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« Questions for Jon Hardister | Main | Ineluctable modality »

Jun 16, 2010

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JC

Can we get a BP oil spill category, please?

Ed Cone

JC, I've asked our most capable staffer to tag all appropriate posts "Broken Pipe," should be done soon.

justcorbly

In the WSJ piece, Epstein argues that a"tough liability system does more than provide compensation for serious harms after the fact. It also sorts out the wheat from the chaff—so that in this case companies with weak safety profiles don't get within a mile of an oil derrick."

The need for "tough" uncapped liability seem obvious. But, the ability to buy the outrageously expensive insurance needed to underwrite that risk is not something that will be found only in corporations with strong "safety profiles".

Liability costs, including the precedent set by Obama's $20 billion fund, can modify corporate behavior in a positive direction. Regulation is also needed to assertively modify behavior. The people, in their sovereignity, have a right to demand that their sovereign resources and their health and their livelihoods not be protected only by the unseen and ofen unreliable hand of the market.

The law should mandate that no offshore wells, at any depth, can operate unless they utilize technology that has been demonstrated to completely contain a spill within, say, 24 hours. Failure to do so would result in a recurring daily fine of, say, $100 million. (You have to play with real money if you want to change the behavior of the Exxon's of the world.) I believe some nations, including Canada, require that wells are built with relief wells in place. So should we.

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