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By Robert Rapier on Jun 2, 2010 with 44 responses

The Demise of BP?

It was about six weeks ago that the man I work for walked into my office and asked what was happening in the world of energy. “This oil leak in the Gulf of Mexico”, I told him, “is going to be a monumental disaster.” He hadn’t heard about it yet, but my views on it at the time were 1). They weren’t going to have an easy time getting the leak stopped; 2). It would drastically shift the debate on offshore drilling.

I published an essay on the spill shortly after it happened in which I predicted that this would be a death blow for deepwater drilling in the U.S. Only time will tell on that one, but it has clearly changed the debate drastically. No longer can drilling proponents point to decades of safe operation. No more can they reassure people that something like this can’t happen. And in that case, what are the chances that new areas off the coasts of Virginia, Florida, or California are going to be opened up to drilling? Slim to none. The latest news per the Wall Street Journal is that “the Obama administration announced a six-month moratorium on all offshore drilling and canceled exploration lease sales in the Gulf of Mexico and off the Virginia coast.” (That moratorium is on deepwater projects; a temporary ban on shallow-water projects has expired. Update 06/03/09: The moratorium has been extended to include all new drilling in the Gulf of Mexico according to a Minerals Management Service e-mail obtained by the AP).

And frankly, as someone who has argued that the U.S. needs to invest in more offshore drilling lest we face oil shortages and increasing dependence on other countries for our energy, I can’t make that argument in light of this sort of disaster. We may need drilling, but we also need our coastlines. If the choice is to deal with oil shortages or risk a disaster off the coast of Florida, I am going to vote to live with shortages. I know that when the shortages occur, we will probably try to drill anywhere and everywhere out of desperation. I believe I understand what the consequences of shortages may look like – hence my support for expanded drilling. But this disaster has convinced me that we have exceeded the depths at which we can safely drill and extract oil. There will always be human error, and there will always be companies willing to take shortcuts. When the consequences are potentially severe, you have to play it safe.

But that’s a digression from the title of this article. When the BP disaster in Texas City occurred in 2005 – killing 15 people and doing a great deal of damage – it was a serious blow to the company’s image. They had carefully crafted the image of a company – now rebranded Beyond Petroleum from British Petroleum – that was moving away from oil. They deeply cared about the environment and were moving the company in a new, greener direction. Then the explosion happened and the world was focused on BP the oil company. While it wasn’t a death blow for the company, their carefully crafted image vanished in the eyes of many people. For many, they were simply an oil company trying to convince people they were something beyond that.

With the latest disaster – which many have already categorized as the worst environmental disaster in U.S. history – BP’s image has likely taken a death blow. Sure, ExxonMobil survived the Valdez disaster, but it was a stain on their corporate image that will last forever. But unlike BP, ExxonMobil never pretended to be anything other than an oil company. Still, ExxonMobil since then has been viewed by many as the epitome of the greedy, dirty oil company.

The situation that has constantly come to my mind is the Bhopal disaster and the subsequent fallout. For those who are unfamiliar, in 1984 an accident at a Union Carbide plant in Bhopal, India wrought terrible destruction on the population there. The official immediate death toll was 2,259, but it has been estimated that ultimately more than 15,000 people died as a result of the incident. As a result of this tragedy, Union Carbide’s reputation was destroyed. They would forever be viewed by many as a company with lax safety standards who put profits ahead of lives. They continued to function as an independent company for a number of years as the inevitable lawsuits played out, but this former component of the Dow Jones Industrial Average was ultimately swallowed up by the Dow Chemical Company.

It is hard for me to envision a different fate for BP. While the nature of these incidents is certainly different (I don’t mean to imply that the oil spill is comparable to thousands of people dead in India), BP will now forever be viewed as the worst kind of corporate polluter. That is simply reality. Many people will make it a point to never buy BP products again. Investors who bought into the rebranding – and hung around after Texas City – may have had their fill. There can be no rebranding in the aftermath of this.

BP’s stock has been pummeled in the aftermath of the disaster, and now a criminal probe has been launched. The witch hunt is on, and it promises to keep BP in the hot seat for a very long time. We will be bombarded with anti-BP news for years to come.

In any case, the name BP will not disappear overnight. BP’s refineries, oil rigs, and chemical plants will continue to operate. Union Carbide’s lawsuits took years to work their way through the courts before Dow bought them out. I think the same will hold true for BP. And although BP has long been a source of pride with many Brits, I can only wonder now if in the future we will refer to them as “BP, a subsidiary of ExxonMobil.”

  1. By disdaniel on June 3, 2010 at 2:10 am

    The CEO of BP, “I want my life back”, is a public relations idiot. If he lasts in his post until the well is capped in August I will be surprised.

    BP has gone from high on my list of oil companies to buy gas from to below Exxon….which used to be at the bottom of my list.

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  2. By Perry on June 3, 2010 at 9:29 am

    Consumer angst didn’t stop Exxon from becoming the most profitable company in the world, even after getting rid of 18,000 gas stations. One gets the feeling the majors would like to exit the retail segment altogether. Chevron recently bailed on a dozen states.

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  3. By Douglas Hvistendahl on June 3, 2010 at 9:30 am

    There are always accidents. Example: the wind industry has the largest ratio of deaths per unit energy produced. So it makes sense to take a personal responsibility to reduce household dependence, whether anything else can be done or not. Our household has a backyard garden, and we are using fans to blow summer air through the basement for cheap cooling (use a dehumidifier if you try this). The latter also warms the dirt under the house – temperature 2 inches below the basement floor are up five degF from last year – which decreases heat bills a bit. Many other inexpensive things can be done. They are largely unused because most people don’t know (search on (“self heating” AND building)) or because of the work needed to do them.

