Articles

Why America should thank BP
Posted on Monday, May 31st, 2010

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.

Deepwater production – anything under more than 500 metres of seawater, far too deep for divers to work should anything go wrong – has quadrupled from less than 2 million barrels per day in 2000 to 8 mb/d in 2010, precisely because onshore and shallow offshore supplies are running down. The industry only drills at such extreme depths because there are very few alternatives – the Canadian tar sands and Iraq are equally unpalatable in their way – and it is a clear sign of impending peak oil.

Ironically one impact of the BP spill, the US moratorium on deepwater drilling, is likely to hasten and worsen the effects of the global production peak. One analyst forecasts the ban could deprive the world of an additional 1 million barrels per day from 2016. City forecasts of $175 per barrel by mid-decade may now prove conservative. So, how is any of this good news?

First, it could have been so much worse. Had BP suffered a similar accident while drilling for Tiber, a 3 billion barrel field it discovered in the Gulf of Mexico last year under 2 miles of water, reservoir pressures and oil volumes would have been far higher, and capping the leak would have been even more difficult at that depth. Likewise, had such a spill occurred in the remote Arctic, galvanizing a speedy response would have been harder still and the damage yet more devastating. Now at least regulations will be tightened making this kind of accident less likely.

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.

For over a month Obama has been caught uncharacteristically flat-footed by the spill. But last week he finally started to heed the old maxim about never wasting a perfectly good crisis. During a visit to a solar power plant in California he said “With the increased risks, the increased costs….We’re not going to be able to sustain this kind of fossil fuel use.”

Obama conceded to expanding offshore drilling to buy off Republican opposition to his much watered down Climate Change Bill. He now has an opportunity to outflank the drill-baby-drill brigade using the calamitous results of their own moronic credo. It is also the perfect opportunity to ram home the message that American ‘energy independence’ is a fantasy when based on fast-depleting oil, but would be entirely feasible with a shift to electrification of ground transport and massive investment in renewables. To pull it off, the President will have to resist the political temptation to succumb to a xenophobic blame game, but if he does, and uses the slick to steer America towards a more sustainable energy policy, we should all be thanking BP.



12 Comments on “Why America should thank BP”

Yossi Says:
June 1st, 2010 at 8:58 am

You say the President will have to use the slick to steer America towards a more sustainable energy policy. What form do you think that stick and that sustainable energy policy might be? John Michael Greer (in The Long Descent’) writes ‘ Net energy in single digits, which is what the best renewable energy technologies manage, simply won’t produce enough spare energy to support an industrial society’.
I wonder whether you have read his book? If you have you will know that he doesn’t think we are heading for an apocalypse but a much reduced material lifestyle – one that most Americans (and Brits) will not accept until forced to rather than persuaded by any politician.



Dag Johansen Says:
June 2nd, 2010 at 3:36 am

The Obama administration already has a substantial stealth peak oil mitigation program in progress. Of course, no one will admit the program exists. And certainly no one will dare utter the dreaded phrase ‘peak oil’. But nevertheless, a stealth peak oil program exists. The various components include:
-Loans/grants for electric vehicle companies
-Higher CAFE mileage standards
-loans/grants for Li-Ion battery makers
-Smart Grid initiatives
-More support for wind power
-More support for solar power
-Loan guarantees and an initiative to building nuclear power plants again
-High speed rail
-etc.

The administration has made some weak statements about alternative energy since the spill. But they have largely resisted the temptation to take credit for their actions. So although they are quiet about it, don’t be fooled . . . they know the problem exists and they are doing something about it. But they are also politicians. They know they can’t be seen as manufacturing a crisis. So they’ll deny the stealth program exists. But their actions speak louder than their words.



Tim Temple Says:
June 2nd, 2010 at 9:03 am

This puts the president in a dilemma. If he stops oil drilling and causes the price of energy to go up, he will be seen as the cause of the economic collapse. The non-liberals will get him out of office.

If he continues to promote oil drilling, his liberal constituents will abandon him for Hillary. His popularity would go low enough for someone to go look at his birth certificate and blow the whole charade.

Either way, oil is running out and no politician can bring it back. During the decline of the Roman empire, they went through emperors like they were candy.



Sarah-Jane Says:
June 2nd, 2010 at 10:23 am

Excellent piece, thank you for posting. Love that BP are getting the blame because they’re the English James Mason villain of the piece (Halliburton = Schwarzenegger? Transocean = Lex Luther?) Although I’m saddened by this event, we are all hypocrites, and we shouldn’t forget America’s part in this, or its wanton use of resources. If we drive petrol/diesel cars, we’re all to blame. Generations to come will find it unbelievable, perhaps even sinful, that some of us used up a gallon of gas to buy and collect a single item!



John Monro Says:
June 2nd, 2010 at 8:48 pm

Yossi perhaps overstates the case in regard to renewable energy resources. but he’s right about the politics. Humanity, including Presidents of the United States of America, is not going to connect the dots if its emotional investment in the status quo is sufficiently powerful. Our addiction to oil, growth, consumerism and cheap air flights to sunny climes is extreme, and as in all addicts, it’s always easier to blame someone or something else for their addiction than to face reality. I think it is beyond this the abilities of this unexceptional President to do more than rhetoricise – he is at least expert in this. Your last sentence betrays a touching but naive faith in a political institution that history shows seldom deserves it.



