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Officers Column
Striking a Balance
The BP Macondo relief well is expected to intercept
the original wellbore by mid-August, and cement pumped
into the errant well to seal it. Hopefully one chapter of the
disaster in the Gulf of Mexico (GOM) will come to an end.
But what remains are the environmental damages, cleanup
efforts, and socio-economic impacts to the affected
coastal areas, and ultimately the causes and assessment
of liability. The images of oil soaked pelicans, billowing
plumes of crude oil from the ocean floor, and a brownish
scum of oil in undulating motion on the ocean’s surface
making its way onto the beaches of the eastern gulf, have
by now become the manifestation of an environmental
disaster of colossal proportion. The environmental impact
and consequential damages from the BP Macondo well
will take a long time to be fully understood and mitigated;
some scars will likely endure for generations to come
(e.g. health effects to humans and aquatic life, prolonged
toxicity) whereas many aspects of the damage may remain
forever indeterminate.
To paraphrase Steve Westwell (BP PLC’s chief of staff)
the accident will change the way the industry works not
only for BP, but the rest of the energy industry (Paula
Dittrick, Oil & Gas Journal, June 22, 2010). The incident
will in some way shape the decision making process
of oil and gas regulations offshore and onshore from
contentious hydraulic-fracturing and drilling procedures to
leasing exclusions nationwide. Exploration and production
operations in the Rockies although more than 2000 miles
from the incident, will not be exempt. Almost 1,000 spills
comprised of oil and drilling fluids have been reported in
Colorado to regulatory authorities in the past 2.5 years
(Burt Hubbard, Denver Post, June 28, 2010). Despite the
fact that these spills are nowhere near the scale of the
Mocando incident, the issue of spills has hit home with
a growing public awareness of the risks of petroleum
development on all fronts.
Alarmingly, many of the “clean energy projects,” e.g.
biomass, solar, wind farms, geothermal, are stalled or
cancelled owing to the environmental review process and
resistance from the “Not in My Backyard” (NIMBY) public
opposition (Jason Blevins, Denver Post, June 27, 2010).
Even these non-petroleum energy source type projects are
not without resistance - energy development in all forms
seems to be under assault.
If there is a silver lining to this incident, it is that
a jargon known to few outside the petroleum industry
has penetrated the vocabulary of mainstream media
accompanied by diagrams and explanations. Terms such
as blowout preventer, pipe rams, casing, and mud weight,
to name a few have contributed to a public awareness of
the technical complexities involved in drilling operations.
The quest for petroleum resources is a challenge that
has been met by innovations in science and engineering.
Images of remotely operated robotic equipment in a deep
sea environment, so hostile that no human being could
exist in, have brought to light the level of sophistication
and leading-edge technology that is integral in the quest
for energy resources.
As oil washes ashore in southern Louisiana where
the damage is currently being done to local ecosystems,
fishing and tourist economies, and a way of life; the
petroleum industry and offshore drilling remain delicately
intertwined with the livelihood of its residents. Becoming
more and more evident is that shutting down deepwater
oil and gas operations would also be detrimental. As the
governor of Louisiana stated, the controversial drilling
moratorium would result in a kind of second man-made
disaster (LA Governor Bobby Jindal, June 25, 2010 Press
Release). Similarly in the Rockies, the petroleum industry
is also interconnected with the economies of agriculture,
tourism, wildlife, and various business enterprises.
Impacts from negligent drilling and production operations
would unquestionably be harmful to the sensitive
western environment as well as the coexisting economies
and any suspensions or curtailment of oil and gas
operations in the Rockies would have a similar economic
impact. So intertwined is oil and gas development with
local economies that cessation of drilling would have
deleterious effects to communities as well as decreases
in royalties and in state and federal tax revenues.
In a recent interview, Christophe de Margerie, the
CEO of Total (Sarah Arnott, May 7, 2010, BusinessWeek),
stated “damage to the oil industry will not be over when
the leak is finally plugged, the last damages paid, and the
last sea bird washed clean.” In the final analysis, global
energy demands will still be present but the balance will
have to be struck, he further states “It is not oil or the
environment; it is oil and the environment…” Enduring
images of late 19th and early 20th century wells with oil
gushing over the crown block now coupled with recent
pictures of oil billowing on the sea floor have helped
prolong the perception of an industry that has reckless
abandon for the environment – invoking public disdain.
Industry efforts taken to protect the environment and
minimize the impact of oil and gas exploration and
development go unnoticed. State and federal regulations
have been in place for quite some time to ensure
environmental sustainability with industry’s compliance.
Nonetheless, there is a balance that can be struck with
oil and gas activities and environmental safeguards.
Investigations into the cause of the accident,
assessing responsibility, and litigation will continue.
August usually signals that the end of the summer is near;
schools’ summer recesses will be coming to a close at
the end of the month, but unfortunately for the disaster in
the GOM it will be quite some time until the curtain falls
on this episode. This event is a pivotal point in history
and if anything, it will usher in a new era of safety ethics.
Unfortunately, it is through failures and disasters that
lessons are learned; the BP Macando well, a gusher, will
inevitably result in a gusher of new regulations. There
are certainly some that are long overdue, while others
may be tainted by biased motivation rather than sound
reasoning. Hopefully common sense will prevail.
REFERENCES
LA Governor Bobby Jindal, June 25, 2010 Press Release, emergency.louisiana.gov/Releases/06102010-moratorium.html
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Sarah Arnott, May 7, 2010, BusinessWeek, www.businessweek.com/globalbiz/content/may2010/gb2010057_666873.htm
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