Would You Pay to Prevent Oil Spills?

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?

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