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It will likely be years before the full impact of the massive BP oil spill in the Gulf of Mexico can be assessed. An explosion beneath a deep water rig last April claimed the lives of eleven men. It also triggered the flow of millions of gallons of oil before the undersea well could finally be capped on July 20th. Cleanup efforts have been underway since. Last month the Department of Justice filed a civil lawsuit against BP for billions, and the Obama administration has yet to allow any new drilling operations in the area. Please join us for an update on restoration efforts, the case against BP, and the future of deep water drilling in the region.
- Cyn Sarthou executive director, Gulf Restoration Network
- David Uhlmann professor of law, University of Michigan, and former head of the Justice Department's environmental crimes unit division,
- Lisa Jackson administrator, the Environmental Protection Agency
- Stephen Power reporter, The Wall Street Journal.
MS. DIANE REHMThanks for joining us, I'm Diane Rehm. Some deepwater drilling is set to resume in the Gulf, but cleanup efforts continue after last year's disaster, the worst marine oil spill in U.S. history. There's been enormous progress, but it will take years to fully assess the damage. As part of our ongoing Environmental Outlook Series, joining me to discuss Gulf restoration efforts and the case against oil giant BP, Stephen Power, reporter for The Wall Street Journal, joining us from a studio at the University of Michigan, David Uhlmann, he's a professor of law, former head of the Justice Department's environmental crimes unit division and from a studio at WWNO in New Orleans, Cyn Sarthou, executive director of the Gulf Restoration Network.
MS. DIANE REHMA little later on in the program we'll be joined by the administrator of the Environmental Protection Agency, Lisa Jackson. You can join us as well, 800-433-8850. Join us by e-mail, Facebook or send us a tweet. Good morning everyone.
MR. STEPHEN POWERGood morning.
MR. DAVID UHLMANNGood morning.
MS. CYN SARTHOUGood morning.
REHMGood to have you with us. Cyn, let me start with you. Talk about how far you believe we've come with environmental restoration efforts.
SARTHOUI think we have not come as far as some Americans feel we have. There is still a lot of oil out there. They have stopped the flow of oil, which is great, and they cleaned up what is observable or on the surface, but there are still over 4,000 miles of wetlands and beaches along the coastal areas of Louisiana, Florida, Alabama and Mississippi that are being monitored and are actively the focus of cleanup efforts.
SARTHOUThere are large tar mats that are still being found in the breakwaters of many beaches that are throwing tarballs onto the shore. And there's a lot of uncertainty as to how much oil still remains in the Gulf, so although, you know, we've taken what people can see and cleaned that up, the actual restoration of our wetlands and our coastal areas is just in its infancy.
REHMNow, the Coast Guard claims it has cleaned up 928 miles of beaches with 30 miles left to clean. Would you agree with those figures?
SARTHOUWell, I would agree that they've actually taken action and that some oil is no longer observable or actionable, but that's how they define it, is whether it is observable and whether they can actually take action to clean it or whether action would be more damaging than non-action. So the question is, what oil remains that is not observable and where is oil simply being left? Because as in many of the wetlands, actions to remove that oil may be more damaging.
REHMThat is very interesting. Cyn Sarthou is executive director of the Gulf Restoration Network. Stephen Power, in light of what we've just heard, I'm interested in the announcement from the Obama administration yesterday on deepwater drilling in the Gulf. Exactly what does it say?
POWERWell, what it says is that for the, roughly a dozen or so companies that had been awaiting decisions from the federal government on applications to start new wells in deepwater at the time of the accident last year that they will not be required to revise their exploration plans. If an updated estimate of the most oil that would be released in an uncontrolled spill is less than the amount that's included in the spill response plans that they have on file with the government.
POWERSo it's essentially a clarification of an existing policy, not a shift, but something that they are trying to do to assure companies and not have to go back to the drawing board, per se, as long as the worst case discharge estimates are accurate and up-to-date.
REHMBut they haven't actually issued new permits or (word?) ?
POWERCorrect, correct and that's a source of some consternation in the oil and gas industry and its supporters in Congress, who many of them come from oil and gas producing states. The Obama administration lifted a moratorium on deep water drilling last October that had lasted for about six months, but they have yet to actually grant any new permits to drill new wells in deep water.
