It is now almost two months since the explosion of BP’s oil rig in the Gulf of Mexico that killed 11 workers and the beginning of the oil leakage. So far all BP’s efforts including the top hat, top kill and junk shot have failed. It is also clear that BP gave misleading information about the amount of oil being leaked and delayed the release of HD video of oil leakage to experts who could have estimated the flow rate. Just yesterday BP began deploying sensors on its ruptured undersea well in the Gulf of Mexico in an effort to obtain accurate estimates of the oil leakage. BP’s stock (NYSE: BP) plummeted since April 20th approximately losing half of its market value. BP is in crisis; trying to fix the leak, clean up the oil spill, deal with shareholder concerns and figure out a way to get of the PR nightmare.
While BP struggles with multiple issues, what is President Obama doing? He is on his fourth visit to the region and will address the nation on Tuesday. In his speech, there is no reason for Obama to show unnecessary rage to BP. People elected Obama knowing he is measured and cool headed. Empty words and anger can win in short term but people know this is not going to solve the problem perhaps it will make it worse. President Obama’s record in passing important bills that have serious long term impact on our nation in less than two years of his presidency is very impressive. He needs to adopt a pragmatic approach to this disaster.
President Obama is absolutely correct to demand BP to escrow funds to be administered independently to deal with clean up efforts and claims. The real impact on the environment and the economic cost of this disaster may take years to figure out. The proposed $20 billion is a good start. More importantly, the President should lay out a clear plan on what his government intends to do in the coming days and months.
One of the major issues is the moratorium on off shore drilling. Politicians comparing the oil spill to a plane crash and demanding to lift the suspension are both ignorant and selfish. The number of people dying in a plane crash is normally limited to passengers only and the environmental impact of a plane crash is minimal or none. The BP oil spill has far reaching consequences not just for the US. It won’t be long before the oil hits the East Coast shores and the rest of the world. The moratorium on off shore drilling should be extended beyond the current six months.
President Obama should grab this chance to get the senate to pass the comprehensive energy and climate bill that was already passed by the House of Representatives. He should directly go to the people when a senator refuses to vote for the bill. He should go to the senator’s constituency and address the people directly. Start with Louisiana, Alabama and Florida, where people may be more inclined to listen now more than ever.
The population of the US is less than 5% of the world population. The US has less than 2% of the oil reserves in the word. And yet the US consumes over 20% of the world’s oil. From a simple business perspective alone, without considering the damage to the environment, this is not sustainable. The US will be, and is, sending billions of dollars to foreign countries to satisfy its oil addiction. There is a whole new green industry focusing on clean energy growing worldwide and for now the US is on the sideline watching. There is no other country in the world that can come close to the US in invention, innovation and entrepreneurship. It is time America stops watching and starts leading the clean energy efforts.
Great disasters also create great opportunities. BP oil disaster is a serious environmental catastrophe. What the President needs to do is to convert this disaster into an opportunity to lay out our energy policy for the future.