Carroll County Times
Carroll County

Mitch Edelman: Clean up of is disaster far from over

Welcome to Day 1 of Sequester World. If you're like most Americans, you're fed up with the situation and would rather not see or hear another word about how this man-made mess will end the world as we know it.

So let's discuss a different mess. On Monday, the trial began to determine liability for damages resulting from the British Petroleum Deepwater Horizon oil spill of 2010. The greatest man-made environmental disaster in American history released between 3 and 5 million barrels of crude oil into the Gulf of Mexico.

Three years later, the spill still affects the Gulf Coast. For instance, every large thunderstorm over Alabama's, Louisiana's, or Mississippi's coastal waters washes tarry deposits up onto the beaches. As recently as January, new oil slicks appeared, their chemical signatures matching the Deepwater well. No one can say how long these environmental insults will persist.

The government case claims that BP and some of the companies that worked with it put profit and production ahead of safety, and corporate decisions at the highest levels made the spill both predictable and preventable. Alabama State Attorney General Luther Strange said, "the culture of corporate callousness, money ahead of safety, is the root cause of this disaster." In other words, corporate greed played a significant role in producing the blowout and spill that wrecked hundreds of miles of fragile, economically important coastline.

BP said that none of the mistakes made by it and its business partners rose to the level of gross negligence, and the other companies involved, Transocean, the rig owner, and Cameron International, manufacturer of the failed blowout preventer, shared responsibility for the disaster. Predictably, each of the other companies pointed fingers back at BP.

The oil giant offered a $16 billion pre-trial settlement with $6 billion in penalties, $9 billion in damages and $1 billion set aside for future cleanups. If the trial continues to verdict, BP could face up to $20 billion just in penalties under the Clean Water Act, depending on whether it is found guilty of gross negligence.

While BP and the governments, federal and state, would need to negotiate a settlement, reaching one would finally put the matter to rest and pump some much-needed money into the area for cleanup and compensation.

Speaking of pumping, you've probably noticed that gasoline prices have gone through the roof lately. Last month, local prices for regular gas rose by about a half-dollar per gallon. As of last Friday, the average price in Maryland had risen for 36 consecutive days. Depending on whom you ask, you get different explanations for this jump.

Oil producers say that even though demand in the United States is down, increased demand in India and China force up the price. Industry analysts cite annual refinery closings for conversion to summer blends, saying this produces temporary shortages at the pump. Everyone but oil producers agree that there's no shortage of gas production.

According to Bloomberg News, we export more gas, oil, and other fossil fuels than we import. OPEC reduced output by about a million barrels per day, allegedly to offset increased U.S. production and keep the world supply relatively constant.

The only certainty is that oil producers are making lots of money. In January, ExxonMobil replaced Apple as the most valuable U.S. corporation, with reported 2012 net profits of $44.9 billion. For 2011, it paid income taxes at the stunningly low rate of 13.5 percent. ExxonMobil also enjoyed about $600 million in tax breaks in 2011, claiming it needed the break to ensure uninterrupted production.

Do you enjoy giving the wealthiest industry in America that kind of deal, even as they raise prices on their products? I don't. Perhaps Congress will reform the tax code as part of a grand bargain to end the sequester. Big Oil's free and greedy ride would be a fine place to start.