19 June 2010

Gulf Oil spill – who is responsible?

Lots of blame being thrown about, most of it at BP, the american people blame BP, Anadarko blame BP, BP blame Transocean, Transocean blame Halliburton etc. Nobody wants to take responsibility so lets look at a few facts.

There seems to be little doubt that BP have, over the last 10 years cultivated a culture that puts profit ahead of safety. Numerous incidents such as the Alaska pipeline disaster and the Texas City refinery fire, pay short shift to Hayward’s claims that safety is paramount. To be clear, the casing design in the well, the lack of centering during the cement job which consequently failed and, not circulating the well for 24 hours prior to the cement job are all acts that put cost cutting ahead of safety. The only shame about all this is that John Brown is not around to pick up the shit that has resulted from the culture he created.

But while BP have clear responsibility, I don’t think they are the key guilty party. And I will try and explain why –

If you accept that we live in a capitalist society (of which America is the poster child) then BP’s only responsibility is to maximize share holder value. A pure capitalists would argue that the threat of having to pay the cost of the clean up would force companies to manage risk. In fact this is exactly what the Bush brigade argued for years. But the problem with that theory is the chance of major incident is so small that companies, who are competing against one another on a quarterly or yearly basis to increase their share price are happy to except the risk. It’s the same attitude as we have to many aspects of our life, where the consequence of an event such as a car crash is large (e.g. death) but the chance of occurrence is very low. We are happy to drive our cars, cross the road, climb a ladder etc.

So no company can be trusted to enforce safety regulation – it’s the job of organizations that are not motivated by profit and have a longer term perspective – Governments! To follow our analogy from above, most people would probably not but car insurance unless they were forced to. People simply believe that the chance of an accident is so small they will accept the risk. And just as government regulation works in the car insurance situation it demonstratibly works in the oil industry – Norway is the prime example of a country that has extremely strict environmental and safety regulation and while accidents could still happen, its far less likely, and while companies bitch and moan, they comply, because they have to. It’s that simple.

So who is to blame – in my opinion the blame lies firmly with the regularity authorities that failed to devise and enforce systems. But those regulators were just doing what they were told by the government. So we should go after that government, but even here Bush, Cheney et al were funded by, and openly campaigned on, a pro-oil company ticket. They invaded Iraq for that very reason. So you could argue that they are just doing what they were paid for. So then who do we blame? I would say that the ultimate blame lies at the feet of the people who voted for those governments.

Anyone who complains that $3 gallon is expensive for petrol while driving their 5 liter SUV, anyone who voted for Bush et al. and their ridiculous de-regulation of the oil industry has to be accountable when it all goes to shit. Not surprisingly they are the same people who are shouting loudest now.

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