Besides the current bombardment of news surrounding the solution to the Greek debt crisis, the EU also unveiled its plans to further regulate offshore oil and gas drilling companies. Hoping to avoid another potential BP oil spill , the EU plans to increase legislation regarding pollution costs—and the industry is not responding favorably, since many oil companies are arguing that further legislation is unnecessary, since they have already taken sufficient preventative measures.
However, the counterargument to this is that this legislation would act as a sort of insurance, since the cost of the legislation only represents a small fraction of the potential costs associated with a new oil spill. The proposed EU law plans to “enforce a regime of independent checks. Companies would have to draw up detailed safety reports and emergency response plans.” It would also “expand the reach of that legislation from 12 nautical miles offshore (22 kilometers) to 200 nautical miles (370 kilometers).”
So while these demands do not appear to be too exacting considering the huge potential consequences at stake, companies still refuse to take on these responsibilities—and the recent rebound of oil companies in the market is a perfect explanation. Just 2 days ago, BP announced its intent to refocus on its financial performance, preparing to increase dividends and buy back shares in order to restore its investor confidence. In a way, it seems the oil spill was just a minor bump in their company—a profit loss, which they are seeking to regain as quickly as possible. And while it is understandable that many of these top oil firms’ primary intent is profit maximization, at what point does corporate responsibility stay in—and not just enter—the picture?
By: Nona Makaveeva