Disasters

People watch a television broadcasting Japan's Emperor Akihito's televised address to the nation at an electronics retail store in Tokyo. (Issei Kato/Courtesy Reuters) [Click here for information on how to locate friends and family in Japan, and here for how you can help] Day five of the struggle to cope with the devastation in Japan brings increasing fears, but it has revealed yet again the herculean effort currently underway across Japanese society to address the complex and urgent needs of the nation.    Japan’s Emperor Akihito, in a recorded message, asked the Japanese people not to give up hope and to reach out to each other in this time of great crisis. He urged the earliest relief be delivered to those in northeast Tohoku region who are still suffering after the earthquake and tsunami, and asked those at the damaged Fukushima Daiichi plant to do all that they could to avoid a worsening of the situation. As NHK continued its reporting on the fire damage at the Fukushima Daiichi plant, new information came in from the Public Safety Commission that the radiation levels had dropped. For the first time all day it seemed possible to try again to get water to the reactors. The minute-by-minute coverage continued, and a letter delivered to NHK by children of a worker at the plant was read aloud. The letter asked the country to understand that their father was prepared to fight until the end, and urged authorities to find a way bring him and others at the plant food and water. This brings home the human cost that attends the heroic effort of those first responders on site who are working to bring the reactors under control.   But the frustrations elsewhere are growing. Supplies are not getting to the half million or more in Tohoku. In Tokyo and beyond, trucks are being loaded with food and water. Ten hours on the road to the closest supply areas are only the beginning of the journey. Roads into the coastal towns and evacuation sites remain blocked. The biggest challenge for those in these areas is gasoline. Even if roads are open, people have no means of getting anywhere. Many are walking the newly bulldozed roads to try to find their missing families.     According to NHK, nine refineries are located in this Tohoku region alone, but six of them are closed. Production of 4.5 million liters has dwindled to 3.1 million liters. Supply depots for bringing oil and gasoline to the north are similarly damaged. Japan’s oil companies are moving gasoline by ship to Niigata and Akita on the Sea of Japan coast, but roads east are similarly difficult to pass. With the electricity out in the affected areas, gasoline stands are also unable to get up and running.     But some signs of movement are evident. The Tohoku expressway, originally reserved for rescue and relief forces, is now open for supply efforts, and supply trucks are beginning to move north in increasing numbers. Some of the ports in Miyagi and Iwate have been cleared of debris, and will offer new ways in for supply efforts. As of the end of the day, roads to the badly hit towns of Hizentakada, Hisaichi and Kassenuma are reportedly almost open.  Once supplies reach communities in the north, the challenge will be to distribute to those not only in evacuation centers but to those without power, heat or information still living in their own homes. Convenience stores and supermarkets that remain are empty. Food producers have prepared meals, but are waiting to get permission to fly them in. Lawson, one of Japan’s biggest convenience store, has 40,000 ready-made meals to send. Air transport will be the key to getting these basic needs met quickly.    Today, 4,340 Japanese are confirmed dead, and 9,083 are still missing. But the focus of national energy at the moment is concentrated on those who have survived.    The crisis caused by Japan’s three disasters—earthquake, tsunami and nuclear—continues, and the nation’s basic needs remain acute—and growing.

Despite turbulence in financial markets, Japan’s multiple disasters will likely not have a major global economic impact, and reconstruction will provide a boost to the Japanese economy in the long term, says CFR’s Sebastian Mallaby.

While many questions remain about the problems at Fukushima nuclear plant, comparisons with the 1986 Chernobyl incident suggest Japan’s government is taking the right steps to mitigate radiation damage, says CFR’s Laurie Garrett.

