Business

Deep kill? They may kill us all

George Gunn

In 2000 British Petroleum, or BP to you and me and the oil-covered fishes, launched its new, green image. The initials 'BP' were surrounded by a yellow flower and the logo proclaimed 'Beyond Petroleum'; just to prove, no doubt, that irony is not dead. Shortly after the invasion of Iraq in 2003 BP and other big oil companies dropped all pretence to dance with the waves and the wind and embraced, as the price per barrel of oil rocketed, their deeply carnal mantra of 'Drill, baby, drill!' You don't make $266 billion in petrol sales, as BP did in 2006, by not doing what big oil companies do, no matter what it might say on the windscreen sticker.
     BP is big in everything. It is the second biggest oil company in the world. But in the oil field everything is relative – compared to Exxon Mobil all the other oil companies in the world combined would still be smaller. In the Gulf of Mexico BP is responsible for the biggest oil disaster in the world. In this, as in most things, BP is consistent. The first serious loss of life in the North Sea took place in 1965 when the BP drilling platform, the 'Sea Quest', shed a leg and sank to the bottom leaving 13 dead. In 2005 there was the Texan City refinery fire which left 15 dead and 170 injured. In 2006 in Prudhoe Bay, Alaska, vast quantities of oil escaped from a corrosive pipeline operated by BP and the lawsuits are still making big bucks for the lawyers.
     There have been many other accidents, incidents, spillages, collisions, wrecks – call them what you will – in which BP has had a presence as have many other oil companies. There are around 40,000 oil and gas fields in the world so it is hardly surprising. What is equally alarming is that 94% of known oil is concentrated in 1,500 giant and major fields and the largest of these are in Siberia and the Middle East. The biggest of these is in Saudia Arabia which has recoverable reserves of between 75 and 83 billion barrels and has been producing since the late 1940s.
     
These oil fields sit on the Atlantic Shelf in deep water – three times the depth experienced in the North Sea. The Transocean drilling rig, the Deepwater Horizon, in the Gulf of Mexico was operating in even deeper water. Now it spills tens of thousands of barrels of oil per day into the ocean. But it is not even the biggest oil spill in the Gulf of Mexico. This dolorous honour went to the cryptically named IXTOC 1 rig, operated by Pemex of Mexico, which exploded and caught fire in 1979 and burned for 10 months, spilling 90 million gallons of crude oil. This rig was operating in the very same region as the Deepwater Horizon.
     But this is not the biggest oil spill in the world. This dubious gold medal goes to the offshore disaster which happened off the coast of Kuwait during the first Gulf War in 1991. We never hear much about it, presumably because it was caused by Saddam Hussein (a bad guy) during a time of war. Whether the Deepwater Horizon tops this in scale and consequence remains to be seen but it is already being regarded as the biggest man-made environmental disaster in the history of the United States. The lesson from this history is that no matter now much the authorities string out coast booms or apply dispersants the damage is done – in 1979 around 160 miles of Texan coast was polluted. Results from Alaskan oil tanker spills show that some species – the Pacific herring, for example – never recover.
     Rick Steiner, a marine scientist, who took part in the clean-up after the Exxon Valdez, said: 'There has never been an effective response to a large oil spill, ever, anywhere. Maybe they have gotten one percent of the oil back this time, maybe less. They need to do what they can to protect these barrier islands and sensitive wetlands, but the battle is lost.' Thousands of fishing-related jobs could also go as marine life succumbs. The current slick in the Gulf of Mexico already stretches some 130 miles by 79 miles and is growing.
     Also growing is the cost to BP. So far it has cost £645 million to attempt the various procedures to stem the flow and plug the well. The latest 'Deep Kill' operation has ended in failure and last week £12 billion dropped off the BP share price. This could be construed as the true 'price of oil'. The cost of a couple of months production for BP can be met easily, as can the court cases and compensation costs and clean-up bills it will face. What BP, like all big oil companies, can't afford is to be seen to be screwing up big time. Reports of BP's demise, however, are premature in the extreme.
     
