jobs vanishing. Creatures dying. A pristine environment destroyed for generations. A mega-corporation that has lied and continues to lie, and a government that refuses to protect the people.” – activist group ‘Seize BP’ (June 5, 2010)

Deemed by president Obama as an ‘environmental 9/11,’ the immediate economic, political, and cultural effects of the 2010 Deepwater Horizon Oil spill have been devastating. The full, lasting effects on the gulf’s environment, however, are less calculable and will likely remain so for many years to come. On the other hand, what was made very clear was general unpreparedness of not just BP, but also, more importantly, of the federal government. Given the unparalleled magnitude of the spill and the wide range of affected parties, it is clear that the Obama administration failed in its duty to properly respond to the accident in the most effective manner. As the primary executive of the United States, the president has the responsibility, as outlined in the Oil Pollution Act and National Response Framework, to assert himself  in disaster situations such as the one presented by the Deepwater Horizon spill. Though providing cleanup assistance, the administration deferred the majority of the response efforts to private parties when it should have taken a more active and forceful role from the start. Clearly failing to understand the true complexity of the issue, the Obama administration’s most significant response efforts came late in the process with its most noteworthy one, a drilling moratorium, coming more than a month after the explosion. Ultimately, taking a consequentialist perspective, Obama’s decision to enforce a six-month offshore drilling moratorium can arguably be considered unethical as its associated economic and opportunity costs outweigh the benefits achieved, especially considering the US financial and economic situation at the time.    

At 10:00pm on April 20, 2010, the United States witnessed the start of one of the greatest natural disasters in history when the BP-operated Deepwater Horizon oil rig exploded in the Gulf of Mexico with 126 workers on board. As towering flames engulfed the floating rig, the Coast Guard and BP quickly sprang to action, doing everything in their power to rescue workers and contain the fire (11 workers lost their lives). With rescue efforts completed, BP would quickly realize that the problem was far from resolved as oil was found to be leaking from its Macondo well thousands of feet below the surface. Taking 85 days to stem the leak, the well released 210 million gallons of oil into the Gulf, a total of almost 20 times the amount released during the Exxon Valdez spill two decades earlier. During the initial phases of the response efforts, BP worked closely with the United States Coast Guard to generate plans to both clean up the oil and stop the leak. At the peak of the response, the Coast Guard, BP, and the Louisiana National Guard deployed 45,000 people to the area; however it quickly became apparent that none of the parties were suitably equipped to deal with a spill of this size.

With the exception of the Minerals Management Service (MMS), the federal government’s presence during the early phases of the response was practically nonexistent. In fact, president Obama and his administration failed to recognize the spill as a material threat for over a week after the initial explosion, despite visible signs of oil in the water.  Despite its willingness to fund and help carry out the response, BP did not have the necessary means to solve the situation on its own:

“BP officials said they did everything possible, and a review of the response suggests it may be too simplistic to place all the blame on the oil company. The federal government also had opportunities to move more quickly, but did not do so while it waited for a resolution to the spreading spill from BP. In fact, the Department of Homeland Security waited until Thursday [April 29th] to declare that the incident was ‘a spill of national significance,’ and then set up a second command center in Mobile. The delay meant that the Homeland Security Department waited until late this week [week 2 of spill] to formally request a more robust response from the Department of Defense.”[1] (Robertson, 2010).

Though not alone on this front, the Obama administration clearly underestimated the severity of the situation at hand, and the result was costly. With each day that passed, 210,000 gallons were being released into the Gulf and no realistic plans had been determined at this point to stymie the flow.

Responding to extraordinary criticism from the Gulf states as well as from the press, Obama ratcheted up his efforts in May, starting with the creation of a national laboratories team led by a Nobel Prize winning physicist Steven Chu. The overarching purpose of the team was to assist BP in its efforts to come up with a feasible solution to cap the well, yet an apparent lack of coordination between the two parties left the group ineffective. As indicated by an onsite MMS official, “the national laboratories team did not immediately integrate itself into the existing source-control structure. Perhaps because the lines of authority were unclear, BP’s sharing of data with the government science teams was uneven at first. BP gave information when asked, but not proactively, so government officials had to know what data they needed and ask for it specifically.” (National Commission on the BP Deepwater Horizon Oil Spill, 2011).  Seeing the situation continue to worsen during his second visit to the Gulf in late May, President Obama officially takes responsibility for the crisis saying, “my job is to get this fixed, I take responsibility. It is my job to make sure that everything is done to shut this down,” (Wagner, 2010).

