As other domestic supplies are exhausted and as oil prices increase, oil exploration and production will move toward the frontier, that is, toward more difficult and expensive places from which to extract hydrocarbons. (“Deepwater Horizon”, the name of the now sunken oil rig, conveys this very idea). In the Gulf of Mexico this means drilling in deeper water for oil that is still deeper below the surface of the seabed. But it also could mean drilling in harsh and remote arctic environments.

As is now apparent, wells in deeper water carry greater risk. I can picture a simple graph plotting the price of oil (a surrogate for scarcity) and potential risk to the environment (and to the lives of the men and women doing this difficult work). As the price goes up, the increased income supports drilling in more dangerous places. I expect this is not a purely linear relationship.

At some point the price and scarcity of oil drives exploration and drilling such that the risk curve steepens perhaps beyond what is manageable. Whether technology can reasonably lesson these risks is not clear.

This relationship extends to America’s overall dependence on oil. As so many others have written, oil dependence is a risk to our economy, our national security, our climate and, as has been demonstrated in the Gulf this last week, our environment and even our food supplies. While we are obviously not going to do without oil anytime soon, the steepening risk curve for oil and other fossil fuels should be telling us to move as quickly as possible toward more diversified and lower-carbon energy sources.

Some people may suggest that, after all, BP is paying to clean up the mess, so that helps to justify the risk. But if we don’t diversify our energy supplies, we will pay for a lot of other bad things like the costs of sea level rise, flooding, crop failures, wars to protect oil supplies, and constantly attempting to clean up an increasingly damaged environment. There are better things on which to spend our children’s money, so we should proceed with energy and climate legislation with even greater urgency in light of the Deepwater Horizon spill.

The tragic Deepwater Horizon accident and the ensuing oil spill that has become the new rallying cry for opponents of increased domestic energy production, will undoubtedly change the debate in Washington. But should it?

From what we can tell, this was an accident. While the finger pointing began before the families of the missing could mourn, here in Washington, some can’t resist but to turn one man’s tragedy into another’s political gain. The best and brightest minds in the world are working to contain the spill and clean-up the areas affected. We know this. The White House has said so, industry has said so, and most Americans would agree that everything is being done to get this under control and cleaned up. When that is accomplished, we’ll learn from it, and move on. That’s what America does. We address adversity head on, then move on.

Those responsible for this accident will foot the bill for the cleanup. And they should. Leaving not one penny to the taxpayer to pick up. Again, you would be hard pressed to find someone to dispute this or somehow argue that the government should expend taxpayer resources without full reimbursements.

What we also know is that politicians on Capitol Hill and political pundits who make of living off of talking about what they don’t know much about, are the least qualified to investigate and assign blame in this matter. As clearly stipulated by law, the United States Coast Guard and their able team of apolitical public servants will find out what occurred and issue a report. Let’s let them do their job.

Political witch hunting is a sport some in Washington have mastered. Unfortunately, when you add a tragic accident such as this on top of a hyper-partisan tone, politicos of all stripes don’t want to miss an opportunity to get on camera or mentioned in the newspaper. It’s a sad fact that plays out whenever something of this magnitude occurs.

Now let’s face a few other facts that some seem not willing, or wanting to address. Oil powers the global economy, and will continue to do so for decades to come. This in no way is a bad thing, as oil is a spectacular resource that we are blessed with. It enables us to live the lifestyle we live. It is the foundation for medical advancement and manufacturing. It allows us to move where we want, when we want. No other fuel can provide us with the versatility that oil does. And to use this accident as a medium to call for a new moratorium on domestic energy production will do more economic harm to our country than this spill could ever cause.

Let’s put the politics aside until this spill is contained and cleaned up. Let’s focus on the families and communities of those affected. And let’s let the experts investigate.

If there is one moratoria that should be adopted as this incident continues to play out, it’s on the sport of political witch hunting.

On April 29, the Obama administration formally approved the Cape Wind project, the United States’ first offshore wind farm. The next day, President Obama suspended authorization of new permits for offshore drilling, but only until the Department of the Interior completed a review of the Gulf of Mexico disaster. President Obama, however, appears unlikely to reverse his decision to expand offshore drilling. And so it goes -- a strong step forward for U.S. energy policy, followed by a disappointing retreat to a dirty, dangerous status quo. In the wake of this tragedy, President Obama needs to do three things: reverse his decision to expand offshore drilling, implement a moratorium on all new offshore drilling leases (including in Alaska), and finally, ban offshore drilling entirely.

