FRFI 215 June/July 2010

On 20 April the Deepwater Horizon oil rig exploded and sank in the Gulf of Mexico, 60 miles from the Louisiana coast, killing 11 workers and injuring at least a further 17, spewing out vast quantities of oil into the sea and causing an environmental disaster. Over a month later as we go to press, attempts to seal the oil leak have had no success. The amount of oil that has escaped is twice that from the Exxon Valdez tanker off the Alaskan coast in 1989, which polluted hundreds of miles of beaches and poisoned marine life for generations. Shortly after the Deepwater Horizon spill, BP’s chief executive, Tony Hayward, claimed that it was ‘relatively tiny’ compared to the ‘very big ocean’.

The Deepwater Horizon was positioned on the outer US continental shelf, drilling where the sea bed is 1,500m deep. It was using new technology necessary as oil companies exploit further afield and take bigger risks to obtain the profitable resource. The Gulf and the Mississippi delta are important environmental regions and the source of around 20% of US commercial seafood and 75% of shrimp production. That the US Coast Guard has so far banned fishing in 46,000 square miles of the US exclusive economic zone in the Gulf demonstrates the extent of the disaster.

Latest figures suggest that the leak is between 12,000 and 19,000 barrels per day. It could be another two months before the oil flow is stopped. Efforts to contain the spill have failed miserably. The main dispersant involved, Corexit 9500, is highly toxic and banned in the UK; it has caused large plumes of oil to coagulate at depths up to 1,300m, the largest of which is 90m thick, ten miles long and three miles wide. These plumes may create dead zones in the ocean where there is no oxygen to support marine life, and the dispersed oil may enter the Gulf loop, taking it out into the Atlantic. Oil has washed up on the coasts of Louisiana, Mississippi, Alabama and even in Key West, Florida, 600 miles away.

BP which owns the oil well, Transocean Ltd which owned the oil rig, Halliburton Inc. which was contracted to cement the cap on the well, and the Obama administration have blamed each other. One week after the explosion, BP posted a profit of £3.6bn for the first three months of 2010, up 135% on the previous year. One bank analyst said the company had benefited from cutting 5,000 jobs and saving $4bn in operating costs. However, BP doesn’t cut costs as far as lobbying is concerned; the Wall Street Journal reported that BP was in the forefront of recent lobbying of the US government against stronger safety controls for offshore drilling. It gave $71,000 more to the Obama presidential campaign than to McCain, but hedged its bets by dividing campaign money 60% to 40% between the Republicans and Democrats during the last congressional election. It worked on Obama: in 2008 he opposed offshore drilling, but by the end of March 2010 he proposed opening up the Atlantic coast, the eastern Gulf of Mexico and the north coast of Alaska.

BP’s US record is appalling. In 2005, a fire at its Texas City oil refinery killed 15 workers, and in 2006 it was responsible for a pipeline spill in Alaska four years after warnings about corrosion. At Deepwater Horizon, the oil well didn’t have a remote-control shut-off switch. All three companies involved ignored test results in the hours before the explosion that indicated faulty safety equipment, and all of them admitted they were conducting no research into dealing with deep water spills. There have been 69 deaths, 1,349 injuries and 858 fires and explosions on offshore rigs in the Gulf of Mexico since 2001.

BP is Britain’s biggest multinational company. It helped keep apartheid running by breaking UN sanctions. BP employed paramilitary murderers in Colombia; chopped down rainforests in Brazil; is the biggest investor in the Baku-Tbilisi-Ceyhan pipeline whose construction resulted in human rights abuses of Kurds in Turkey; and cleared forests and poisoned crops and water to exploit Canadian oil sands.

Transocean has filed to limit its liabilities to $26.7m in a Houston court.  Its assets are worth $37bn, and it has announced it will distribute $1bn in dividends to its shareholders. The claim would also bring down the statute of limitations for workers claiming injury from three years to six months. There is growing pressure to repeal 1990 federal legislation which limits liability for oil spills to $75m. BP is trying to use Transocean’s insurance to claim $560m in insurance for the spill, demonstrating the contempt of multinationals for their workers and for the environment.

David Hetfield