BP Rakes in Billions, the Environment Pays the Price

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The company responsible for the catastrophic oil explosion in the Gulf of Mexico has spent millions to escape regulation, restriction, oversight and enforcement. Now we see the result.

by Antonia Juhasz
Guardian,  May 2, 2010

While the explosion of BP/Transocean’s Deepwater Horizon drilling rig was a horrific event, it was neither surprising nor unexpected.

BP is one of the most powerful corporations operating in the United States. Its 2009 revenues of $327bn are enough to rank BP as the third-largest corporation in the country. It spends aggressively to influence US policy and regulatory oversight.

In 2009, the company spent nearly $16m on lobbying the federal government, ranking it among the 20 highest spenders that year, and shattering its own previous record of $10.4m set in 2008. In 2008, it also spent more than $530,000 on federal elections, placing it among the oil industry’s top 10 political spenders.

This money has bought BP great access and, many would argue, leniency. “I personally believe that BP, with its corporate culture of greed over profits, murdered my parents,” Eva Rowe testified before Congress in 2007. The Congress was investigating the worst workplace accident in the US in more than 15 years, a massive explosion at BP’s Texas City Refinery in March 2005 that killed 15 workers, including Rowe’s parents, and injured 180.

The US Chemical Safety Board, an independent federal agency, investigated the blast and released a devastating indictment of BP. “The Texas City disaster was caused by organisational and safety deficiencies at all levels of the BP corporation,” the 2007 report found. “The combination of cost-cutting, production pressures and failure to invest caused a progressive deterioration of safety at the refinery.”

While experiencing its highest profits in its corporate history, BP implemented budget cuts of 25% in 1999 and 2005 at each of its five US refineries. The safety board found a pervasive “complacency towards serious safety risks” at all of them.

When the next great explosion at a US oil workplace occurred, it was of little surprise to learn that it was, again, BP at fault. It also came as little surprise that the location was the deep offshore waters of the Gulf of Mexico.

BP and the entire oil industry have lobbied aggressively to open new US waters to offshore drilling and expand the access they already had. For decades, the vast majority of drilling from the US Gulf took place on simple scaffolds in 30ft to 200ft of water. In the past 10 years, the number of rigs drilling in depths of greater than 1,000ft (deep wells) has risen dramatically, as have ultra-deep wells, those greater than 5,000ft. The trend is problematic for many reasons, including that drilling of water depths greater than 500ft releases methane, a greenhouse gas 20 times more potent than carbon dioxide in the contribution to global warming.

Many of the shallower fields have dried up, and the industry has become ever more flush with cash (in 2009, for the first time in history, seven of the 10 largest corporations in the world were oil companies) and more desperate for oil. As a result, the companies – led by BP, the largest producer of oil in the US Gulf – are breaking all records, pushing ever deeper – and well past the point of technological know-how and safety.

In September 2009, BP drilled the deepest well ever at its Tiber field in the US Gulf at a depth of more than 35,000ft (farther down than Mount Everest is up). When it exploded, BP’s Deepwater Horizon Drilling rig was drilling at just over 18,000ft deep. Anyone in the business will tell you that drilling at such depths is incredibly risky, even with the most conscientious oversight. As the Chevron Corporation writes on its website, “Navigating uncertain weather conditions, freezing water and crushing pressure, deepwater drilling is one of the most technologically challenging ways of finding and extracting oil.” In the words of Micky Driver, a Chevron spokesman: “It’s lots of money, it’s lots of equipment, and it’s a total crapshoot.”

The entire oil industry, will continue to use its vast wealth – unequalled by any global industry – to escape regulation, restriction, oversight and enforcement. BP, now the source of the last two great deadly US oil industry explosions, has shown us that this simply cannot be permitted.

Antonia Juhasz, author of The Tyranny of Oil: The World’s Most Powerful Industry – and What We Must Do To Stop It (HarperCollins, 2008), is director of the Chevron Program at Global Exchange, a San Francisco-based human rights organisation (www.globalexchange.org/chevron).

1 Comment

  • The funny thing is, they’ll only get richer as reserves dwindle. Costs will go up somewhat, but we’re so totally dependant on their product, ‘price elasticity’ is a dead given.