The disaster in the Gulf of Mexico clearly demonstrates that offshore drilling is not an environmentally or economically viable solution to our energy crisis. Oil companies’ greed for untapped crude has outpaced the development of appropriate safety devices and protocols. Despite the fact that the margin of error for offshore drilling operations is infinitesimal, BP played down and ignored the risks and fought the implementation of new safety rules.

The government has been complicit in oil companies’ reckless disregard for safety. The Department of the Interior rubber stamped BP’s Gulf of Mexico drilling without an environmental impact study. Senators writing energy legislation have let themselves be swayed by lobbyists into protecting the interests of Big Oil instead of the people who elected them.

President Obama’s plan to expand offshore drilling would yield a year’s worth of oil. Is that enough to make up for a generation’s worth of destruction in the Gulf of Mexico or on the eastern seaboard? A fishing industry that may be destroyed entirely, along with the livelihoods of generations of fishermen? The permanent loss of coastal wetlands and the endangerment of native species from both the oil and the chemicals that are supposed to clean it up? Elevated cancer risks due to the volatile chemicals in the oil vapors that taint the New Orleans air?

These risks were worth it to BP because its executives think in terms of corporate balance sheets. But the government has a different purpose. President Obama shouldn’t forget that in his commencement address at the University of Michigan on Saturday, he repeated Teddy Roosevelt’s belief that the role of government is to protect the welfare of the people. It’s time for President Obama to show us that he has taken Teddy Roosevelt’s words to heart. Anything less than an end to offshore drilling is an endorsement of the oil industry’s priorities over the best interests of the American people.

The images of the Santa Barbara oil spill and the Cuyahoga River burning in 1969 inspired the first Earth Day and led to the passage of landmark legislation such as the Clean Air Act. If anything good is to come of this disaster, it’s that the images of a burning platform in the Gulf of Mexico, a dying sea turtle washed up on the Louisiana shore, and the crude-stained hulls of docked shrimp boats might bring about a green renaissance in the United States -- a wholehearted investment in and relentless pursuit of the innovations and solutions, such as electrifying and expanding rail and strengthening fuel economy standards, that will help us finally end our use of dirty oil.

When it comes to national oil drilling policy, the facts on the ground have changed. Instead of leaning on the myth that technology had made oil spill disasters obsolete, the Administration must now face what could become the largest oil spill disaster in our history. Clearly this is not the time to expand drilling as if nothing had changed. The threats to places like the Arctic coast, where there isn’t a fleet of Coast Guard vessels to respond to oil spills, are too great to open up more areas to offshore drilling.

Instead, we should be stepping back, calling a timeout on new offshore drilling, and building a new policy on a foundation that is not mired in an oil slick. Part of that new foundation must be a clean energy bill that moves away from, not towards, new drilling. Trying to clean up our fouled climate with new incentives for drilling is like trying to stop cancer while subsidizing smoking.

The future lies with solar panels shimmering on our rooftops, not oil shimmering in our coastal wetlands and arctic tundra – and as the cleanup continues in Louisiana, in Washington we should be discussing how move away from oil dependence, not how to increase it.

Faced with what threatens to become one of the greatest environmental disasters this country has ever seen, to demand anything less than a complete reevaluation by the administration of future offshore drilling plans would be to forfeit our rights as Americans and stakeholders in some of the nation’s most treasured lands.

In the days to come, we may be witness to the destruction of the some of the country’s most valuable coastal wildlife refuges. There are 39 national wildlife refuges along the coast of the Gulf of Mexico, many of which lie in the likely path of the ever-spreading oil slick. These places, such as Breton National Wildlife Refuge, were created to protect wildlife such as brown pelicans, black skimmers, royal and Caspian terns, nesting sea turtles and American alligators. Damage caused to their homes by the oil will leave these species incredibly vulnerable.

And as the spill increasingly threatens to enter the Gulf’s loop current, other vital areas stand in the oil’s potential path, including Sanibel Island, Everglades National Park, the Florida Keys and Biscayne National Park. Should the powerful current catch hold, the slick could even make its way up the Atlantic coast, staining the fabled sands of places like Miami Beach and Cape Hatteras.

