Spill, Baby, Spill: BP and its Gulf Coast oil catastrophe

from the latest edition of ¡Reclama! magazine:

As May 8th-9th efforts to control the BP oil leak in the Gulf Coast failed and the oil slick spreads to more coast lines, we are reminded that disasters like this don’t happen in a vacuum and without plenty of foregone opportunities to prevent them.

On the evening of Tuesday, April 20th, an explosion on the oil rig Deepwater Horizon killed 11 workers and injured nearly 20 more. The ship, on lease by the oil giant BP, sank two days later, ironically on the 40th anniversary of Earth Day, in the next step of what has been predicted to be the worst industrial environmental disaster in US history. By April 30th the oil slick (the film of oil floating on the surface of the water) had grown to 20,000 square miles and had begun to come ashore near the mouth of the Mississippi river, on course to hit 10 state and national wildlife refuges and management areas. Beyond affecting the parks, the oil leak may potentially hit five states, with fragile economies dependent on fishing. The extent of the oil leak, which is leaking from pipes laid at an ocean depth of 5,000 feet, is predicted to take at the bare minimum two to three months to control. Estimates of daily leak volume have grown steadily: April 22nd estimates placed the leak volume at 1,000 barrels per day, roughly 42,000 gallons; by April 29th, when BP revealed there was an additional breach in the riser (the pipe through which the oil flows), the estimate was 5,000 barrels, or 210,000 gallons per day. On May 5th, a senior BP executive revealed in a closed-door Congressional brief that the pipe could be leaking as much as 60,000 barrels, or 2,520,000 gallons, per day. If that number is true, we will have roughly four Olympic swimming pools worth of oil leaking into the Gulf of Mexico every day for the next two months.

The BP oil spill, already considered to be worse than the Exxon Valdez spill in Alaska in 1989, comes not too long after the Obama administration revealed plans to open up sensitive areas along the Atlantic and Pacific coasts to offshore oil drilling, ending a 27-year moratorium protecting these areas. As victims from the explosion and families of the killed workers begin a lawsuit against BP, the probing into BP’s habit of shirking of safety regulations reveals not just the appalling disregard of the London-based oil giant for worker safety and the environment, but also a distinct relationship between the oil industry and the institution meant to regulate it that makes this tragedy not all that surprising, and not all that unlikely to be repeated in the future.

They might be giants
In 2009, for the first time, seven of the ten largest corporations in the world were oil companies. According to Antonia Juhasz, author of “The Tyranny of Oil: The World’s Most Powerful Industry – and What We Must Do to Stop It,” BP – British Petroleum, or, since the start of their green-wash campaign in 2000, Beyond Petroleum – brought in US$239 billion in revenues in 2009, qualifying it as the fourth largest company in the world. With its staggering yearly revenues, BP has little interest in moving beyond petroleum, and a decidedly vested interest in funding new sources of oil and keeping themselves free from government regulations that would hinder them from doing so or increase the cost of their operations. With off-shore oil wells at shallower depths running dry, BP and other oil companies have begun gaining permits to drill at unprecedented depths, despite their technology not being tested to be safe for drilling these new wells. When the Deepwater Horizons explosion occurred the rig was drilling under 5,000 feet of water and as deep as 18,000 feet into the earth. (Interestingly, and relevant to the lawsuits being filed, the well that is now leaking had just been cemented by the somehow ubiquitous contractor Halliburton, known more for its contract work in Iraq and Afghanistan, which makes 15-17% of its annual revenue from offshore drilling contracting of this nature.)

Drilling at such an extreme depths is a huge operation, and comes with considerably elevated risks. Avoiding the actualization of those risks via safety regulations, however, costs BP money. Well, no problem for BP, right? After all, they made $239 billion last year. But why would BP increase the cost of their operations and compromise their profits when they can just buy off the organization meant to impose those regulations? Accordingly, in 2008 BP spent a record $10 million on lobbying in Washington, and then broke their own record in 2009 by spending $16.5 million, lobbying heavily against stricter offshore drilling safety rules that were being considered. As pointed out by Tyson Slocum, Director of Public Citizen’s Energy Program, when the Department of the Interior (the department that oversees offshore oil operations) proposed a mandate of additional safety and oversight regulations in 2009, BP wrote back in September that additional regulations were not necessary as their own “internal voluntary safety standards” were adequate.

