Why America should thank BP
David Strahan, The Last Oil Shock
This article was first published in the The Independent, 1 June 2010
Hollywood loves its villains to have an English accent. After the Deepwater Horizon disaster it was inevitable American commentators would deride BP as British Petroleum and its CEO as Tony Wayward. But even as Gulf Coast residents despair and BP fumbles from one seat-of-the-pants engineering ‘solution’ to another, Americans should realise the company may have done them a huge favour.
It may seem grotesque to suggest an upside given the scale of this human tragedy and unfolding environmental disaster: the 11 dead and their grieving families; the wetlands and marine ecology devastated by crude and toxic dispersant; the lost livelihoods of Louisiana fishermen; and the $30 billion hit to BP shareholders – that’s anyone with a pension in this country. But benefits there may be.
It is easy to understand Americans’ hostility to BP but it is fundamentally misplaced. Never mind that Transocean and Halliburton were also involved and it seems there is plenty of blame to go round. Never mind that more oil is spilled every year in the Niger delta, where Shell and Exxon are the big operators, and which supplies 40% of US oil imports, without a peep of American protest. Never mind that despite the hyperventilation the slick is still relatively small by historical and international comparison.The plain fact is BP is not uniquely culpable, just unlucky.
Oilmen tell me the US offshore has always been loosely regulated compared to world leaders Norway and, since the Piper Alpha disaster, the British North Sea. But now we discover the safety regime is not just slack but also profoundly corrupt. First hand testimony reveals drug-taking government inspectors from the Minerals Management Service routinely accepted gifts from operators, and allowed them to fill out their own safety reports in pencil to be inked over by officials later. It would make a Banana Republic blush, and means it is unlikely any rig in the Gulf of Mexico was working to higher standards than the Deepwater Horizon. In other words, this was an accident waiting to happen and it could have happened to anyone.
That doesn’t make it alright, of course, but it does mean the scale of the disaster is not so much due to any particular incompetence of BP’s – though where is their much-vaunted technology now? – but to the enormous depths at which the industry is forced to operate. And the fact that BP was drilling for Macondo, a tiny field containing less than 12 hours’ global consumption, under a mile of water tells us all we need to know about the state of oil depletion.
…More important, the spill may finally spur Americans, who make up 5% of the world’s population but guzzle 25% of the oil supply, to get serious about cutting their consumption. America has always been an obstacle to international progress on climate change, but the problem is no longer the country’s leadership, as it was under President Bush, but popular opinion. According to a poll taken after Climategate, almost half of all Americans believe there is no scientific consensus around climate change or that it is not happening. But the images of the devastation caused by the slick may finally force them to confront the real costs of their own way of life – the more so when dolphins begin to be washed up Florida beaches – if President Obama can frame the debate correctly.
(31 May 2010)
Nigeria’s agony dwarfs the Gulf oil spill. The US and Europe ignore it
John Vidal, the Guardian
We reached the edge of the oil spill near the Nigerian village of Otuegwe after a long hike through cassava plantations. Ahead of us lay swamp. We waded into the warm tropical water and began swimming, cameras and notebooks held above our heads. We could smell the oil long before we saw it – the stench of garage forecourts and rotting vegetation hanging thickly in the air.
The farther we travelled, the more nauseous it became. Soon we were swimming in pools of light Nigerian crude, the best-quality oil in the world. One of the many hundreds of 40-year-old pipelines that crisscross the Niger delta had corroded and spewed oil for several months.
Forest and farmland were now covered in a sheen of greasy oil. Drinking wells were polluted and people were distraught. No one knew how much oil had leaked. “We lost our nets, huts and fishing pots,” said Chief Promise, village leader of Otuegwe and our guide. “This is where we fished and farmed. We have lost our forest. We told Shell of the spill within days, but they did nothing for six months.”
That was the Niger delta a few years ago, where, according to Nigerian academics, writers and environment groups, oil companies have acted with such impunity and recklessness that much of the region has been devastated by leaks.
In fact, more oil is spilled from the delta’s network of terminals, pipes, pumping stations and oil platforms every year than has been lost in the Gulf of Mexico, the site of a major ecological catastrophe caused by oil that has poured from a leak triggered by the explosion that wrecked BP’s Deepwater Horizon rig last month.
That disaster, which claimed the lives of 11 rig workers, has made headlines round the world. By contrast, little information has emerged about the damage inflicted on the Niger delta. Yet the destruction there provides us with a far more accurate picture of the price we have to pay for drilling oil today…
(30 May 2010)
BP oil spill: Shares fall further
Graeme Wearden, The Guardian
Another £2.4bn was wiped off the value of BP when trading began in London today, as investors continued to fear that the company’s management may not survive the Gulf of Mexico disaster.
BP shares fell 3% at the start of the trading session, sending its shares down to 417p, despite reports that the oil giant is promising investors that it will maintain its $10bn (£6.82bn) annual dividend payout.
Today’s losses mean that BP’s market value has plunged by nearly £45bn, or 36%, since the Deepwater Horizon rig caught fire and sank in April. On Tuesday its shares shed 13% following the company’s failure to block the well that is leaking tens of thousands of barrels of oil into the sea off the coast of Louisiana.
Last night it emerged that the US authorities have launched a criminal inquiry into the disaster, heaping more pressure on BP and its chief executive, Tony Hayward.