How can we believe that drilling off treasured areas like the Chesapeake Bay or North Carolina’s Outer Banks will be safe from potentially catastrophic oil spills if protected areas in the Gulf cannot escape harm? These places are invaluable to the country, supporting lucrative fisheries and unique ecosystems. An expanded drilling plan that includes areas off the Atlantic coast jeopardizes their safety; even a single oil spill could compromise them for decades.

Even as the government scrambles to protect the Gulf of Mexico coastline from a rapidly approaching slick, Shell plans to move forward with exploratory drilling in the Arctic this summer. We’ve seen enough difficulties with cleaning up the mess in the Gulf, in warm water with relatively calm seas. Imagine the same scenario, but with freezing temperatures, fragmented sea ice and harrowing weather conditions. The fact is, as the events in the Gulf are demonstrating, technology to clean up a spill remains rudimentary and, in the Arctic, it doesn’t even exist. If a spill occurred in the Arctic on the magnitude we’re now seeing in the Gulf of Mexico, it would be nothing short of devastating for threatened polar bears and the rest of the region’s fragile ecosystem.

In the aftermath of the spill in the Gulf, President Obama took a step in the right direction by putting a temporary stop on opening new areas for drilling. He should go further though and reinstate the moratorium on all offshore drilling. This country needs to get serious about a clean energy future and move forward with safe, available renewable technology. We can’t afford to play Russian roulette with American lives, economic stability and our coastal marshes, critical wetlands and estuaries. We can’t afford to walk away from this tragedy having learned nothing.

The explosion and fire on the Deepwater Horizon was a tragic accident; our thoughts and prayers go out to the workers and their families. The best minds in industry and government are working to stop the spill, contain the oil and clean up the environment. The accident is unprecedented, and so, too, is our response. We recognize our commitment to our neighbors along the Gulf Coast: the people whose communities are at risk.

Although an accident like this hasn't occurred in the United States in more than 40 years, it is clear we need to find out what happened and quickly fix any problems. Our industry recognizes that obligation. Our goal is zero incidents, zero injuries and zero fatalities. We owe it to the nation that has put its trust in us to responsibly develop the oil and natural gas off our coasts.

The industry is expeditiously forming two task forces to review technologies and procedures to improve safety. They will continue the industry's long-standing efforts to improve offshore safety through technology, management practices, training, industry standards and regulatory oversight.

Developing our offshore oil and natural gas resources made sense many decades ago when the first well was drilled in the Gulf of Mexico. And, despite this accident, it still makes sense. Producing our own oil and natural gas, both onshore and offshore, means more U.S. jobs, greater energy security and many billions of dollars in revenue to government.

The nation needs to rely on all of its energy resources to keep its economy strong and growing. We'll consume 14 percent more energy in five years, according to estimates, and that means more energy of every type: fossil fuels and renewables. Oil and natural gas will continue to be an important part of that energy mix for decades to come. We need to rely on American sources of oil and natural gas, and that means developing our offshore resources, safely and responsibly.

The accident in the Gulf is a powerful call for our industry to redouble its commitment to safety and environmental stewardship. Improve we must and will, employing all of the innovation, planning and hard work that is necessary.

It is not easy to talk about the importance of a strong domestic oil industry in the wake of the tragic incident in the Gulf of Mexico. We do not yet have all the information about what caused the explosion, but we do know that it could have and should have been prevented.

In the months ahead, our first order of business must be to conduct a thorough investigation of the incident. We must find out exactly what happened and redouble efforts to fix it and ensure that this does not happen again.

Last month’s rig explosion occurred just as President Obama had announced plans to open more of the country to offshore drilling – a critical move designed to reduce our nation’s over-reliance on foreign oil. Now we must make the case for a strong domestic energy industry to a much more skeptical public. It is important that we address this challenge head on. In the same way that accidents like the one that occurred last month in the Gulf are not acceptable, our country’s current energy situation – in which we import well over half the oil we consume -- is simply untenable.

