While on the campaign trail that eventually led him to the White House, President Obama scored political points by reminding voters of the federal government’s inept responses to hurricanes Katrina and Rita.

Promising that things would be different under his administration, Obama placed blame for inadequate pre-disaster planning; inexpert leadership at the Federal Emergency Management Agency; unclear lines of authority between federal, state and local officials; and Washington’s apparent indifference to human suffering, squarely on the shoulders of President George W. Bush.

As we now know, the same script played out following the explosion at BP’s Deepwater Horizon rig in the Gulf of Mexico. Obama at first distanced himself from the disaster by arguing that it was BP’s job to stop the crude oil gushing from the ocean’s floor as the rig sank to the bottom and pulled a mile-long pipe down with it. The administration even tried to underplay the magnitude of the tragedy initially by accepting at face value BP’s estimate that “only” 5,000 barrels of oil were being pumped into the Gulf every day.

As time went on and the dimensions of the oil spill grew by a factor of ten or more, Obama reversed course and claimed that his administration had been in charge of the emergency response since day one, April 20, 2010.

But the only visible action taken thus far is to issue an executive order declaring a six-month moratorium on offshore drilling in waters deeper than 500 feet, along with suspending plans to permit drilling in areas off the coasts of Alaska and Virginia.

That policy is both misguided and nonsensical.

Not only does the president’s moratorium on deepwater drilling fail to stop the oil leak, it costs jobs on the offshore rigs that he has shut down; reduces the amount of crude oil available for refining into gasoline, diesel fuel and heating oil; and penalizes BP’s competitors, who have been pumping oil from offshore wells responsibly for decades. Until BP’s Deepwater Horizon rig exploded, no oil had been spilled as a result of offshore drilling in U.S. waters since an accident off the coast of Santa Barbara in 1969.

Without energy production from deepwater areas, a vital source of jobs and tax revenue will be lost. And if offshore rigs remain idle for long, the Gulf’s economy will wither.

Yes, BP bears all responsibility for the explosion that killed 11 workers and caused staggering economic and environmental damage that is still ongoing. BP must be held accountable for its mismanagement.

Among industry insiders, the fact that an “accident” occurred at a BP offshore drilling site was no surprise. BP has a reputation for cutting corners and disregarding risk.

If Obama truly wanted to supply incentives for trading off risk and reward optimally, he would press for legislation that holds oil companies strictly liable for the economic and environmental damages they cause. Because such damages may exceed the responsible company’s ability to pay, the sanctions for wrong-doing also should include jail time and fines for the executives responsible for business decisions that harm others.

The bottom line is that we should be realistic about the demand for oil. Disastrous as the BP’s oil spill is, we should not walk away from offshore energy development. Most of the world’s production nowadays is recovered in deepwater areas. Thousands of wells have been drilled offshore without an accident of the Deepwater Horizon’s magnitude. Unless we are willing to shut our energy-intensive industries down and to stop driving our cars, we will continue to need oil from offshore wells.

In the absence of taxpayer-financed subsidies, there simply is no economically feasible alternative to fossil fuels on the horizon.

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William F. Shughart II, a senior fellow of the Independent Institute, is F.A.P. Barnard Distinguished Professor of Economics at the University of Mississippi