Oil leaks in the Gulf – who will pay and who should pay?

We are still counting the cost of an accident; accidents will happen. So far the numbers are eleven lives, 26,000 claims for compensation, nearly one billion dollars spent so far by BP another $70 million pledged for resuscitating a lost tourist interest and $500 million on research into deep water oil spills. You can add to that the amount of time and money spent by the US Administration in supervising what attempts to be a cleanup and the time and energy spent by the Gulf States in doing the same.

The numbers are massive and the US government has targeted BP as the party responsible. BP has been going through a range of options to plug the oil leak. I am not an expert in deep water oil leaks but from where I stand it looks as though BP have been going through the cheapest options first.

You remember that the first option was to put what looked like (and probably cost as much) as a forty foot container over the leak, the funnel the oil. That did not work. The next more costly option was to try and stuff the leak with garbage and then concrete. Any plumber will tell you how hard it is to plug a leak while the pipe is still leaking. The second option failed. The next option is to cut off the well head and when that fails to drill a relieving bore. In the meantime huge volumes of crude oil have leaked into the sea and have reached the coastline of the Southern USA.

This is not the largest leak the world has seen; there has been one larger in Nigeria, but this is certainly the largest oil spillage that has ever affected the most litigious nation on the planet. BP has seen a third knocked off its share price and if it fails to cap the leak soon it makes you wonder whether there will be a BP at all.

Most oil companies have significant (usually more than 10%) of their oil reserves located under deep water. The present disaster will not stop them from drilling in deep water, we need the oil too much or so we think. It will however make the drilling in deep water far more expensive than it is now. I have no doubt that when an inquiry is held into the present disaster many ways of avoiding it or mitigating it will be found, all of which will have cost very large sums of money.

I doubt if deep sea oil drilling can ever be made 100% safe from large leaks. You just have to picture the effect of an undersea earthquake to understand that.

The environmental disaster is just one aspect of the leak at Macondo. It is terrible that seas and coasts are polluted, that wildlife is killed, that fishermen and tourism providers lose their livelihoods and that beautiful resorts will suffer for years as oil keeps washing ashore. It is also worrying that a large volume of crude oil in the sea when the hurricane seasoin starts may have environmental consequences far greater than we can imagine now.

But the environmental disaster has occurred because as humans we want energy – we are greedy for energy especially in the USA. We are so greedy for it that oil companies find it worth their while to drill miles below the seas for oil. We in the use of the energy brought to us by the oilman are careless with it.   It is still cheap.

And perhaps focussing on BP’s failure misses the point. It is the oil users who pollute, not those who trade in or get the stuff out of the ground. If the polluters did pay a price for the oil which covered all of the environmental problems that oil usage brings then no doubt the polluters (us) would be less minded to waste the energy that oil produces.

One Response

  1. I think we’ll all pay the price for this one. We must hope that this disaster that mobilises one of the largest economies into action. The US, for too long, has dragged its heels at most environmental forums, maybe (fingers crossed) this will actually shock them enough to innovate new technology and seek a viable alternative to oil. Respect and Peace @dam

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