REHMAnd what about the safety of the seafood. What do we know about that, Cyn?
SARTHOUWell, I mean, there's a lot of uncertainty, I think. I guess the way we would put it is that for most Americans who do not live in a coastal state, it is probable that the current FDA standard, which is four jumbo shrimp in a week eaten by an average male, probably safeguards their health. You know, if you live in Washington, D.C. or Ohio or Iowa, the chances of any significant problem related to seafood consumption is probably very small.
SARTHOUThe question, really, is whether those levels are realistic for a coastal population that eats far more than four shrimp a week. In fact, they probably eat far more than four shrimp a day or eat fish and seafood every single day. So there's a lot of uncertainty as to whether coastal populations are actually protected by the FDA standard and are at risk from consumption on a frequent basis of seafood.
REHMAnd turning to you, David Uhlmann, I know there are a number of investigations going on at this point, including one led by the Obama administration. What can you tell us about these?
UHLMANNWell, the Justice Department has both a criminal investigation, which began in the first days or weeks after the spill in April, and they also have a very large civil case which they filed in federal court in New Orleans on December 15. The civil case was expected. We knew that the Justice Department eventually would seek civil penalties and also seek what are called natural resource damage claims to address what Cyn has been talking about.
UHLMANNWe have unprecedented damage to a very fragile ecosystem along the Gulf Coast and that's likely to result in several million -- I'm sorry, several billion dollars in natural resource damage payments to try and help restore the Gulf. That's part of the civil case that was filed in December. And we're also likely to see several billion dollars more in civil penalties as part of that first civil suit, but the civil suit is just the opening salvo for the government.
REHMAnd the presidential co-chairs of the investigation that's going on, Bob Graham and Bill Reilly, have urged the Congress to give the panel subpoena power to get to the bottom of all this. Is that likely to happen, do you think?
UHLMANNNo, that won't happen, Diane, and it's too late. The Commission will be issuing its final report next week. They've already had all of their public hearings and they were forced because Congress would not give them subpoena power to conduct those hearings without witnesses compelled to testify.
REHMNow, it's interesting because, of course, Bill Reilly is the former director of the EPA. He said that BP, Halliburton and Transocean Limited made breathtaking and largely preventable steps, Stephen Power.
POWERYeah, he did say that recently in a speech to the oil and gas industry. BP has acknowledged that some of its employees misinterpreted the results of a pressure test, a key pressure test that was done shortly before the accident. Several of the other companies that were involved with this well, Halliburton and Transocean have largely pointed the finger back at BP, saying that they were taking orders from BP. They were just contractors.
REHMSo you've got everybody pointing fingers at everybody else?
POWERYeah, that's, that's been the dynamic pretty much from the outset of this accident from the moment we had the Congressional. We saw the Congressional Hearings last year and continuing on now. And so we're going to start hearing soon from some of the investigative authorities about how they sort of apportion the blame. But ultimately, obviously, the question of legal liability will be settled in the courts.
REHMWho is heading up these other investigations that are going on?
POWERSo as David mentioned, next week we're going to hear from the so-called Graham, Reilly commission, that's the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling. They're going to release their report next week on the accident. There is a continuing investigation by what's called the Marine Investigation Board, which is a panel established jointly by the Coast Guard and what's known as the Bureau of Ocean Energy Management, which is the agency which regulates offshore drilling. They're doing their own investigation and that's expected at the end of late March.
POWERThere is another investigation going on by the National Academy of Engineering that's expected later this year into a lot of the technical causes and contributing factors behind the accident. And then there's another agency called the U.S. Chemical Safety Board, which investigated the Texas -- the Texas City Refinery accident that BP had some years ago. And they are doing their own investigation. They've been squabbling a bit with some of these other agencies over the amount of access that they're going get to evidence in the case, but there are several other investigations going on and that does not count what the Justice Department is doing.
REHMYeah, so could these investigations conflict with each other leaving us with no clear picture of how this happened?
POWERThat's a great question. That's something that we're going to be, we're going to see in the weeks and months to come as these reports come out. We have a rough idea of where the Presidential Commission is going because they've issued a series of reports over the months that castigate, as you mentioned, the three companies, BP, Halliburton and Transocean, to varying degrees. But as to whether or not they're all going to be in alignment will not be seen for some months.
