Don't Blame Tony Hayward: Why We Need Laws and Regulations That Specifically Hold Parties Liable for the Harm They Cause
BP CEO Tony Hayward has been careful to say his company will pay for the "clean-up" from the oil spill -- meaning, not the damages. But if past disasters are any guide, the clean-up will be just a small fraction of the damages from the spill (the deaths, the damage of the oil to natural resources and the humans that depend on them, and more). Many media have commented that Hayward is a “jerk,” but the who-pays-for-the-damages problem isn't really about Hayward and BP. Rather, it points out a weakness with our health and safety laws not unique to this case – they do not always demand and require that industry pay for the harm it causes society.
Hayward, in fact, has been answering in the only way that he legally can while still representing the shareholders of the corporation. Why? The law (specifically the Oil Pollution Act, passed after Exxon-Valdez) requires BP to “clean up” the oil spill itself, but caps economic damages at $75 million. What if BP decided it wanted to pay all of the damages, though? Corporate law, which defines the fiduciary responsibility of a Corporate Board as maximizing shareholder profit, would forbid the managers of BP from …
CPR Member Scholar Holly Doremus and fellow UC Berkeley School of Law Professor Eric Biber have penned an op-ed in today's LA Times arguing that the Administration's plan to split the Minerals Management Service in two in response to the BP oil spill disaster falls short of what's needed.
Write Doremus and Biber:
The political pressure to prioritize rapid development over safety won't evaporate if the MMS is split. The new safety agency would still be under the supervision of the Department of Interior, where it would have to compete with its bureaucratic sibling. Environmental and safety interests have been losing that competition for years. Giving them a new name and logo won't automatically change that outcome.
Second, environmental protection is not just a matter of enforcing a clear set of regulations as wells are being drilled or operated. The key environmental …
As millions of gallons of oil continue to pour into the Gulf of Mexico, the Washington Post and New York Times reported that the Minerals Management Service (MMS) – the agency within the U.S. Department of Interior that oversees offshore oil and gas leasing and development – mostly ignored some of the country’s most important environmental laws when it gave the green light to Deepwater Horizon and other offshore drilling.
The Endangered Species Act requires federal agencies to consult with the National Marine Fisheries Service (NMFS) when they take or approve actions that may adversely affect species listed as threatened or endangered. Though MMS has acknowledged that oil and gas drilling is likely to adversely affect protected sea turtles, sperm whales, and Alabama sturgeon, the Post and Times reported that the agency failed to consult with NMFS prior to issuing permission for the Deepwater Horizon drilling. The …
In the year since EPA Administrator Lisa Jackson announced a new process (pdf) for updating chemical risk assessments in EPA's IRIS database, agency scientists have succeeded in getting some stalled assessments moving through the system. Since the May 21, 2009 announcement, EPA staff have competed nine new and updated assessments. Two others are in the final stages of review and 20 more are at the external peer review stage.
But just as EPA staff are getting geared up, industry, potentially regulated federal agencies, and the White House are trying to throw a monkey wrench into the works.
First, Inside EPA reports (subs. required, "Industry, Agencies Struggle To Revise EPA's Risk Assessment Process") that anti-regulatory advocate Jim Tozzi's Center for Regulatory Effectiveness is making the claim that external peer review must be "Data Quality Act compliant." That's a great way to strike fear in …
Though in many respects similar to provisions in the House-approved American Clean Energy and Security Act (ACES) bill and the prior Boxer-Kerry bill in the Senate, the adaptation program proposed in the newly released Kerry-Lieberman American Power Act substantially decreases funding for federal and state adaptation programs and eliminates provisions establishing a public health adaptation program.