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  4. By Wendell Mercantile on June 3, 2010 at 10:46 am

    There are always accidents.

    That’s true, Douglas. One of the first things I learned while in the military is that you have to expect losses in any big operation.

    Accidents become even more likely as the complexity of anything increases. Drilling for oil a mile or more under water is incredibly complex. There is no way possible to ensure it will be foolproof. There is no way possible that any amount of government regulation can guarantee it would be foolproof.

    We don’t want reckless companies drilling, but even the most careful and diligent will have accidents.

    The only way that offshore drilling will stop is if we stop demanding liquid motor fuels made from oil. But that’s not going to happen. As I walked to work this morning, I bet 5,000 cars passed me — almost everyone holding only one person, and — as far as I could see — there were no electrics, they all burned motor fuels made from oil.

    BP as a brand may now be so damaged it will disappear, but their assets and real property will continue on as someone else’s brand as long as the demand for liquid motor fuels exists. And there is no sign that demand will stop; in fact as more people in China and India move into the middle class, we can expect the demand for oil to only increase.

    BP isn’t the culprit, the root is our demand for oil.

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  5. By Perry on June 3, 2010 at 12:04 pm

    The leak is 50 miles from land, and the oil is light sweet crude. What eventually makes it to shore is easy to clean up. The Ixtoc spill was heavy crude,leaked at twice the rate, and lasted for 9 months. Clean-up didn’t amount to much. We’re shooting ourselves in the foot with these extreme reactions. Someone spots a sheen 20 miles in the distance and oyster beds are closed, even though testing has yet to turn up an oiled oyster. The governor said the moratorium will cost Louisiana 6000 jobs in the next two weeks. 20,000 more will follow shortly. That’s just oil jobs. The ancillary effect will be 4X that. I live at ground zero. I’ve fished these waters all my life. Fishing was shut down in Barataria Bay last week because a sheen was spotted. I went out there and saw diddly squat. I’ve seen more oil in the water at marinas than what shut Grand Isle beaches down. It’s ridiculous.

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  6. By BeckyMinx on June 3, 2010 at 12:05 pm

    There have been a bunch of much worse oil spills and all of the companies behind them are still around. Plus people have such a short attention span that a boycott would last less than a month. we’ve already boycotted Exxon and all the Venezuelan oil companies and that did nothing

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  7. By rrapier on June 3, 2010 at 1:16 pm

    BP as a brand may now be so damaged it will disappear, but their assets and real property will continue on as someone else’s brand as long as the demand for liquid motor fuels exists.

    Which is my point. The brand they have worked hard to create is gone; in its place is the exact opposite of the brand they tried to create. Their name will be mud as Union Carbide’s was. Of course their assets will continue to operate, but I don’t see how the brand can make it. Regardless, it will take years to play out. Nobody will touch them until the legal obligations are resolved. In Carbide’s case that took more than 10 years.

    RR

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  8. By rrapier on June 3, 2010 at 1:20 pm

    BeckyMinx said:

    There have been a bunch of much worse oil spills and all of the companies behind them are still around. Plus people have such a short attention span that a boycott would last less than a month. we’ve already boycotted Exxon and all the Venezuelan oil companies and that did nothing


     

    The nature of this spill is quite different than many before it in many aspects. And as I pointed out above, this is about a brand that BP worked hard to build, and is now the opposite of what they tried to create. As a brand, I think BP is ultimately done. It would be like hearing that the leaders of PETA beat their own pets. Could they survive that sort of exposure?

    I am headed out of town shortly. More on that to be posted on my blog tomorrow, but I won’t be able to respond to many more comments.

    RR

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  9. By savro on June 3, 2010 at 4:16 pm

    The Obama Administration just ordered a halt to ALL new offshore drilling in the Gulf of Mexico. It’s not just a deepwater moratorium now.

    http://news.yahoo.com/s/ap/201…..washington

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  10. By Anonymous One on June 3, 2010 at 8:07 pm

    Just an accident at a careful and diligent company?
    BP’s Dismal Safety Record

    OSHA statistics show BP ran up 760 “egregious, willful” safety violations, while Sunoco and Conoco-Phillips each had eight, Citgo had two and Exxon had one comparable citation.

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  11. By takchess on June 3, 2010 at 8:26 pm

    By capping liability of oil producers, did we encourage risky behavior?

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  12. By jcsr on June 3, 2010 at 8:27 pm

    BP has tapped into hell and are now between the devil and the deep blue sea. Just like Jimmy Carter before him Obama is also between the devil and the deep blue sea over America’s need for oil to keep our fat arses in our cars. I dont get it. This is a catastrophy. Why hasn’t the price of oil shot up? It happens when the frost gets on the tomatoes.

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  13. By takchess on June 3, 2010 at 8:30 pm
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  14. By Perry on June 3, 2010 at 8:31 pm

    The effort underway down there looks like something out of a sci-fi movie.

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  15. By PJ on June 3, 2010 at 9:51 pm

    Yes, Union Carbide was my big awakening to the simple fact that dangerous plants are placed in poor, poverty stricken areas for strategic as well as economical reasons. Ever been to Pascagoula or Mobile? The nameless suffer and unfortunately, this time that oil spillage I’m afraid is going to affect the nation’s bread basket. Do we belong to countries or oil companies? I couldn’t believe the arrogance exhibited by the Chairman of BP. He sleeps quite well at night and his main reason seemed to be, “It’s a big enough body of water”. This is the mentality of those that are heads of companies. He has no idea of how the water currents flow and how our wetlands are in deep Bandini because of him and those like him.