REHMStephen Power is a reporter for The Wall Street Journal. We'll take just a short break. When we come back, we'll talk further, take your calls, your e-mail. I look forward to hearing from you.
REHMWelcome back as we talk about the BP oil spill, its aftermath and damages that BP and others involved in the oil spill in the Gulf could be forced to pay. Stephen Powers, a reporter for The Wall Street Journal, he's here in the studio. On the line with us, David Uhlmann, professor of law at the University of Michigan, he's former head of the Justice Department's environmental crimes unit division. And Cyn Sarthou, executive director of the Gulf Restoration Network.
REHMHere's an e-mail from Alisha in Illinois. She says, "I know the Oil Pollution Act gives the government the authority to sue the offender for cleanup costs and any lost economic cost as well. We have yet to see all the long-term environmental effects from the oil spill. Will BP still be held accountable for any future unforeseen costs? Are there limitations on the amount they're liable and are these costs something taxpayers will have to pick up?" David Uhlmann.
UHLMANNWell, that's a great question, I think, and Cyn touched on this a little bit as well. There's known damage to the Gulf, which we have seen tragically play out over the course of the summer months, but there are so many unknowns here and we won't know the full extent of the natural resource damage for many years. But the government will do, I think, a pretty good job of factoring that into whatever settlement demands it makes of BP and the other companies involved in the civil lawsuit.
UHLMANNAnd I said earlier, I would expect them to seek several billion dollars in natural resource damage claims alone. That's separate from any civil penalties, that's separate from any criminal penalties. And at the end of the day, I don't think we'll see the taxpayers bearing the brunt. I think the bigger question really is, can this ecosystem recover? How long will that take?
REHMAnd joining us now by phone is Lisa Jackson. She's the administrator of the Environmental Protection Agency. Good morning to you. Thank you for joining us.
MS. LISA JACKSONGood morning, Diane. Thanks for having me.
REHMIndeed. Tell us about the administration's Gulf Restoration Task Force.
JACKSONOh, I'm happy to. It's in recognition of all that's happened in the Gulf recently, but more importantly, all that's yet to be done that the president formed something called the Gulf Coast Eco System Restoration Task Force. Long name and a big assignment, but essentially, the idea was that as the president said, this is not just about a response to the BP explosion and the oil that spilled into the Gulf, but rather, it's an effort to make the Gulf better than it was on the day that that explosion happened. And that's a much broader mandate. It's a primarily environmental one, but it's broader than just response to the spill.
REHMBut how would the administration hope to do that?
JACKSONWell, in a number of ways. The first is actually by marshalling the forces of the federal government and they are big and numerous. Between EPA and the Department of Interior, NOAA, agriculture, commerce, the departments, the Corp of Engineers, all of whom have worked on various parts of either coastal restoration, ecosystem restoration, water flow, issues related to nutrient pollution that affect the Gulf of Mexico and the Mississippi River at its mouth. All those issues, if we're all aligned and working together and most importantly in support of state efforts and local efforts, as Cynthia was talking about earlier, those -- all of us aligning to make sure that we're trying to get the same thing accomplished, I think, is where the power of this movement comes from.
REHMI guess what I'd be worried about is where is the money going to come from if this whole suit against BP drags on for years?
JACKSONWell, that's certainly something to worry about, but let me give you a little bit of a counter. I am absolutely excited about the possibilities that come from the establishment of this task force. Remember, the task force is all the federal agencies I mentioned and then a few. Plus, a representative from each one of the states, plus, we're looking at a separate committee to bring in local governments and then we're working with NGOs. What the region has always needed is the national recognition that comes from the White House, that comes from the president's level that this water body and this ecosystem are vital to our nation. Absolutely vital.
JACKSONI think everyone realized that as we were watching those horrible pictures of the well during the summer months, but there's a Chesapeake Bay Council, there's a Puget Sound Commission, there's a Great Lakes Water Quality Agreement. We work hard on our oceans and I think the promise of this moment and of the work we're doing over the next year, and it's only about a year, is that we want to sustain that level of interest and turn it into real action to improve the Gulf Coast to make it better than it was before.
