Will the Gulf Oil Spill Be This Generation's Three Mile Island?

As we once wrote, you can make the argument that the 1979 accident at the Three Mile Island nuclear-power plant — which came just 12 days after the release of the film The China Syndrome, a cautionary tale about a nuclear-plant meltdown — helped stop the U.S. nuclear-energy industry dead in its tracks. While other countries soldiered on — France, Japan, Switzerland and Sweden, to name just a few — the U.S. turned away from nuclear, in large part because of public and political fear generated by what turned out to be a relatively harmless accident. There were other barriers to nuclear, of course, including cost overruns and regulatory nightmares; but once the sentiment turned, those more substantial barriers became secondary.

Does anyone have the sense that the recent BP oil disaster in the Gulf of Mexico may come to be seen as a Three Mile Island moment, at least for the prospects of U.S. offshore drilling? President Obama has called the spill a “potentially unprecedented environmental disaster” — just weeks after he endorsed an increase in offshore drilling, to the deep chagrin of a broad swath of his supporters and environmentalists.

To be sure, there are key differences between the BP spill and TMI, the chief one being that our economy today is (still) very much dependent on oil, whereas our economy in 1979 was not very much dependent on nuclear power. Nor is it today, even though the U.S. does make more electricity from nuclear power than another other country in the world — although, when ranked by share of overall electricity, the U.S., with 20 percent coming from nuclear, is roughly in the middle.

That said, could the Gulf disaster be just the kind of tragic, visible, easy-to-comprehend event that crystallizes the already-growing rush to de-petroleum our economy? As with TMI, it won’t do much to change the facts on the ground about how energy is made. But as we’ve seen before, public sentiment can generate an awful lot of energy on its own, for better or worse.


Nosybear

Interesting question. I think it will become a Three-Mile Island incident for deregulation of corporations. Look at the news the past few months, Wall Street meltdowns, mine disasters, oil spills, the common thread either the industries were deregulated or they were able to thumb their noses at regulators. Government may become the answer again as the source of the problems in nearly every case is unregulated drive for maximum profit.

John S.

Let the man who said "Oil rigs today don't generally cause spills" go down there and clean it up.

joshua

One way or another, a TON of green energy upstarts just won second/third round funding from their venture capitalists.

Matt

Given that the extent of this disaster could range in scope from a merely awful environmental catastrophe to an event that has unprecedented and unimaginable economic and environmental consequences, I think it's way too early to start wondering how the public is going to interpret it. We still don't know how much oil is leaking, but so far every piece of new information has led officials to revise that estimate skyward. I don't think most people have wrapped their heads around just how bad this could be.

Erik Brynjolfsson

You write that "economy today is (still) very much dependent on oil". That may be true, but it does not follow that it is dependent on more offshore drilling.

I ran the numbers and even a huge (50%) increase in oil production from the Gulf of Mexico would lead to a tiny (1% or less) change in gasoline prices. The reason is that oil is traded on a world market, so more drilling would make a negligible dent in global supplies, especially when you consider that it would in part merely substitute for other supplies and much of the net increase would be consumed in other nations.

See http://www.economicsofinformation.com for details.

Mack

The big difference is that oil isn't scary the way nukes are. Oil is something we're intimately familiar with. Nukes represent an existential threat. Oil heats our homes and powers our cars. Radiation is the silent killer.

Not an entirely rational thought process, but then, we don't make most decisions rationally.

Rudiger in Jersey

Never make important policy decisions based on fear.
Ironically the most important person who most influenced the Nuclear Industry in America in the past 30 years is not a politician, technologist or engineer.

It is JANE FONDA. She had a critical role in an Oscar Nominated film called 'The China Syndrome.' Millions of Americans saw it and it influenced their opinions to this day. Its effect was magnified by the concurrence of Three Mile Island and Chernobyl Disasters. Note: no Americans were killed at 3 Mile Island or any other nuclear disaster in the past thirty years. But there have been American workers killed in wind turbine fatalities.

Does Jane Fonda know anything about nuclear energy? Probably no more than Leonardo DiCaprio or George Clooney. Yet she is our leader in Nuclear Policy despite having a patchy history of morality, intellect and patriotism.

As a Democracy, we risk being guided through herd mentality by a single incident and NOT SOUND POLICY JUDGEMENTS.

If she still looks good in a bikini, maybe Jane Fonda should be Secretary of Energy?

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srfinger

While this spill may not affect the true economics of oil production, it definitely cause us to update our prior.

Calculations change when you realize potentially catastrophic events could happen with much greater probability than you previously believe.

Deep water drilling is now not just limited by firms' abilities to find oil miles below the surface, but also by their abilities to control extraction miles below the surface. The relative importance about this second skill is much higher after we have updated our prior.

richard

interesting question.
i think the answer depends on various factors:
1. how big does the spill eventually get.
2. the actual and perceived damages from the spill.
3. the public's perception of how BP (here representing "BIG OIL") responds as the crisis develops.

by the way, the chances of the safeguards in place all failing and allowing this to happen were really really remote. I have been in the Oil & Gas Upstream Exploration & Development industry since 1989 and have never seen anything like this. hopefully cool heads will prevail in future legislative changes to the industry by noting the solid track record of such a hazardous industry.

froggyprager

The difference as I see it is that few American's really care about where there gas comes from, they just want it cheap and there is not an alternative to gas. This will be a big deal and hopefully more will be done to prevent similar catastrophes in the future but the Three Mile Island event helped to end the nuclear power plant industry in this country in favor of coal and natural gas. No one will suggest stopping all domestic oil and gas exploration and production. Ideally we would look at the environmental impacts of the whole gas production system, not only off-shore drilling, but I doubt we will do so. Also, I doubt that this event will make anyone push harder to conserve gas and drive less, etc. even thought reduced demand would lead to reduced need for drilling and less accidents and less environmental damage.

