Seizing BP Assets: Compounding One Disaster with Another

The April 20 explosion and subsequent round-the-clock oil spill from a BP-operated deepwater drilling rig in the Gulf of Mexico 40 miles off the Louisiana coast has generated justifiable anger across the nation. It's also generated calls for strict sanctions against BP, the most drastic of which is confiscation of all company assets. The front line of this campaign is an ad hoc organization calling itself "Seize BP," which already has organized dozens of rallies across the country. Its mission mirrors its name: persuade the Obama administration to seize assets of the British-based oil company and use the proceeds for compensating victims and family members for loss of life, health, and property. Were it only that simple. Surely, heartbreaking accounts of the ecology of the Gulf of Mexico coastal region damaged by oil toxicity and oxygen depletion make such impulses understandable. At least 100 million gallons of crude oil have spewed from the broken well and onto beachfront and other properties. Yet such a move in the long run would set a precedent whose effect would be to chase away private-sector oil drilling from that region. And given the experiences of nationalized oil industries elsewhere, it is not likely to prevent further spills. Market logic, unfortunately, rarely appeals to the impatient. Apparently, it doesn't appeal to the Obama administration. President Barack Obama, under enormous public pressure to "do something," has already embarked on a course of de facto nationalization. In a private June 16 White House meeting, Obama coaxed BP chief executive Tony Hayward into "donating" $20 billion to a new escrow account earmarked for payment of damage claims — the president called it "a good start."...more