Thursday, June 10, 2010

Phil Flynn: BP Means Bad Policy

Bashing BP is in. While Obama is trying to figure out whose "ass to kick", politicians are acting like jilted lovers falling all over themselves to try to lash out and hurt BP while our global reputation as the world’s best and most fair place to do business is at risk. This goes far beyond BP and what they could have or should have to avoid this disaster or how they are handling the aftermath but really comes down to the credibility of this country in the global market place.

BP stock got hammered again in part because the Obama administration wants to make BP cover all the damages from the Gulf oil spill even the millions of dollars in salaries of the laid off oil industry workers let go because of their Federal moratorium on deepwater drilling. This is a concept that has no basis in our rule of law and is trying to change the law after the fact. In other words, they want BP to pay for their own bad policy. At the same time members of Congress are trying to retroactively lift the 75 million dollar liability cap on punitive damages and possibly have no cap at all.

Yet revenge and emotion always makes bad policy. The truth is that eliminating or raising the liability cap for oil companies will cost us thousands of jobs in the oil industry. Small oil companies and drillers will go out of business and insurance rates for companies will skyrocket faster than health care costs. US domestic oil and gas production would fall, maybe dramatically. It would add dollars to the cost of a gallon of gasoline and higher costs would prolong the recession. Higher energy costs would hurt small businesses across the country and would.....Read the entire article.


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