  The Fukushima Daiichi nuclear plant, 240 km (150 miles) north of Tokyo, is seen in this satellite image taken on November 21, 2004. (Ho New/Courtesy Reuters)   China’s nuclear industry’s free ride may soon be coming to an end. While nuclear power represents a mere fraction of China’s overall energy use—just over one percent—China plans to add another ten nuclear power projects to the books as part of the 12th Five Year Plan. By 2020, China wants to have a  nuclear power capacity of 86 GW–a dramatic increase considering China’s current capacity of 10.8 GW (To put that in perspective, in 2008, Japan’s nuclear capacity was 48 GW while the United States’ was 101 GW). China also has big plans to export its nuclear technology in the coming years. Despite such ambitious plans for an often contentious technology, there is virtually no public debate in China on the topic of nuclear power. In a country where environmental activists protest everything from dams to incinerators to the Maglev Train, the issues of nuclear safety and contamination are completely off the radar. Greenpeace Beijing, which should be a natural repository for anti-nuclear activity in China, has no campaign or study underway on the issue. Perhaps they want to avoid the fate of the two known activists—uranium mine worker Sun Xiaodi and his daughter Sun Haiyan—who were sentenced to jail in 2009 for inciting the public with libelous slogans of “nuclear pollution” and “human rights violations.” While censoring environmental debate and activism on nuclear power may have made life easy for the Chinese government up until now, the devastating nuclear accident in Japan has necessitated a new, serious dialogue on nuclear safety—at least among government officials. Certainly, as Evan Osnos writes, at least the official in charge of nuclear safety for China has warned in the past of too rapid an expansion in China’s nuclear industry, fearing that the quality of construction and safety will be compromised. But Japan’s nuclear crisis has afforded China a more concentrated time of introspection and debate. As James Areddy from the Wall Street Journal notes, some officials, such as Ministry of Environment Protection Vice Minister Zhang Lijun, have taken a relatively sanguine view: “Some lessons we learn from Japan will be considered in the making of China’s nuclear power plans, but China will not change its determination and plan for developing nuclear power.” Others, such as Liu Tienan, a deputy director of the National Development and Reform Commission, express greater concern, urging authorities to “seriously analyze and summarize lessons learned from Japan’s nuclear accident to ensure the safe development of the nuclear power industry…” A few experts, however, use the moment for real teaching. Wen Hongjun, the original director of the Chinese Nuclear Energy Studies Committee, in an article, “Analyzing Nuclear Pollution: The Unseen Devil” speaks to all the Chinese who live or will live in the shadow of a nuclear power reactor, when he warns in detail of the dangers of radioactive fallout. Even in the midst of the nuclear crisis unfolding next door, broader public debate is largely absent. While there is wide-ranging discourse on Japan’s devastating situation writ large, there is no such discourse on the implications for China and its nuclear industry. The Chinese website Baidu Zhidao has nothing on its website discussing China’s own nuclear power sites, suggesting that independent online public discussions on the topic are being censored. Yet the mere fact that officials are being forced to commit to the safety of China’s nuclear power industry in the media offers its own form of transparency and public accountability. It may not be everything, but it is something.

People on their wheelchairs rest at an evacuation centre in Kesennuma, Miyagi Prefecture in northern Japan, after an earthquake and tsunami struck the area, March 15, 2011. (Courtesy Reuters/Kyodo) [Click here for information on how to locate friends and family in Japan, and here for how you can help] At ten thirty in the night of March 15, another earthquake—magnitude 6.4—rocked the Kanto plain. Watching NHK to catch up on the latest news, I watched the incredibly composed news team at Newswatch 9 begin to report on an aftershock along the northeastern coast—and warn residents of the potential for a tsunami. But then the studio began to rock, and they began to realize that they were in the midst of another earthquake, centered this time just south of Tokyo. Cameras revealed the powerful lateral swaying buildings of Yokohama, Shizuoka and Tokyo. Just another night in a country that is struggling to cope with a national emergency that includes unimaginable devastation in the northeastern coast, a nuclear emergency at the tsunami-ravaged Fukushima Daiichi plant, and an economy that is reeling. As information about explosions in the nuclear plant raised fears and anxiety, the Nikkei lost more than 1,000 points—a 10 percent loss in Japan’s assets. All day today the urgent need for assistance at evacuation shelters in the north was communicated to national TV viewers. Messages from those in shelters, over 80 percent of who are elderly, ask for water, food, blankets and medicine. Local officials urged the national government to step up their efforts as they worry about the evacuees’ failing health, and the potential for more serious outbreaks of disease. Meanwhile, Self Defense Force search and rescue teams, accompanied by local residents, continue their grim task of searching the rubble of communities devastated by the tsunami. The television coverage on Tuesday, day four, continued the telling of individual stories. The horror of the day continues to be recalled. Amidst the sadness of those who face mountains of debris in their search for family and friends, there are moments of relief as those stranded in buildings were rescued and given access to telephones to reach their family. In tsunami-stricken Iwate, today, there were signs of help arriving. A British search and rescue team with their dogs arrived to begin their work amidst the crumpled buildings and impenetrable piles of ruin left behind by the tsunami. A doctor began to talk to a group at an evacuation center. When he asks the elderly evacuees if anything is bothering them, many hesitate and then raise their hands: “we cannot sleep, we are so frightened.” The doctor reassures them that he has medicine that will help them. In a gymnasium-turned-shelter, middle and high school students put up a brightly colored, hand painted sign: “We have our lives—let’s try hard to be happy!” While everyone is safe, life in Tokyo is wearing. The rolling blackouts have created confusion. Traffic signals are not working; refrigeration is compromised. Consumers have cleared shelves of goods that can be sustained over time. Noodles, rice, and other basic foodstuffs are being stockpiled, creating difficulties for supermarket inventory. The transportation system has had to improvise, and many companies, including Mitsubishi Truck, Sony, and Rakuten, have told their employees to work from home rather than wait in line for hours to get on a train. The news broadcasters are now reporting minimal damage from the new quake. Power lines are down in some areas, but traffic continues along the major highways connecting Tokyo to the south and west as supplies continue to flow north. Meanwhile, the weather man reports snow and freezing rain in the stricken prefectures in Tohoku.