REHMHow many times have you managed to get down there?
JACKSONOh, during the spill, it was over a dozen times that I was down there. We had our first task force meeting, because I chair the task force, in Pensacola on November 8 and we're planning another one quite soon. And the executive director of the task force is from Florida, a guy by the name of John Hankinson, with a long history in conservation and environmental protection. But also in working with the private sector and the non-profit sector to reinforce their efforts (unintelligible).
REHMEarlier in the program, you may have heard Cyn Sarthou of the Gulf Restoration Network say that while certainly a fair amount has been done, there is so much left to be done. Is the federal government gonna hang in there and do what needs to be done if BP's and all the other groups are fighting the government and each other about whose responsibility it is?
JACKSONWell, this is a passion for me. I grew up in New Orleans on the Gulf Coast. I feel as though I've been given an opportunity to use the weight of my office as administrator of the EPA and now as chair of this task force to try to bring that kind of attention and action to the Gulf. My belief is absolutely. And let me give you an example of the kind of things that I know can happen. We just recently here at EPA worked with the states in the Chesapeake Bay watershed to put out what we call the Chesapeake Bay TMDL, but what we commonly call the pollution diet for the bay. It is a huge document that combines scientific work from all of the states in the Bay Region. And that, I think, it was widely hailed when it came out right before Christmas as one of the real opportunities as a real step forward in making sure that this ecosystem, the Chesapeake Bay is restored.
JACKSONNow, think about the same kind of plan for the Gulf. Think about all the resources that the Corp spends and EPA spends and Interiors spends and all those states spend on conservation and restoration programs and aligning all those resources. So yes, we absolutely need the money from the penalties, Diane. We need to prosecute that case and we are committed. Attorney General said he's absolutely committed to aggressively prosecuting the case against BP and others, but there's work that can be done right now to line up our resources, to make sure we have permitting and regulatory processes lined up so that when we're ready to go we can get these projects off the ground and continue to support, not only the states, but the natural resource trustees who are also lining up projects.
REHMAnd one final question for you, how much money do you estimate it's going to take to truly restore that region?
JACKSONWell, I think past estimates have been in the hundreds of billions of dollars for coastal restoration and I think those might've just been in the state of Louisiana, so you can add that and continue to multiply it. But I also think that there's an incredible amount of synergy that will come from having a task force and I hope it eventually turns into something that's in legislation. You know, we'd like to see a piece of legislation that addresses the Gulf of Mexico, that dedicates these penalties, that establishes this task force just like we established the Chesapeake Bay Commission so that it's in law. And I think once that happens, we'll have turned a corner in this country in realizing that we need to permanently and unfailingly look to restore the Gulf. So it's going to take money, but it's going to take more than money as well.
REHMLisa Jackson, she's administrator of the Environmental Protection Agency. Thank you so much for joining us.
JACKSONThanks. Thanks so much.
REHMAnd turning back to you, Stephen Power, what about the money for individuals who've been harmed by this oil spill. What's happening there?
POWERSo there's a $20 billion fund that was set up by BP to compensate victims of the spill and it's administered by a lawyer named Ken Feinberg. And as of last month, the fund had processed more than 463,000 claims and paid out about $2.5 billion in emergency payments to nearly 170,000 individuals and businesses. Now, the Justice Department has been leaning on Mr. Feinberg to speed up the pace of the awards of the money. He has said that many of the claims came with improper documentation and couldn't be processed. And the Justice Department also brought charges recently against some individuals who allegedly tried to defraud this fund, so it's still unfolding basically, the claims process.
REHMAnd David Uhlmann, is there any question as to whether BP can actually survive all this?
UHLMANNThere were questions about whether BP would survive, Diane, in the first weeks after the spill when damage estimates were ranging up to $100 billion and even more. But more recently, over the last several months, BP has estimated and has started actually setting aside between 40 and $50 billion to pay its liabilities. And although that's an enormous sum of money and that would not be something that most companies in the world could pay, it is something that BP can afford, so I think BP will survive. I do want to make one point if I could, Diane, though...