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  16. By Perry on June 3, 2010 at 10:21 pm

    “The deposit of oil they were tapping into has been described as the second largest oil deposit ever — anywhere — even when one considers Saudi Arabia, the Russian discoveries and Iraq. This oil deposit has been estimated to have the potential to yield 500,000 barrels of oil per day for from 10 to 15 years!”

     

    http://www.viewzone2.com/oilnuke.html

     

    I read somewhere else that the reservoir could contain 8 billion barrels. US reserves are only 30 billion barrels or so. It would be a shame to see it go to waste.

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  17. By Slatz on June 3, 2010 at 10:33 pm

    really..the second largest ever…c’mon people, cut the total BS

    this was a marginal field that BP was planning on tieing back to their Pompano platform.

    Most sources say this field was in teh 100 million bbl range…hardly an elephant

    Slatz

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  18. By od on June 4, 2010 at 1:13 am

    Robert how can you make this comment..

    But this disaster has convinced me that we have exceeded the depths at which we can safely drill and extract oil.

    ..without even knowing what exactly went wrong down there? Or do you know 100% what the failure was? I normally agree with what you say, but you seem to be putting the cart before the horse here.

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  19. By Michael Cain on June 4, 2010 at 1:40 pm

    “…I can only wonder now if in the future we will refer to them as “BP, a subsidiary of ExxonMobil.”

    Why not China? They’re sitting on $1.5T or so of US Treasuries, and could make a cash offer for BP PLC with well less than 10% of that. Arguably, the stock price has fallen far enough that it represents a fair value just for the non-US assets (ie, the market has priced in an assumption that BP America is worthless). As BP is a British company, there might be considerably less resistance than there was to their attempt to purchase Unocal in 2005. If BP America really is worthless (say, if the spill liabilities exceed the value of the company’s assets), they could simply spin it out and hand it over to the US government.

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  20. By savro on June 4, 2010 at 2:18 pm

    OD said:

    Robert how can you make this comment..

    But this disaster has convinced me that we have exceeded the depths at which we can safely drill and extract oil.

    ..without even knowing what exactly went wrong down there? Or do you know 100% what the failure was? I normally agree with what you say, but you seem to be putting the cart before the horse here.


     

    Robert is traveling (more info on that in a post going up in a few hours) so I don’t know when he’ll be able to respond. I’d like to hear him explain the above statement too. The only thing I can think of is that he’s refering to the difficulty of stopping the leak and the severity of the outcome rather than the cause of the leak itself. Accidents happen, and if there’s no effective means of repairing a leak at such depths, then we’ve got a huge problem.

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  21. By armchair261 on June 4, 2010 at 4:18 pm

    Accidents happen, and if there’s no effective means of repairing a leak at such depths, then we’ve got a huge problem.

    There is call from many that there needs to be guarantees that this kind of tragedy won’t happen again, if deepwater offshore development is to continue in the future. But it’s going to be a real challenge to be able to safeguard against every possible scenario. Consider for example these hypothetical situations.

    What if the rig had fallen on top of the leaking BOP, making the wellhead inaccessible?

    What if the rig landed atop the wellhead in an overturned position, the wellhead was possibly accessible, oil was seeping through the hull of the rig in 13 different places, and pooling in other parts of the hull?

    What if the rupture occurred 134 feet below the BOP (unlikely, but…), and oil was leaking out in an irregular ring through the sediments underlying and around the BOP?

    etc.

    It seems to me the decision we need to make here in the USA is fundamentally do we want to continue to explore for and develop oil reserves in the deepwater environment. Do the rewards outweigh the risks, or not? In deciding whether to go forward, the relevant question shouldn’t be “How can we take steps to be certain this won’t happen again?” but rather “Recognizing that we can’t eliminate error, what can we do to minimize risks, how can we improve response time, how can we maximize the adaptability of response plans, and how can we improve remediation technologies?”

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  22. By Kit P on June 4, 2010 at 6:41 pm

    “Accidents happen”

     

    No, they do not when it comes to
    producing energy and resulting in death of workers! OD is correct in
    that we do not know know the root cause of the methane explosion on
    an oil rig, coal mine, or power plant but I will be surprised if it
    is some previously unknown failure mechanism. I will be surprised if
    it a result of a confluence of freak circumstances.

     

    It is true that humans error occurs at
    a predictable rate but it can be reduced to a very low rate. It is
    true that equipment fails at a predictable rate but it can be reduced
    to a very low rate by a reliability program. At least in the nuclear
    industry, it costs a about a million dollars a day to replace
    electricity because an o-ring fails or a technician a nob the wrong
    way. Preventing small accidents makes it very unlikely that serious
    accidents will result in a co-worker being seriously injured.

     

    RR may be correct that the frequency of
    blowouts, the failure of mitigation technology, and the remoteness of
    deep water rigs makes meeting safety standards impossible.

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  23. By walter-sobchak on June 5, 2010 at 12:46 am

    Robert: I think this a bit overwrought.