Although there were many extraneous factors complicating Obama’s dealing with the spill, the administration’s overall response represents a failure of foresight and leadership. Undoubtedly, the spill was ill-timed for Obama in that the US was already tied up in two international conflicts (Iraq and Afghanistan), locked up in a fierce battle to pass major healthcare reforms, and still struggling to rebound from a major financial recession. Yet, the particular circumstances of the Deepwater Horizon spill warranted more aggressive action from an administration that the American people elect and rely on to lead them through the toughest of times:

“With the Deepwater event, the Obama administration was faced with a gradual disaster caused by a failed man-made system and made worse by poor decision making. Although the failures of BP have been widely discussed, there is also a role for the federal government. The American public rightly needs and demands accountability for the handling of situations that have a potential effect on a wide population of citizens” (Watson, 215).

Throughout the process, Obama, as well as many other federal officials, were quick to deflect any blame onto BP and the other private parties involved (i.e. Halliburton, Transocean…). The administration’s tone, especially early on, made it sound as if the problem was solely BP’s problem rather than a national one, and so it was happy to fill the role of ‘overseer’ rather than of ‘leader.’ While there is no disputing that BP is largely to blame for the accident, Robert P. Watson correctly points out in The Obama Presidency: A Preliminary Assessment that the federal government needs to take a more assertive role in cases where ‘the problem is on-going’ and ‘affects such a large group of citizens.’

Furthermore, the Oil Pollution Act (OPA), and the EPA’s subsequent expansion on the legislation, indicates that the president should play a greater role in situations involving oil spills. Under President George H. W. Bush, the OPA was signed into law with the purpose of “expanding the authority and resources of the federal government to respond to oil spills” (EPA, 2009). Essentially, the OPA provides three options for the president: 1) ‘federalize the spill’; 2) monitor the response effort; or 3) direct the efforts. In this situation, Obama clearly elected to take the second option early on as the administration merely oversaw BP’s activities. Though in accordance with the act, this option certainly represents the most basic level of involvement. However, the current NCP, National Oil and Hazardous Substances Pollution Contingency Plan, demands more of the president. As of 2009, the EPA the NCP states that “The Federal government is require to direct all public and private response efforts for spill events” (EPA, 2009). Ultimately, Obama and his administration arguably failed to comply with this expansion until late in May when scrutiny and elevated tensions finally forced him to take control.

At the recommendation of Secretary of the Interior Ken Salazar, President Obama declared a six-month stop to drilling at 33 deep water Gulf of Mexico rigs on May 27th, commonly known as the drilling moratorium. Along with the restructuring of the MMS into three new departments1, the moratorium represents the most significant regulatory change that the Obama administration would enact after taking command of the response efforts. According to Salazar at the time, “the moratorium is needed because additional deep-water drilling poses serious, irreparable, or immediate harm to life, to property, or to the marine, coastal, or human environment. This temporary pause will give investigators and the industry time to address this threat” (Clayton, 2010). A central recommendation of his presidential report, Increased Safety Measures for Energy Development on the Outer Continental Shelf, the moratorium was to take effect immediately as a way to slowdown drilling activities until the current spill was completely stemmed and sufficient time was given to investigate its causes.

Though a seemingly logical response at the time, the decision was not met by unanimous approval, but rather was hotly contested by many who characterized the moratorium as rash and unethical given the current environment. Employing the ethical theory of consequentialism, one can argue that this claim holds a great deal of validity. Generally, the theory of consequentialism holds that the consequences of a particular action should be the ultimate basis of judging the morality or ‘rightness’ of that action (Brink, 2005). In this particular case, one must pose the question of whether president Obama’s decision to enforce a moratorium produced a net positive or net negative result based on its associated consequences. As mentioned previously, Salazar’s principal reasoning behind his recommendation of a moratorium was to allow for sufficient time to implement new safety measures for rigs. Furthermore, many argued that a pause would allow for more time to conduct a more thorough investigation of the causes of the spill to help ensure that another one does not occur. As for the negative consequences, a six month moratorium was sure to have a significant impact on individual, company, and state earnings, gulf employment, and oil production (figure 1).

