The U.S. Environmental Protection Agency (EPA) has announced that fossil fuel, chemical, and electric power companies will not be required to insure themselves against major spills and other toxic disasters.
The agency concluded that “existing environmental regulations and modern industry practices” are enough to offset the risks of manufacturing and refining petroleum and coal products, generating or distributing electric power, or making toxic chemicals. The obvious retort is that they weren’t enough to prevent the Kingston coal ash spill, the Port Neches chemical plant explosion, or any of the countless other environmental disasters that these industries have unleashed in recent years.
Another important issue is that companies often cannot or do not pay for the full damages that their environmental disasters inflict on communities. According to a ProPublica report, there were 140 companies responsible for chemical spills during Hurricane Katrina in 2005. As of 2019, not a single one had been cited or fined for its spill. Indeed, government audits have found that polluters aren’t paying for billions of dollars in cleanup costs.
Many companies that are fined or found liable for damages in civil litigation become insolvent or seek to declare bankruptcy before mitigating the damage. When polluters walk away from their disasters, taxpayers are left holding the bag. The EPA’s Superfund program is an acknowledgement of this problem. Currently, the EPA has a list of more than 1,300 Superfund sites to be dealt with, many of them at high taxpayer expense. Every year, hundreds of millions of government dollars are spent cleaning up the messes of polluters.
Mandatory insurance would obviously help address this problem. In rejecting that solution, the Trump administration is ignoring both the recommendation of the Obama administration and common sense. The government doesn’t let you pull out of the driveway without sufficient insurance to compensate anyone you happen to smash into, despite there being traffic laws. The damage that an oil or chemical company can potentially inflict upon society is many orders of magnitude greater. It’s not too much to insist that these industries insure themselves too.
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