    First: This is not the biggest oil spill in history.

    http://www.popularmechanics.co…..in-history

    The latest estimates I have seen:

    “The National Incident Command’s Flow Rate Technical Group, a collection
    of government and independent researchers, said last week that 12,000 to
    19,000 barrels a day were pouring into the gulf.”

    http://www.nytimes.com/2010/06…..atest.html

    That would be 80,000 gallons per day. Fifty days worth (next week around 6/9/10) would be 40 million gallons. That would not make the top ten list, as #10 is 42 million gal. Another 50 days would push it up to the middel of that list.

    Nor is oil alien to the environment. “Natural seepage of crude oil from geologic formations below the seafloor
    to the marine environment off North America is estimated to exceed
    160,000 tonnes (47,000,000 gallons) …”

    http://books.nap.edu/openbook……mp;page=2#

    That volume suggest that the ocean has plenty of resources to consume oil, which after all is composed of biologically derived organic molecules. A large portion will evaporate. Some will ball up and some will be consumed by micro-organisms.

    Nor should the damage, if any to fisheries, be regarded as the determinative criteria. Fishing is a tiny business. The entire US fishing business produced about $4.4 Billion in 2008. Out of that Shrimp was about 10%.

    http://www.st.nmfs.noaa.gov/st…..index.html

    Oil is a much more important business to the local economy. It has a higher dollar value of product and supports better paying jobs.

    Second. BP will not sustain a major financial blow from this incident. Their annual revenues are on the order of $300 Billion and net profits of $20 billion.

    http://www.marketwatch.com/inv…..financials

    This incident should not hurt them that much financially. The 11 men lost on that rig grieve me far
    more than all of the pelicans in the Gulf. Although, I think in all fairness that they need to revisit their safety culture and conduct a great deal of soul searching and restructuring.

    Finally as to the continuation of offshore production, I do not think the United States has any real choice. The country is bankrupt and its finances are deteriorating at a high rate of speed. The solution is that we must spend less, particularly borrowed money, and produce and save more.

    Producing oil is production of a high value product, and we have to do it. I would not advocate doing it with out due regard to safety. But the idea that some places in this country are off limits has to go. I think we should be drilling not only in the Gulf off LA, but off Florida and California too. As well as in Alaska.

     

     

     

     

     

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  24. By paul-n on June 5, 2010 at 4:24 am

    It is true that humans error occurs at
    a predictable rate but it can be reduced to a very low rate. It is
    true that equipment fails at a predictable rate but it can be reduced
    to a very low rate by a reliability program.

    And I think the oil industry (and energy industry in general, in most democratic countries) has done a pretty good job in achieving these goals.  Compare somewhere like Nigeria and it is a very different story.

    The real problem here, as I see it, is that when an accident(spill/leak) happens in a deepwater well, there is no sure fire way to stop it, as we have seen.   With on shore and shallow water, this is much easier.

    Given that that there will always be a small, but non-zero chance of this happening again, and the consequences are so great, the question becomes, do we continue without a proven plan for dealing with it when it happens?  

    And this decision is not for the oil industry, unless they can come up with a reliable plan, and if they can, why have they not done so before now?

    This is the sort of tough decision that governments are elected to make – whichever way they go, there will be unhappy people, but that’s the nature of government.

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  25. By Wendell Mercantile on June 5, 2010 at 12:57 pm

    No, they do not when it comes to producing energy and resulting in death of workers!

    Kit P.

    Nothing can be done with 100% surety — other than perhaps to say the Sun will rise tomorrow. As Wilbur Wright said about flying safety when people questioned why anyone would want to risk flying in the machines he and his brother were building, “If you are looking for perfect safety, you will do well to sit on a fence and watch the birds.”

    It’s a matter of evaluating the risk v. the reward. Is the risk of drilling for oil in the oceans and Gulf worth the reward of millions of Americans to be able to drive two tons of steel, plastic, glass, and rubber wherever they wish, whenever they wish, at almost the lowest cost on the planet?

    As Paul N said, that’s not a decision for the oil industry, that’s a decision the United States as a country must make. Even though I walk to work and drive only about 3,000 miles/year, my guess is the majority of Americans want to keep driving their cars.

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  26. By Kit P on June 5, 2010 at 6:11 pm

    “Nothing can be done with 100% surety
    ..”

     

    But it is a great goal. Once you
    accept it is okay to loose a few workers for profit, you will start
    loosing workers.

     

    The other sign of trouble is when
    people think think it can not happen to them or an an acceptance of
    undue risk. At one meeting a manger asked a young father if if he
    would let is daughter do a certain task in 18 years the same way that
    it had been done the last 30 years. While no one had been hurt, a
    block wall had been so lucky a couple of times. The next question
    was what do you need to make your job safe enough for your children
    to grow up and do it.

     

    If you look at the safety record now
    compared to 30 years ago, we are approaching that goal of never
    sending energy workers home in body bags. So it is not a choice
    between giving up energy and enjoying the benefits of energy.

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  27. By paul-n on June 6, 2010 at 3:11 am

    But even if it can be done in complete safety, such that no one is ever killed or seriously injured, what about the environmental impacts?

    Even if no one had died in this accident, and would not die in future blowouts (e.g.if the rigs were completely automated and unstaffed),

    there is still a lot of damage done to the Gulf ecosystem.  It likely won;t be permanent, as oil does biodegrade, but it is still major.

    I’m sure the Louisiana shrimpers and fishermen would be just as much out of work even if no one died.

    So, assuming the safety issues is dealt with you just have an environmental one, and to paraphrase Kit, once you accept that to have an uncontrolled leak, (for over a month) for profit, you will start getting more of them.  