Perhaps the members of the Obama administration and Secretary of the Interior Ken Salazar (a big supporter of expanding oil drilling in the Gulf Coast) were open to taking BP’s word for it thanks to the generous campaign contributions made by BP. They certainly wouldn’t have trusted BP’s voluntary standards based on an exemplary safety record: BP is one of the worst repeat corporate law-breakers out there when it comes to disregarding safety regulations. After an explosion at a Texas refinery in March 2005 that killed 15 and injured 180, BP was found to have hundreds of worker safety violations. The company was fined $21.4 million, convicted of negligence and put on probation, with orders to address the safety violations and its previous disregard of the Clean Air Act. According to a 2009 BP report by RiskMetrics analyst Yulia Reutur, a government review found that BP failed to comply with the terms of its probation, and the company was fined an additional $18 million, on top of a related $50 million fine added in 2007 for violations of the Clean Air Act. These fines, however, are just slaps on the wrist for such an enormous corporation; standard costs of operation which are easier to pay than to avoid altogether by adhering to the regulations.

How to make billions, and keep them, too!
Corporations though, including BP and the contractor Halliburton, have found other ways to avoid those fines and avoid having to run safe and environmentally conscious operations: bend the laws. Riki Ott, marine toxicologist and author of “Not One Drop: Betrayal and Courage in the Wake of the Exxon Valdez Spill” points to the Halliburton Exemption in the Clean Water Act, which authorizes oil and gas drillers to inject recognized hazardous materials into underground water supplies without regulation in a process known as fracking. This is indicative of a corporate trend. The Halliburton Exemption is included in the actual Clean Water Act, part of the Bush Administration’s Energy Policy Act of 2005. BP has benefited in a similar manner. The Minerals Management Service, of the Department of the Interior, granted BP a “categorical exclusion” from the standard environmental review required to receive an offshore drilling project. That means that when Deepwater Horizons was out drilling this now heavily leaking well at unprecedented depths, there had been no environmental review of their project, just an easy rubber stamp, permitted through a loophole in the National Environmental Policy Act. This is standard practice: the Minerals Management Service grants 250-400 of these exclusions to oil companies every year.

We have to be cognizant of this sort downward spiral, as the power flows unabated into the hands of corporations like BP and out of the hands of the institutions meant to regulate them. With the January 21st Supreme Court decision in the Citizens United case, corporate funding of political candidates can proceed without limitations. Whereas in 2008 BP spent $500,000 on campaign finance, BP is now free to dump as much money into campaigns as it does into lobbying; $16.5 million will go a long way in electing politicians that will back the further deregulation of the oil industry, with more than enough left over to buy off the politicians that would otherwise be against it. The Supreme Court, in its decision, just granted corporations the rights of persons under the constitution, except BP is a person with $239 billion and an explicit interest in electing politicians that will give the oil industry free reign. This is, incidentally, not democracy, when corporations can finance campaigns, buy politicians, and make up the rules to their own games.

Yet people support this! Citizen’s United was a 5-4 Supreme Court decision. These laws, these safety regulations—they are put in place to protect us. They are put in place to protect the 11 workers who just died in the Deepwater Horizon explosion or, at the very least, hold someone accountable for their deaths. We offer BP protection under our constitution, granting them legal personhood when it comes to their profits, but when it comes to their responsibility to their workers, their liability in disasters like this, suddenly it is nobody’s fault. You can’t put a corporation in jail for life for killing 11 people.

The regulations these corporations fight protect the water we drink and the air that we breathe; they are meant to preserve public safety, worker safety, and our public health, and yet we let corporations get away with murder – figuratively and literally – because we don’t hold the corporations accountable. We can’t, as a country, seem to disenchant ourselves from the illusion that an unregulated market is going to take care of us.

And so it goes
The 1990 Oil Spill Liability Trust Fund may well protect BP from having to pay anything more than $75 million in liabilities claimed by individuals, companies, or the government in this spill. Fishermen from the coastal states will see their livelihoods disappear, as this oil spill will wipe out animal resources for years, as we saw with the Exxon Valdez spill in Alaska. And if that oil spill liability wasn’t going to cover them enough, BP was just ordered to stop offering settlement agreements to the people of Alabama who will be most affected by the spill. Taking a page out of Exxon’s Valdez spill response on this one, BP was offering people $5,000 upfront to waive their right to sue in the future for any damages that may occur to their business, their health, or their families.

We allow BP to lobby for decreased regulation and expanded areas for drilling and we will now allow them to dump their astronomical revenues into electing our politicians. Yet, when a huge spill like this occurs, are we surprised? It was only a matter of time, and it is only a matter of time before it happens again. We allow the profit of the oil industry to be privatized and the risk to be socialized. BP will continue making $239 billion a year after the shock of this spill wears off, but the communities and average Americans whose lives have been devastated will have to fight to ever see a penny from them. Shell Oil, by the way, plans to start oil drilling in the Chukchi Sea of Alaska in July. What were those wise words we once heard during the 2008 campaigns? Ah, yes, I remember. Drill, Baby, Drill.