Consumer Energy Alliance, a broad alliance of both traditional and renewable sources of power, understands this better than most. We support a diverse energy sector in which our power is derived from oil and gas, solar and wind. We applauded last week when the Obama Administration approved the long-contested Cape Wind project, paving the way for the nation’s first large-scale offshore wind farm. We encourage consumers to do their part to conserve power, buy energy efficient appliances and re-insulate their homes. And yet we also know the numbers well enough to understand that even under the best case scenario, in which wind and solar and all the other renewable power sources meet their most optimistic growth projections, fossil fuels will be essential to everyday life for decades to come. Oil and gas are the backbone of our economy. They are the fuels that make every day commuting and long distance travel, business and commerce, manufacturing and education possible. Without oil and gas, the entire U.S. economy would come to a grinding halt.

For too long the United States has passively accepted that truth, but not really confronted it. We have simply looked the other way as we imported more and more of our oil. Today, we import much of our oil from unstable governments in far away places. This entails huge financial costs and a not insignificant global environmental footprint in transporting the oil. It has also left us at the whim of governments that do not always have the United States’ best interest in mind. The history of our dependence on foreign oil is a history of unpredictable supply and volatile prices, which has from time to time crippled fuel-intensive industries and average consumers alike. It is a history of political conflict. Our thirst for foreign oil has compromised both our economic and our national security. It cannot continue.

The difficult takeaway from last month’s accident in the Gulf, then, is that both oil rig safety and the national security that comes from a strong domestic oil sector are non-negotiable. We must commit to the highest standards of safety in oil production, complete with enforcement and accountability. And, in the interest of our economic and national security, we must commit to producing more of our vast reserves of domestic oil. We cannot just export another vital American industry because it faces challenge. And we cannot afford to let gasoline prices top $4.50 a gallon because foreign suppliers are calling the shots. In the coming weeks, as the debate over our domestic oil production reaches a fever pitch, it will be easy to take an anti-oil position and call for more limited production in the U.S. But we must commit to the harder work of building a reliable – and above all, safe – domestic industry.

To be clear, we cannot accept even the rare accident as an inevitable byproduct of oil production. This debate must not be cast in terms of safety versus steady supply. We must have both, and with hard work, we can.

As the Deepwater Horizon catastrophe spreads by the minute, and BP desperately tries anything it can to tame the underwater gusher that it’s drilling projecthas become, one thing is overwhelmingly clear:

The intellectual foundation of the off-shore drilling enterprise – that oil companies knew how to handle ever deeper drilling “horizons” – is false. BP doesn’t know what it is doing – and neither do any of the other oil companies.

Look at the knowns:

1) Explosions happen on offshore oil rigs – not often, but a serious mishap every few years.

2) Such explosions release a massive gusher of oil into the ocean – unless the well is shut down by its Blow-Out Preventer.

3) Blow-Out Preventer valves have failed – most recently in the Australian Timor Sea spill, but earlier in the Gulf of Mexico at Ixtoc I, the largest oil disaster in North America. Indeed, in the late 1990’s the Minerals Management Serviced of the Department of the Interior found 117 BOP failures in only two years.

4) Norway and Brazil require a second back up system, an acoustical trigger, to allow the Blow Out Preventer to be shut even if the main systems fail. The US does not require such a back-up.

5) Shell oil routinely installs an acoustical back up – BP does not, because at $500,000, it is “too expensive.”

6) Rigs like Deepwater Horizon cost billions of dollars.

7) Our techniques for dealing with oil spills turn out to be almost useless, as they have in every major oil disaster in history – once you dump millions of gallons of oil in the ocean, you really can’t do much to stop the damage. Prevention, not rapid response, is the key here.

Look at the known unknowns:

1) No one knows precisely why Deepwater Horizon exploded.

2) No one knows why the Blow Out Preventer failed to operate. Was the equipment defective? Was it damaged in the original explosion? Or did the system that is supposed to signal it to shut down fail?

3) No one actually knows if the acoustical back up system, if it had been installed, would have worked under these conditions.

4) Indeed, no one really knows anything about how oil spill prevention and management equipment works at these depths and under these pressures, because very few wells have been drilled under these conditions – there is computer modeling, but models are not reality.

And of course we don’t know about the unknown unknowns – factors that we may not even be looking at that influence when and how off-shore oil rigs explode.

And the industry, after every such disaster, promises us that this can’t happen again, or at least can’t happen at whatever project is under discussion.