    My guess is that deepwater drilling will be allowed to resume at some future point, with more regulations, which may or may not solve the problems.  I will also guess that those places that currently do not allow drilling (e.g. the west coast states) are not going to change their position anytime soon, and any attempt to drill in federal waters off these states will be politically unacceptable.

    Canada faces the same decision, as oil companies (including BP) have been given exploration licenses for the Beaufort Sea, though drilling is not expected to start until 2014.  However, Canada can keep on driving for a long time without the Arctic oil, and a spill in the Artic would take decades to biodegrade, so there is not much popular support for drilling there.

     

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  28. By rrapier on June 6, 2010 at 3:30 am

    Samuel R. Avro said:

    OD said:

    Robert how can you make this comment..

    But this disaster has convinced me that we have exceeded the depths at which we can safely drill and extract oil.

    ..without even knowing what exactly went wrong down there? Or do you know 100% what the failure was? I normally agree with what you say, but you seem to be putting the cart before the horse here.


     

    Robert is traveling (more info on that in a post going up in a few hours) so I don’t know when he’ll be able to respond. I’d like to hear him explain the above statement too. The only thing I can think of is that he’s refering to the difficulty of stopping the leak and the severity of the outcome rather than the cause of the leak itself. Accidents happen, and if there’s no effective means of repairing a leak at such depths, then we’ve got a huge problem.


     

    Sam has it right. One of the things about doing safety reviews is that if the consequences are catastrophic, the odds of occurrence must be miniscule. I think the very fact that this happened means that the odds aren’t likely to be miniscule. It think it is ultimately like armchair said: We have to decide whether we are prepared to accept these kinds of consequences. I am not. If I thought that in the event of an incident it could be quickly controlled my opinion would be different, but it is apparent that this won’t always be the case.

     

    RR

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  29. By rrapier on June 6, 2010 at 3:33 am

    Walter Sobchak said:

    Robert: I think this a bit overwrought.

    First: This is not the biggest oil spill in history.


     

    Walter,

    First, I didn’t say or imply that this was the biggest spill. It is probably the most ill-timed, though, with the debate slowly moving in the direction of finally opening up more deepwater drilling.

    And I don’t way that BP can’t survive this financially. I don’t believe the BP brand is going to be one that the company will be proud to carry into the future. That’s why I don’t think the company survives as BP.

     

    RR (from a hotel lobby in Tuscany)

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  30. By Kit P on June 6, 2010 at 9:27 am

    “but it is still major.”

     

    Is it? First of all, I get real bent
    out of shape by those who skip past the tragedy of loss of human life
    and start moaning about the trivial.

     

    We do have a lot of experience with
    major oil spills. I was taking an environmental class at the free
    republic of Davis. On the first day of class we were told the
    professor might be late because he was traveling on business. I full
    navy captain shows up in dress whites just back from the first gulf
    war.

     

    When the navy found out that his day
    job was protecting the environment, they put him on a helo to go out
    and evaluate the mess.

     

    Gulf War oil spill

    http://en.wikipedia.org/wiki/G….._oil_spill

     

    Although it was an act of war, it is
    still an example of the environmental impact.

     

    Other recent events:

     

    Ixtoc I oil spill

    http://en.wikipedia.org/wiki/I….._oil_spill

     

    Piper Alpha

    http://en.wikipedia.org/wiki/Piper_Alpha

     

    Speaking of environmental impact, what
    is the impact of all that cement and asphalt that we drive on?

     

    It has actually been evaluated by the
    EPA (AP-42?- AirChief). If you are going to build a power plant, the
    impact of transportation must be evalauted.

     

    Sure you can drive to the beach to find
    birds covered in oil but you better ignore the road kill along the
    way.

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  31. By paul-n on June 7, 2010 at 2:56 am

    but you better ignore the road kill along the
    way.

    Which Kit obviously does. More people die on US roads every day than died in the Deepwater Horizon incident.  The use of oil ultimately leads to many more deaths than the extraction of oil.

    But the environmental problems of oil are mostly related to the extraction and supply of it.

     

    I am not skipping over safety issue – if these operations can;t be done safely, they shouldn;t be done.  If they can be done safely (human safety), but a failure can;t be controlled, as in this case, then there is another question to be answered.

     

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  32. By Kit P on June 7, 2010 at 10:10 am

    “Which Kit obviously does.”

     

    That is a pretty stupid statement Paul
    followed by too much ignorance. Let me count the ways.

     

    First, I was comparing the
    environmental impact on bird of producing transportation fuel to that
    of using it. Very stupid of PaulN not to get that.

     

    Standards must be met to protect the
    environment and stricter standers to protect workers and still to
    protect the public. Paul N obviously thinks we should relax the
    standards because of the number of transportation fatalities. Second,
    it is ignorant of you not to know this.

     

    “but a failure can;t be controlled,
    as in this case,”

     

    Really, you have read the root cause of
    this recent BP event? So third it is both ignorant and stupid to
    make such a statement.

     

    So PualN if you want have a civil
    discussion I will stop calling you stupid, if you want to suggest
    that I am ignoring loss of human life, I will not worry about being
    civil.

     

    In the mean time I would suggest that
    you read the link to Piper Alpha above.

     

    It has been a long time (20 years)
    since I have read a root cause of a fatal accident while producing
    energy was some new failure mechanism that should have been
    recognized but it was understandable that it was not. I get really
    bad think about the 20 or so that have died since then. That
    particular failure mechanism is controlled by simple maintenance
    procedures.