Gary

I think this is going to be very different from the Valdez accident if/when the spill gets to shore. When Alabama, Mississippi, Louisiana and parts of Florida lose their gulf shoreline, (right as summer is starting) a lot of people are going to feel it hit home. Its going to be much more real than the Alaska accident.

Its interesting that the people who will feel it most were the "drill baby drill" crowd, who will now blame it on Obama, rather than themselves.

Robert McGregor

Richard says he has "been in the Oil & Gas Industry since 1989" and has never seen anything like this happen. Well you have to assess those odds: Once in 21 years may not be so bad, but then it may be unacceptable. If one plane around the world crashes in 21 years, we may feel that's an okay risk. If one nuclear bomb blows up and destroys a city--we probably wouldn't like that risk. The damage of this oil spill may be in between.

It reminds me of the Space Shuttle's record. I think there were two "everyone-dies" disasters in 40 flights. A Total Disaster out of every 20 flights is not such good odds. The "incidence statistics" are different, but one Huge, environment-destroying oil spill every 21 years may not be very good odds either.

Mike B

If the oil doesn't come ashore in huge quantities and provide video bites of ruined beaches and dying animals don't expect the "outrage" to last more than a few months. The LA coastline is already fairly remote and already vanishing due to other reasons. Also there are few cute and cuddly creatures that people would get all worked up over so I don't see this oil spill being a real game changer.

Honestly I am most upset about the 200k gallons of oil being wasted each day :-(

Tony in NOLA

One thing you learn by studying history is that the future is unpredictable, so stop what purpose is served by speculating? There are so few parallels between the two situations that it makes no sense to think the outcomes will be the same. When I was a kid we all thought the future would be nuclear powered, so look how far those predictions got us.
Two rules to live by: don't try to predict the future of such complex issues, and don't drill oil wells in water that is deeper than you can reach if something goes wrong.

Ben

@richard:

The odds may be very low, but the damages are very high, so you have to multiply the odds by the damages to look at the expected damages. If the odds were low and there were no real damages, we might all agree that it is a fine thing. When the odds are low and the damages are such that entire industries might shut down regionally, well, it's less likely to be acceptable. Do you think that the coastal region would be happy if you told them there were only a 1 in 30 years chance that their seafood/fishing and tourism industries would be shut down that they'd think 1/30 was sufficiently low? Not likely.

kevin

Calculated Risk = Actual Threat * Outrage

Didn't freakonomics cover this in book 1?

The threat here is still unknown - and is likely not going to involve human death. The outrage is likely low compared to "OMG nukular meltdown."

So, no, I don't think this will be on the level of TMI.

J

"The big difference is that oil isn't scary the way nukes are"

Also, unlike nukes, wiithout oil the world as we know it shuts down. It's in everything, not just energy.

"Huge, environment-destroying oil spill"

That's the key here. The spill is going to have to destroy environment that the public cares about, and while media may be able to get some good pictures, I'll believe the public is going to be upset about an oil slick in the LA swamp when I see it. This won't be the big visible disaster TMI or even the Exxon Valdez was unless the oil makes landfall in Florida.

Rudiger in Jersey

#12 Robert MacGreagor

"It reminds me of the Space Shuttle's record. I think there were two "everyone-dies" disasters in 40 flights. A Total Disaster out of every 20 flights is not such good odds. "

Major errors of fact. The Space Shuttle Program has 131 flight missions. Yes there were two crashes with fatalities. But you do not help your cause by EXAGGERATING Facts. Two Crashes in 131 flights is less than 2% failure rate. Pretty good Las Vegas odds.

Al V.

The Exxon Valdez spill in Alaska did not appear to have a significant long-term effect on oil demand or production, so I doubt BP's Gulf problem will affect demand in the long run, if the impact can be confined. Of course, while the Exxon Valdez was highly publicized, it didn't have a direct effect on most U.S. citizens. If seafood supplies and vacation beaches are affected by the BP spill, therecould be a much different outcome for BP and Gulf oil drilling.

AM in NOLA

@ Robert #12:
The Space Shuttle has had two accidents in 130+ flights, not 40. So it's 98-99% reliable, which is good but not great.

I think the difference with oil vs nuclear is that there was a larger fear factor working against nukes, as well as a replacement already in use (coal, which, I don't see people rallying to halt coal production)

Halting the production of oil is impossible, especially given our addiction to it. As a Louisiana resident, I know people who work in the oil fields and I know others who work in the oyster beds. I feel that we need much more stringent safety measures (realistic worst-case scenario plans, more stringent equipment testing and inspections, etc), which is especially important as we pioneer deep well drilling.