There is am amazing document Shell Oil used to justify its proposed drilling in Arctic Alaskan waters, after the Timor Sea disaster. http://www-static.shell.com/static/usa/downloads/about_shell/strategy/major_projects/alaska/australian_timor_blowout_myth_buster_final2.pdf

First Shell argues that US rules – tougher than those in Australia – guarantee that a major disaster cannot happen:

“ prevention measures ensure that no single incident leads to the worst case blowout scenario.”

Then Shell claims that if it needed to drill a relief well to cut off an underwater gusher, it could “begin” to do so “in days.” As we are learning from Deepwater Horizon, it will take weeks after BP begins, and BP is not beginning in anything like the “days” Shell promised.

Perhaps the most bizarre sentence in the Shell report is this one:

“The well that blew out was not the well that the rig was drilling. Because it was a production well and cased (steel pipe within the hole) it could not collapse on itself and naturally stop the flow, as would be the case in an exploration well.”

So Shell is arguing that in the Arctic it is going to drill exploratory wells first, and that the Timor Sea disaster happened only after oil companies starting producing oil. So did Santa Barbara, Ixtec I and Deepwater Horizon – so apparently we don’t need to worry about looking for oil, but if we find it, that’s when the trouble begins. (I am shocked, simply shocked. If there is no oil, there is no risk of an oil spill. Yes, I imagine that is true.)

Let’s learn the right lesson. Oil and water don’t mix. A major explosion on land is a tragedy, but not a region wide catastrophe. Oddly enough, Senator Lindsay Graham, one of the more thoughtful off shore drilling advocates, seems very tone deaf. Graham is arguing that after the Challenger disaster America went back into space, so after Deepwater Horizon we should keep opening up new area to oil drilling.

The analogy is simply the wrong one. Imagine that the Challenger, in addition to causing the tragic deaths of astronauts, had put at riskthe economic base of a significant part of the United States. Suppose thousands of businesses, and hundreds of thousands of workers, had faced the loss of their livelihoods. Would we have kept sending Space Shuttle launches from Cape Canaveral?

I don’t think so. It’s time to start phasing our off-shore oil production now, as the first step getting America genuinely independent of oil.

“React but don’t overreact” should be the rule that applies here. Unfortunately, when we experience a tragedy (and this certainly is one), the tendency of politicians is to overreact. Their approach too often is the equivalent of proceeding with the hanging and then holding the trial. Already, the House Energy and Commerce Committee is jumping into the fray, attempting to pre-empt the Executive Branch which has prime responsibility.

So far, the Administration has acted more or less responsibly, although comments that BP wasn’t doing enough border on absurd. The company knows that this accident is going to cost it an enormous amount of money and tarnish its reputation. Anything less than an all-out response would make a bad situation far worse. Until proven otherwise, BP should be given the benefit of the doubt.

Inspecting all drilling rigs to make sure that they have the proper blowout prevention systems and are operational is an appropriate step as is suspending new drilling projects until a determination can be made of what caused a systems failure on the BP platform and what additional preventive measures can be taken. Over the past few years in the wake of our financial crisis, the term “black swan” has become a mainstay of our vocabulary. Up until now, it has been applied to incidents on Wall Street. Now, it looks as if its headed toward the Gulf.

Unfortunately, the drum beat to re-impose a moratorium is already being heard.

Offshore exploration and production is a safe activity. Over the past 41 years there have only been two major offshore accidents, Santa Barbara in 1969 and the Valdez ship incident in 1989. Our industry has safely drilled over 30,000 wells in the Gulf without incident. While the immediate damage from oil spills is significant, long term damage is not. The ecology recovers, and the oil breaks down. Re-imposing a moratorium on offshore drilling would make no more sense than banning modern automobiles, because of the recent problems Toyota encountered.

The US is going to be dependent on oil as the dominant source of our transportation fuels for decades to come. There is no practical alternative at this time, and turnover of the auto fleet cannot happen quickly. We have to make a choice of either producing that oil here or importing it from other nations. The more we produce domestically, the greater the domestic economic benefits and the greater the contribution to our economic security.

In the mean time, the right course of action is to focus on stopping the flow of oil from the underwater well, containing and cleaning up oil on the water and onshore, and determining the accident’s cause and why the rigs blowout prevention system failed.

Restoration will take time. But as we have seen from the past, there will be restoration and restitution for losses. Tragedies such as this usually lead to more knowledge and improvements in the systems and equipment used by industry. That will almost certainly be the case here. However, if punitive politics is given full and free reign corrective action will be more costly and produce negative unintended consequences.

