Oil Spill puts BP in troubled water

 

The giant oil spill off the Louisiana coast in the Gulf of Mexico is a bitter reminder that providing Americans with reliable and affordable energy is serious business. 

Investigations are underway to determine the cause of the April 20 explosion on the Deepwater Horizon rig that killed eleven workers and raised fears of widespread ecological damage.  Drilling for oil lying 5,000 feet below the surface, the Deepwater Horizon caught fire and collapsed, allowing an estimated 5,000 barrels of oil a day to spew into the sea.  Disasters are rarely caused by one thing; instead, they are the cumulative result of a series of missteps and miscalculations, mixed with a healthy portion of pure happenstance.

The United States consumes 25 percent of all the oil produced in the world, yet it accounts for only 10 percent of global oil production.  We import 58 percent of the oil we consume, a percentage that will only rise unless the U.S. takes seriously the task of developing its own abundant sources of fossil fuels, including those lying off our coasts. 

Congressional hearings in mid-May on the disaster revealed the unseemly but predictable spectacle of the three companies involved in the accident – BP PLC, Transocean Ltd., and Halliburton Co. – pointing fingers at one another.  BP carried out the drilling, Swiss-based Transocean supplied the Deepwater Horizon platform, and Halliburton handled the cementing of the well.  Also, the Mineral Management Service (MMS), the federal agency (along with the Coast Guard) charged with regulating offshore drilling, is coming under scrutiny to see if it acted responsibly.

Of the parties involved in the spill, none has garnered more attention than BP.  The giant British oil company has been criticized for its apparent lack of contingency plans to deal with the kind of leaks that can occur when drilling nearly a mile below the gulf‘s surface.  The company also has acknowledged “mistakes” in compensating fisherman unable to make a living in the polluted coastal waters.

Indeed, BP, which has spent an enormous amount of money touting its green credentials, has a shoddy environmental and safety record.  In 2005, 15 workers were killed and over 170 injured in an explosion at the company’s Texas City plant, which earned BP a $21.3 million fine from federal workplace safety regulators.  That same year, the Environmental Protection Agency launched a criminal investigation of BP’s management of pipelines in Alaska’s North Slope.  EPA later expanded its inquiry into the spill of an estimated 134,000 to 267,000 gallons of crude oil from a BP-operated pipeline in Prudoe Bay, Alaska.

All the while, BP was pouring tens of millions of dollars into a high-visibility advertising campaign, extolling the virtues of its commitment to reducing the effects of carbon dioxide.  “It’s time to turn up the heat on global warming,” read the headline of an August 2005 ad in the Wall Street Journal.  “We were the first major energy company to take steps to reduce greenhouse gas emissions,” proclaimed another full-page WSJ ad from the same month.

In 1997, BP joined forces with none other than Enron to twist the Kyoto Protocol to its advantage.  Enron’s Ken Lay and BP’s then-CEO Sir John Browne met with President Clinton and Vice President Gore to express their support for the global-warming treaty.  “Sir John,” an internal Enron memo pointed out, “thinks there will son be government regulation of greenhouse gases.  And companies that have anticipated regulation will not only know how to use it to their advantage, they will also, as Browne puts it, ‘gain a seat at the table, a chance to influence future rules.’”

Some 13,000 people, including a contingent of CFACT Collegians, are engaged in trying to contain the spill in the Gulf of Mexico.  The oil and gas industry is inherently risky, and no one should charge BP or any other energy company of intentionally disregarding environmental or safety concerns.  One cannot help but wonder, however, if the tens of millions of dollars BP poured into self-congratulatory testimonials to its global warming achievements might not have been better spent on workplace safety and maintenance at the facilities it manages.

 

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About the Author: Bonner Cohen, Ph. D.

Bonner Cohen, Ph. D.

Bonner R. Cohen, Ph. D., is a senior policy analyst with CFACT.