Figure 1 - Moratorium

Not surprisingly, almost all of the arguments against the moratorium sited the great economic costs associated with a loss of drilling activities in the Gulf. Specifically, many argued that the financial burden that the spill had already place on the Gulf states would be compounded by a moratorium due to the hundreds of high-paying jobs and tax revenues that drilling activities provided. In fact, Louisiana State University professor Joseph Mason predicted that “ over the six-months of the deep-water moratorium, Gulf states will lose an estimated $2.1 billion in economic productivity, 8,169 jobs, $487 million in wages, and $98 million in state tax revenues” (Clayton, 2010). Opponents in congress, namely the Senate Small Business and Entrepreneurship Committee, also went as far as to argue that the moratorium “was causing a second economic crisis in the Gulf” (Clayton, 2010). Though extreme, the Senate committee’s claim is not all that off base given the economic setup of the gulf region. Taking Louisiana as an example, the state’s top three industries include: oil and gas production and refinement, tourism, and commercial fishing. Ultimately, the spill itself devastated both the tourism and fishing industries, leaving the state to rely on oil activities to provide essential revenue streams. At a moment at which the region was finally witnessing the effects of a gradual economic rebound, the combination of the spill and moratorium was disastrous for the state. As Louisiana Governor Bobby Jindal notes:

“The President’s six-month suspension of activity on 33 permitted deepwater drilling rigs, including 22 deepwater drilling rigs off Louisiana’s coast is a direct hit to our state’s economy that is already suffering from the BP oil spill and its closure of water areas for fishing and our beaches from tourism. This is about more than just direct jobs – this shut down will kill related services and other indirect jobs that support these rigs” (Jindal, 2010).

Here, Jindal directly speaks to this ‘compound’ effect that the moratorium was feared to have on Louisiana. Without the support of these drilling activities, Louisiana and the other Gulf States were set up to lose an essential source of tax revenue and employment at a time when there was clearly a high demand for both (see figure 2) .

Moratorium 2

In addition to the direct economic importance that drilling had on the gulf economy, the moratorium also had significant implications on a national level. Particularly, the decision represented a major setback in America’s goal to become energy independent since 33% of the country’s domestic oil production comes from the Gulf (Louisiana Mid-Continent Oil and Gas Association, Figure 1). The decision marked a major momentum shift in US oil policy as the industry was experiencing a boom in offshore activities that suddenly came to a dramatic halt (Figure 3). And even after the moratorium was lifted, its effects have been felt for an extended stretch. In fact, according to the National Center for Policy Analysis (NCPA):

“The U.S. Energy Information Administration showed a decline of 240,000 barrels per day in oil production from the Gulf of Mexico this year [2011]. Due to declining production at existing wells and bureaucratic delays on new wells in the Gulf of Mexico since the Deepwater Horizon oil rig blowout in 2010, the federal government is forfeiting revenues of more than $4.7 million per day” (Bluey, 2011).

Moratorium 3

Importantly, the NCPA points out that the consequences go beyond an overall loss in oil production since the federal government lost a significant source of revenue as well. Specifically, the US receives lease payments as well as an 18.75 percent royalty payment in return for access to the gulf. As of 2008, lease payments generated more than $200 million annually and over $8 billion in royalties (Bluey, 2011). At a time in which the country is struggling to effectively reduce its deficit, the billions in revenue could have gone a long way in achieving that goal.

Taking a step back and evaluating the Obama administration’s overall response to the Deepwater Horizon spill during the early months of the incident, it becomes quite clear that its efforts and decisions were inadequate given the severity of the situation. The administration was definitely wise in deploying resources to generate reports such as that of Ken Salazar and in pledging funds to assist in cleanup efforts. However, these efforts merely fulfill the minimum requirements for an executive as defined by the Oil Pollution Act.

