More regulations won’t ‘plug the damn hole’

The Heritage Foundation | May 31, 2010 

A week after the April 21 Deepwater Horizon oil spill began off the Louisiana coast, President Obama reportedly snapped at his aides and ordered them to “plug the damn hole.” Nearly five weeks later, the oil continues to spew in record-breaking quantities. The latest estimate indicates that the spill is now twice the size of Exxon Valdez, but officials say the new “top kill” effort is going as planned and the leak may stop may stop soon.

In a press conference on Thursday, the President assured Americans the oil spill “has been our highest priority since this crisis occurred.” He also called out BP, the firm that owns the offshore rig, stating “as far as I’m concerned, BP is responsible for this disaster.”

In one sense, he’s right: BP, and not taxpayers, should be held responsible for the costs of the clean-up and liability. This is what current federal law requires. And the costs — both economic and environmental — will be very high.

But the President shouldn’t use this crisis to end the debate on domestic drilling, Heritage’s Nick Loris explains. “The easily accessible oil has already been sucked up out of the ground,” he said in his remarks yesterday.

But the truth, Heritage Foundation energy expert David Kreutzer explains, is that over-regulation keeps us from extracting “easily accessible” oil off the coast of California and Alaska.

Instead of piling on new regulations, the old ones should be reformed to restore incentives through profit and loss. When government micromanages how private enterprises are run, those entities are not incentivized to prepare for the worst outcomes. And that’s exactly what we’re seeing now.


Contributor's website: http://www.heritage.org



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