White House Energy Advisor: Small Oil Firms Depend on Government Handouts to Survive

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Saturday, 03 July 2010 19:51

That is not the way the Wall Street Journal reported it, but this in fact what it effectively quoted White House Energy Advisor Carol Browner as saying. The piece is headlined: "Smaller Oil Firms Might Exit Gulf."

The item at issue is the $75 million liability cap that the government currently imposes for spills from offshore drilling. This cap effectively means that taxpayers are paying for the insurance for oil companies that drill offshore. The article reports that the smaller oil companies are complaining that they would not be able to compete if they had to pay for their own insurance.

It would have been helpful if the article had made this point more clear to readers. While there are arguments that the government should pay for items like education for children or fire protection, it is not clear what the argument is that government should pay for insurance for oil companies that cannot compete effectively in a free market.