Like its predecessors, Kerry-Lieberman’s adaptation program, included in large part in Title IV, §§6001-6011, incorporates a number of provision focused on managing the effects of climate change on natural resources in the United States:
- a Natural Resources Climate Change Adaptation Panel, headed by the chair of the CEQ and including the heads of federal public land and natural resource agencies, to develop and implement a National Resources Climate Change Adaptation Strategy
- data gathering on adaptation to be coordinated between NOAA’s National Climate Service, a National Climate Change and Wildlife …
While Kerry and Lieberman (and before two weeks ago, Graham) have tried to pitch the proposed new Senate climate and energy draft legislation as a “game-changer” the truth is that, aside from the stronger preemption language limiting the states, its effect is not terribly different from what has come before. Sure, there are sweeteners for the conservascenti, such as enhanced loan guarantees and permit streamlining for nuclear energy, continued support for carbon capture and sequestration, removal of a natural gas “penalty,” and ostensibly an opening up of now closed offshore oil areas. But whether this would be different than what would have happened by adoption of the ACES bill is questionable.
ACES also allowed the coal industry to continue with the help of monetary support of carbon capture and sequestration. As for increased offshore oil drilling, even with revenue sharing, opening new areas is going to be …
Today marks the one-year anniversary of President Obama’s Executive Order on Chesapeake Bay Restoration and Protection, which commits federal agencies to a new leadership role in Bay restoration. This morning the Federal Leadership Committee, headed by EPA and comprised of many of the major federal agencies, released its final Strategy for Restoration and Protection of the Chesapeake Bay. While the final Strategy is not significantly different from the draft Strategy, it contains new detail about a watershed-wide nutrient trading program and the independent evaluator.
Since the Order was issued, the federal government has promised to take a strong leadership role in compelling state governments to fulfill a series of broken promises, demanding that states establish deadlines for concrete action that would trigger economic consequences if missed. Given stunning failures in 2000 and 2010 to meet pollution reduction goals, EPA’s commitment to become the enforcer and …
The Kerry-Lieberman bill's provisions on offsets are largely similar to those in the Waxman-Markey and Kerry-Boxer bill, but include a number of changes that make more specific policy choices in the use of offsets.
First, the proposal enumerates a specific lengthy list of eligible offset categories (whereas Waxman-Markey didn't list specific categories, instead giving instruction for a regulatory decision). This change might assist in providing market liquidity. In terms of offset regulation, there seems to be a complex dance between the EPA and the USDA, which requires consultations between the two in most cases for offset designation and removal. The USDA is given the primary role over agricultural and forest offset approval while the EPA has a similar role over other offsets; as I've written before, this could be potentially problematic if the USDA is not up to the regulatory task.
Environmental consideration of …
Cross-posted from Legal Planet.
As oil drifts on and offshore in the Gulf of Mexico, forcing the closure of wildlife refuges and more fishing grounds, Interior Secretary Ken Salazar has called a temporarily halt to new offshore drilling while his staff prepare a report on the disaster and even Republicans in Congress are calling for new investigation of the troubled Minerals Management Service.
Clearly, things didn’t go as planned on the Deepwater Horizon. Notwithstanding Rush Limbaugh’s wild accusations of environmentalist sabotage, no one has seriously suggested that the fire, the sinking of the rig, and the failure of the blowout preventer were anything but accidental. But that’s far from the end of the story. Accidents are not always unforeseeable or unpreventable. BP, its contractors, the Minerals Management Service, and the Coast Guard could have and should have foreseen the possibility of a blowout, but …
CPR Member Scholar Victor Flatt has an op-ed piece in this morning's Houston Chronicle, in which he argues that the week of April 20 will likely be recalled as "one of the most pivotal and important weeks in the history of energy in this country," citing the confluence of the explosion of the Deepwater Horizon offshore oil drilling platform and its disastrous environmental consequences, and the federal approval of the massive Cape Wind project in Nantucket Sound to capture wind energy. He writes:
To be sure, offshore wind power has costs: impacts on animal habitat (notably birds');, possibly on fishing and on view-scapes. But in this case, cold calculation has determined that these costs are worth it when compared to the benefits of mostly pollution-free energy production. In the last few months, studies have shown that a string of offshore wind projects along the East Coast …
