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Comment by crisnoble | Hacker News Reader

>[Taylor Energy Company] claim that only one drop of oil per minute is being released from a small area covered in mud, amounting to less than three gallons each day.

.... 14 years later ...

Somewhere between 1,000 and 71,000 gallons have been leaking per day.

> Taylor Energy has disputed every outside assessment of oil flowing from the site.

Welp hopefully now that there is proof, they will get to pay for their externalities.

From http://www.taylorenergy.com/

>Taylor Energy Company LLC sold its oil and gas assets in 2008 and ceased all drilling and production operations. Taylor Energy exists today solely to respond to the MC-20 incident.

Okay nevermind. Socialize the losses, concentrate the profits, the American dream.

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So the company basically went out of business. Sounds about right to me. What more could you possibly ask for?

It doesn't really seem fair that a company can return profits to its shareholders for many years while being environmentally negligent, then once it actually has to respond to environmental issues, it can just goes out of business. One, those profits are basically ill-gotten gains, and two, you are encouraging this kind of behavior by letting the people who received the profits keep them.

I'm not sure how to implement this, especially in a way that's fair, but if the company is unable to cover the environmental damage itself I think those profits out to be paying for the damage before taxpayers.

The usual solution in other industries is to require all companies in the industry to pay a percentage of revenues into a common insurance fund. Then there would be a pool of money to pay for cleanup even after bankruptcy.

Insurance is a pretty dirty word right now. Especially when they are for-profit insurance companies.

US healthcare is a great example of insurance companies causing so much complexity that people willingly chose death over going bankrupt.

If the (sunk-cost) common insurance pool pays for it, where's the incentive not to pollute? We're right back where we started with a tragedy of the commons.

For the proper incentive structure, you have to treat the money the way we treat all proceeds of crime - it's forfeit. If you buy a stolen bike, you don't get to keep it when the police come knocking. Ignorance of the crime doesn't earn you the item - it simply means you don't go to jail.

Indeed doesn't seem fair, but that's the point for a Limited Liability Company. Who is in their right mind grant mining rights to a company that can't cover the consequences?

No one does. The mining rights are stolen by corrupt governments and then given away to cronies.

The solution is clear: prison. The CEO knew that the company caused huge environmental damage, but lied about it. I don't think it could be simpler than that.

Of course the CEO won't go to prison, as he has too much power for that.

The limited liability business concept is extremely damaging because it removes accountability for externalities and bad behavior. I myself and an owner of a limited liability company so ending this Would not be to my benefit. However the benefit has society would be massive. Shareholders and owners and directors and managers should all be held personally financially liable and there should not be a time limit to this liability. The government should be able to claw back all of the profits that Taylor energy generated.

Well, it's impossible (and unfair) to claw back revenues from shareholders at this point, but we could require active oil/gas drillers to put up gigantic deposits, held in escrow, which would be confiscated if they're unable to pay for environmental cleanup of spills they caused. If they can't afford the deposit, they can return capital to shareholders and cease operations. Of course, this will never happen "because jobs."

I've been thinking the same for companies operating nuclear power plants, they should be forced to do this, provision funds according to the scale of losses in case of accident, or factor these potential losses in the price.

Otherwise it's completely unfair to other technologies that don't yield similar environmental and social impact when they fail catastrophically.

I see your point but I think that might do more harm than good. When nuclear goes wrong it goes really wrong, but it's still way better than petroleum or coal. Discouraging nuclear is the last thing we need right now when oil companies have so little accountability for carbon emissions.

I'd like some "really wrong" examples that aren't 60 years old today.

Even Fukushima was quite clean and it was a total compounded disaster... Three Miles Island is ancient already and limited in impact.

Anything else?

I can look and find examples of improper dust and ash disposal, mining accidents, incorrect filter operations daily, on the other hand. Sometimes fatalities too, every some years.

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