Taxpayers on the hook for oil cleanup

To its credit, BP has said it will pay for the cost of the cleanup, but under federal legislation it is obligated only for the first $75 million. After that, guess who picks up the tab? The taxpayers.

The oil industry succeeded in getting its pals in Congress to obligate the taxpayers to clean up anything more than a minor spill. If the Deepwater Horizon leak were capped today, the cost of the cleanup would surpass $10 billion.

Actually, $75 million is petty cash to BP, which posted a $14 billion profit in 2009. In fact, it is hard to envision a significant oil spill that could be contained and cleaned up for $75 million.

In a sense, the regulatory climate for the oil companies is just like that of the financial industry. It privatizes profits but the risks belong to the public. Is this what we call a “free market” these days?

The policy is designed to encourage exploration for and exploitation of oil and gas fields, something a country dependent upon foreign energy imports craves, but the high profits the oil companies make should enable them to shoulder more of the risk when they create massive problems. Not only should U.S. policy be reviewed to see if ample environmental protection is in place, but the free ride for the oil companies when disaster occurs should be removed. If the oil companies can walk away with the profits from selling oil and gas found in U.S. waters, they should also foot the bill for cleanup when things go bad.