With thousands of barrels of crude pouring into the sea, the downsides of offshore oil drilling have become all too clear. Before moving forward to open more of the Outer Continental Shelf to expanded drilling, the President and Congress should take a hard look at the costs and benefits of deciding that now is the time to drill.

The choice of whether or not to drill is not a one-time decision; if we decide not to drill today, that does not mean we can’t drill in the future. Only the choice to drill is irreversible—once we use up a non-renewable resource, that’s it. The reserves of oil and gas offshore can be thought of as an option, one that has considerable value that we need to take into account.

Think of a CEO who has stock options. Cashing in on an option for a company about to go into the tank is a bad idea. Likewise, when the U.S. government opens up drilling areas, we may be clumsily hitting the sell button before our assets mature. Waiting for a better price or new, safer drilling technologies, could be the right move to make. Failing to take into account option value potentially wastes hundreds of billions of dollars.

To avoid the unnecessary loss, we recommend the Department of Interior update the overly simplistic formulas it uses, and include option values to calculate the most lucrative path forward.

Economists have recognized for decades that when decisions are irreversible (like removing oil and gas from below the ocean floor) and conditions are uncertain, (like the price of oil which fluctuates from $50 to $140 per barrel and back down again within 8 months), an option value model is needed. In the financial context, experts have developed methods to put a value of waiting to exercise options to increase their personal wealth, and these methods can be applied in the offshore drilling context to increase our nation’s wealth.

It bears mentioning that beyond being financially beneficial to include option values in their assessments, Department of Interior’s Minerals Management Service is under a statutory duty to account for all the economic value of its leasing program. By leaving out the value of waiting to sell when the price is right, they are running afoul of the law in addition to making a bad deal.

The massive, continuing oil spill in the Gulf of Mexico should remind us that the development and use of virtually all forms of energy entails significant risks – and sound risk management requires measures to reduce those risks. Accidents happen; but given the devastating damage from this instance, yes, Washington should suspend new deep water drilling in places that are especially environmentally sensitive, at least until we have in hand much better ways to contain the destruction from such accidents. Since we all have stakes in both preserving the environment and securing domestic supplies of energy, the government should support and assist the industry in developing faster and more effective responses. The incident isn’t likely to affect the current debate over climate legislation, even as it makes a powerful, implicit case for a comprehensive climate program by reminding us of how high the costs of securing carbon-intensive forms of energy can be. But until the controversy over the accident subsides, or scientists and engineers come up better ways to deal with the next one, recent talk of peeling off many of the energy provisions from the comprehensive climate proposals almost certainly will subside. In the end, that’s probably good news for climate advocates, since many of those provisions are sweeteners that could prove necessary to enact a serious climate program.

I wonder if Senator Kerry wants to stand up with the oil megalith British Petroleum (BP) now and tout his climate bill as was the original game-plan last month. BP had been a purported supporter of the bill and for no surprise: Kerry-Lieberman-Graham waives the Clean Air Act, sets a weak scientific cap with offset loopholes, and gives massive subsidies to the very fossil fuel industries that have built us the current global warming fire. When will we ever learn? There is no such thing as oil drilling without disastrous spills. Never has been. Never will be. The president’s pandering to the Palin crowd was bad politics and bad policy, made worse by cynically tying it to the Senate climate negotiations. This tragic and historic oil spill is cruel irony for President Obama and the senior Senator from Massachusetts. (We’ll talk about the comfortable corporate lunacy of how Interior Secretary Salazar was going to honor BP before the massive oil spill occurred in a later blog).

Where does this leave us? First, BP and the slow administrative response have given the Gulf of Mexico a death kiss that won’t be cleaned up for years; it is a total ecological and economic disaster for the region. Second, with help from Governor Brewer of Arizona who put immigration reform back on the map, the oil spill has killed the Kerry-Lieberman-Graham bill as we know it. The only hope Obama and Kerry have to demonstrate their leadership is to focus on truly clean energy, stop the budgetary give-aways, and build upon regulatory programs that have been proven to work. Will the last two Democratic candidates for President learn from their mistakes and correct course? That is the central question.

