By Peter Lehner, Natural Resources Defense Council

When the Deepwater Horizon rig exploded in 2010, we all watched in horror as oil gushed unchecked into the Gulf of Mexico. Cleanup crews flocked to the scene, but their ability to respond to the spill was limited: they were stuck using the same technology deployed during the Exxon Valdez disaster, 21 years earlier. Those outdated, inefficient booms and skimmers managed to pick up just 3 percent of the nearly 5 billion barrels of oil spilled in the Gulf.

Philanthropist Wendy Schmidt, head of the Schmidt Family Foundation and an NRDC board member, knew America could do better. In June 2010 she sponsored the Wendy Schmidt Oil Cleanup X Challenge, promising $1.4 million in prize money for teams that could efficiently recover more than 2,500 gallons of oil per minute in a field test – doubling the industry standard.

This relatively modest prod apparently inspired the oil industry to do what it hadn’t done on its own in more than two decades: innovate.

image via Wendy Schmidt Oil Cleanup X Challenge

The veteran oil spill cleanup technology team, Elastec/American Marine, based in Illinois, took top honors with its new skimmer, which uses a series of spinning, grooved disks (the grooves increase surface area) to attract and pump out oil. Elastec’s skimmer collected 4,670 gallons of oil per minute – about 4 times the industry standard — with an efficiency rating of 89.5 percent oil to water, exceeding the challenge’s goal of 70 percent efficiency. When that rate was announced, I could hear the gasps from the representatives of the other teams – they were really impressed. No matter how much fluid a skimmer collects, if there’s a lot of water in the mix, it vastly increases the cost and complexity of the cleanup.

Other technologies tested included special absorbent coatings for skimmers, oil-hungry brushes and a machine that separates and skims under water.

It’s astounding the level of innovation we see when companies are given a little encouragement. In this case, a million-dollar prize – in a multi-million-dollar industry, part of the multi-billion-dollar oil industry — helped motivate an established company to improve its technology to an unprecedented level, and spurred international competition in a field which hasn’t seen much innovation for 20 years.

I am very grateful to Wendy; thanks to her the world is now better equipped to respond to the next oil disaster. Kudos also to Elastec for stepping up and delivering an impressive achievement, and to all the finalists who were able to test out new oil cleanup technologies.

Having seen the BP blowout mess first hand, as well as several major oil spills in the New York Harbor region, I am sure this is a huge step forward. But I’m also a bit surprised. Why did these companies not seek to improve their cleanup technology in the last 20 years, when that technology was repeatedly shown to be inadequate? Why did they need this prod to innovate?

I’m not exactly sure – business experts offer many reasons for the complacency we see in an industry with few players, near-monopoly control over transportation fuel, vast influence over government, and huge profits. As I mention in my book In Deep Water, oil companies have been especially slow to invent new safety and spill response technologies. In the three years preceding the Gulf disaster, oil companies spent $39 billion to explore and produce new wells. But they spent a mere $20 million per year on research and development for safety, accident prevention, and oil spill response.

They are even still using the same kind of blowout preventer that failed so tragically in the Gulf.

If companies can’t use the biggest oil spill in history as a prod for innovation, then it’s up to the rest of us to push them in the right direction.

Prize money is one way to spur innovation. Environmental and health safeguards are another.

Pollution controls, consumer protections and other government safeguards have a history of pushing sluggish industries into action. The power industry said they couldn’t scrub sulfur out of smokestack emissions, it would just be too expensive. Well, when we changed the laws, they figured out how to do it at a fraction of the cost: It cost 97 percent less than they thought it would, and they dramatically reduced acid rain. They also found other ways to improve the efficiency of their power plants.

Government protections got lead out of gasoline and put seatbelts and airbags into cars – innovations that have cleared the air and saved lives and young minds at a fraction of the expected costs for industry. And each of these prods – or “nudges,” as Cass Sunstein might call them – also spurred innovation more broadly than just in pollution control, pushing companies to find faster, cheaper, better ways to manufacture their product.

The rhetoric we hear in Congress and on cable TV about protections for health and the environment being job-killers is such a distortion of the truth. History irrefutably demonstrates that safeguards spur innovation and that innovation creates jobs.

What kills jobs is complacency. Attempting to turn safeguards into a scapegoat for the jobs crisis is just a cover for too much complacency.

Forget the rhetoric. Wendy Schmidt’s prize, and the response to it, shows what American ingenuity can do.

Editor’s Note: This column comes to us as a cross post courtesy of Natural Resources Defense Council. Author credit for the column goes to Peter Lehner.