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millions of dollars, they would save money in the long run by minimizing the risk of losing billions of dollars in such an accident, or of having an entire project closed down and losing its whole investment. One Chevron manager explained to me that he had learned the economic value of clean environmental policies when he was responsible for cleaning up oil pits in a Texas oil field and found that the cleanup cost for even a small pit averaged $100,000. That is, cleaning up pollution is usually far more expensive than preventing pollution, just as doctors usually find it far more expensive and less effective to try to cure already sick patients than to prevent diseases in the first place by cheap, simple public health measures.

In prospecting for oil and then building an oil field, an oil company makes a large initial investment in a field that remains a producing asset for between 20 and 50 years. If your environmental and safety policies reduced your risk of a big oil spill to “only” once every decade on the average, that would not be nearly good enough, because you would then have to expect between two and five big oil spills in your 20 to 50 years of operations. It’s essential to be more rigorous. I first encountered this long-range outlook of oil companies when I was contacted by the director of a London office of Royal Dutch Shell Oil Company. That office’s job is to try to predict likely alternative scenarios for the state of the world 30 years from now. The director explained to me that Shell operates that office because it expects a typical oil field to be operated for several decades, and it needs to understand the likely shape of the world several decades in the future if it is to be able to invest intelligently.

A related factor is public expectations. Unlike the toxic mine runoffs to be discussed below, oil spills tend to be highly visible, and often their occurrences are sudden and obvious (as when a pipeline, platform, or tanker breaks or blows out). The impact of the spill is also usually obvious, for instance in the form of oil-coated dead birds whose pictures saturate television screens and newspapers. Hence the public can be expected to howl at the kind of big environmental mistake most likely for an oil company.

Those considerations of public expectations and minimizing environmental damage were especially important in Papua New Guinea, a decentralized democracy with a relatively weak central government, weak police force and army, and strong voice of local communities. Because local landowners at the Kutubu oil fields relied on gardens, forests, and rivers for their subsistence, an oil spill there would impact their lives much more seriously than oil-coated seabirds impact the lives of American television viewers. As one Chevron employee explained it to me, “We recognized that in Papua New Guinea no natural resource project could be successful in the long run without the support of the local landowners and villagers. They would disrupt the project and shut it down, as they did in Bougainville [see below for explanation], if they perceived environmental harm affecting their land and food sources. The central government lacked the ability to prevent disruptions by landowners, so we needed to take prudent steps to minimize harm and maintain a good relationship with the local people.” Another Chevron employee expressed a similar idea in different words: “We were adamant at the outset that the success of the Kutubu project would depend on our ability to work with the local landowner communities, to the extent that they would believe they are better off with us there than they would be if we were gone.”

A minor aspect of that constant scrutiny of Chevron’s operations by local New Guineans is that they understand the money that can be made by pressuring entities with deep pockets, like big oil companies. They count the number of trees cut down during construction of a road, placing particular value on trees in which birds of paradise display, and then they present a bill for damages. In one case of which