The Gulf spill and the Hobson's choice of oil production

The ongoing oil spill in the Gulf of Mexico is a catastrophe that seems to be occurring in slow motion. Oil continues to pour forth from the oceanic well with little, it seems, to be done to prevent the flow into the Gulf waters and threaten further the ecosystems that lie around them. Meanwhile, a massive oil slick inches towards the Louisiana coast and threatens Florida and Alabama as well. The president has called it a "potentially unprecedented environmental disaster."

A string of questions looms, not just about how the spill happened but about the reaction to the crisis, both by BP and the federal government, and well as the oil industry's requirements for readiness and prevention. These are issues that Thomas Beamish knows well. A sociologist at the University of California Davis, Beamish wrote his 2002 book Silent Spill about a California oil spill that went unattended for 38 years. In his research he became intimately familiar with the regulatory and organizational issues that go into oil production.

We asked Beamish for some thoughts on the Gulf spill, and he sent us one of the richest and most detailed posts we've hosted on this blog. His thoughts - focusing on delayed response, the oil industry's priorities, and the future of 'normal accidents' - follow after the jump

The Gulf oil spill has the potential to be horrifically destructive. In the coming weeks, literally hundreds of thousands, perhaps millions of gallons of crude may wash ashore, coating shorelines, marshes, estuaries, and shallow bays. It may foul an extremely fragile biome that is home to innumerable fish species and endangered marsh plants and an important flyway for migrating birds. This is a natural treasure, not only for the wildlife it supports but for its social and economic importance to the region: fishing, tourism, and oil. The spewing oil has thrown these into stark relief. Yet we confront a “Hobson's choice.” We are free to choose one option: In the rhetoric of the last election, and as evidenced in the recent energy agenda of the Obama administration,  it’s “drill, baby, drill.” Yet even if oil production is currently our only choice—something I do not believe it need be—it must be done differently, and indeed must be done better.

My interest in oil spills began with my study of another spill documented in the book, Silent Spill. That disaster involved slow leaks and frequent spills at an isolated oil field on the coast of central California that, over a period of 38 years, became the nation’s largest on record (20 million gallons versus the Exxon Valdez’s 11 million). And while very different than the Gulf's Heritage Platform spill, it is comparable to the current disaster insofar as they involve similar casts of characters, accident routines, and industrial regulations. Response to the Gulf spill also coheres with lessons learned from other “man-made disasters.” In what follows I explore three issues exposed by the current oil spill catastrophe that are remarkable in their similarities to previous events: delayed response, industry priorities, and normal accidents.

Oil spill response: slow, halting, and secretive

As is typical of the government and industry, crises spawn post-hoc reaction in a way that symptoms of a crisis seldom do. Yet it is in attending to the symptoms that a crisis may be averted, mitigated, or at the very least eased. I do not mean this to be a superficial remark: the emphasis on reaction— and delayed reaction at that — rather than proaction is reflected in the law and oil regulation as it currently exists.

I don’t mean to imply the Gulf spill was caused by government regulations, but the nature of our current system of industrial self-regulation, coupled with the punitive form post accident response takes, engenders unanticipated consequences. Primary among them: very slow, guarded, and secretive response to signs of crisis.

Why? In part because of the structure of regulation itself. Unlike conventionally conceived forms of law enforcement that are predicated on a belief that violators will do everything within their power to avoid getting caught, oil industry regulators — such as the Minerals Management Service (MMS) and the Coast Guard — are almost completely dependant on the violator — or, in this instance, the oil operator — to self report. This is partly a matter of expertise, but it is also codified in laws such as the Oil Pollution Act of 1990 that stipulates self-regulation and self-reporting as the trigger for emergency response. When any entity, from a mom and pop gas station to a multi-national corporation, spills more than a barrel of petroleum (about 42 gallons), the onus is on them to report that spillage before it damages a waterway or significant resource. Only when spillage is known to exceed 10,000 gallons (about 240 barrels of oil) can the authorities legally set up an incident command structure, abrogate private property, and compel the offending operator to respond. As I noted in Silent Spill, “Perhaps punishment [for violations] coupled with self-reporting [requirements] represents the worst of [all regulatory] worlds” (p. 77). It certainly does not grease the wheels for a quick and cooperative response.

