A Disaster That Could Change Everything

A Disaster That Could Change Everything

A Disaster That Could Change Everything

Will the BP spill prove to be Judgment Day for the decades of growing corporate rule over government?


On June 11 Obama linked the BP oil blowout to the attacks of September 11, 2001. He made the parallel in terms of impact on the American psyche and of the spur to chart new policies. There are less flattering ways—to Obama personally—to compare the events. Few performances in George W. Bush’s wretched tenure aroused more derision than his conduct when he was alerted to the first attack on the Twin Towers, continuing to confer with the children in that Florida classroom.

Bush didn’t want to scare the children, a laudable instinct. Obama, less laudably, didn’t want to upset the grown-ups. Within hours of the explosion, NOAA scientists and federal officials were preparing for "the spill of the decade," with worst-case assessments of 110,000 barrels a day. But the White House, in collusion with BP, successfully capped the outflow of disturbingly high estimates, lowballing it at 1,000 barrels a day, then crawling reluctantly up to 5,000.

In his nerveless speech from the Oval Office on June 15, where he made the extraordinary claim that "in the coming weeks and days, [BP’s] efforts should capture up to 90 percent of the oil leaking out of the well," Obama reached for the traditional buck-pass of a blue-ribbon commission to assess the circumstances leading up to the April 20 explosion. It will be interesting to see just how diligently this commission excavates the incredible government indulgence toward the oil companies on ocean drilling. It could take off from the Clinton administration’s Deep Water Royalty Relief Act of 1995, a bill encouraging oil companies like BP to start drilling for oil 5,000 feet below the surface of the Gulf of Mexico. When Ken Salazar was still a Colorado senator, he berated the Bush administration for its slothfulness in pushing forward with deep-sea drilling in the gulf.

In the first year of the Obama administration, Salazar’s Interior Department put 53 million acres of offshore oil reserves up for lease, far eclipsing the records set by the Bush administration. As Jeffrey St. Clair describes in our CounterPunch newsletter, Salazar was adamant in retaining Chris Oynes as associate director of offshore drilling at the Minerals Management Service. As St. Clair explains, an outraged inspector general of the Interior Department discovered that on Oynes’s watch "the repeat offenders in the oil industry were allowed to police themselves, writing their own environmental analyses, safety inspections and compliance reports, often in pencil for MMS regulators to trace over in ink."

By the time Obama declared on March 31 that "we’ve still got to make some tough decisions about opening new offshore areas for oil and gas development in ways that protect communities and protect coastlines," his administration had given the green light to BP’s Deepwater Horizon well, giving this notoriously criminal company—a big contributor to the Obama 2008 campaign—a pat on the back for its safety record.

Struggling to recover from a Gallup poll conducted June 11–13 showing that 71 percent of Americans believe he had not been "tough enough" in dealing with BP, Obama announced on June 16 that under White House pressure BP is putting $20 billion in an independently run escrow fund to compensate individuals and businesses injured by the oil spill. Any satisfaction at this should be qualified by recalling that powerful international corporations like BP have armies of lawyers, lobbyists and politicians toiling to extinguish or diminish all financial sanctions imposed on them for criminal negligence.

We can set the benchmark here with the terrible 1984 disaster at Union Carbide’s Bhopal plant in India. In 1989 an Indian Supreme Court–assisted settlement set compensation at $470 million. At that time, the government still claimed that the release of a toxic gas cloud had killed merely 3,000 and injured 102,000. Over the years the casualty list swelled to 574,367 victims, including (according to independent, authoritative counts) more than 20,000 dead. In other words, the compensation now worked out, on average, to around $800 per victim. After a quarter of a century, on June 7 of this year, seven former officials of Union Carbide’s Indian subsidiary were convicted in a Bhopal court and sentenced to two years in prison for what was the world’s greatest industrial disaster—and fined $2,100 each. All seven were out on bail within an hour. Punishment for the far more responsible officials in the US-based parent company? None.

Exxon Valdez? In 1994 a jury imposed damages of $5 billion on the company. In 2006 an appeals court halved this to $2.5 billion. And in June 2008 the Supreme Court cut this by 80 percent, to roughly $500 million—an average of $15,000 per plaintiff, of whom there were about 32,000. Lee Raymond’s compensation package for his last year as Exxon CEO was $400 million.

We do not yet have the barest outline of the ultimate consequences of BP’s blowout. There are serious scenarios by experts on the Oil Drum website suggesting that the outflow may not be halted until the entire reserve (which BP estimates at 2.1 billion gallons) has discharged into the gulf. That could be a grimly transformative moment in American political life, Judgment Day for decades of increasing submission of government to corporate rule, with vassals in every successive Oval Office. Few of them have been more compliant than the present incumbent, on whose oil spill crisis team is Lawrence Summers. This is the man who, as chief economist at the World Bank, declared in a notorious memo that "the economic logic behind dumping a load of toxic waste in the lowest-wage country is impeccable and we should face up to that." Follow the money—which BP, like the other big oil companies, has been sluicing into the political system for decades—and the requisite logic is always available. Our task: to ensure that the April 20 explosion and the aftermath make a dent in it.

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