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Gulf Oil Spill Isn’t Just Damaging To BP


MAY 17, 2010

By James Herron

When BP implements increasingly desperate-sounding methods to shut down its leaking well next week–blasting golf balls, shredded rubber and other junk into the well before filling it with cement–the rest of the oil industry will no doubt be praying for its success. [Read BP’s latest press statement on the disaster here.]

You might think that companies like Royal Dutch Shell or ExxonMobil, both of which have had their share of environmental or safety scandals, would feel some relief that someone else is drawing the political heat. But the failure of a company as well funded, experienced and technologically advanced as BP to get a grip on this disaster after almost four weeks damages others too.

The Deepwater Horizon oil platform leaning on it’s side before sinking into the Gulf of Mexico.

For many years, BP and its peers have bragged that they are the only ones with the skills and know-how to find and extract oil at the industry’s frontiers, whether in the deepest ocean, on remote Arctic shores or from complex geological formations. Until the Deepwater Horizon disaster, this was a convincing argument and these companies dominated new areas like offshore Angola or Russia’s far east.

As BP’s finest minds have tried every conceivable option to get a grip on their leaking well, and it becomes increasingly obvious that no established procedures existed to cap a leaking well in such deep water, confidence in the industry’s technological prowess has been tarnished.

Already, Shell faces problems with its plans to explore for oil in the Chukchi and Beaufort seas offshore Alaska this summer. Interior Department Officials, who approved Shell’s drilling plans last year, are refusing to sign off on those permits, at least until a review into the Deepwater Horizon disaster is complete.

President Barack Obama has accused the Interior Department’s Minerals Management Service of having a “cozy relationship” with the companies it regulates and has begun a review process that will likely lead to tougher regulations for all oil companies operating in the U.S.

BP finally got some good news Monday as one of its many attempts to contain the oil gusher beneath of the Gulf of Mexico finally paid off. It has successfully threaded a tube into the broken oil pipeline that is leaking onto the sea bed and is siphoning off around a 1,000 barrels of oil a day into a tanker at the surface.

However, as glimmers of hope come, this one is pretty dim, considering that at least 4,000 barrels of oil a day continues to pour into the Gulf. Furthermore, the discovery of huge plumes of oil deep beneath the surface of the Gulf of Mexico have raised fears that the current 5,000 barrel a day estimate for of the size of the leak, which is based on observation of oil visible on the surface, may be far too low.

This remains a disaster that threatens to destroy BP’s reputation, wreak billions of dollars in environmental and economic damage and threatens to be severely detrimental to the long term interests of the oil industry.


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