This painfully protracted response characterized the Gulf spill, which is now two weeks in the making. The explosion occurred on April 20. On April 22, BP Inc. claimed the oil on the ocean’s surface to be “residual oil” from the explosion, fire, and sinking of the offshore rig. Over the next week, BP expressed confidence that they had everything under control.  In all of this, the Coast Guard and MMS, while initially sending three coast guard cutters, four helicopters, and one spotter plane to rescue injured workers, remained totally dependant on BP and its subcontractors—Transoceanic, Haliburton, and Cameron—for information, technology, and advanced planning — and thus response. Not until the scope of the leaks had been ascertained and BP asked for assistance did regulators step in and step up their response. (It should be noted that the term “leak” is misleading: Oil is currently spewing forth from a 5”-6” diameter pipe at a rate of 200,000 gallons a day.)

Industry priorities exposed

The lack of a coherent response plan and the post-hoc manner of response are also revealing. The response to the Gulf spill exposes a set of industry priorities— those of the oil producers but also those of the regulators and lawmakers who propose, create, and enforce regulations. While it may come as no surprise that the industry’s and Mineral Management Service’s main priorities lie with greater levels of oil production, that concern does not presuppose a de-emphasis on safety and environmental compliance or accident preparation. Some numbers might clarify my point. While BP has spent heavily on PR to rebrand itself as the “green energy company” ($200 million in 2000 on rebranding campaign), and grossed some $47 billion in 2009, actual human and environmental safety seems to be a low priority, as reflected in their track record over the past half-decade. In 2005, their Texas City Refinery disaster claimed 15 workers who died in an explosion that was the culmination of a series of smaller accidents. In 2006, the Prudhoe Bay shutdown, reflecting poor infrastructural maintenance and pipeline corrosion, resulted in an estimated 267,000 gallons spilled. And in 2007 the Prudhoe Bay toxic spill involved some 2000 gallons of methanol. All of these incidences, upon further investigation, have been attributed directly or indirectly to BP’s cost-saving measures such as cutting back on maintenance and safety costs to improve the company’s bottom line. 

And while I’m unwilling to say that the blowout in the Gulf was itself the result of this ethic, I am of the mind that spill response has been heavily influenced by a set of priorities BP shares with other industry producers. The oil industry has a dismal track record: according to the MMS, there were 1400 offshore oil drilling accidents between 2001-07. Health, safety, the environment, and emergency preparedness are simply not priorities. This point is also born out by recent media reports claiming that BP is currently constructing “containment chambers” to put over leaking the wellhead and pipes on the sea floor that won’t be finished for weeks, and that the drilling of a “relief will” could take months.

Spills like this, while infrequent, are not unknown to the industry, and, given their magnitude and destructive power, require focal prioritization. Indeed, lessons from the 1979 blowout of IXTOC I rig in the Gulf off the coast of Mexico could have promoted such preparedness. It clearly did not. Questions along these lines — Why weren’t containment chambers on shore and ready for deployment? Why weren’t containment crews, booms, and skimmers immediately and proactively deployed at the start of the crisis? Why hasn’t investment in prevention and preparedness kept pace with the billions spent on state of the art drilling technologies — are not difficult to answer. They are a matter of industry priority, not technological capacity.

Oil Spills are “Normal Accidents”

My final point involves what in the opening I referred to as a Hobson’s choice. That is, we approach questions about oil drilling, production, and consumption as if they were the only choice available to us. And the industry and its advocates repeatedly proclaim that oil production, with its current technology—such as the Heritage Platform in the Gulf — is safe, will have little impact, and can be pursued without environmental or safety concerns. They tell us — tipping their hats to the Santa Barbara, Exxon Valdez, and Amoco Cadiz — that such disasters cannot happen again. Yet, the very nature of petroleum and the complex, tightly coupled systems required to produce it mean that gushers and spills will undoubtedly be part of our future. While they are an infrequent occurrence, they are a “normal,” if catastrophic, part of production.

Armed with that knowledge, if we decide as a society that we must continue to “drill, baby drill,” we should require oil producers to step up, fund research, fund environmental and safety equipment, fund accident preparation, and ensure against catastrophic occurrences in advance. We should stop treating petroleum as a Hobson’s choice. The cost of planning and preparing are indeed high, but as the Gulf spill so tellingly reveals, so too are the costs of pretending we only have one choice: petroleum without accidents.

Comments

[Alain Crawn]

"70,000 psi " is quite impossible. MAYBE 7,000 psi, which would still be one helluva a lot.
Are you sure you're the figure you're quoting was not given in kilopascals?

[David]

Alain:

Thanks very much for pointing this out. We've checked with the author and it was indeed a typo - we've now removed that figure.