BP’s Deepwater Horizon Disaster: The False Hope of Nationalization

ThinkProgress reports, and Crooks & Liars confirms, that the U.S. Code contains clear authorization for President Obama to nationalize, commandeer, or otherwise direct, at BP’s expense, the cleanup of the disastrous Gulf Coast oil spill, citing 33 U.S.C. § 1321(c), the relevant subsections of which follow:

  • (A) If a discharge, or a substantial threat of a discharge, of oil or a hazardous substance from a vessel, offshore facility, or onshore facility is of such a size or character as to be a substantial threat to the public health or welfare of the United States (including but not limited to fish, shellfish, wildlife, other natural resources, and the public and private beaches and shorelines of the United States), the President shall direct all Federal, State, and private actions to remove the discharge or to mitigate or prevent the threat of the discharge.
  • (B) In carrying out this paragraph, the President may, without regard to any other provision of law governing contracting procedures or employment of personnel by the Federal Government
    • (i) remove or arrange for the removal of the discharge, or mitigate or prevent the substantial threat of the discharge; and
    • (ii) remove and, if necessary, destroy a vessel discharging, or threatening to discharge, by whatever means are available.

Emphasis theirs.

However, it’s not clear that any of those provisions authorize the drastic remedies of commandeering BP, or buying the company, and “send[ing] the bill to its foreign parent company.” Nationalization of a private company, even one we don’t like, is a drastic remedy disfavored at law unless a clear statement exists authorizing just that. We went through this type of scenario in the depths of the Korean War, when President Truman hoped to nationalize the nation’s steel mills, to avoid a strike that could’ve crippled the war effort. In Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579 (1952), the Supreme Court held that the President could not exercise that authority in the face of explicit Congressional disapproval.

Here, although Congress hasn’t outright expressed a policy against nationalization of a major polluter, the powers granted are limited. The statute states that the President “shall” (must) “direct” (coordinate) “Federal, State, and private actions,” and towards that end may “remove and, if necessary, destroy a vessel discharging, or threatening to discharge [oil], by whatever means are available.” The first clause is precatory, assigning the President a duty, but granting no independent authority to fulfill it; the sections that follow it authorize limited means towards that end. Neither is adequate to the task posed.

The statute purports to distinguish between a “vessel” (“every description of watercraft or other artificial contrivance used, or capable of being used, as a means of transportation on water other than a public vessel,” 33 U.S.C. § 1321(a)(3)), an “offshore facility” (essentially something afloat that’s not a “vessel,” 33 U.S.C. § 1321(a)(11)), and an “owner” or “operator” over the same. Plenary authority is given only over a “vessel” — not an “offshore facility,” like Deepwater Horizon, and not an “owner,” like BP or its affiliates. The statute is therefore a near-miss, whose scope suggests that Congress considered but rejected further grants of authority. By failing to mention nationalization, then, the statute effectively bans it.

There may be room for debate over this conclusion. But to avoid protracted litigation, the issue can’t be a “close call.” It has to be a slam dunk, which it’s not. Nationalization seems attractive, especially because of its punitive quality. By nationalizing BP, we treat it as a threat, and a failure. Both may be true, but penalizing BP can’t be our prime motivation. At least, not yet.

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