This is surreal to me. This is an excerpt from an article in the New York Times on April 12, 1980.

I repeat. 1980. Thirty years ago. The internet was still science fiction then.

It is about the oil spill caused by the Ixtoc I oil well in the Gulf of Mexico, which spewed 140 million gallons over several months in 1980:
History's largest oil spill has been a fiasco form the beginning to end. Human errors and ineffctive safety equipment caused the blowout, and none of the "advanced" techniques for plugging the well or recapturing the oil worked satisfactorily thereafter. The gusher ran wild for nearly ten months....
The enduring question is whether a devastating blowout could occur in our own offshore waters....
A second question: Could a blowout in American waters be quickly capped and cleaned up? Ixtoc I shows that control technology is still quite primitive.  Attempts were made to jam the pipe back into the hole; a large cone was lowered over the well to capture oil and gas, and steel and lead ball were dropped down the well to plug it. Nothing worked. Relief wells to pump in mud failed for months to reach their target... The mop-up techniques did not function effectively either....
Most Americans would accept risking such blowouts to find oilfields as rich as Mexico's.  But the lessons of Ixtoc I can help reduce the risks.
If you don't know why this is darkly funny, look over the list of strategies BP has employed to stop the current spill.  There is obviously something wrong with the incentives to innovate emergency/cleanup technology.  In 1980, the techniques we are still using today were being joked about as "advanced."

The sheer volume of innovation that has occurred in the last 30 years across an uncountable number of research fields is astonishing and a tremendous feat of human ingenuity.  The fact that effectively zero innovation has occurred in oil-drilling-catastrophe-management suggests that nobody believed there was a sufficient payout to warrant such investments.  Since these catastrophes are massive public-bads, and the cost of the externality is almost certainly not internalized by the oil-companies, then standard economic theory would suggest the government needs to create incentives to invest in these technologies.  The problem is doubly difficult because we often think that research in profitable industries is under-supplied, since researchers cannot capture the full value of their work.  So policies to reduce our risk must counteract both a public-bad problem and an innovation problem.

The obvious tendency is to heap blame on BP.  But the current situation is a result of 30 years (at least) of improper policy.  Whether the US government had sufficient information in 1980 to realize its policies motivating innovation [in these technologies] was too weak, I cannot say.  But this article seems to suggest that perhaps they did.

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