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  33. By Scott Burrow on June 7, 2010 at 3:40 pm

    I’m not for sure if this will mean the death of off-shore drilling or not. Our immediate reaction would be to put a long term stop on the drilling in our gulf coast. I use to live in Ft Walton Beach, Florida and I am horrified at what could happen to those pristine beaches that I use to go too. However, two things make me wonder how long it will be before we see the call for more drilling and exploration in the gulf. First, we American’s have the odd ability to forget, or at least put aside memories of the worst type of disasters and press on with our day to day lives. Furthermore, if this crisis goes on much longer, what will that do the price of gas at the pump? If America thinks that the full stoppage of drilling in the gulf is a direct factor of higher gas prices, the ideal of no drilling in the gulf might lose some of its flair.
    I do agree with Robert that the damage to the BP corporate image is done and will be extremely hard to undo. Although we may set aside memories of something like this to press on with our individual lives, we are less likely to forgive those who put is in the predicament.
    As a lifelong Emergency Responder and instructor of Hazardous Materials responses, I do wonder what lessons learned will come out of this. Will new technologies be developed to mitigate future incidents like this? Will it spur new response agencies, technologies, or concepts in Emergency Management for future disasters? What new laws and regulations will be signed into legislation due to this? It will be interesting to see the final fallout from this.

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  34. By savro on June 7, 2010 at 4:26 pm

    Scott Burrow said:

    However, two things make me wonder how long it will be before we see the call for more drilling and exploration in the gulf. First, we American’s have the odd ability to forget, or at least put aside memories of the worst type of disasters and press on with our day to day lives. Furthermore, if this crisis goes on much longer, what will that do the price of gas at the pump? If America thinks that the full stoppage of drilling in the gulf is a direct factor of higher gas prices, the ideal of no drilling in the gulf might lose some of its

    flair.


     

    I think that your second question kind of answers the first.

    I agree with you 100% that in the world we live in, what with the short attention spans of most people, and the 24-hour news cycle broadcasting a constant stream of crises, most events usually blow over after a short amount of time. For that reason, I believe that perhaps the biggest key here (against BP and the future of offshore drilling) is the length of time and the never-ending feeling of this crisis.

    Had all the damage been done (whatever it amounts to in the end) in a span of a few days or a week, as bad as it is I still have more faith in society’s inability to remember what they read or saw in the news a couple of weeks prior. Perhaps it would’ve taken a bit longer to forget or put aside than usual, but eventually it would have been history.

    Due to the length of time (45 days or so?) that this has already been the top story (and it’s not going away any time soon), with constant updates and new twists, the impact has been so great as to be imprinted upon our minds to the extent that it will never be forgotten. Granted, the severity will wear off in time, but it will never be completely brushed aside. It will forever be a historical event that we lived through and can recall without difficulty.

    This has been my take on the oil spill since the beginning. I discussed this with Robert a number of times, and I was always of the opinion that the length of time –moreso than just the magnitude– it took for this event to be knocked off the front pages would be the deciding factor for BP and the future of offshore drilling. I think that it’s already gone way beyond the point of no return.

    So… on that note, I think that the longer this drags on, the less likely it is for this to be forgotten or brushed aside, and the worse it’ll be for BP and the issue of offshore drilling. Besides, how much do you think the loss of oil from that rig will affect the wholesale markets anyhow?

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  35. By Scott Burrow on June 7, 2010 at 9:04 pm

    Samuel….That is an excellent point about the time this has gone on. That is probably more devasting for BP that the actual damage done itself. If there was tremendous damage done in short period if time, I wonder if we would even still hear much about it in the news. However, the longer this is headline news, the more nails could be driven in BP’s and possibly off-shore drilling’s respective coffins.

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  36. By savro on June 7, 2010 at 9:25 pm

    Kit P said:

     

    Is it? First of all, I get real bent

    out of shape by those who skip past the tragedy of loss of human life

    and start moaning about the trivial.

     

    I’m with Kit on this one. He actually brings up a fantastic point which, unfortunately, is being overlooked.
     

    I think it says a lot about our society that the media and government (mostly because the public doesn’t really care) only focuses on the environmental and economic impact of the spill, and barely anything has been mentioned about the 11 killed, and 17 injured, rig workers. A lot more ink and airtime is being spent on the dead pelicans than dead and injured humans. How crazy is that?

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  37. By Wendell Mercantile on June 7, 2010 at 11:22 pm

    barely anything has been mentioned about the 11 killed, and 17 injured, rig workers. A lot more ink and airtime is being spent on the dead pelicans than dead and injured humans. How crazy is that?

    Samuel,

    For one thing, those workers were all out there of their own free will and getting paid pretty good money to do it. Some jobs are inherently risky — working on oil platforms, working in oil fields, working on an aircraft carrier, being a lumberjack, deep sea diving — and we are lucky some are willing to do that. On the other hand, the pelicans and other wildlife are innocent standers by, and have absolutely no control over what’s happening.

    It’s tragic when anyone dies, but there are things worth doing that involve risk. How many died building the Hoover Dam? How many Americans died in WW II to overthrow Nazism and Fascism in Europe?

    How many have died in coal mines over the last three centuries? (Somebody must have felt the benefit of having heat, light, and energy to make things was worth the lives of the people that gave their lives in coal mines. True, coal miners died, but how many sick kids and babies lived that would have otherwise died without heat? Those coal miners didn’t die for nothing.)

    Where would the aviation and space industry be if not for the test pilots and astronauts that gave their lives?

