This month’s ruptured pipeline oil spill should be a wake-up call for our legislature to address the huge elephant in the room. The older this stuff gets, the more hazardous it becomes. The less valuable these less productive assets become, the less able its owners are to cover spill liabilities as the deep pockets companies continue to sell off these older assets. Consider the additional hazards our backed-up supply chains have added with more and more large ships anchoring while awaiting dock space to unload, and you start to see the potential for more and more expensive government clean-ups as infrastructure is damaged and those responsible go bankrupt.
Let’s look at some more aspects of this problem to find some ways to reduce the perils our environment faces.
First, it is vital that anchoring ships have accurate charts mapping underwater pipelines and such—but they don’t. It would be very expensive for the operators to expedite accurate comprehensive underwater surveys, and then distribute updated electronic chart overlays freely to all large vessels permitted to anchor in state controlled waters. That is the only reason not to insist they undertake such a mission immediately before more accidents like this one happens.
Imagine that somehow such laws could be written soon to compel operators to pay for this effort, and the multitude of challenging lawsuits from the oil producing companies could be expeditiously settled. Then, wouldn’t the expenses of such a charting operation when properly charged to the companies who profit from them drive many into bankruptcy with their walking away from their responsibilities? Wouldn’t their abandoning the rotting infrastructure create costs beyond the bonds the oil lessors paid years ago to cover the costs of capping the wells and removing the remaining underwater hazards?
The answer is that once again the public would have to pay the difference between the lease bonds and the actual decommissioning costs.
The next question is: How would the government’s share of decommissioning a bankrupt operation compare with the actual clean-up costs and the environmental damage for which there is no mitigation? The answer is probably that cleaning up the mess would be more costly than plugging the problem before it happens. Remember that complete environmental restoration after a spill can never be expected.
Now look at the actual leases under which these oil operations are licensed and you’ll see that revoking a lease leaves the government on the liability hook for the value of lost oil production. However, if the company abandons the operation, they forfeit their deposit bonds and have no claim for lost income damages.
Put these factors together and it looks like the smart move is to get started writing the new laws to get the underwater infrastructure surveys done and delivered as costs to the operators. If some companies go bankrupt to avoid paying their share, that might not be such a bad outcome. Even it their shut down activities are incomplete and we the people have to pay for finishing it, at least we won’t have the spill damage to clean up. Wouldn’t it be better to shut down the operation before they spill oil in our waters and on our shores?
I propose that we’d get a twofer by requiring underwater oil infrastructure surveying and chart distribution right now. Visiting ships could more easily avoid potential anchoring hazards with accurate information and the marginal operators would be driven out of business before their infrastructure spills petrochemical plague in our water.
Let’s stand up to the oil industry and write new laws now.
Tim Tunks, Ocean Park
