by Daniela Perdomo
May 29, 2010
How the owner of the
exploded oil rig has made $270 million off the disaster,
and nine other shocking, depressing facts about the oil
is a staff writer and editor at AlterNet. Follow Daniela
on Twitter. Write her at danielaalternet [at] gmail
It's been 37 days since BP's offshore oil rig, Deepwater Horizon,
exploded in the Gulf of Mexico. Since then, crude oil has been
hemorrhaging into ocean waters and wreaking unknown havoc on our
ecosystem - unknown because there is no accurate estimate of how
many barrels of oil are contaminating the Gulf.
Though BP officially admits to only a few thousand barrels spilled
each day, expert estimates peg the damage at
60,000 barrels or over 2.5 million
gallons daily. (Perhaps we'd know more if BP hadn't
barred independent engineers from
inspecting the breach.)
Measures to quell the gusher have proved
lackluster at best, and unlike the country's last big oil spill -
Exxon-Valdez in 1989 - the oil is coming from the ground, not a
tanker, so we have no idea how much more oil could continue to
pollute the Gulf's waters.
The Deepwater Horizon disaster reminds us what can happen - and will
continue to happen - when corporate malfeasance and neglect meet
governmental regulatory failure.
The corporate media is tracking the disaster with front-page
articles and nightly news headlines every day (if it bleeds, or
spills, it leads!), but the under-reported aspects to this
nightmarish tale paint the most chilling picture of the actors and
actions behind the catastrophe.
In no particular order, here are 10
things about the BP spill you may not know and may not want to know
- but you should.
Oil rig owner has made $270
million off the oil leak
Transocean Ltd., the
owner of the Deepwater Horizon rig leased by BP, has been
flying under the radar in the mainstream blame game.
The world's largest offshore
drilling contractor, the company is conveniently
headquartered in corporate-friendly Switzerland, and it's no
stranger to oil disasters. In 1979, an oil well it was
drilling in the very same Gulf of Mexico ignited, sending
the drill platform into the sea and causing one of the
largest oil spills by the time it was capped... nine months
This experience undoubtedly influenced Transocean's decision
to insure the
Deepwater Horizon rig for
about twice what it was worth. In a conference call to
analysts earlier this month, Transocean reported making a
$270 million profit from insurance payouts after the
disaster. It's not hard to bet on failure when you know it's
BP has a terrible safety record
BP has a long record of
oil-related disasters in the United States. In 2005, BP's
Texas City refinery exploded, killing 15 workers and
injuring another 170.
The next year, one of its Alaska
pipelines leaked 200,000 gallons of crude oil. According to
BP has paid $550 million in fines.
BP seems to particularly enjoy violating the Clean Air and
Clean Water Acts, and has paid the two largest fines in the
Occupational Safety and Health Administration's history.
it any surprise that BP played a central, though greatly
under-reported, role in the failure to contain the
Exxon-Valdez spill years earlier? - below video.)
With Deepwater Horizon, BP didn't break its dismal trend. In
choosing a cheaper - and less safe - casing to
outfit the well that eventually burst, the company
to equip Deepwater Horizon with an acoustic trigger, a
last-resort option that could have shut down the well even
if it was damaged badly, and which is required in most
developed countries that allow offshore drilling.
In fact, BP employs these
devices in its rigs located near England, but because the
United States recommends rather than requires them, BP had
no incentive to buy one - even though they only cost
SeizeBP.org estimates that
BP makes $500,000 in under eight minutes.
Oil spills are just a cost of
doing business for BP
According to the Harte
Research Institute for Gulf of Mexico Studies,
$1.6 billion in annual economic activity and services are at
risk as a result of the Deepwater Horizon disaster.
Compare this number - which
doesn't include the immeasurable environmental damages - to
the current cap on BP's liability for economic damages like
lost wages and tourist dollars, which is $75 million. And
compare that further to the first-quarter profits BP posted
just one week after the explosion:
BP's chief executive, Tony Hayward, has solemnly promised
that the company will cover more than the required $75
million. On May 10, BP announced it had already spent $350
million. How fantastically generous of a company valued at
$152.6 billion, and which makes $93 million each day.
The reality of the matter is that BP will not be deterred by
the liability cap and pity payments doled out to a handful
of victims of this disaster because they pale in comparison
to its ghastly profits. Indeed,
oil spills are just a cost
of doing business for BP.
This is especially evident in a recent Citigroup analyst
report prepared for BP investors: "Reaction to the Gulf of
Mexico oil leak is a buying opportunity."
The Interior Department was at
best, neglectful, and at worst, complicit
It's no surprise BP is
always looking out for its bottom line - but it's at least
slightly more surprising that the Interior Department, the
executive department charged with regulating the oil
industry, has done such a shoddy job of preventing this from
Ten years ago, there were
already warnings that the backup
systems on oil rigs that failed on Deepwater Horizon would
be a problem. The Interior Department issued a "safety
alert" but then left it up to oil companies to decide what
kind of backup system to use.
And in 2007, a government
regulator from the same department
downplayed the chances and
impact of a spill like the one that occurred last month:
The Interior Department's Louisiana branch may have been
particularly confused because it appears it was closely
fraternizing with the oil industry.
The Minerals Management
Service, the agency within the department that oversees
offshore drilling, routinely accepted gifts from oil
companies and even considered itself a part of the oil
industry, rather than part of a governmental regulatory
Flying on oil executives'
private planes was not rare for MMS inspectors in Louisiana,
a federal report released Tuesday says.
hunting and fishing trips, golf tournaments, crawfish
boils, and Christmas parties" were also common.