An extraordinary series of events has caused Japan’s nuclear crisis but it appears backup safety systems were flawed, says nuclear expert Charles Ferguson. He expects the disaster to slow some nuclear projects elsewhere but not cause a wholesale stoppage.

Japan needs assistance immediately for those stranded in the northeastern part of the country devastated by the earthquake and tsunami. Hundreds of thousands of Japanese tonight continue to be displaced, and in need of basic supplies such as water, food and blankets. Communities are devastated and a sustained humanitarian support effort will be required. While the nation’s military and civilian disaster relief teams are hard at work, supported by the U.S. and other national disaster relief teams, donations to experienced non-governmental disaster relief agencies can help mitigate the suffering. Agencies with strong organizational capacity in Japan are: American Red Cross International Red Cross Red Crescent Save the Children Mercycorps The Japanese Embassy in Washington, DC website carries a list of options for those seeking to donate to the relief effort as well. For U.S. citizens trying to locate family and friends in Japan, the U.S. Embassy in Tokyo has a dedicated page for the relief effort in Japan. Japan-America societies around the United States are also organizing donation efforts. A full list of these efforts can be found at the National Association of Japan-America Societies.

President of International Federation of Red Cross and Red Crescent Tadateru Konoe walks among rescue workers searching through rubble in residential area of tsunami-hit Otsuchi. (Damir Sagolj/Courtesy Reuters) The impact of Japan’s deadly earthquake and tsunami is now apparent. With search and rescue personnel now reaching some of the communities in the northeastern region of Tohoku, the devastation along the eastern coast is complete. Entire villages are in ruin, roads and bridges broken and impassible, and thousands remain stranded in isolated schools and buildings where they managed to retreat in the face of the tsunami. The human toll is tremendous. The confirmed death toll has reached 1,834, but over 15,000 remain unaccounted for three days after the Great Tohoku Earthquake. Over 450,000 have safely evacuated, but many are without water or food. Temperatures in the chilly northeast have dipped below freezing, and many are without heating or blankets. Telephone service is starting to be restored, but water and food are hard to come by. Japanese television on Monday captured heartbreaking stories of those who survived and the long lists being compiled by local shelters of those who are searching for separated family members.   Prime Minister Naoto Kan told the nation on Saturday that this was the worst crisis Japan has faced since the devastation of World War II, and asked every person in Japan to contribute to the effort to recover. The Japanese government has displayed remarkable calm in the face of this tremendous catastrophe, and from the beginning launched an all-out and comprehensive effort to organize the country in the face of catastrophe.    The search and rescue effort has been enhanced by additional Self Defense Force deployments. Over 100,000 have now been mobilized, as well as local fire and police units. Helicopters have been working non-stop to remove those stranded in the midst of this devastation. The U.S. military has added considerable airlift capability and is working to supply the Japanese military ships that have been deployed offshore. Additional emergency relief supplies have also been brought to Japan. The USAID Disaster Assistance and Response Team (DART)—including 150 personnel and 12 canines from urban search and rescue teams from Virginia and California—arrived in Japan on Sunday. As if this wasn’t enough, the Japanese government has been struggling to contain the damage incurred by the Fukushima Daiichi nuclear plant. For the first time, a state of nuclear emergency was declared, and residents were evacuated from nearby communities. The radius of evacuation was expanded on Saturday after a hydrogen explosion at Fukushima Daiichi plant’s Unit 1 reactor increased concern. Some of those evacuated revealed limited exposure to radiation. A second hydrogen explosion occurred on Monday at the Unit 3 reactor.    