Overall, Obama’s two most major policy decisions, deferring immediate responsibility to private parties (namely BP) and declaring 6-month moratorium, brought with them damaging consequences which greatly outweighed benefits of his other moves. Although it is impossible to say for sure, Obama’s unwillingness to take accountability early on likely ‘slowed and complicated response and recovery efforts” (Watson, 214). Furthermore, the drilling moratorium caused a great deal of harm to the gulf and US economy at a time in which it was already in a weak state. Ultimately, the overarching goal of the moratorium was to provide ample time to improve standards across the industry. While there has been a slight improvement of safety standards, such as a 15 percent increase in rig inspections, many of the recommendations made by National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling have yet to be implemented (Watson, 221). The most blatant sign of the lack of improvement can be seen in our current aggressive pursuit of offshore drilling in the Arctic. In 2012, Royal Dutch Shell experienced a series of “ship groundings, environmental and safety violations, the failure of a spill-containment system, weather delays and other mishaps” (Broder, 2013). Upon investigation, Alaska Department of Natural Resources Commissioner Dan Sullivan blamed the federal government’s involvement for “what he called an inefficient permitting process not addressed by the 2010 offshore drilling moratorium in the wake of the BP spill” (Broder, 2013). Hearing this, it is hard to believe that the moratorium accomplished as much as it was estimated to do so when implemented. In the end, it becomes hard to justify Obama’s decision in the wake of the spill as ethical given the general ineffectiveness of the moratorium in comparison to financial setback it proliferated in the Gulf.

 

Works Cited

Bluey, Rob. The Fiscal Impact of the Offshore Drilling Moratorium. NCPA. April 27, 2011, Nov 17, 2013

Brink, D. O. (2005). Contemporary Political Philosophy:Consequentialism and Utilitarianism. UCSD. Nov. 10, 2013.

Broder, John M. Interior Dept. Warns Shell on Arctic Drilling.The New York Times. Mar. 14, 2013. Nov. 17, 2013.

Clayton, Mark. “Offshore drilling moratorium: good for the Gulf, bad for the economy?” The Christian Science Monitor. Jul. 27, 2010. Nov. 15, 2013

EPA (2009). “National Oil and Hazardous Substances Pollution Contingency Plan Overview.” Epa.gov. Nov. 12, 2013.

Jindal, Bobby. ‘Governor Jindal Says Drilling Moratorium Second Manmade Disaster, Calls on President to Work Quickly to Ensure Safety and Protect Jobs’. State of Louisiana: Office of the Governor. Jun 10, 2012. Nov 17, 2013.

McBournie, B. (2010). Landrieu: Obama not moving fast enough on deepwater horizon commission. (). Charlottesville, United States, Charlottesville: SNL Financial LC. Nov. 10, 2013

Offshore marine service association; OMSA praises ruling holding obama administration in contempt for its moratorium on gulf oil drilling. (2011). Energy Weekly News, , 1795. Nov. 12, 2013

Robertson, Campbell. BP Is Criticized Over Oil Spill, but U.S. Missed Chances to Act. The New York Times. April 30, 2010. Nov. 15, 2013

United States, Congress, Senate, Committee on Small Business and Entrepreneurship (2013). The Deepwater drilling moratorium: An economic disaster for Louisiana’s small businesses: Field hearing before the committee on small business and entrepreneurship, united states senate, one hundred eleventh congress, second session, august 17, 2010. Nov. 12, 2013

United States, National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling. (2011). Deep water : The gulf oil disaster and the future of offshore drilling : Report to the president. U.S. G.P.O. Nov 1, 2013

Wagner, Alex. Obama’s Oil Spill Response: On Top of It, or Too Little Too Late? Politicsdaily.com, 2010. Nov. 10, 2013.  

Watson, Robert P. The Obama Presidency: A Preliminary Assessment. State University of New York Press. (2012) pp. 213-221, Nov. 2, 2013.


1 Bureau of Ocean Energy Management, Bureau of Safety and Environmental Enforcement, Office of Natural Resources Revenue

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s