Wednesday, May 26, 2010

On Oil Spills

That  BP spill in the gulf is going on for some time now. Its certainly become a problem, judging from all the lawsuits being filed for BP, Haliburton, Transocean, and Cameron. Eventually all the facts of this tragic event will be unearthed in the discovery process (I think discovery is the correct legal term). In the meantime its worthwhile to note a few points about how the industry operates and the political games being played by the government.

The US government has threatened to take over relief efforts on this well. Personally I doubt that the Feds have either the technology or the expertise to perform this kind of operation. Given their impotence its sadly amusing to hear them carping away as they are. Probably the best they could hope for would be to hire another oil company and put them in charge of capping and clean up - wouldn't that be interesting? The experts in this field are most likely to be found in the Gulf coast oil industry where they drill some the most deep and difficult wells in the world. The feds couldn't organise blankets during Katrina  - have they suddenly become well control experts?

There will probably be several  lengthy investigation into all aspects of this disaster. Each of the companies involved have been investing heavily in compliance (ass covering) for the last 10 years or so. In an industry where every action is scrutinized and reviewed the problem will be actually a surplus of information. Even a minor service failure or departure from routine procedure warrants a page in the End-Of-Well Report. Whole forests will be needed to publish the report on this well.

There is a strong need to find out what went wrong on this well, and how it can be avoided in future. Eleven men during a routine operation. Beyond any possible environmental impact this may have its crucial to remember that lives have been lost. Without knowing the causes it will be difficult to confidently drill into these deepwater environments in the future, not to mention finding crews to do the work. The nature of the tendering process puts safety at a premium these days and company records have to be available and traceable in order to qualify to tender. In other words, without resolution on this issue it will be very difficult for the companies associated with this well to get other work. Large multi national companies such as BP are especially anal in this regard.

The press has gleefully taken the opportunity to bash the industry. I suppose it doesn't sell a lot of newspapers to focus on what went wrong and make even a cursory check of the processes involved. Instead we are reminded of the "scandalous rapacious greed" of the multinationals and how this spill will singlehandedly destroy the planet. As to multinationals its worthwhile to note that the largest of them Exxon Mobil is only the 17 largest oil company in the world. The 16 larger oil companies are all National Oil Companies (NOCs). In reality the largest oil companies in the world are political tools with no real accountability to the public. If this disaster had to happen then the best group for it to happen to is a large multinational oil company - at least there is an internal process of accountability. Its also worth noting that Governments at every level take a cut on every barrel of oil produced - oil is probably the single most heavily taxed commodity on the planet. Just who is being scandalously rapacious here?

The question of environmental damage is certainly a tricky one. Certainly there will be damage. Predictions of wiping out the wetlands are, in my opinion, wild hyperbole. For one thing oil has been seeping naturally into the gulf for millions of years, quite a volume in fact. So why isn't the gulf a wasteland? There are microbes in the ocean that actually live on oil. These microbes, when left to themselves have done a pretty amazing job in cleaning up spills such as the Amoco Cadiz spill in 1978 and the Exxon Valdez in 1989. Human intervention by way of detergents and bioremedials often do more harm than good. Problem is of course that mother nature takes time. The people affected want the problem fixed right now which is which is reasonable but not realistic.

Its important to me personally that the root cause of the BP blowout in the gulf are determined and drilling practices are refined to minimise the risk of this kind of accident ever happening again. I have no desire to test drive first hand the ejector pod type lifeboats currently in use. Knee jerk calls to stop drilling and/or end today our dependence on hydrocarbon fuels may sell at lot of newspapers but really help no one in the long term.


H. Nizam said...

Hi PJ,
The oil spill is a tragedy that I thought can only happen in Indonesia.
But the good thing is that BP does not runaway from responsibility, thus very different from the Lapindo case.

Dedi said...

nice post

pj said...


This kind of mistake could happen anywhere. Lapindos masterstroke was having the disaster declared a natural one. If god did it then how can the company be liable.

I think given the chance BP would be running as fast as possible. Oil companies play a risk/blame with contractors...they can't hold contractors to account without themselves being accountable - wouldn't look so good to shareholders.

Hi Dedi

Welcome to the blog and thanks for dropping in and leaving a comment.

H. Nizam said...

Hi PJ,
I hope that everything is okay with you. Have a wonderful weekend.