Vol. 114 - No. 101 - May 27, 2010

BIMCO: Watchkeeper: Investigation Before Legislation

"To legislate in haste is to repent at leisure". This is a pretty good piece of advice for those who seek to govern us. Invariably, laws which are rushed onto statute books as a reaction to sudden public concerns produce unintended consequences and often make matters a good deal worse.

There is understandable anger in the US about the inability of the best brains in the offshore oil world to come up with a workable solution to stop the emission of oil from the wreckage left when the rig Deepwater Horizon exploded more than a month ago. Perhaps the public, and the politicians who reflect their frustrations, find difficulty in comprehending the difficulties of working a mile under the sea in terrifying pressures and complete darkness. Perhaps the fact that the leaking pipes have been shown on network television, with live footage relayed from the various submersibles, makes the problem seem easier than it really is. "There’s the leak", says the member of public "why can’t it be stopped up?"

"The oil company needs to be urged to do more!" say the politicians, effectively "politicizing" what is a wholly technical problem and the specters of legislation and litigation loom larger. So perhaps nobody should be even remotely surprised that there are proposals in the US which would remove any limitations of liability for oil clean-up costs. It is only to be expected, as the first substantial oil from the Gulf blowout washes ashore in Louisiana.

Talk to any member of the public in the US, as the whole issue of blame reverberates around the media, and nobody would dissent from legislation that would place the whole financial responsibility for an oil spill upon those who spilt it. Does not the polluter pay?

It is easy to say, and possibly easy to enact, but the unintended consequences of such a hasty change would be extraordinary and almost all negative. Maybe this is what the environmental campaigners really want, but such legislation would spell the end of virtually all offshore drilling around the coasts of the United States. Moreover, because the proposals fail to differentiate between offshore operations and the transport of oil by ships, the carriage of oil cargoes into US ports would become very problematical.

For a start, the price of insurance would become prohibitive and without insurance, voyages into US waters would effectively be impossible. Foreign shipping companies would be forced to turn away US business, and the costs of shipping oil into the country, which uses more energy than any other, would simply soar.

It is to be hoped that such a probable chain of events would be made clear to anyone contemplating any support for this proposed legislation. Wiser counsels would hopefully prevail. Nevertheless, there must be considerable concern at the way in which a single serious accident seems so often to provoke wide-ranging implications. Large numbers of people recall the aftermath of the Exxon Valdez, in which a navigational mistake led to a complete redesign of the world tanker fleet. We all must hope that the extraordinary "first-aid" measures on the floor of the Mexican Gulf are crowned with success and before anyone even considered changes to the law, the circumstances of the accident, and the lessons to be learned from it, are digested.