The Enclosure of the Gulf of Mexico

The noxious gusher of oil flowing from one mile beneath the Gulf of Mexico is an unprecedented environmental disaster, no doubt about it. But will we learn the right lessons from it?

There are any number of narratives that are starting to take root, and all of them are true as far as they go: the incompetent and corrupt regulators at the Interior Department, the incompetence and arrogance of British Petroleum; the lackadaisical response by President Obama weeks after the spill began. The implication is that a different regulator, CEO or President would have done things differently.

Perhaps. But the real problem here is structural: There is no adequate governance structure for the commoners to protect their shared resource, the Gulf of Mexico, and all that depends upon it. These sorts of "accidents" are almost becoming routine: the Massey Energy coal mine disaster, the Toyota "stuck accelerator" safety hazard, the Wall Street abuses of derivative financial instruments.

These are just the "mega-scandals." There are all sorts of smaller, regional ones that occur every day: the mountaintop removal coal mining in the Appalachias; the over-fishing of coastal waters by industrial trawlers; the appropriation of precious groundwater by multinational companies; the genetic engineering of crops and pesticides that is spurring the evolution of "superweeds" and pesticide-resistant pests.

The point is that the corporate institution is systematically taking resources that belong to all of us; privatizing the market gains and socializing the risks; and then dumping the wastes back into the commons, letting the government (i.e., us taxpayers) and hapless local residents pay the costs. Government, regulators and politicians essentially sanction this behavior, stepping in only when the results becomes too visible or egregious.

If there is a silver lining to the BP spill, it is that it has laid bare the systemic failures of the regulatory system and its political sponsors, Congress and the President. It is a conspiracy against the commoners, with everyone in power getting a piece of the action. We commoners get our commons ruined, and are handed the bill for the cleanup.

BP is the top dog, arrogating to itself the lion’s share of the wealth from the deepwater oil reserves and displacing the risks onto the rest of us. The oil industry took pains to secure a statutory limit on its liability from offshore oil spills to a paltry $75 million, after which we taxpayers pick up the tab. Efforts to raise that liability cap to $10 billion or eliminate it altogether are in the works, but there is sure to be fierce opposition, and not just from Republicans.

Oil is not the only thing bubbling forth from the vasty deep. All sorts of subterranean secrets are also gushing out into the stark light of day. Deepwater Horizon was first reported to be leaking only 5,000 barrels a day, according to BP. Now it is estimated by government scientists to be leaking 1 million to 2.1 million barrels a day — the equivalent of an Exxon Valdez spill every five days. Since April 20, when the spill began, nearly 100 million barrels of oil have spewed into the Gulf.

It is now quite clear that the Obama administration, in the 18 months since it took office, did little to clean house at the Minerals Management Service of the Interior Department. The MMS under the Bush II administration was notoriously corrupt. It didn’t just enter into cozy sweetheart deals with the oil industry on leasing and revenue collection, its regulators were literally sharing drugs and sleeping with each other. It wasn’t just a few bad apples. The problems are structural. The MMS is charged with both collecting revenues from oil leases as well as regulating their safety: not exactly an aligning set of interests.

The MMS remained a captive of the oil industry, with Obama continuing the Bush I and II tradition. Obama stalwarts, such as Energy Secretary Steven Chu, have their own close ties to BP. When at UC Berkeley, Chu was instrumental in raising funds to start the Energy Biosciences Institute, an academic research project. BP kicked in $500 million. Critics at the timecharged that the project compromised UC Berkeley’s academic independence. It’s safe to say that Chu’s chummy relationship with BP now makes him a less than vigorous overseer of BP’s attempts to stop the gusher and clean up the Gulf.

It took weeks for Obama to get exercised about the Deepwater Horizon spill. Instead of knocking heads and taking charge, he delegated supervision of the BP spill to industry-friendly regulators like Chu and Interior Secretary Salazar, with predictable results. BP essentially ran the show, claiming superior knowledge of deep-water rigs. But of course, BP also wanted to keep the full truth under wraps, lest it damage the company’s balance sheet and reputation even further. Washington happily acquiesced. It not only let BP manage things, it colluded in the damage control by helping impose a press lockdown on coverage of the spill, often with the cooperation of local and state officials and friendly Republicans.

Just as Obama played softball with Wall Street on financial reform and Big Pharma and hospitals on health care reform, so on the BP spill Obama has kept a low profile. When public anger and disgust reached a fever pitch, the President knew he had to put on a show, and so he trotted out some get-tough sneers worthy of W. himself, saying that he was going to look for "some ass to kick." This prompted John Stewart to host a hilarious segment, "AssQuest," mocking Obama’s stagy anger. (Remember when populist rage against Wall Street also reached a crescendo? The President similarly ratcheted up his faux-anger with out-of-character denunciations of "Wall Street fat cats." As if to say to the public, "There! Satisfied?")

There are chapters that have yet to be written, of course. The compensation that BP will pay to fishermen, coastal businesses and individuals. The lawsuits that will be filed and tried. The valiant cleanup attempts that will take years. The ruined lives, the lost livelihoods, the decimated species.

It is of little comfort to learn from the Associated Press that "more than half of the federal judges in districts where the bulk of Gulf oil spill-related lawsuits are pending have financial connections to the oil and gas industry." And remember the Exxon Valdez spill? The U.S. Supreme Court obligingly reduced the punitive damages of $5 billion to a paltry $507 million. The courts, which have formally recognized the personhood of corporations — the better to corrupt legislators and insulate themselves from responsibility — are remarkably hostile to ordinary people.

The distressing news is that even with a disaster of this magnitude, with clear cause-and-effect and culpability, reforms will be half-hearted and symbolic, not structural and effective. Replace the regulator. Pay off victims who are visible, powerful or noisy. Spin the press. Minimize the ecological damage. Take about hope and resilience in the face of tragedy. And so on.

But how about a more serious change in the structural governance of the oil industry? Some commentators have suggested nationalization of offshore oil drilling. Others have suggested steep carbon taxes to subsidize the emergence of renewable energy alternatives. What about full transparency of oil cleanup operations, along with posting every step of MMS regulation and oversight on the Web in a timely fashion?

Perhaps the advisory panels at the MMS should include the Gulf fishing and tourist industries, and local environmental organizations. Come to think of it, why not an environmentalist instead of an industry buddy at the helm of the MMS and Interior Department? The fact that such ideas sound "radical" shows how truly compromised the regulatory system truly is. The only respectable, "reasonable" regulators are industry stooges — and look what they deliver for us.

The Gulf already had a "dead zone" — the result of tons of fertilizer mixed with soil that washed down the Mississippi into the Gulf of Mexico. Now that zone is going to expand and get even deader. A really, really dead zone. This is the logical endpoint of enclosure: the destruction of the value of the commons, after it has been used up and abused. It’s a predictable outcome because the commoners themselves have few influential, meaningful roles that they may play in the governance of the Gulf, except through their governmental proxies….and we know what happened to them.

As the financial crisis raged in late 2008 and early 2009, White House Chief of Staff Rahm Emmanuel famously crowed, "A crisis is a terrible thing to waste," as if to promise sweeping change. We now see that such calls were themselves a subterfuge, a classic diversion and distraction.

The real point of this administration has been to tamp down popular rage, allow complexities to overwhelm simple truths, divert and diffuse blame, cultivate a veneer of bipartisanship, and restore a crude semblance of normality without showing leadership in securing structural reforms. Is it any wonder that progressives who envisioned Obama as a new FDR are now rueful, disillusioned and angry?

It’s many weeks later, and million barrels of oil are still gushing into the Gulf .