Next week marks the fifth anniversary of the Deepwater Horizon Incident. Most important to remember are the 11 lives lost in the accident and the many lives impacted along the Gulf Coast.
Concerns remain as reasonable parties disagree about the residual impacts and value of damages to the affected states, entities and individuals. All of this is well documented and will likely dominate news coverage in the coming days.
Mississippi and the other Gulf States were affected economically and environmentally to varying degrees. Even today, research and restoration activities remain underway. BP has paid $28 billion so far in response, restoration, research and claim payments for individuals, businesses and governmental entities. More will be paid as the recovery continues.
As with any disaster, money doesn’t heal all wounds. Money only helps move on. Based on my own experience in disaster response as Recovery Director under Governor Barbour, I can attest to the benefit of having BP as a response and recovery partner. From the start, BP went beyond the law’s requirements for funding response and damages.
In natural disasters such as floods, tornados, and hurricanes; recovery is typically restricted to a pre-determined set of tools, i.e. financial aid to repair buildings/cities and to help those with disrupted lives. As we learned with Katrina, the Great 2011 MS River Flood, and recent tornadoes, federal response programs often do not tailor well to the unique challenges of each event. Far too frequently, we haggled for months with FEMA or some other federal agency for rational solutions. When lives are disrupted, there is simply no time, nor patience for red tape.
With BP, justified needs were quickly met and even five years later BP continues to pay damages and fund projects to enhance Gulf resources. To me, the contrast to other disaster responses was stark. Any haggling was done in hours, not months. While it was not perfect, BP seemed a sincerely concerned partner in response who understood the magnitude of the impacts and stepped up.
Looking more broadly at the industry in the context of the spill, we should acknowledge important lessons learned, including technological advances and increased collaboration. Should another incident occur, response capabilities and equipment are staged and ready, making for a safer, stronger industry.
Also, as I suspected then, the Gulf oil production moratorium and permitting slowdown were senseless and exacerbated the negative local economic impacts in the aftermath of the incident. Even in challenging circumstances, the entire energy sector should not be shackled by far-reaching, knee-jerk policies hindering domestic investment and production. But that’s what happened.
Concurrently, one of the most significant economic events in American history was occurring. Luckily, the Obama Administration’s devastating decision to shut down all Gulf operations was masked in part by an onshore renaissance – commonly called the U.S. shale boom.
U.S. consumers want affordable energy for transportation, electricity and heating. The economy likes cheap gasoline. The sharp decline in gasoline prices recently is the result of more U.S. energy production. That is indisputable. Over the past few years, we have witnessed a world scale and remarkable example of basic economics – when supply goes up, price goes down.
A policy repertoire encouraging more investment and more supply is the right policy. Imagine the economy today if gasoline was $5/gallon instead of $2, or if natural gas was $10/mcf instead of $3. Might we still be in recession?
The point is U.S. energy production should be a source of pride, recognizing the inseparable linkage with the economy as a whole. Unfortunately, more often than not, energy is demonized. The professional critics offer no real solutions and have done a convincing job perpetuating myths and false expectations.
What is missing in these arguments is the surplus of benefits, far outweighing the risks and costs. The economic benefits are clear today in energy prices. Average wages in energy are 2-3 times higher than most. These are high-income, high-skilled positions supporting many families and coveted by many more. BP employs tens of thousands of Americans. Many energy companies employ tens of thousands in Mississippi. More of these jobs are needed to make our communities stronger.
Close to home, the Mississippi Gulf Coast is a real example, with the energy industry and neighboring delicate ecosystems driving the economy together along with the many other things required to accommodate people according to today’s high standard of life, all enabled by energy.
More energy projects and jobs locally for Mississippi mean stronger families and communities. Individuals looking to climb the economic ladder can make big jumps in this sector.
For Mississippi, continuing to be fair and reasonable towards this sector will invite more investment, more jobs and a higher quality of life. Some companies in the offshore energy business have taken notice to Mississippi’s acceptance, evidenced by recent investments at the Port of Gulfport and long-standing, sustained commitments in other communities.
Energy industry makes good community partners. Through the years, Mississippians along with local and state leaders have done well in projecting acceptance of this industry. Let’s continue to dwell on the real impact of this sector to our lives and the economy, looking for more opportunities ahead.
President, Mississippi Energy Institute