We are at day 60 of the oil spill in the Gulf Coast and this week, more than any other so far, the government showed that it was taking a more active role in managing the crisis. Tuesday night, President Obama directed some tough words at BP (Stock Quote: BP) in his Oval Office address and laid out plans to establish a commission for rebuilding the Gulf before meeting with the company’s executives the following day. And yesterday, BP’s CEO, Tony Hayward, testified before Congress and was ultimately grilled by representatives.
While pundits will undoubtedly spend the next few months debating what the government’s role should have been in preventing this crisis and the role they should play moving forward, we thought it would be worthwhile to re-examine the role that consumers could play in the future. In particular, would Americans be willing to spend more money on gas if it meant preventing future oil spills?
Shortly after the Exxon Valdez oil spill in 1989, the worst in this country’s history prior to the spill in the Gulf, researchers polled Americans and asked how much they would be willing to spend to prevent another oil spill crisis. At the time, there was widespread outrage about the spill and much anger directed towards Exxon just as there is today with BP. Yet the answer, according to the study, was that despite this outrage, the average American was only willing to pay about $31 per household to prevent another spill. That number was not about gas in particular, but the total amount that consumers would be willing to take out of their wallets.
In the time since the Exxon Valdez crisis, oil spills have remained commonplace. According to LiveScience, there were more than 250,000 oil spills in U.S. waters between 1971 and 2000. And each year, drilling for oil seems to become more risky. This current oil spill is essentially the result of two factors. First, as President Obama noted in his speech from the Oval Office, “we’re running out of places to drill on land and in shallow water,” which is forcing oil companies like BP to drill in deeper and more dangerous locations. And the second factor, is that BP cut corners and had a terrible safety record.
It’s easy to criticize BP for all the flaws they exhibited as a company, but are Americans willing to sacrifice deepwater drilling in order to limit the likelihood of another oil spill?
Last month, Sen. Bernie Sanders (D – Vt.) proposed a bill that would permanently ban offshore drilling in the U.S. Sanders claims that the bill, which also includes new fuel efficiency standards, would actually cause the price of gas to decrease by $1.43 a gallon, but many are skeptical that this could be the case.
According to a 2008 article in Time Magazine, in the long run, a ban on offshore drilling would make gas cost an extra 3 cents a gallon. That may not be an earth shattering number, but if we consider the fact that drilling for oil on land is also risky for the environment then the idea of preventing drilling in “dangerous places” becomes more difficult, and arguably, more expensive for the consumer.
So we asked our readers if they would accept paying $5 a gallon for gas in order to stop companies like BP from drilling in locations that could have a serious impact on the environment? And if not, would they even be willing to pay 20 cents more? For several of our readers, the answer to both was, surprisingly, yes. “If we want to keep using oil, we need to do so as responsibly as possible,” wrote Andi Haynes. “If that means it costs more to produce it then so be it.”
Similarly, Chrystal Simmons told us that she would pay more for gas from any company that was “socially responsible” and engaged in safer drilling. “I pay more for organic food because it’s often local and I know there are long-term benefits. I buy handmade items as much as possible for the same reason,” she wrote. “This too would be an investment that I feel is worthwhile.”
Yet, the most common response from readers was a simple “No.” As Leah Lockhart put it, “The $3.00 we pay now is ridiculous.” Many understandably feel that they are already on a tight budget, enduring tough economic times. But the general consensus from readers so far has been a bit more complex. The belief held by many seems to be that drilling for oil is inherently dangerous, wherever the practice takes place and regardless of how much we pay for it. So why would it be worthwhile to pay more?
Some experts argue that there is a large benefit to paying more for gas. As Stephen Reiss wrote in Wired a few years ago, if gas cost $5 a gallon, consumers would undoubtedly be frustrated, but it would also serve as an incentive to pursue other fuel alternatives. If proof is needed to support this claim, there’s the fact that for years, a tank of gas in Europe has cost twice as much as it does here, primarily because we tax it less. While this may sound like a sweet deal for us, the result is that Europeans never really had the big car phase that the U.S. did, where we bought vehicles with poor fuel-economy like the Hummer. One research firm declared that there is a “growing fuel-efficient car gap” between the U.S. and Europe.
However, many readers steadfastly defend our oil use and see the problem as less about where we drill for oil than the competence of the companies drilling for it. “I can't help it if BP doesn't know how to do business safely,” Lynn wrote. “Who let them drill in the Gulf anyway? There has been drilling down there for over forty years.”
Add your voice to the mix. Do you feel that drilling should be restricted even if it leads to higher gas prices, or do you think things are fine the way they are now? And has the current oil crisis affected your views on this issue? Let us know in the comments!
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