BP’s catastrophe in the Gulf of Mexico demonstrates how risky oil and gas drilling really is. For the 11 crew members killed in the Deepwater Horizon explosion, Gulf communities, ocean water and wildlife, the impacts were immediate. The long-term repercussions will also be devastating. Stopping the leak, cleaning up the mess, and restoring the economic viability to the Gulf’s many industries that rely on clean, healthy water is going to be an enormous challenge.
The multi-billion-dollar question is: How are we going to pay for it?
The answer should be easy. BP is responsible for this disaster. BP should pay for everything–the cleanup and damages. On the surface, it may seem like BP agrees. In congressional testimony and a series of expensive ads, BP has assured us its efforts in the Gulf will “not come at any cost to the taxpayers.”
But the facts are murkier. Taxpayers already underwrite billions of dollars in generous subsidies for oil and gas companies. We’ve been padding their bottom line for years, essentially pre-funding the clean-up.
In the last four years, BP has recorded $83 billion in profits. Its first-quarter profits this year averaged $66 million a day. At the same time, it has enjoyed tax breaks and other giveaways from the federal government. If we don’t start whacking these tax breaks and subsidies, taxpayers stand to lose roughly $53 billion in royalty revenue on late-1990s Gulf leases, and $36 billion by 2020 on just a handful of the subsidies oil companies receive.
And when it comes to the BP oil disaster, taxpayers could also be shelling out billions in damage liabilities. Existing law requires BP to cover the costs of cleanup, but only requires the company to cover damages up to $75 million. This disaster is already larger than the Exxon Valdez fiasco, and damages are expected to total tens of billions.
Not surprisingly, protecting its subsidies and lax regulations is a top priority for BP. Like other oil companies, BP fields an impressive team of lobbyists in Washington, having spent $41.2 million on lobbying since 2005, according to the Center for Responsive Politics. The list includes former staff from the White House, Office of Management & Budget, Federal Trade Commission, House Energy & Commerce Committee, Senate Commerce, Science, & Transportation Committee, and the Employment Standards Administration. BP spent about $3.5 million on lobbying during the first three months of 2010, working on bills such as the Oil Pollution Prevention and Response Act of 2009, the Oil Spill Prevention Act of 2009, and the Clean Water Restoration Act. Topping BP’s list of legislative priorities, however, is the so-called climate bill, American Clean Energy and Security Act of 2009.
BP, like other energy companies, funnels most of its campaign contributions to members of the committees with jurisdiction in Congress, such as the House Energy and Commerce Committee, which has received $90,500 from BP over the last three election cycles. Other big recipients include members of the House Resources Committee, which received $69,000 during the same period, and members of the Senate Government Affairs Committee, who got $114,251.
BP’s claim that taxpayers will pay nothing is likely to be little more than doublespeak. There’s no evidence that protecting taxpayers, the environment, or affected communities have ever been their concern.
Instead of taking BP’s word for it, Congress must take action. It’s time lawmakers wake up and stop kowtowing to oil and gas interests. The gravy train must end. Big Oil must be held accountable and BP must pay.
