The US oil spill is a salutory lesson?

[OrmRenewed]

DAvid Strahan.

"To pull it off, the President will have to resist the temptation to succumb to a xenophobic blame game, but if he does, and uses the slick to steer America towards a more sustainable energy policy, we should all be thanking BP"

This has occurred to me in quiet moments. For a country wedded to the internal combusion engine, with big long roads, and relatively cheap petrol, this might help to concentrate the collective mind.

I'm having trouble working out what your point is, coolfonz, besides demonstrating you have some knowledge about the oil industry (or you have been googling). Are you saying that because Lord Browne was CEO when the Texas City refinery exploded that it therefore okay that people die in the oil industry?

These things are avoidable. In the North Sea it took Piper Alpha to get appropriate HSE in place. And, yes, in the oil industry it is well known that today North Sea regulations are much stricter than the Gulf of Mexico. Perhaps this disaster will change that.

But...

This disaster wasn't so much an HSE issue as it was a blantant disregard for the technical information that had been brought to his attention (assuming what has hit the news so far is true - it is of course possible we don't know all the facts). AND.... let's not forget the Obama's guy who was in charge of overseeing the industry was fired last week. So the US government is playing the same blame game that BP/Transocean/Halliburton are playing.

I'm not saying it's ok or not. It just happens all the time. It's not really material to the industry.

After Texas City in 2005 another three/four workers died in their refineries in the US, one was chopped in half by a lift.

Nothing happens, it doesn't really matter in the bigger picture.

And in a couple of years this oil spill wont matter to BP. How much did ExxonMobil pay for the Valdez spill? $500mn. Fuck. All.

The reaction to the spill in the Gulf is from people who don't know or understand the industry. BP are a subsidiary of banking, nothing will happen to them. But I would say Tony Hayward and Andy Inglis (head of upstream) will be shitting in their pants...

All the banks are screaming BUY BUY BUY BP by the way...fill your boots...if they don't cut the dividend, fuck me you'll be getting close to 10pc off the top of my head...

Riven - Not really quite right. The majority of oil geologists is a moot point - i don't think that's right - it's more about scale, time, politics and its subsidiary economics.

There are looaaaaaads of hydrocarbons left on the planet. But loooaaadddds of them are off limits due to politics (Saudi Arabia is the biggest example), difficult to extract (hostile environments, deepwater), or environmentally suspect (shales, sands etc).

We also consume around 85-86mn b/d...so if you take a conservative depletion rate of 3pc/yr that is around 3mn b/d annualised you need to bring on stream. Just to stand still, let alone satisfy growing demand in China/Asia and it is growing fast.

Then there is cost. Oil prices need to - and will - stay above $60/bl to make extraction profitable for private companies and national companies.

Easy oil? Iraq and Iran are full of it...

strix the BP crash 14 months ago wasn't from weather but from equipment failure - my DH works in the offshore industry in the UK and had a personal interest in the accident reports (before he went up again). His view was that it was a bit of a freak accident but better safeguards are in place now.

And thank you for mentioning the 11 dead, it upsets me that they seem to have been brushed aside in all of this.

Coolfonz - Since the oil industry is the biggest in the world, I'm not sure that it's death rates are really that high compared to other manual labour jobs (farmer? fisherman? much higher) but somehow there's not quite the same sympathy in the media for the oil worker. At the end of the day, most of those who die are relatively low paid and just earning to take care of their families.

Abdn - Sure, it's really rubbish. Also contractors die often, often people work in quite dangerous places just to live, folks die in traffic/air accidents quite often.

Now I don't know US companies quite as well - so you might check this, im 80pc its roughly right - ExxonMobil had their first refinery death like in 2006 or 7...was in Asia i think Singapore...was their first one for 18 years.

I mean some people have good records and BP doesn't...Texas City right...175 injured as well...that is some explosion. Since then they had a gas release there ~90 workers got compo, i think three more contractors have died, it is still failing some (admittedly small and contested) tests it was set to complete.

I mean make of it all what you will. But BP will survive. You know, when you have power accountability become somewhat more flexible a concept.

I don't have any idea about BPs safety history - my DH has never worked with them.

But again, "contractors die often", I worry there's the assumption that they're taking on more risk to get more money. Often contract work is the only work there is and I hate hearing that contractors died because it feels like the companies somehow are a bit more insulated from it than if it was their employees.

I'm not an expert on drilling completions so I'm not sure what to think yet of the reports that BP is to blame - but living where we do, the truth of the matter will be public knowledge pretty quick. (I'll hear about it at the school gate if not before).

i am a little confused...i didn't think BP actually ran this particular oil drill, but were liable as they bought the oil (and the company that did do the drilling went out of business the second this happened?)?

that is, i heard a BP dude on radio saying 'not our people, not our processes, not our equipment'...

I am not so sure that BP will survive this disaster. BP has lost one third of its' market value since the oil spill began.

All the figures quoted (money spent to date, and money projected) to stop the flow of oil doesn't begin to address the company's liability to the businesses/communities/individuals damaged and/or destroyed by the spill. There will be huge environmental costs, not to mention astronomical legal fees. Those figures will dwarf the money spent to stem the flow. If BP is found to be negilgent in the oil spill, the financial costs could (and probably will) crush the company.