UHLMANN...that you raised with Administrator Jackson and that was, you know, what if this takes years, which is a fair question. And certainly, there may be litigation for years by people who were harmed, people who are suing BP and the other companies, people who don't want to go to the fund set up and administered by Ken Feinberg that Stephen was just talking about. But I don't think the government's case against BP is going to take years. I think BP and for that matter, the other companies involved, they're probably anxious to settle and do whatever they can to put this matter behind them.
UHLMANNWe're not gonna see a settlement in the next few months, you now, but by the end of this year and if not this year certainly next year, I think we'll see multi-billion dollars settlements that will go a long way toward financing the Gulf Coast restoration efforts that Administrator Jackson was speaking about.
REHMDavid Uhlmann, he's professor of law at the University of Michigan. You're listening to "The Diane Rehm Show." Stephen Power.
POWERYeah, going back to BP and your question about their ability to pay, they've sold about $22 billion in assets over the past year to help pay for the impacts of the spill, so they've been in the process of basically selling off assets around the world to help defray the cost.
REHMIs there any concern that BP is like some of the banks we've seen in the past, too big to fail?
POWERWell, you've seen some elements of that suggestion in some of the deliberations of the government over whether to debar BP. That is to ban it from getting federal contracts. There was some discussion of that at one point over the past year. And the Pentagon objected because BP is one of its biggest sources of jet fuel for the Air Force, so there is some aspect of that.
REHMWhat about comparison to the Exxon Valdez, David, when you were at the Department of Justice?
UHLMANNWell, the Exxon Valdez is the closest comparable case or the, you know, the case -- prior case that's most like the BP Gulf oil spill. We saw Exxon pay over a billion dollars. As I said already, I think we'll see BP -- and not just BP, also Transocean and I think eventually Halliburton, as well, pay far more money. The debarment question that you asked Stephen's an interesting one. I mean, there is some sense in which some of these contractors are so important to the government that the government doesn't want them suspended or debarred.
UHLMANNBut in my experience, EPA's quite aggressive about how it pursues debarment actions. And the issue isn't whether they are subject to debarment, the issue is that the law, as it's currently formulated, only prohibits companies that are debarred from government contracting until they correct the condition giving rise to their violations. And the condition giving rise to the violations here were the oil spill and the oil spill's already been stopped. So even if they're debarred, I don't think they'll be debarred for very long. The problem's with the law. I don't think the problem is that these companies are too big to debar.
REHMAll right. Let's open the phones first to Antwerp, N.Y. Good morning, Tyler.
TYLERGood morning. My question, I was wondering if your guests could comment on the oil dispersant Core-Exit that was used during the cleanup and its associated health and environmental risks and problems.
SARTHOUWell, I mean, I think that the jury's out on that. We are very concerned about what was in the dispersant and have been told by many toxicologists that although EPA's testing of the dispersant found it nontoxic, there's a real question about the toxicity of oil and dispersant combined, which in fact was not a subject of a lot of rigorous testing. And we have actually sued EPA with several co-plaintiffs over the fact that EPA failed to follow the law over the last 20 years.
SARTHOUAnd so did not do the required testing of dispersant in various types of water with various life stages of sea life. So really, we have significant concerns about the use of dispersants. It was, as many people have said, the largest science experiment ever performed on a marine ecosystem and the jury is still out about what the effect of that science experiment will be in the long term.
POWERThere are -- as Cyn was saying, there are a lot of unanswered questions on the dispersant issue. There were about 1.8 million gallons of chemical dispersant sprayed on the oil to break it up and keep it from washing ashore. And there was a report that was published last month by NOAA, the National Oceanic and Atmospheric Administration, that found that in some sediment on the Gulf floor, there was a chemical contained in the dispersant that was found there in the sediment on the floor. But the report was sort of inconclusive on what the environmental impact of that was, so (unintelligible).
REHMYou know, that is what could certainly have the long-term impact...
REHM...that people are truly worried about.
POWERRight. And that's something that the presidential commission has expressed concern about.
REHMStephen Power, a reporter for The Wall Street Journal, David Uhlmann, professor of law at the University of Michigan, Cyn Sarthou, executive director of the Gulf Restoration Network.
REHMAnd welcome back. Just before the break, we were talking about the dispersants, many of which have ended up on the ocean floor. And here's an e-mail, let's see, from C.J. who says, "What's not being talked about is what's being done about the creatures who do not speak English, namely the animals, who don't have a voice and who are the worst victims of the BP mess. Cyn Sarthou.
