Obama's tough stance on BP seems flawed
Yesterday, following meetings at the White House, President Obama managed to extract an apology from the heads of British Petroleum and the promise of $20 billion for a compensation fund.
This seems reasonable, as a catastrophic error on the part of BP has caused untold damage around the Gulf of Mexico, but it does not help solve the root problems.
I am by no means making any excuses for BP. There is nothing from this whole fiasco that makes them look anything but incompetent. How a multinational corporation can have no contingencies or technologies for use in the event of a disaster is baffling. Their negligence has caused a huge environmental disaster, but Obama's actions look like posturing.
Firstly, the United States has a woeful record on the environment, and the constant refusals to sign the Kyoto agreement or make any meaningful effort to combat climate change are well-documented. Part of the reluctance to commit to reducing emissions is due to the fact that the U.S. creates a huge percentage of emissions because it uses around a quarter of the world's oil.
However, when this oil causes an environmental disaster in its backyard, the U.S. is outraged. I do not remember this fuss over Trafigura and their reputed dumping of toxic waste on the Ivory Coast.
Secondly, corporations the size of BP run themselves with little or no accountability to anyone because of the power they hold. This size and power is primarily due to what has effectively been the state religion of the U.S. (and much of Western Europe) since the Reagan era: free market capitalism.
How advantageous it would have been for someone to maintain a semblance of control over oil production in the Gulf of Mexico and perhaps have prevented the spill from happening in the first place. But this was out of the question as markets must be free.
Finally, it is worth bearing in mind that it is inadvisable in the current economic climate for Obama to push a large transnational company for more and more money. As the world struggles out of a recession, the last thing we want is the collapse of BP, which would have a ripple effect around the world's markets.
I understand that somebody should pay for the damage caused as a consequence of what can only be described as idiocy. But this debacle should highlight two even bigger problems: The U.S. and the world's continued reliance on oil and free markets with their enormous companies are 20th century concepts that need to be updated.