But big oil is an extreme world and galling as it may seem the real tragedy for BP is that the Deepwater Horizon blew out so close to America. Oil spill is a common enough occurrence for industrial oil. In reality no-one takes much notice, as no-one sees it – unless you are unlucky enough to live in the Niger Delta. You could not help but see, live in, die because of, the 2,000 major oil spillages which have as yet not been cleaned up.
     Other African countries 'lucky' enough to have retrievable hydro-carbon reserves such as Angola, Chad, Uganda, Gabon and Sudan pay a similar price for cheap oil. In the South American countries of Venezuela, Colombia, Ecuador and Peru there is a similar sorry tale of pollution, toxic dumping, blow outs and associated criminality and murder. All big oil companies are culpable. Almost all are engaged in legal battles with the governments of some of these countries. Ecuador is currently pursuing Texaco for $30 billion. In other countries the oil companies operate like a shadow authority, providing 'parallel government'. Here anti-oil activists and even national and 'democratically elected' presidents can disappear.
     That the price of a barrel of oil hovers between $70 to $100 is because the oil producers pass on the real cost of crude oil to Third World countries while at the same time extracting tax breaks and various subsidies from the First World. It is the glare of TV cameras beaming pictures back to US channels and into millions of homes that BP cannot live with. If this media exposure were given to operations in Nigeria, for example – and if its government were able to extract the same financial penalties as Barack Obama will do – a barrel of oil would cost well over $200, or there would be no drilling, baby.
     As far as environmental and industrial regulation of the oil industry is concerned, most of that, in the US, hit the dirt during the Bush years as big oil enjoyed what it saw as its natural role in government. The secretary of the interior, Ken Salazar, claimed that the Obama administration's job is 'to keep the boot on the neck of BP'. When BP decided to suspend the Deep Kill operation it did not inform the president who has made much of telling the world where 'the buck stops'. As ever, it would seem, oil companies have the boot on the neck of governments.
     
The North Sea is peppered with oil installations. The Beatrice field is visible off the Caithness coast. But mostly the oil fields are out of sight and that means, for most people, out of mind. How much do we really know about what is going on out there? The Scottish Government has no control at present over the oil fields off the Scottish coast, no matter how much it would dearly desire such powers. This is the political hole in the polo mint of the devolution settlement and makes the real-politick of what Scotland has been granted by Westminster appear ever so cynical. Oil, like nuclear, is the business of real, grown-up governments. Like many developing countries our resources flow elsewhere.
     Much has been made in the British press about how this – the Gulf of Mexico blow-out – could never happen here because our regulatory bodies are much stricter. The Norwegian company Stat Oil has said that the equipment of the Deepwater Horizon would never have left the fjord. This may be true but the history of the North Sea tells a different story. There have been many disasters including tankers, helicopters, drilling rigs, platforms and reaching its gruesome zenith in 1988 with the Piper Alpha when 167 men died.
     On 20 April 2010, 11 riggers were needlessly killed on the Deepwater Horizon in the Mexican Gulf. These were not oil executives or sheiks, but roughnecks and roustabouts, crane-ops and engineers. You will see their equivalent in most Scottish towns trying to make a living for their families, in pubs and restaurants relaxing until it's time to go back off-shore.
     In the deep water west of Shetland, beyond the Atlantic shelf, what kind of future is there for them? The British Government rakes in over £5 billion annually from the North Sea alone and as the Clair field production increases so will the revenues. Holyrood makes do with the Calman Commission. As the banking collapse has shown – what risks will not be taken when there is serious money to be made? The British government of the day in the 1990s threw out the priests of financial regulation and welcomed in the free market gods of chaos whose ransom price was the very blood of our social society. Oil companies will do the same thing, over and over again, until they are stopped. But what addict can control their addiction let alone their supplier? The treatment lies well beyond petroleum.

George Gunn is founder and artistic director of Grey Coast Theatre Company, based in Caithness, and is well known for his playwriting.