As of Monday, 91 countries have offered Japan assistance. The World Food Program and five other international organizations have begun to organize help as well. On Friday, President Barack Obama pledged full assistance and promised Japan that the United States would stand beside Japan through its reconstruction. U.S. Ambassador John Roos in Tokyo announced on Saturday details of Operation Tomodachi (“friend” in Japanese), including the deployment of the aircraft carrier USS Ronald Reagan as well as eight additional naval ships to waters off northeastern Japan. U.S. Forces Japan (USFJ) redeployed its military units stationed in Japan to regions where they could offer full assistance to Japan’s Self Defense Force. DART search and rescue teams will be based at Misawa Air Force Base. U.S. government nuclear experts are also working closely with the Japanese government. In the United States, fundraising has already begun. The American Red Cross, Save the Children, and Mercy Corps (working with Peace Winds Japan) have efforts with their counterparts in Japan. The Japanese Embassy in Washington carries a list of options for those seeking to donate to the relief effort. The National Japan America Society in Washington DC, as well as Japan-America Societies around the country, are organizing to help the disaster victims. Throughout the weekend, as the effort to organize relief gained momentum, the dignity and the calm of the Japanese people in the face of such devastation was on display across the board. Japan’s leaders, dressed in blue disaster relief uniforms, presented the scope of the disaster with clarity and calm, providing detailed descriptions of the complex stream of information becoming available from the stricken regions in the north as well as from the nuclear complex in Fukushima. Japanese television reporters supplied a comprehensive coverage on a similar range of information by providing nuclear physicists to carefully explain the details of the government’s announcements, following the growing number of displaced Japanese in the northeast, and streaming the names of those already confirmed dead.    In community after community, the Japanese people were articulate—if traumatized—about their needs and their experiences. In the face of this overwhelming shock and loss of life, the resilience and the strength of this fragile nation has been on constant display. Needless to say, the effort at reconstruction will be long, and hard. This morning the country began scheduled power cuts across much of Tokyo and its surrounding region in an effort to avoid a power failure. With many nuclear and conventional power plants offline, Japan has lost access to about 25 percent of its electricity. Transportation systems have been affected, and Tokyo commuters lined up in the hundreds at train and subway stations in an effort to make their way to work this morning. Yet, despite the shock and devastation, the Japanese people have gone on to focus on recovery—and they will need all the help we can offer.

Evacuees stand around Shinjuku Central Park in Tokyo Japan March 11, 2011. A massive 8.9 magnitude quake hit northeast Japan on Friday, causing many injuries, fires and a ten-metre (33-ft) tsunami along parts of the country's coastline. (Courtesy Reuters/Kyodo) Japan suffered a tremendous earthquake yesterday afternoon, and already we know that many have lost their lives. My thoughts and prayers are with all Japanese families as they seek to cope with yesterday’s devastating shock and loss. The Japanese government has mobilized the largest relief operation ever, with tens of thousands of Self Defense Force personnel, as well as coast guard, fire and police units, deployed to the northern part of Japan. The U.S. government, too, has pledged immediate and extensive assistance, and U.S. naval ships are already on their way with helicopters and other emergency relief needs. On a more personal note, I wanted to share some preliminary information available for those of you—like me—who are attempting to find family members, friends and colleagues. There is virtually no telephone communication at this moment. The government is asking Japanese not to use the phone lines so that they may be dedicated to the rescue efforts in the Tohoko region. Instead, the internet and the cell phone companies, are making their services available to individuals trying to find people. Google has created a multi-language person finder site. The cell phone companies are also operating message boards—with English options available also—and those within the disaster area can post messages on this site. The areas where this services is available are Aomori, Miyagi, Yamagata and Fukushima prefectures—thanks to Risa Kamio of the Japan-America Society of Washington, DC for providing the links to each company below. For those of us who are looking to hear from friends in Tokyo, we will need to be patient still. Cell Phone Message Boards: For the docomo users: http://dengon.docomo.ne.jp/top.cgi For the KDDI (Ezweb) users: http://dengon.ezweb.ne.jp/ For the Softbank users: http://dengon.softbank.ne.jp/ For the Wilcom users: http://dengon.willcom-inc.com/dengon/Top.do Another way to find out: http://dengon.emnet.ne.jp/