SARTHOUWell, yeah, I mean, that is in fact what of -- a lot of people do not consider, which is that there are many varied species in the Gulf of Mexico. It's a very rich marine ecosystem. And many, many species, not just the species that were counted by NOAA or U.S. Fish and Wildlife Service, were affected by this disaster and by the impact -- I mean, by the application of dispersants and we really do not yet know what the impact on those species are. From the whales that were located very close to this -- to the spill to the nurse sharks, the blue fin tuna. Sharks were never counted, that we saw. We never saw a count of sharks, despite the fact that many responders told me that hundreds of sharks were killed.
SARTHOUThere are a lot of species out that and what will be the impact of this? We do not know. And that is the scariest thing, I think, about this. As we talk about continuing exploration, the question for many people who live in the Gulf is, have the federal government and the oil industry really learned anything from this experience and can we trust that, as we move forward, there is sufficient oversight? I mean, we've called for formation of Regional Citizen Advisory Committee because we think it's essential that citizens have more engagement in insuring safeguarding and we also really need to focus on those restoration efforts that can be made to help the species that have been affected, to really protect them from future impacts, whether it be from oil and gas drilling or from other activities in the Gulf of Mexico.
REHMAll right. To Cincinnati, Ohio. Good morning, John.
JOHNHi, how are you today?
REHMFine, thanks. Go right ahead.
JOHNYes, I was interested in whether or not the 4.9 million by the Flow Rate Technical Group was (word?) agreed upon. Is that correct?
REHMNow, go ahead.
JOHNAnd also, I was wondering if the EPA was going to impose the 43 (word?) per barrel fine?
REHMLet's see about that. David.
UHLMANNYeah, the EPA has -- and the Justice Department have the authority to seek $1100 per barrel spilled, which is close to $5 billion using that 4.9 million barrel figure that the caller referenced, just for the fact that there's oil in the water. So they can seek up to $1100 per barrel simply because there was a spill. If there was gross negligence or what's called willful misconduct or a violation of federal safety regulations, then they can seek up to $4300 per barrel. And that's clearly what they're shooting for.
UHLMANNTheir complaint alleges -- well, it alleges everything, including the kitchen sink, but it is clearly an effort by the government to seek penalties up to $4300 per barrel and they will base that on the 4.9 million barrel figure that the caller referenced, although BP and the other companies involved claim that the number's actually lower.
POWERYeah, just to elaborate on that last point, BP has said that the unavailability of certain data and information and evidence, such as the blowout prevented, the capping stack and some other evidence that were only recently recovered and are important to determining how much oil flowed into the Gulf, those factors render the -- some of the flow rate estimates unreliable.
REHMThis e-mail goes back to the cause, it's from Justin in North Carolina, who says, "The drilling companies offer large bonuses to rig workers that are based on meeting certain timelines. Any safety issues that occurs will cause all work at a rig to be put on hold for a period of time. These delays always violate the timeline, reduce the bonuses dramatically. By structuring things this way, the drilling companies are actively discouraging workers to not report safety issues. These bonuses are large, $12,000 was given as an example." Stephen.
POWERYeah, that has been brought up, you know, this question of whether or not profits or the desire for profits and finishing this well on time caused the accident or contributed to the accident. BP has denied that costs or profits were the issue here. You know, I think the industry -- the industry's position (word?) at large on this accident is that it was an isolated incident and they tend to portray BP as this outlier and it's true that BP, when it comes to safety, has had a number of really bad accidents in recent years, but it's also true that in recent years, we've seen, certainly in the U.S., Gulf of Mexico, an increase in certain kinds of accidents.
POWERIn the U.S. portion of the Gulf in 2009, there were 28 major drilling related spills, natural gas releases or incidents in which workers lost control of a well, which is up 4 percent from 2008, 56 percent from 2007 and nearly two-thirds from 2006.
POWERSo there has been -- now, when you look at how much oil they're producing...
POWER...I mean, the industry points out that between 1985 and 2007, it produced 10 billion barrels of oil with a spill rate of just .001 percent. But the big question, I think, that's hanging over the industry in going forward is as you move increasingly into these deep water areas of the world, how well are they going to be able to maintain their safety record?
