Reasonable people understand that oil is a product that’s necessary to the quality of life we enjoy today. We all benefit from oil development because we’re all using oil every day of our lives.
One day some other energy source, or combination of energy sources, may replace oil. That day is not today, or any of the immediate tomorrows.
In the meantime it behooves us to support oil development. We want it done as safely and responsibly as possible, sure, but we need the oil if we want to enjoy the quality of life we’ve become accustomed to.
Unreasonable political zealots, on the other hand, think we should leave the oil in the ground. And every time there is an accident in oil development – a spill or something similar – the usual political cranks start beating the drums to have the oil industry regulated out of business.
That was certainly the case five years ago when a pipeline operated by Tesoro (known as Andeavor these days) spilled 840,000 gallons of oil in a wheat field near Tioga. The leak, caused by a lightning strike, was bad. There’s no two ways about it. And, as you might expect, the situation quickly became propaganda for a certain faction of political activist.
These activists argued that the Tesoro pipeline was a product of North Dakota’s light regulatory touch when it comes to oil and gas development.
But today news is that the cleanup of the Tesoro spill is largely over. The farmer who owns the wheat field plans to plant a cover crop this year, with the expectation that a cash crop will go next year.
It turns out that the oil spill wasn’t a apocalypse. It’s been cleaned up through a very lengthy and very expensive process, but the point is that it has been cleaned up.
Some, such as this letter to the Fargo Forum today, argue that in North Dakota oil companies aren’t fined enough for spills. But is our goal to make big headlines with large fines? Or is our goal to get the spills cleaned up?
Tesoro was fined $454,000 by the State of North Dakota for the spill, but they also spent $93 million on the clean up (they originally estimated that it might cost about $4 million). If our state’s regulators and policymakers can get that sort of an investment in cleaning up a spill, who cares what the fine amount is?
Those who argue that a big fine acts as a deterrent aren’t quite making sense when you consider that companies like Tesoro have plenty of incentive to avoid spills when the consequences is the cost of clean up, the cost of lost product, and a huge amount of negative publicity.
Some, for explicitly political reasons, want the oil and gas industry to be treated as the enemy. The State of North Dakota doesn’t do that. Rather, they treat the oil and gas industry as a partner. One expected to clean up after itself when a mess is made.
That’s the right approach.