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A disaster waiting to happen

The Deepwater Horizon disaster was foreseeable and preventable and was a result of systemic failures in the oil and gas industry, according to the White House enquiry into last year’s oil spill.

In a report which is a model of clarity, the panel notes that for the past 20 years, the oil and gas industry moved into ever deeper and riskier areas of the Gulf of Mexico. This generated huge revenues for corporations and for the federal Treasury.

But during the same period there was growing complacency and absence of regulation, which ended with the death of 11 oil workers and the destruction of eco-systems, livelihoods and the health of unknown numbers of people in states and countries bordering the Gulf.

There were errors and misjudgements by all three major oil companies involved – BP, Halliburton, and Transocean. They failed to properly interpret warning signals; to see flaws in their own testing processes and pushed ahead with untested last-minute design changes.

Deepwater happened, the report says, because the US government let it happen. The Department of Interior Minerals Management Service both regulated the industry and collected tax revenue. Only income tax delivers more cash to the US government, and revenue collection consistently “trumped safety in the Department’s priorities”.

Science was virtually shut out of regulation and decision-making. This was also the case in March 2010, when President Obama agreed to expand drilling in the Atlantic and eastern Gulf.

While Democrats want to implement the report’s recommendations, the Republican majority are determined to prevent any limits on the US oil and gas industry.

And at a recent closed-door meeting, right-wing billionaire activists Charles and David Koch brought the oil and gas industry together to plan a full-on campaign against improved environmental regulation.

BP is still failing on the safety front. An improvement order was issued by the UK Health and Safety Executive (HSE) after incidents in the North Sea. On the Shiehallion oil platform for example, BP left corroded equipment in place until it ‘failed catastrophically’.

So 10 months on from the disaster, how are those affected faring.

BP reported a loss for 2010 but will resume paying out dividends at 4.34p per share. It is on course to return to profit, after signing a deal with the Russian state oil firm, Rosneft to drill in the Arctic.

Halliburton, doubled its profits in the last quarter of 2010, and Transocean, is still active in the Gulf and in many other emerging areas. Reporting on their activities this year, CEO Steve Newman said they were expecting demand for deepwater, ultra-deepwater and ‘hostile environment’ drilling to go on growing.

The US Government agencies (Environmental Protection Agency, Food and Drug Administration and the National Oceanic and Atmospheric Administration) and Obama have declared the Gulf of Mexico, its waters, beaches, and seafood, safe and open to the public.

But residents of the Gulf states are facing a different future. Widespread health problems are reported, including children covered with lesions and people with very high levels of deadly ethyl benzene in their bodies.

States close to the disaster are also amongst those where unemployment is continuing to rise, at a time when the Republicans passed laws immediately on being elected to Congress that cut taxes for the rich whilst placing a new time limit on unemployment benefit.

For capitalism, the drive for profits will always trump environmental concerns and governments are only concerned with ‘growth’. Only a transformation of ownership and control of the oil industry can prevent another Deepwater Horizon, which could easily be in the North Sea where deepwater drilling is powering ahead. In May 2010, gas entered a well being drilled by the Norwegian state oil company and according to the Petroleum Safety Authority, only luck prevented the incident evolving into a disaster.

Penny Cole
Environment editor
3 February 2011

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Your Say

Tim says:

Penny rightly places a lot of the blame on the Obama administration for its complicity in the Deep Water Horizon disaster. For this reason I don't feel that the proposed answer of a change in ownership will necessarily be any better and certainly not a public nationalisation without first sorting out the public sector. Would we really want BP run by Eric Illsley? -- fraud and false accounting or David Chaytor? ditto; or Lord (Tory} Taylor? - I was only doing what my mates in the House of Lords told me when hoovering up expenses; - or Duck Pond Viggers? - or Jacqui Smith, ex-Labour Home Secretary? I lived with my sister and claimed £150,000 on expenses - or McNulty? ex-Labour Employment minister - I lived with my parents and claimed £60,000; or Lord (Labour) Taylor? - £100,000 a bung for getting the right legislation through for his clients - or Stephen Byers (the ex-Labour Transport secretary) cab for hire at £5000 a day.....I could be here all day listing the venal behaviour of our great public servants! No. Public sector ownership, without more, will be as disastrous as leaving BP to the market.

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