    We don’t want companies to be careless and overconfident, but deliberately accepted risk is part of what allows civilization to progress.

    The only way to guarantee no one will die is to take no risk. I shall repeat once more what Wilbur Wright said about flight safety when people would tell him flying was too dangerous, “If you are looking for perfect safety, you will do well to sit on a fence and watch the birds.”

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  38. By savro on June 7, 2010 at 11:51 pm

    Wendell Mercantile said:

    Samuel,

    For one thing, those workers were all out there of their own free will and getting paid pretty good money to do it. Some jobs are inherently risky — working on oil platforms, working in oil fields, working on an aircraft carrier, being a lumberjack, deep sea diving — and we are lucky some are willing to do that. On the other hand, the pelicans and other wildlife are innocent standers by, and have absolutely no control over what’s happening.


     

    I don’t see how “free will” and “knowing there was risk involved” changes the fact that 11 workers perishing and 17 more injured is so much more tragic than pelicans and innocent wildlife that, in a normal world, the pelicans should be an afterthought to the loss of human life. Unfortunately it’s been the other way around; the loss of human life has become an afterthought.

    Whether the rage at BP (before we know what went wrong) is warranted or not, those in the “enraged” camp should be enraged more about the loss of human life than the loss of pelicans.

    For the record, I don’t disagree with anything else you wrote in the above post. There is a known risk involved, and mature adults made the choice to do so. Someone has to take that risk in order for us to enjoy the lifestyle we’re accustomed to, and we should be thankful to them. Whether they earn a nice paycheck or not is besides the point. They still took a risk that not many of us would be willing to take, and we normally just get to see the end result of pumping fuel into our cars. It’s a shame that the media has barely focused on the lives of those that perished.

    And here’s something I just came across which enraged me even more. I came across this not long after writing my previous post.

    http://news.yahoo.com/s/ap/us_…..ll_workers

    Gulf rig widows urge repeal of high seas death law 

    CHALMETTE, La. – Members of Congress vowed Monday to amend a 90-year-old law that limits the amount of money survivors can recover in the deaths of family members killed in the Gulf of Mexico oil rig explosion.

     

    Rep. Edward Markey, D-Mass., and other members of the House Energy and Commerce committee said the April 20 Deepwater Horizon explosion exposed the need to reform the 1920 Death on the High Seas Act, which limits liability for wrongful deaths more than three miles offshore.

     

    “One way we can hurt BP is to make sure that ‘BP’ stand for ‘Bills Paid,’ that the money for families, the money to cleanup the Gulf comes out of their pocket, and that we repeal the Death on the High Seas Act,” Markey said.

     

    The families are being used by Markey in order to “hurt BP” as much as possible. His goal is to “kill the evil oil companies,” rather than “how can we help the families and those hurt.” He’s showing his true colors. Utterly pathetic.

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  39. By moiety on June 8, 2010 at 7:33 am

    Samuel R. Avro said:

    I’m with Kit on this one. He actually brings up a fantastic point which, unfortunately, is being overlooked.

    I think it says a lot about our society that the media and government (mostly because the public doesn’t really care) only focuses on the environmental and economic impact of the spill, and barely anything has been mentioned about the 11 killed, and 17 injured, rig workers. A lot more ink and airtime is being spent on the dead pelicans than dead and injured humans. How crazy is that?


     

    Interestingly I asked people to consider this a long time; it would seem Sam that society needs many callers to regrister something

    http://www.consumerenergyrepor…..e-2/#p1011

     

     

     

     

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  40. By Wendell Mercantile on June 8, 2010 at 4:34 pm

    Moiety and Samuel,

    How many long-haul truckers do you think have died and been injured so far this year bringing you the stuff you can buy in stores and have in your homes? I bet it’s a lot more than the 11 that died or 17 injured in the Deepwater Horizon disaster.

    Why is no one other than their families upset about their deaths and injuries?

    Of course, losing 11 people in the Deepwater Horizon accident is tragic, but what about the nearly 34,000 who died on U.S. highways in 2009? (That’s 93 deaths per day. Each day we kill nearly nine times as many on our roads and highways as died on that oil rig.)

    People long ago must have decided the freedom to drive anywhere they want and have stuff delivered to stores and their homes is worth the cost of the tens of thousands who die on the roads each year. In relation to the tens of thousands we lose on our roads, how do you rate losing 11 lives to keep those cars and trucks supplied with fuel?

    [link]      
  41. By savro on June 8, 2010 at 5:02 pm

    Wendell Mercantile said:

    Moiety and Samuel,

    How many long-haul truckers do you think have died and been injured so far this year bringing you the stuff you can buy in stores and have in your homes? I bet it’s a lot more than the 11 that died or 17 injured in the Deepwater Horizon disaster.

    Why is no one other than their families upset about their deaths and injuries?

    Of course, losing 11 people in the Deepwater Horizon accident is tragic, but what about the nearly 34,000 who died on U.S. highways in 2009? (That’s 93 deaths per day. Each day we kill nearly nine times as many on our roads and highways as died on that oil rig.)

    People long ago must have decided the freedom to drive anywhere they want and have stuff delivered to stores and their homes is worth the cost of the tens of thousands who die on the roads each year. In relation to the tens of thousands we lose on our roads, how do you rate losing 11 lives to keep those cars and trucks supplied with fuel?