As the conservative English political philosopher Edmund Burke observed: “Ambition can creep as well as soar” and “Bad laws are the worst sort of tyranny.” We don’t need glitz and short-term political opportunism. We need a determined, honest and arduous decade-long American team effort to fundamentally change the way we create and use energy. We could even create many jobs and have some fun in the process. That’s exciting irony.

The news of the Gulf oil spill are developing in front of our horrified eyes. The event is quickly becoming one of the worst environmental catastrophes on record. The BP facility has been leaking and will continue to leak millions of gallons of oil into the Gulf since it exploded on April 20, and could cause serious damage to coastal regions of Louisiana. As a result, President Obama may have to reconsider his proposal to expand drilling in the Eastern Gulf of Mexico and along much of the Atlantic Coast, as does the draft climate and energy bill developed by Senators John Kerry, D-Mass., Lindsey Graham, R-S.C., and Joe Lieberman, I/D-Conn. This sobering situation could have a major effect on the administration’s plans to expand offshore drilling.

As in the case of nuclear energy or coal extraction from deep mines, off - shore drilling by its own nature involves potentially catastrophic risks, namely small probability events with enormous consequences. As with nuclear energy, the upside is relatively small: nuclear fuel is very limited so nuclear power cannot replace fossil fuels, and off - shore drilling similarly has a limited impact on the nation's consumption of oil. So the upside is limited. The downside, however, is enormous. We are seeing right now what an off - shore drilling catastrophe can imply to our nation, costing lives, asset losses in coastal areas, business interruption, massive damage to fishing, to unique environmental assets and an untold number of species. Another event of this nature is catastrophic climate change, a risk that the Pentagon has recently identified as one of the worst threats to national security. Are we sure these catastrophic risks will happen? No, we are not, and the probabilities are small. But this is also the case in the burning of one's home, an event that has a small probability yet is so devastating that most people do insure against it. One insures against catastrophic events whenever possible and reasonable.

Reasonable insurance is available in this case. It involves avoiding off - shore drilling and using other energy sources that do not involve catastrophic risks. To think properly about the problem, one has to focus on the worst that can happen, as well as on the upside. The upside, as already mentioned, is limited. And we can see what is the worst with off - shore drilling - it is now in front of our eyes. Small upside, large downside. The reality is that we do have choices. For example, developing wind and solar energy instead of off - shore oil is a form of insurance policy. Solar and wind involve no catastrophic risks, and the value of the 'insurance' that they provide cannot be overestimated. Wind energy is limited in supply but concentrated solar power (CSP) is a secure source of energy and it is so abundant that it can easily replace fossil fuels (which nuclear energy cannot do, since nuclear fuel is scarce) and is almost competitive in cost with fossil fuels. All of this CSP can do without catastrophic political risks such as interrupted oil supplies, without the costs of lives lost in mining accidents or off - shore oil spills, and without potentially catastrophic climate change. The small additional cost of CSP while it is being commercially developed will dissapear as the technologies go through their "learning by doing" cost drops. In any case, the insurance factor that CSP provides over off - shore oil is worth the small additional cost. It pays to be prudent: better safe than sorry.

As in the case of the financial catastrophe that grips our nation and the world economy since 2008, off - shore drilling involve catastrophic risks that are perhaps one in fifty or a hundred year events and seem unlikely to happen - until they happen. Now they are happening.

Our tendency to ignore infrequent risks because of their small probability has to be change. This tendency is based on existing theories of risk management - introduced by John Von Neumann after WWII - they weigh the loss by its probability and therefore ignore rare events with devastating consequences. We need to follow a different approach - one that I am proposing in theoretical as well as empirical terms, including practical methodological approaches I am developing for the US Air Force that can have a positive bearing on national security (see also attachment).

It is human nature to ignore risks that are infrequent, and such insensitivity is built into our current approaches to risk management. But denial does not work and increases the losses after the fact. Catastrophic risks must be faced and measured properly, they must be adequetly managed and mitigated. The small probability of their occurence should not blind us about the enormous consequences at stake. My suggestion on how to do this is practical and it also involves changing the foundations of statistics, providing a rigorous, systematic and practical way to measure, anticipate and mitigate catastrophic risks that considers the worst consequences along with the averages. It is a matter of common sense that can save many lives, avoid damage to national security, help secure critical supplies of energy for our nation while avoiding technologies - like off - shore drilling - that seem productive until one takes into consideration the catastrophes that they can unleash, and the attendant enormous losses.