And then there is the issue of the coming indictments/criminal charges from the US Federal government - all this results in a liability list that will go on for years, and that even BP, with its $20 billion free cash flow and $12 billion dividend to draw on cannot withstand.

abdnhiker, sorry you are right. I thtink I was confusing the stories of the fatal crash and the one a couple of months later in which everyone was resued when the chopper crashed on approach to ETAP (BP again). As I recall, the weather was an issue on that day and some of the othere scheduled flights were cancelled. But, this one flew. Of course, in fairness to BP, they don't own/operate the choppers. So I don't know that the decision to fly was actually a BP decision.

I do remember what a phenominal rescue job was carried out. I think plunging into the North Sea is probably the worst way I can think of to die.

EdgarAllanPoll, the drilling rig belonged to and was operated by Transocean. But, Halliburton was on board as the cementing/completions contractor (I think , not sure of their exact scope of work but it included cementing the well), BP was on board as the owner/operator of the field. It is usual for the operator of a field to have contractors involved who perform various aspects of the work.

EdgarAllanPoll - bit more info about various parties involved:

''failures could have involved a number of different companies besides BP, including Transocean, which owned and operated the rig, Halliburton, which cemented the well, and Cameron International, which made the blow-out preventer.

BP was in overall control, but responsibility for safety was shared. That model may have to change, said Mr Hayward.''

Haven't read it yet, but there is a big article/interview in today's FT.

abdn I hope you are right about better HSE, but somehow I have always been very sceptical about these claims of the offshore industry. I had a look at the museum about offshore drilling in Aberdeen (it is amazing! - I am sad), and it did not convince me about it. A lot of people work in offshore industries where I live, too.

I think reading reading this book will be very timely for me.

I am very impressed by all the facts and figures on this thread.

If I understood it well, the debate was about whether this oil spill is a "blessing in disguise" being a wake-up call. I do not think it is, but the case Trafigura never changed anything, because the people affected lived in Africa therefore their voices easily go unheard. Maybe the powerful US administration could achieve better safety standards and more responsible drilling.

Transocean and BP both have quite a lot of information on their sites. Here is Transocean's condolence site for those who died: www.deepwaterhorizoncondolences.com/

There are more links on Transocean home page.

gingercat - the HSE in the North Sea is quite good and according to friends who've worked elsewhere, better than most places - whether it's good enough is another story but I can only hope since it's my DH who goes out there.

strix the non-fatal flight was first - my DH was offshore that day so I remember it well. And then when the crash happened a few months later I know exactly where I was when I heard (a friend texted to check DH was onshore)... There was another helicopter crash involving fatalities off eastern Canada around the same time too.

Thanks for the link to the transocean site - it brings it home that these are not well paid corporate bosses that lost their lives but ordinary men. As bad as the environmental impact is and the tendency to blame BP for cutting corners, you have to realize that no one thought it was a risk because no company would care that little about their employees/staff/contractors. (Or at least no one who actually goes offshore and makes the safety and engineering decisions). It's a tight knit group and I've meet some of the rig supervisors and they are lovely people who care a ton and aren't at all cowboys in search of profit. But what needs to happen is a careful review of regulations and risk assessment and some of the engineering itself to make sure this can't happen again.

BP was in overall control, but responsibility for safety was shared. That model may have to change, said Mr Hayward

does anyone else think that where companies share responsibility it is too asy for errors of miscoordinationto happen (where i person thinks X has been checked by someone else...)

All the work at any well in the US Gulf is not done on spec. It has to be approved by the US MMS, all the work at Block 125 was approved.

BP isn't going anywhere.

The costs will be around $10bn, not chicken feed, but no material to the company when spread over a couple of years.

The reaction is waaaaaaaaaay over the top.

And a hurricane would be bloody brilliant for BP, it would disperse the oil all over the place and thin it right out...even better get it to the surface so the sun can get at it...

I still think Hayward and Andy Inglis' position has become weaker though...at their full year results they were telling us about how strong their tech is...whoops...

I'm sorely tempted to buy £20k worth of BP shares right now...wonder what the missus will say...

not material

I am not sure who is to blame or even if it will change anything. Out here, everyone has still managed to blame Obama (OK, I live in Texas where I see ''secede'' stickers and ''tea party'' stickers everywhere but also in LA they are blaming him).

I would like to see some more renewable energy available for cars - I live in a relatively highly populated place but have to drive anywhere - I could maybe walk to get a cup of coffee or to get mexican food - anything else requires a drive (and it is HOT right now).

I feel horrible for the 11 people who died and at first that was what was reported. Now everyone is focusing on LA and how their economy is shot. I think I see just as much about how people can't fish in LA as about how tragic this oil spill is. I have seen ONE person (besides Obama mentioning it once) say that this is indicative of a need to find different energy sources.

There isn't oil by me yet, but I would not be surprised if we saw some. My Mom keeps talking about how where she lives (NE USA) they keep showing pelicans in the oil struggling to move .

This is really tragic on so many levels. I am not entirely sure what the answer is, either.

Regarding someone saying this is just ''what happens'' if you work in oil - this IS the view taken. I know someone whose DP works at an oil refinery and she is scared every day about him coming home. It really is viewed as just a job where it is dangerous. There have probably been about 8 other chemical spills or leaks very close to me too that are ''small''.

So no - I am not particularly hopeful that this will be a catalyst for change.