Is it any wonder that Deepwater
Horizon was given a regulatory exclusion by MMS?
It gets worse. Since April 20, when the Deepwater Horizon
oil rig exploded,
the Interior Department has approved 27
new permits for offshore drilling sites. Here's the kicker:
Two of these permits are for BP.
But it gets better still: 26 of the 27 new drilling sites
have been granted regulatory exemptions, including those
issued to BP.
Clean-up prospects are dismal
The media makes a lot of
noise about all the different methods BP is using to clean
up the oil spill. Massive steel containment domes were
popular a few weeks ago. Now everyone is touting the "top
kill" method, which involves injecting heavy drilling fluids
into the damaged well.
But here's the reality. Even if BP eventually finds a method
that works, experts say the best cleanup scenario is to
recover 20 percent of the spilled oil. And let's be
realistic: only 8 percent of the crude oil deposited in the
ocean and coastlines off Alaska was recovered in the
Millions of gallons of oil will remain in the ocean,
ravaging the underwater ecosystem, and 100 miles of
Louisiana coastline will never be the same.
BP has no real cleanup plan
Perhaps because it knows
the possibility of remedying the situation is practically
impossible, BP has made publicly available its
"Oil Spill Response Plan" which is, in fact, no plan at all.
Most emblematic of this farcical plan, BP mentions
protecting Arctic wildlife like sea lions, otters and
walruses (perhaps executives simply lifted the language from
Exxon's plan for its oil spill off the coast of Alaska?).
The plan does not include any
disease-preventing measures, oceanic or meteorological data,
and is comprised mostly of phone numbers and blank forms.
Most importantly, it includes no directions for how to deal
with a deep-water explosion such as the one that took place
The whole thing totals 600 pages - a waste of paper that
only adds insult to the environmental injury BP is
inflicting upon the world with Deepwater Horizon.
Both Transocean and BP are
trying to take away survivors' right to sue
With each hour, the
economic damage caused by Deepwater Horizon continues to
grow. And BP knows this.
So while it outwardly is putting on a nice face, even
pledging $500 million to assess the impacts of the spill, it
has all the while been trying to ensure that it won't be
held liable for those same impacts.
Just after the Deepwater explosion, surviving employees
held in solitary confinement, while Transocean flacks made
them waive their rights to sue. BP then did the same with
fishermen it contracted to help clean up the spill though
the company now says that was nothing more than a
If there's anything to learn from this disaster, it's that
companies like BP don't make mistakes at the expense of
others. They are exceedingly deliberate.
BP bets on risk to employees to
save money - and doesn't care if they get sick
When BP unleashed its
"Beyond Petroleum" re-branding/greenwashing campaign, the
snazzy ads featured smiley oil rig workers. But the truth of
the matter is that BP consistently and knowingly puts its
employees at risk.
An internal BP document shows that just before the prior
fatal disaster - the 2005 Texas City explosion that killed
15 workers and injured 170 - when BP had to choose between
cost-savings and greater safety, it went with its bottom
BP Risk Management memo showed that although steel
trailers would be safer in the case of an explosion, the
company went with less expensive options that offered
protection but were not "blast resistant." In the Texas City
blast, all of the fatalities and most of the injuries
occurred in or around these trailers.
Although BP has responded to this memo by saying the company
culture has changed since Texas City, 11 people died on the
Deepwater Horizon when it blew up. Perhaps a similar memo
went out regarding safety and cost-cutting measures?
Reports this week stated that fishermen hired by BP for oil
cleanup weren't provided protective equipment and have now
fallen ill. Hopefully they didn't sign waivers.
Environmental damage could even
include a climatological catastrophe
It's hard to know where
to start discussing the environmental damage caused by
Each day will give us a clearer
picture of the short-term ecological destruction, but
environmental experts believe the damage to the Gulf of
Mexico will be long-term.
In the short-term, environmentalists are up in arms
the dispersants being used to clean up the oil slick in the
Gulf. Apparently, the types BP is using aren't all that
effective in dispersing oil, and are pretty high in toxicity
to marine fauna such as fish and shrimp. The fear is that
what BP may be using to clean up the mess could, in the
long-term, make it worse.
On the longer-term side of things,
there are signs that this
largest oil drilling catastrophe could also become the worst
natural gas and climate disaster. The explosion has released
tremendous amounts of methane from deep in the ocean, and
research shows that methane, when mixed with air, is the
most powerful (read: terrible) greenhouse gas - 26 times
worse than carbon-dioxide.
Our warming planet just got a lot hotter.
No one knows what to do and it
will happen again
The very worst part about
the Deepwater Horizon calamity is that nobody knows what to
do. We don't know how bad it really is because we can't
measure what's going on.
We don't know how to stop it -
and once we do, we won't know how to clean it up.
BP is at the helm of the recovery process, but given its
corporate track record, its efforts will only go so far - it
has a board of directors and shareholders to answer to,
after all. The U.S. government, the only other entity that
could take over is currently content to let BP hack away at
Why? Because it probably has no
idea what to do either.
Here's the reality of the matter - for
as long as offshore drilling is legal, oil spills will happen.
Coastlines will be decimated, oceans
destroyed, economies ruined, lives lost. Oil companies have little
to no incentive to prevent such disasters from happening, and they
use their money to buy government regulators' integrity.
Deepwater Horizon is not an anomaly - it's the norm.