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.