Stephen Says:
June 3rd, 2010 at 1:40 am

We Americans have not been too concerned when the pollution from oil wells has been in other people’s back yards, but now we’re all upset when it’s in ours in a major way.

I wish I could be hopeful about the outcome from all this, but I’m not.



Simon Taylor Says:
June 3rd, 2010 at 8:59 am

Dag Johansen suggests the Americans have a “stealth” peak oil mitigation programme and cites various investment increases to support his claim. There is no doubt that increased concern following the 2008 oil price spike has empowered a number of better informed US law makers on Capitol Hill and within the Administration to to push through these investments. But the reality is that they pale into insignificance when compared to the level of both financial and non-financial support in favour of sustaining the status quo. Added to this is widespread and substantial ignorance around the reality of our current global oil production potential. This in turn sustains the current lackadaisical way of thinking about the pace of change required – Instead of having appreciated the need for a “Detroit make tanks” second world war style mobilisation (surely a moment now long passed), instead all is left to the market, whilst “Rome burns.” We’ll have to see whether this disaster can be harnessed to increased the pace of change, but as things stand, it does not look optimistic.



Tony Weddle Says:
June 3rd, 2010 at 9:37 am

Could you elaborate on your statement that “American ‘energy independence’ … would be entirely feasible with a shift to electrification of ground transport and massive investment in renewables”. I was under the impression that the way of life embodied by American consumerism is unsustainable, regardless of the the energy source. Are you saying both that the American way of life can be sustained by switching to renewable electricity, in some way, and that enough renewable energy can be produced (and expanded forever to support economic growth) to displace fossil fuels, without having any adverse impact?



Jeremy Gilbert Says:
June 3rd, 2010 at 11:27 am

David’s comment about Hollywood and English-accented villains may have more relevance to the way in which US politicians have acted in the face of BP’s cutting-edge efforts to kill the Gulf well. I worked in Alaska for BP in the late 1990s and was involved in a case where the Federal Government was investigating the illegal disposal by a drilling crew of hazardous waste down a North Slope well. It was quite clear that the Government was making huge efforts to put the blame on a foreign oil company rather than a drilling company owned locally and that the place of ownership was what drove their policy rhater than any technical consideration.



Yossi Says:
June 3rd, 2010 at 3:26 pm

Reference John Monro response of June 2nd, 2010 at 8:48 pm
John, I wasn’t stating a case. I was quoting John Michael Greer with regard to renewable energy resources. Having read a lot about peak oil, I ‘m convinced that we have a problem. However I have no idea whether we have any other options that will sustain a modern industrial global economy. Greer makes a convincing case for the suggestion that we don’t. A lot of people who think we can just carry on as before seem to have an almost religious faith in technologies ability to come up with a viable alternative.



Bob in Philly Says:
June 4th, 2010 at 3:25 pm

Your piece hit the nail on the hit and I am sure you know many people will not be able to grasp the fundamental truth to which you speak to.

I would also suggest for your consideration that in time history will show we will be thanking the Bush/Cheney regime for their equally reckless disregard for any other path other than more oil.

To let you know I do have a dog in the fight in that I have been in the solar industry for more than 10 years. There is a growing awareness within our industry the Bush/Cheney cabel have taken at least 15 years off the American clock regarding how we need to change going forward.

Two wars, trillions in military spending, neglect of the renewables industry, and stacking the energy oversight agencies with oil friendly buddies and pals along with $4.00 a gallon gasoline.

Its helping the discerning to connect the new energy dots.

These two have set in motion a series of events which is having the net effect of bringing to the forefront the energy issue.

Please keep up the good and necessary work. Americans are about to undergo a series of energy shocks of which the BP mess is only one of them.

America and Americans are in for hard and brutal lesson in which we will see our arrogant birth right claim to cheap and abundant energy disappear in a changing world.



Dag Johansen Says:
June 5th, 2010 at 12:34 am

Simon, I agree with you. The amount of investment being made is not massive. But it is substantial. Certainly far more investment than during the Bush years. And much better targeted as well. The “Hydrogen Economy” initiative by the Bush administration was nothing but a farce. A move to look like they were doing something when it was really nothing but busy-work chasing a pipe dream.

And your point that fossil fuels are highly subsidized is an important one. But perhaps Obama read your comment, since he came out swinging saying that he would cut the tax-breaks & subsidies given to the fossil fuel industry.

I certainly hope the incentives for alternative energy continue since we will otherwise wake up to triple digit oil prices again with no other alternative.

Let me part with this . . . Powerpoint slides from from a presentation given in 2005 by current Energy Secretary Steven Chu. Pages 15 and 16 talk about peak oil. The Obama administration is well aware of peak oil . . . they just won’t talk about it.
http://www.lbl.gov/solar/ipfiles/plenary/chu_Solar_to_Chem_Energy_3-28-05.ppt





Post a Comment




Get new articles by email:




Delivered by FeedBurner


Search


RSS FT Commodities News
Categories
Blogroll
Copyright © 2010 David Strahan | Ecological Hosting | Cover Design by Darren Haggar Site by JPD Studio