Toxic Gumbo

In the aftermath of Katrina, the contaminated floodwaters of New Orleans are a grim reminder that toxic chemicals are still ubiquitous in our allegedly “post-industrial” economy. In fact, the catastrophic and widespread release of hazardous substances—from oil refineries, chemical plants, pesticides and even household cleaning products—have turned much of the Gulf Coast into a toxic wasteland. And as our nation tallies up the health, economic and ecological costs of this tragedy, we are faced with two questions: Who will pay for the cleanup, and how can such disasters be prevented in the future?
...Sound public policy dictates that industries should be liable for the toxic contamination they create in the pursuit of profit. And it is hard to believe that the multibillion-dollar oil and chemical companies residing in Cancer Alley, along with their insurers, did not contemplate the risks their facilities and products would pose in a severe hurricane.
However, it is unlikely that American taxpayers will receive one dime of reimbursement from these powerful polluters. When Superfund became law in 1986, the oil and chemical industries persuaded Congress to include two liability loopholes. First, petroleum is exempted from the definition of hazardous waste. Second, “acts of God” constitute an affirmative defense for toxic spills. In exchange, the industry agreed to the imposition of “polluter pays” fees to provide a steady and reliable source of money to pay for toxic cleanups—especially in cases where liability could not be imposed.
Up front, this Faustian bargain with the likes of DuPont and Shell might appear as a reasonable and pragmatic calculation. In hindsight, the public was shortchanged by legislative sleight of hand: While the loopholes were drafted as permanent, the polluter pays provision required reauthorization by Congress.
And that’s where the chemical companies went to work—launching a multi-year PR campaign to smear Superfund and undercut support for polluter pays. In 1995, their efforts paid off; Congress failed to reauthorize the fees. As a result, the Superfund is now officially bankrupt. The Oil Spill Liability fund is expected to be bankrupt by 2009, although costs to clean Katrina oil spills may advance this date. And in case you hadn’t heard, Exxon/Mobil just reported record-breaking profits on the order of $8 billion earnings last quarter.