An oil industry problem
President Barack Obama does not yet know what caused the Gulf of Mexico oil spill ("we need to know the facts before we allow deep-water drilling to continue," he said last month). But the force of his anti-BP rhetoric suggests he has already made up his mind
If BP is shown to have cut corners or to have worked to shoddy safety standards, then it fully deserves the rap. But it seems unfair – and not even helpful or productive – to jump to that conclusion without all the facts.
The spill is BP's financial problem (although the other field partners might also have to pay), but it is yet to be established whether it is its sole fault from a technical or procedural standpoint. In addition, the government must shoulder its share of responsibility for the deficiencies of its regulatory regime, which Obama has lambasted as corrupt.
The fury directed at Tony Hayward, BP's chief executive, whom US politicians have conveniently turned into a lightning rod for public anger (helped by the fact he is British), is unfair and also unproductive. And it masks the root cause of the problem: excessive oil consumption, which his accusers in congress have done little to reduce. But for all that, the rhetoric of the congressional panel felt like a lynching.
US domestic exploration strategy suddenly looks as if it were planned with unseemly haste. There should be a measured approach to apportioning blame that is driven by facts, not emotions, jingoism or political point scoring (also, some of the nationalistic rhetoric treads dodgy ground: after all, it was a US company, Union Carbide, that was held responsible for thousands of deaths in Bhopal and which many people think nickel and dimed that tragedy's victims. Also, US banks played a big part in causing the credit crunch and recession).
On the evidence available at present, the spill looks like an industry problem, not just a company one. And it is short-sighted of other oil companies to stick the knife into BP in a lame attempt at self-protection. BP is operating in countries with dictators or half-baked democracies, the Arctic, the oil sands and the deep waters of the Gulf of Mexico and other provinces for the same reasons as they are. And the risks are evident.
BP's recent track record for safety in the US certainly – and not unreasonably – makes the firm a bigger target than it might otherwise have been, but it is not the only company that spills oil. It is also clear that no-one else – neither the US government nor any other oil firm – has a solution for the problem other than drilling time-consuming relief wells. If anyone did, it would have been deployed.
One of the most impressive aspects of the response to the Gulf of Mexico oil spill is the way various elements of the oil industry and government have co-operated in an attempt to solve it. Obama listed them: nearly 30,000 people working across four states, and thousands of vessels. The industry, government and regulators should build on that collaborative approach in an effort to establish bullet-proof safety standards. And they should raise their sights beyond the Gulf of Mexico, setting globally recognised and independently audited standards for various aspects of oil and gas operations. That would help regions of the world where politicians do not have the same clout they do in the US and where oil spills, if and when they happen (and they do), aren't so prominently covered in the media.
Rather than trying to heap all the blame on one isolated cock-up, companies must work together to co-operate, to convince regulators and the public that good environmental stewardship is their top priority. And they will have to redouble their efforts to attract new talent to the business.
BP will pay for this incident, but the spill will bring hefty economic consequences for the wider oil industry: it will result in a more restrictive regulatory environment, close off areas of the US to exploration that might otherwise have been opened up and could trigger an asset reshuffle in the Gulf because independents may not be able to accept the increased risks and costs of operating in US waters. It might push exploration dollars into other countries: Canada's oil sands, for example, look clean and safe by comparison.