The algae-filled Chaohu Lake is seen in Hefei, Anhui province, on August 3, 2010. (Stringer/Courtesy Reuters) While China’s economy continues to grab headlines, a new report, "Choke Point: China," suggests  that we ought to be spending a bit more time on an often-ignored economic fundamental: water.   China’s environment has been a long-standing passion of mine, both as a research focus and as an area to promote U.S.-China cooperation. While China’s poor air quality has received a lot of attention in the West—we can all see the pollution in Beijing or read about the pollution clouds that travel from China across the Pacific to the United States—the issue of greatest concern for China is access to clean water. We know a fair amount about China’s water challenge already. Both municipal and industrial demand for water continues to grow, as both the economy and middle class expand, and levels of pollution throughout many of China’s major river systems and largest lakes make the water unusable even for agriculture or industry (forget about fishing or drinking). China is sinking as underground aquifers are drawn down, with the result that buildings are tilting, highways cracking, and people relocating as their coastal villages sink beneath sea level. Water is a source of societal concern: the public health costs from polluted water are mounting, and water pollution remains a source of significant social unrest in rural China. Civil society in China, in the form of environmental NGOs, has made enforcement of water pollution control regulations one of their top priorities. However, there is always more to learn, and the new web-based media report, "Choke Point: China—Confronting Water Scarcity and Energy Demand in the World’s Largest Country," produced by the NGO Circle of Blue, takes a fresh look at this issue. It leads with good news: Some cities, such as Beijing, for example, are beginning to recycle wastewater for use in toilets or other grey-water applications. Yet, the bulk of the initial report—and this is the first in a series of twelve postings yet to come—underscores the challenge the country faces, particularly from the nexus of energy and water. Almost 20% of China’s water consumption goes to the mining, processing, and consumption of coal. Coal consumption has tripled since 2000, and Chinese analysts project another 30% increase by 2020. To meet the water demand will require ever more costly, large-scale, and technologically complex river diversion projects—a plan of action that many view as untenable over the long term. "Choke Point: China" doesn’t yet explore the broader ramifications of such growth, such as discussions in Beijing of diverting water from the Yarlung Tsangpo (which flows into the Brahmaputra), which would likely lead to serious political tensions with India or the implications of growing water scarcity for global agricultural commodities. However, I would bet that these issues and many others will be discussed in the rest of the twelve-part series. I, for one, will read each eagerly to see what the water future for China and the rest of the region might hold.

Can Haiti rebuild better, with improved stability and prosperity? Four top experts stress different approaches to enable Haitians to rebuild and sustain their economy and public sector.

Cliff Krauss’s otherwise excellent article in the New York Times yesterday on the safety risks from Cuban oil drilling in the Gulf of Mexico had one big and important omission: it said nothing about the quality of the Cuban regulator. That quality, of course, will have big implications for the odds of the sort of oil spill that the article talks about. In a trip to Cuba this past July, I had a chance to meet with Cuban regulators and understand a bit about how they’re thinking. The Cuban regulators seem to be on firm methodological ground. They proudly pointed out that they were using the sort of “safety case” approach that was conspicuously absent in U.S. regulation before the Macondo (BP) disaster. Indeed, in that sense, they’re ahead of the United States. The top regulators also appeared to be technically solid. This is, of course, a difficult thing to judge from limited interaction, but I saw no reason to doubt their skill. What worries me much more is the people I didn’t see -- that is, the lower level people. I have two concerns. First, effectively overseeing operations is not just a matter of studying textbooks – it’s a matter of experience. And, despite the fact that Cuba has sent many of its people overseas, such experience (particularly in the Cuban context) is inevitably limited. Second, given the pathetic salaries that Cuban workers receive, the possibility of bribery (or something more subtle) by oil company officials is going to be ever-present. That may undermine whatever approach Cuba chooses. So what’s the United States to do? Senator Bill Nelson has one answer: change the maritime border so that Cuba can’t drill. Unless the United States wants to go to war, this isn’t going to happen. (To be completely clear: I think that unilaterally changing the border is a terrible idea.) The only option is to engage with Cuba as much as possible in an effort to better understand its approach, and, to the extent possible, to strengthen it.

