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[04.06.2010] The Gulf of Mexico Oil Spill
On April 20 about 100 km SE before the Mississippi delta a deep-water oil rig drilling for BP in a sea depth of 2.4 km exploded, caught fire and sank days later. 11 workers were killed.
Physical aftermath and measures
Since the accident:
- Oil [BP claims ca. 800,000 Liter daily] has been flowing out of the hole in the riser pipe at the sea floor.
- Until recently, favourable winds have kept the oil to a large extent away from the coast. But gradually the coastlines of Louisiana, Mississippi, Alabama, and since June 4, also Florida are being affected.
- As yet, all attempts to stop the flow have failed (from June 4 a portion of the escaping oil is being funneled off via a cap placed over the rupture)
- A fishing ban has been proclaimed, and in May extended to cover 20% of the Gulf of Mexico.
- BP has faced mounting criticism, also from political Washington, as yet without major consequences.
- BP has been massively using chemicals* at the source of the leak and on the sea surface to disperse the oil into smaller droplets. Later in May, after BP had already sprayed 2.7 million Liter Corexit dispersant, the Environmental Protection Agency, after being criticized for authorizing the most toxic dispersant, requested BP to select a less toxic chemical. BP refused (!!). The sense of using a dispersant under water is being questioned by various experts.
Effectively, the use of dispersants represents a decision to sacrifice ocean life (not visible to the news media) in favour of land animals (visible to the news media).
The burning off of surface oil also sets free toxic fumes from the dispersants. These affect the fishers and other helpers. No protective clothing has been distributed to the helpers, nor is any government monitoring in place.
*) approved at short notice by the Environmental Protection Agency (EPA)
- Two relief wells to reduce the oil pressure are being drilled, but will not be completed until August (!!).
- Giant oil plumes have been found by scientists beneath the sea surface. These deplete the water of oxygen that is needed by sea life. A marine scientist said it could take years, possibly decades, for the system to recover from an infusion of this quantity of oil and gas. At the moment it is impossible to fathom the impact. The chemical dispersants may be preventing the oil from rising to the ocean surface.
Scientists estimate that 5-15 times the BP claim for the quantity of spilling oil is flowing into the sea. BP refused requests to position better equipment near the riser pipe to more accurately estimate the oil quantity escaping ("irrelevant, may get in the way of plugging efforts").
The oil spill is starting to eclipse the financial crisis as the US number one national problem. Obama is showing himself increasingly furious.
- The blowout is expected to cause billions of dollars in damage to fisheries and tourism
- Initial contracts to fishers to take part in the help efforts in combating oil floating on the ocean surface contained a waiver clause, saying that the helpers relinquished all rights to any legal regress action against BP or compensation claims.
- Current US law limits energy companies' liability for lost business and local tax revenues from oil spills to $75mio (!!). But experts warn that BP's total liability for the spill could run into billions of dollars. See below for an attempt to raise the limit.
- Costs to BP: so far, cleanup costs amount to $1 billion. Sand barriers planned around the Mississippi delta would cost additional $400 million.
Political criticism (and consequences?)
1. Criticism of BP
The safety records of BP and the government agency charged with overseeing offshore drilling was sharply criticised at a White House hearing on May 19:
'Many of the elements of this tragedy are familiar to the committee', said Rep. Oberstar, chairman of the House Transportation and Infrastructure Committee. With BP America President Lamar McKay in front of the panel, Oberstar assailed BP's 'sorry record' on safety, adding that the well blowout off the Louisiana coast was the latest in a spate of BP safety lapses.
Those include a deadly refinery blast in Texas and 'the worst spill in the history of oil development on Alaska's north slope', incidents that have 'cast doubt on whether the company has the commitment to the practice and the culture of safety necessary to protect the public', Oberstar said.
'BP has harnessed impressive scientific and technological experience to drill at great depths in the sea, and you have to wonder why they hadn't harnessed similar science and technology to anticipate failure, to install redundancy to prevent failure, and practices to clean up after an oil spill'.
2. Criticism of the regulating authority
Oberstar also took to task the Minerals Management Service, the Interior ministry agency responsible for overseeing oil drilling on federal land and waters, citing a 'disturbing lack of dedication to safety, excessive reliance on the industry to police itself'.
'Minerals Management Service has fallen way short of the commitment needed for effective oversight of offshore drilling', he said.
Interior Secretary Salazar acknowledged what he called 'ethical lapses' on the part of the Minerals Management Service. 'We need to clean up that house', he said, adding that there were 'a few bad apples' among the agency's 1,700 employees.
3.Concrete political measures
- The Obama administration has halted any new applications to drill in the Gulf - for the next half year.
- Congress is considering legislation, including setting new environmental and safety rules for offshore drilling and increasing the industry’s liability for spills.
A Democrats' move to retroactively increase the maximum fine for oil spills to $10 billion was foiled by a Republican Senator, with the argument, it would make drilling too expensive for smaller companies (and would therefore lie in the interest of the giants like BP).
- Obama has indicated that he will try to use the oilspill disaster as motivation to overcome the Clean Energy Bill ("American Clean Energy and Security Act") that is being opposed in the Senate by (would you believe it?) Republicans.
The conflict of interest in the relationship of the MMS* with the oil companies is similar to the conflict of interest in the relationship of the financial rating agencies with the issuers of rated securities.
*) US Department of the Interior Minerals Management Service
 BPs categoric and arrogant "no" to requests from government authorities, and the suppression of any governmental and scientific efforts to gain a detailed knowledge of what is happening in the Gulf of Mexico and what the short and long term repercussions are*, is yet another demonstration that companies of the size of BP have the ultimate say in democracies, even of the size of the USA.
*) The EPA has undertaken no air-born monitoring, no studies are under way to determine the ecological damage, the oceanography institute NOAA is inactive, and the Occupational Safety and Health Administration, responsible for issues of workers' health claims not to be responsible, because the place of work is outside the coastal area.
Citation of oceanographer and environmentalist Riki Ott : "The US government has no means whatever to react to such a disaster. We depend completely on BP, and that is totally unacceptable. It's as if the rescue action and investigation of a traffic accident were given into the hands of the drunk driver".
 BBC "Oil rig blaze off Louisiana leaves at least 11 missing", 21.04.2010
 NY Times "Giant Plumes of Oil Forming Under the Gulf", 16.05.2010
 LA Times "Republican senator blocks higher liability cap on oil spills", 19.05.2010
 LA Times "Gulf oil spill: BP safety record blasted by House panel", 19.05.2010
 NY Times "Conflict of Interest Worries Raised in Spill Tests", 20.05.2010
 NY Times "Agency Orders Use of a Less Toxic Chemical in Gulf", 20.05.2010
 Zeit "BP has more power than the US government", 26.05.2010 [german]
 NY Times "Obama Says He’ll Push for Clean Energy Bill", 02.06.2010
 grist "Everything you always wanted to know about the Waxman-Markey energy/climate bill—in bullet points", 03.06.2010
 NY Times "Logs Show Coast Guard Saw Potential Threat Early", 03.06.2010
 BBC "BP reaches key 'milestone' in halting Gulf oil leak", 03.06.2010
 BBC "BP lowers a cap onto leaking Gulf of Mexico oil well", 04.06.2010