The failure of the “top kill” operation – in which 30,000 barrels of mud were pumped into the well over three days – means oil is likely to keep leaking until a relief well is dug and BP can pump concrete into the well shaft. This could take until the start of August, well into the hurricane season. City experts are now speculating that BP could soon find itself fending off predators.
City commentator David Buik of BGC Partners pointed out that the plunge in BP’s value will have been felt in pension pots across the country, and questioned whether the company’s management will survive…
(2 June 2010)
BP’s OTHER Spill this Week
Greg Palast blog
With the Gulf Coast dying of oil poisoning, there’s no space in the press for British Petroleum’s latest spill, just this week: over 100,000 gallons, at its Alaska pipeline operation. A hundred thousand used to be a lot. Still is.
On Tuesday, Pump Station 9, at Delta Junction on the 800-mile pipeline, busted. Thousands of barrels began spewing an explosive cocktail of hydrocarbons after “procedures weren’t properly implemented” by BP operators, say state inspectors. “Procedures weren’t properly implemented” is, it seems, BP’s company motto.
Few Americans know that BP owns the controlling stake in the trans-Alaska pipeline; but, unlike with the Deepwater Horizon, BP keeps its Limey name off the Big Pipe.
There’s another reason to keep their name off the Pipe: their management of the pipe stinks. It’s corroded, it’s undermanned and “basic maintenance” is a term BP never heard of.
How does BP get away with it? The same way the Godfather got away with it: bad things happen to folks who blow the whistle. BP has a habit of hunting down and destroying the careers of those who warn of pipeline problems…
(28 May 2010)
The real cost of cheap oil
John Vidal, the Guardian
Big Oil is holding its breath. BP’s shares are in steep decline after the debacle in the Gulf of Mexico. Barack Obama, the American people and the global environmental community are outraged, and now the company stands to lose the rights to drill for oil in the Arctic and other ecologically sensitive places.
The gulf disaster may cost it a few billion dollars, but so what? When annual profits for a company often run to tens of billions, the cost of laying 5,000 miles of booms, or spraying millions of gallons of dispersants and settling 100,000 court cases is not much more than missing a few months’ production. It’s awkward, but it can easily be passed on.
The oil industry’s image is seriously damaged, but it can pay handsomely to greenwash itself, just as it managed after Exxon Valdez, Brent Spar and the Ken Saro-Wiwa public relations disasters. In a few years’ time, this episode will probably be forgotten – just another blip in the fortunes of the industry that fuels the world. But the oil companies are nervous now because the spotlight has been turned on their cavalier attitude to pollution and on the sheer incompetence of an industry that is used to calling the shots.
Big Oil’s real horror was not the spillage, which was common enough, but because it happened so close to the US. Millions of barrels of oil are spilled, jettisoned or wasted every year without much attention being paid.
If this accident had occurred in a developing country, say off the west coast of Africa or Indonesia, BP could probably have avoided all publicity and escaped starting a clean-up for many months. It would not have had to employ booms or dispersants, and it could have ignored the health effects on people and the damage done to fishing. It might have eventually been taken to court and could have been fined a few million dollars, but it would probably have appealed and delayed a court decision for a decade or more.
Big Oil is usually a poor country’s most powerful industry, and is generally allowed to act like a parallel government. In many countries it simply pays off the judges, the community leaders, the lawmakers and the ministers, and it expects environmentalists and local people to be powerless. Mostly it gets away with it.
…The only reason oil costs $70-$100 a barrel today, and not $200, is because the industry has managed to pass on the real costs of extracting the oil. If the developing world applied the same pressure on the companies as Obama and the US senators are now doing, and if the industry were forced to really clean up the myriad messes it causes, the price would jump and the switch to clean energy would be swift…
(28 April 2010)
What Will it Take to End Our Oil Addiction?
Craig Severance, Energy Economy Online
It’s time we moved on to something else, or this is going to kill us.
Not only are world oil supplies running out, but what oil is still left is proving very dirty to obtain. We need to kick our oil addiction now if we expect to preserve any hopes of economic prosperity, or unspoiled habitats.
“This is What the End of the Oil Age Looks Like.” We have the Deepwater Horizon oil spill now precisely because the easy to obtain oil is already tapped. You don’t drill in mile deep waters if you have somewhere else you could go.
The worst is yet to come. If we don’t kick oil now, we will see more disasters as oil companies move to the Arctic offshore, clear more forests for tar sands, and rape the American West to develop oil shale. Worldwide droughts, floods and dead seas will also ensue from global warming caused from burning oil.
Richard Heinberg of Post Carbon Institute said it best: “This is what the end of the oil age looks like. The cheap, easy petroleum is gone; from now on, we will pay steadily more and more for what we put in our gas tanks—more not just in dollars, but in lives and health, in a failed foreign policy that spawns foreign wars and military occupations, and in the lost integrity of the biological systems that sustain life on this planet. The only solution is to do proactively, and sooner, what we will end up doing anyway as a result of resource depletion and economic, environmental, and military ruin: end our dependence on the stuff.”
We Can Do That. I said in my recent Peak Oil article “The End of the World as We Know It” that we need to adapt to Peak Oil, but we can do that. This article explains how…
(29 May 2010)