Pakistan’s floods spell setbacks for the U.S. fight against extremism and its war effort in Afghanistan, says CFR’s Daniel Markey. He says beyond humanitarian aid relief, Washington must focus on boosting Pakistan’s economy through greater trade opportunities.

The international response to Pakistan’s flood disaster has been inadequate so far, says Richard Holbrooke, U.S. special representative to the country. He says Washington is contacting international governments and is sending more aid, including helicopters to assist in relief efforts.

The spill bill is in deep trouble in the Senate. Democrats want to eliminate the existing libability cap for offshore oil accidents. The Wall Street Journal summarized the Republican position yesterday: “The main effect, if it passed, would be to push the small- and mid-sized producers that account for most domestic drilling out of the Gulf, regardless of their safety records.” Jon Chait gave the basic Democratic response at The New Republic: “The pure free market position is that oil companies should be able to drill wherever they want as long as they’re responsible for their own externalities, like cleaning up the cost of oil they spill. The Journal’s position is that this is no fair -- not every oil company can afford to clean up the cost of their oil spills! So the government has to subsidize offshore drilling by promising to cover the cost of any cleanup beyond a given size. The justification for this corporate subsidy is that even oil firms with great safety records won’t be able to afford the insurance. But why not?....  And if insurance companies won’t cover that risk at a price small oil firms can afford, that means the risk is too high.” Chait goes on to add: “That is, if you think the market works. The Journal sees this as a market failure requiring government intervention.” I share in his enjoyment at watching the Journal editorial page twist itself into hypocritical knots. But alas, on this count, I think that they’re probably right. There are three potential market failures here. First, while there are public risks associated with offshore drilling, there are also public benefits. When a company extracts oil from the Gulf of Mexico, the government collects part of the rent in the form of royalties, which benefits the American people as a whole. Leaving that oil in the ground is leaving money on the table. That doesn’t mean that all oil that’s out there should be extracted – but it does mean that the market won’t recognize its entire value by itself. Second, U.S. production displaces production elsewhere in the world. The United States produced 1.6 million barrels per day (mb/d) from the offshore Gulf of Mexico last year. Let’s say that removing the liability cap knocked out 0.5 mb/d (more on that in a moment), and that OPEC countries responded by increasing their own production by 0.5 mb/d, holding the price of oil (and hence demand) constant. At $80/bbl, The United States would send an extra $40 million abroad each day for oil, for a total of $14.6 billion each year. At the same time, OPEC countries would gain $14.6 billion in annual revenues. Removing the oil spill liability cap is worth something in terms of reduced oil spill risk. I doubt that it is worth paying a $14.6 billion annual premium to OPEC. Basic market dynamics do not price this problem in. All of which leads to the critical question: Would removing the liability cap really knock out a big chunk of production? I think there’s good reason to believe that it would. Supermajors will probably fail to pick up a good chunk of the leases that smaller players control if those independents are put out of business; the business is just too different. Those independents won’t survive if they can’t get insurance. (Or at least those with somewhat diverse portfolios, which they won’t be willing to risk, won’t survive.) Chait makes the standard argument to the contrary – insurance companies should be able to price the risk of a spill and sell insurance accordingly. But that’s not quite how insurance companies work. Say I have a one-in-a-thousand risk each year of incurring $40 billion in oil spill damages. I should be willing to pay a bit more than $40 million each year to insure that risk, and an insurance company should be willing to sell me that insurance for that price. But the insurance company has another consideration: it needs to have the money around to pay out in case I have an accident. $40 billion is a lot of money. Even if I’m insuring a few dozen companies, I’ll only take in a few percent of that (at most) each year. There are decent odds that I’ll decide that it’s not worth risking my insurance business to pick up these small premiums. The small and medium sized oil companies will be out of luck. So what’s government to do? It can step in as the insurer. Here’s what I suspect the government needs to do. First, figure out what sort of premiums would make sense for an insurer that is only worried about the probability of having to pay out, not about risks to its own solvency. Next, sell companies that insurance (or at least the part of insurance that isn’t available in the private market) itself at that price. In practice, this would probably look like a fee on oil producers, combined with some sort of liability cap. Some companies will be knocked out -- and they should be. Also, there’s no doubt that the government won’t get the price or the cap quite right. (And industry lobbyists will help it screw up even more.) But the laissez faire alternative may be to implicity set the price of insurance for most independents at somewhere around infinity, while ignoring public benefits from offshore production. That doesn’t seem right either.