     

    Wendell, you bring up a valid point when comparing the number of rig deaths to the amount of traffic deaths the nation suffers each and every day. The rig deaths are no more tragic than the hundreds of traffic fatalities, murders and other accidents that occur each day.

    However, what bothers me in this case is the fact that all the focus is being placed on the economic and environmental impact, and pretty much none whatsoever on the human safety element. It’s akin to fussing over the shrubbery, trees, utility poles, guardrails, vehicles etc. that get damaged in traffic accidents, while ignoring the human fatalities.

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  42. By Robert E on June 9, 2010 at 10:39 am

    It is a disaster. It is an accident. The BP witch hunt needs to stop. (by the way 39% of BP is owned by US institutions and individuals). If anyone seriously thinks this was a “calculated risk” on BP’s part they are insane. They make too much money to want to deal with the fallout of something like this. There are a lot of factors that set this in motion – desire for profit only one of them.

    That being said, the well will be capped, the spill cleaned up, and life will go on (except for the 11 that died). We are humans. We get past unthinkable horrors. And yes, we do view individual lives as cheap – otherwise 50k wouldn’t die on our roads each year – so people can avoid a walk to the store. But so what??? We use oil to make our lives better – however long or short that life may be.

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  43. By russ on June 9, 2010 at 12:19 pm

    The ‘witch hunt’ is simply theatrics for the political class and the unwashed masses.

    The comments I see on CNN are generally beyond stupid. Kind of hard to admit those people do belong to the human race but it is impossible to claim otherwise. 

    The ‘greens’ are in their glory days – they can and are making a big point of the whole thing.

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  44. By paul-n on June 10, 2010 at 3:52 am

    @ Kit P

    First, I was comparing the
    environmental impact on bird of producing transportation fuel to that
    of using it. Very stupid of PaulN not to get that.

    I absolutely get that, and showed there is a parallel impact on people by using said fuel compared to producing it.  Roadkill, regardless of species, is not deemed newsworthy, unless spectacular.  The human tragedy happened, and thankfully, did not continue to happen – should it still be being covered, in great detail, 45 days afterwards?  I am not saying the environmental situation merits the amount of attention it has been getting – but the news networks air what they deem will get the most viewers, not what is the most important.  Obviously it is advantageous to other parties (politicians, lawyers) to maximise the publicity gained, and I am not excusing that either.   

    Standards must be met to protect the
    environment and stricter standers to protect workers and still to
    protect the public. Paul N obviously thinks we should relax the
    standards because of the number of transportation fatalities. Second,
    it is ignorant of you not to know this.

    Kit, please quote me where I have ever said that we should relax standards, of any sort, and that is certainly not what I am saying here, and you know it.   

    “but a failure can;t be controlled,
    as in this case,”

    Really, you have read the root cause of
    this recent BP event? So third it is both ignorant and stupid to
    make such a statement.

    My statement should have read “IF a failure can’t be controlled”.  That said, the point is the same.   Regardless of the cause of a blowout, there is still the question of how to handle it.  If the answer is “in deepwater, we can’t”, then there is a decision to be made as to whether to continue and accept this risk, or stop until the risk can be reliably controlled.

    There is a risk of planes crashing, and this has been reduced to a vary low level, though the consequences are severe for the (relatively small) number of people involved.  But we accept this remaining risk and fly.

    So PualN if you want have a civil
    discussion I will stop calling you stupid, if you want to suggest
    that I am ignoring loss of human life, I will not worry about being
    civil.

    In the mean time I would suggest that
    you read the link to Piper Alpha above.

    It has been a long time (20 years)
    since I have read a root cause of a fatal accident while producing
    energy was some new failure mechanism that should have been
    recognized but it was understandable that it was not. I get really
    bad think about the 20 or so that have died since then. That
    particular failure mechanism is controlled by simple maintenance
    procedures.

    So these accidents show us that the best procedures are of no use if they are not followed. AS long as there are humans involved, there is potential for human error.  We minimise it to acceptable levels, by all means available, and then get on with business, whatever it may be. If it can;t be minimised to acceptable levels, the practice concerned is discontinued – I am sure you know of many more examples than I of unsafe practices being corrected, or discontinued if they can’t be.

    The oil industry, like any other, bears responsibility for the safety of its people

    And, they bear responsibility for their environmental impacts.

    What makes this different from most other environmental incidents is that it is out of control, and remains so after over a month. The Ixtoc well remained out of control for many months, so how much has the mitigation technology advanced?  

    Is it time to call a halt until a reliable solution is found?  

    Any operation that leads to a continuing, uncontrollable human safety situation would be stopped, should we do the same if it leads to an uncontrollable environmental one?  

    Let’s take the US nuclear energy industry for example.  It has a zero fatality record, and an accident/hour record 1/30th of that of all manufacturing industries (http://en.wikipedia.org/wiki/N…..ted_States).  So clearly, it is a very safe industry.   But, there is the perception that it could have a Chernobyl type disaster, and the country has not been willing to accept that (perceived) risk for the last 30 years.  Now that it is perceived that the industry is better than it was then, the mood has changed.  

    It has never been about the safety of the workers in the nuclear industry, as those issues were resolved, successfully, many years ago.  The oil industry still has some way to go in this regard, especially for offshore operations.

    But the nuclear experience shows that even resolving the worker safety issue does not resolve the perceived public safety and environmental issues for an industry.  As long as other people outside the oil industry perceive that they are suffering at the hands of the oil industry, intentionally or not, the oil industry has a problem.  How they deal with both this and their safety issues, will determine whether the deepwater industry continues or not.

     

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