REHMAnd this from Theresa, she says, "We know that the effects of the Exxon Valdez spill, which was a finite amount of oil, are still felt in Alaska today, 20 years later. How can anyone pretend that the environmental effects of months and months of oil spewing into the Gulf are not catastrophic beyond anything we've seen before?" Cyn.
SARTHOUWell, I agree. I think part of the problem here is that there is this uncertainty. And I've heard a lot of arguments that, oh, it's a different type of crude, it's a different type of environment, it's warmer temperatures, but the real question will only be answered five or 10, maybe 20 years from now and there really is a question of what will the impacts of this be on the ecosystem and how long will those impacts exist? And really, there is uncertainty. Nobody can say for sure, oh, in five years, it'll all be gone. There's already uncertainty and question about how much remains, how many acres or miles are affected and how many species are affected.
SARTHOUAnd, you know, there are questions of bio-accumulation, there are tar mats that have been found on the bottom of the Gulf of Mexico and I think the hardest thing about this is that most people consider damage only by what is immediately killed or impacted. And so there's this -- seems to be this presumption by some people that because, you know, only X number, like 500 turtles were killed, therefore that's where damage ends. And that is, in fact, not where damage ends, that's just what we know now.
SARTHOUThe damage continues.
REHMTo LaSalle, Ill. Good morning, Leo.
LEOHi, there, Diane. I want to say I watched the hearings on the oil spill and it's -- the Republicans kept fighting for Halliburton and BP and also, when Obama was successful in getting the $20 billion getting put in escrow so that BP couldn't run away like Exxon did and not finish paying some of the people that sued, Joe Barton, the Republican, apologized to BP and with the Republicans winning so many seats, do you think anything's gonna get done?
POWERI think the stage is set for, actually, a fair amount of conflict in Congress and between the Republicans in Congress and the Obama...
REHMOn this issue.
POWER...on the issue of offshore drilling policy. And just one news development that I think is important to point out is Chevron just last month said it would invest $4 billion over several years to develop the Bigfoot Field in the Gulf, which is in the same region of the Gulf as the Macon do well. The fact is, the Gulf remains a very attractive bet for U.S. oil companies because it's one of the only remaining spots worldwide where state run firms don't have first crack at major new discoveries.
POWERSo although -- so what I think that means is that we're gonna see the industry continuing to push hard to get access in the Gulf and you're already starting to see some of that conflict. You know, the Obama administration announced last month they reversed themselves on the issue of whether to open up the Eastern Gulf of Mexico and the Atlantic. They said they would not do that, that was something that Mr. Obama had proposed just a few weeks before the BP spill. And as soon as he made that announcement, I mean, he was hit from Republicans in Congress, the industry, very unhappy with that decision.
POWERAnd the new Chairman of the House Natural Resources Committee is Doc Hastings, he's been among those critics. And so I think you are going to see a fair amount of conflict over what should be the policy.
REHMDavid, would you agree?
UHLMANNI agree with Stephen that there's gonna be a lot of conflict between this administration and the Republicans in Congress over a whole host of issues and drilling -- you know, the issue to me with drilling is that there's a larger picture here that we seem not to -- we seem to lose sight of and, you know, you could, I think, fairly ask the question, you know, whether we'll ever learn from our mistakes and from the disasters that befall us, but, you know, here we have a golden opportunity to shift our energy policy away from risky behavior that exposes our environment to the way offshore drilling does and to start developing the alternative forms of energy that are essential to our nation's future, both form an energy standpoint, from an economic standpoint and from an environmental standpoint.
UHLMANNThat's gonna be the larger conflict that I think plays out between the Obama administration, which is trying to provide leadership to promote a greener economy and to promote alternative energy. And Republicans in Congress who seem determined to hold us -- hold us in pursuing policies that lead us into problem after problem after problem.
REHMAnd you have said during the break, Stephen, that the Obama administration is putting forth regulation after regulation for the EPA to deal with.
