Yes, yes and another yes to George Monbiot’s latest blog post, The Money Gusher, in which Monbiot muses on the real cost of extracting fossil fuels. BP and other fossil fuel corporations just do not prepare adequately for exigencies such as the Deepwater Horizon spill or global warming, nor do they charge the real price of oil in order to do so. They do, however, ensure that shareholders get their due. The rest of us? Nickle and dime.
“Pollution has been defined as a resource in the wrong place. That’s also a pretty good description of the company’s profits. The great plumes of money that have been bursting out of the company’s accounts every year are not BP’s to give away. They consist, in part or in whole, of the externalised costs the company has failed to pay, and which the rest of society must carry.
Does this sound familiar? In the ten years preceding the crash, the banks posted and disposed of stupendous profits. When their risky ventures failed, they discovered that they hadn’t made sufficient provision against future costs, and had to go begging from the state. They had classified their annual surplus as profit and given it to their investors and staff long before it was safe to do so.”
This has been the essence of my criticism of the price of fossil fuel for years — we as consumers have never paid the real cost of fuel because corporations have never been forced to do a true reckoning of the costs of producing fossil fuels. Why? Because governments have been either complicit — look at the oil interests among the Bush-Cheney government executive for example — or have been lax in regulating the fossil fuel industry to ensure it is safe and sustainable. Governments should have had effective policies, inspection and enforcement in place that regulated the industry to ensure that it was not polluting the environment, either through excess CO2 and other greenhouse gasses and pollutants or by the kind of catastrophe we see unfolding in the Gulf. Government should have had regulations in place to ensure that when they drilled, either in shallow or deep water that they were able to prevent - or at least respond to effectively — the kind of disaster playing out now as a result of the Deepwater Horizon spill. They have consistently allowed industry to get away with less than was necessary as is made obvious by BP’s inability to cap the well for so long.
It’s not that people were unable to predict this disaster could happen — environmentalists and scientists alike have done so for years. Even Brit Hume admits as much. Ouch. That must hurt…
Of course, the history of the automobile and fossil fuel industry in America and the industrialized world, and now in the developing world, is complex and we in the developed world have all benefitted immensely from cheap fossil fuels, but we’ve danced the jig and now it’s time to pay up. The price we have been paying has been a sham — it does not cover the real cost of development using fossil fuels.
Monbiot points this out — how the dividends BP will try to pay its shareholders and has been paying its shareholders over the past decades should have, at least in part, been going to ensure that their production processes are safe and don’t lead to the kind of catastrophe we are witness to today in Louisiana , Florida and elsewhere. Obviously, they won’t do it on their own — corporations, by their very design, are intended to maximize shareholder value and they will do pretty much everything legal — and oftentimes not so legal or outright illegal — to do so.
Politicians — the ones we cede our power to and expect will protect our interests as citizens — are deep in the pocket of corporations, relying on donations and jobs in their districts for election/re-election. They are only going to push so far without the threat of losing elections hanging over them. No party is immune to this, although the length to which the parties go varies and depends on the characters involved. You can be sure that Bush and Cheney, as oil men, saw the role of government in regulating the fossil fuel industry in a different way than the rest of us might.
The effect of industry on the environment and on public health has never been factored into the price of oil and gas and byproducts. It’s high time they are.
Here’s Monbiot’s proposal:
“There is an alternative, but it is unlikely to materialise. Just as Norway has treated its oil money not as profit but as provision against a tougher future(13), so the governments in whose territories oil companies work should force them to pay into a decommissioning fund. The levy should reflect the costs economists are able to calculate, plus a contingency for those we can’t yet foresee.”
It sounds great. It’ll never happen. No one has the testicular volume. Instead, we the taxpayer will pay the cost one way or the other when government picks up the tab. BP’s shareholders will laugh all the way to the bank.
As Joe Romm says, it’s all a big ponzi scheme.