POWERYeah, I mean, since Cap N Trade has failed, that was the administration's preferred approach for dealing with climate change, now the EPA is in the driver's seat in setting climate policy and the EPA is increasingly in the crosshairs of industry, major smoke stack industries and Republicans in Congress who say that these actions are gonna further burden the economy, so that's gonna be this whole -- this is all part of the bigger debate.
REHMAnd there's also a Constitutional question that Republicans have raised about this regulatory authority on the part of the agencies.
POWERRight. It gets into the issue of how flexible the Clean Air Act is for dealing with certain emissions. The Supreme Court ruled in 2007 by a divided margin, five to four, that carbon dioxide falls under the definition of a pollutant under the Clean Air Act and it told the EPA look, if you're not gonna do anything on this issue, you've got to ground that decision. Whatever you do on carbon dioxide, you've got to ground it in the law, you've got to determine whether or not it endangers human health and welfare.
POWERThe Bush administration declined to take a position on that question, the Obama did and it said that it does and so that has what -- is what has set us off on this now big battle.
REHMAnd you're listening to "The Diane Rehm Show." And let's go to Larry in Olney, Md. You've been holding for awhile, Larry, go right ahead.
LARRYYes, Diane, you're the best thing on radio. I'm a longtime listener.
LARRYHave the rules for deepwater drilling been changed to require a relief well to be completed prior to the production well, as I heard was -- is required in the North Sea in Europe?
LARRYAnd if not, why not?
POWERWell, the issue -- as I recall, the issue of the relief well is that in Canada, there was or there is a requirement to drill a relief well, I believe it's at the same time or near the same time when you drill any well when you're up in the North Sea. That would obviously add a lot of cost to the industry and that was not -- that has sometimes been discussed in the context of various safety measures that should be or that have been considered in the U.S.
POWERBut there was a very broad piece of legislation passed the House of Representatives to institute various safety requirements on the industry. I don't believe it included the relief well requirement, but it did -- it was going to impose a lot of new safety requirements on the industry and that failed in the Senate. I mean, it passed the House, but the Senate took no action on it because it was caught up in a, you know, broader dispute over a whole number of issues in the Senate, so that's basically what's been -- what's been going on.
REHMDavid, any comment?
UHLMANNJust that I think the Department of the Interior already has the authority to issue new safety rules and in fact has issued new safety rules, so we will see, I think, a better environment, for lack of a better term, in terms of how we approach deepwater drilling. We will be more careful, we will monitor more aggressively. The question is will that be enough to avoid another disaster like this happening in the future? And that's impossible to answer.
REHMAnd here's a last question from Chris who says, "I'd like to know how the cleanup expenses and payments to individuals on the Gulf Coast are being handled by the companies responsible for spills. Are they treating the expenses as they would normal business expenses, which are tax deductible and therefore the U.S. taxpayers indirectly pay for?" David.
UHLMANNYeah, I think -- I do think the payments to -- the damage payments are tax deductible, so the $20 billion fund, I'm not a tax expert, but, you know, they are a -- they are the kind of expense that normally would be considered tax deductible, but your -- the person who wrote can take some heart, I -- you know there will be a criminal case brought based on the Gulf spill. There will be billions of dollars in criminal penalties imposed against BP and against Transocean and probably against Halliburton and those won't be tax deductible.
REHMAnd so you're saying ultimately, the taxpayer will not be the one on the hook?
UHLMANNWell, the taxpayer won't be on the hook for any criminal penalties. They may or may not be on the hook for civil penalties and, you know, on the hook -- from my perspective, on the hook means taxpayers are financing the cleanup on the Gulf, are financing the payments to victims and we're not doing that. I mean, I think there's a lot that reasonably gives us cause for concern about the spill...
UHLMANN...but not whether taxpayers are gonna pay the brunt of it.
REHMDavid Uhlmann, professor of law at the University of Michigan, Cyn Sarthou, executive director of the Gulf Restoration Network and Stephen Power, reporter at The Wall Street Journal. Thank you all so much. Thanks for listening everybody. I'm Diane Rehm.
ANNOUNCER"The Diane Rehm Show" is produced by Sandra Pinkard, Nancy Robertson, Susan Nabors, Denise Couture and Monique Nazareth. The engineer is Erin Stamper. Dorie Anisman answers the phones. Visit drshow.org for audio archives, transcripts, podcasts and CD sales.
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