To The Left Of...The Oil Drum

On Memorial Day I posted a rather provocative question to the Oil Drum website regarding the efforts of British Petroleum to stop the Deepwater Horizon oil leak. I got a lot of provocative answers. In fact, I felt a bit like a private detective character in a crime noir film who walks into the midst of a street brawl unawares. I took a few lumps. But here's giving a few lumps back again (as private detective characters usually do).

My question was as follows:

I have been following the Deepwater Horizon story from a bit of a distance. I am not an oil man or oil industry expert by any means. But seeing the multiple failed efforts to plug the leak, along with the continued low-balling of estimates of the magnitude of the leak on the part of BP and the U.S. Federal government, I can't help but be a bit skeptical about a few things. To me it seems that BP's efforts are constrained by its desire to protect its profits from damage at all costs. I think they're just dinking around. I wonder - not that I think this would ever happen in our country at present - but what if money was no object; how quickly could this leak be stopped?

By "stopped" I mean stopped - without any regard for whether BP could use this well afterward. How could it be that "money was no object" in stopping the leak? One of two ways - either assume that BP has unlimited resources, or assume that a government (such as the U.S. government) had the guts and the strong moral sense to seize BP's assets and liquidate the company entirely in order to pay for the quickest and most effective means of stopping the leak. In other words, someone with a backbone and means of enforcement would have to make BP an "offer they couldn't refuse." What sort of engineering solutions would be available then? And how quickly could they be implemented?

It's an academic question to be sure, since it's not going to happen. But considering such a question would at least provide us with a "delta" between what could happen if those in charge really wanted to stop this mess versus what's happening now.

You can read both my question and some of the answers here. Now here's the thing. Most of those who answered my comment attacked my lack of expertise and the obvious “silliness” of my question and assumptions. I'll have to give them a bit of credit; as I said, I am not an oil man or oil industry expert. These same people were very sympathetic to BP, stating that BP was doing the best job it could under the circumstances, a “first class effort” undertaken by the “best minds on the task.” One poster commented that “...we should all wish them luck, and after all, they really are working for the collective 'us'.” Another wrote that “the idea that BP is withholding some efforts on the basis of costs is pure nonsense. Your analysis is just not credible...” Yet another said that “right from the start BP volunteered to pay for everything although they could have hidden behind a $75 million cap for the clean-up...”

Farther down the comment thread are posts unconnected to my question, written by posters who gush (pardon the pun) about the “breathtaking skill of the engineers and technicians” now working to stop the leak. One poster writes that “we are seeing stuff akin to what NASA does.” He also writes, “We are witnessing the destruction of wealth and assets and reputation and we may never be certain if anyone really screwed up...KUDOS to the people in the petroleum industry. You all rock!” There's more obsequious frothing at the mouth in praise of the petroleum industry, but I'll let you all read it for yourself if you're interested.

Once again, I admit that I'm certainly no oil production expert. But I also have experience in witnessing the mismanagement of problems in engineered systems, along with the inevitable lying and cover-ups that occur afterward. In fairness to the many fine experts at the Oil Drum, I promise to read up on the tech talks that have been written about the efforts to stop this leak. I am sure they are all fascinating. However, I think the following points are still worthy of mention:

• BP's low-balling of the magnitude of the leak, from the very first days after the sinking of the Deepwater Horizon until now;

• The attempts to cover up the extent of the environmental damage and of the spread of the oil, as I documented in my last posts on this subject;

• The use of a toxic dispersant chemical (Corexit) by BP in an attempt to break up some of the oil slicks, instead of more expensive, yet more effective and environmentally-benign chemicals used by other companies;

• And lastly, the lies that were published in the mainstream media (such as Rupert Murdoch's News Corp outlets) about the “progress” being made by BP in bringing the spill under control (such as the ship that was supposedly sucking 5,000 barrels of oil per day from the leak).

These things all make me question (and frankly gag over) the party line that BP is a wonderful company that just happened to be the victim of an accident that's nobody's fault and that nobody caused, and now BP is exerting superhuman efforts to try to clean up the resulting mess. It is still a valid question to ask whether the most effective engineering solutions are being employed here.

I'm also wondering a bit about the Oil Drum. When I first started visiting that site, I was drawn into participating in some of the online discussions, driven by a fascination with the Peak Oil story and wondering how it would all play out. I made the “mistake” of announcing that I was a Christian once when I ran across an online discussion that was critical of Christians, in which most of the posters assumed that we were all like Sarah Palin or Pat Robertson. Because of my admission, I was treated to another round of “private-detective-gets-jumped.” Nowadays it's ironic that I, the moralist, the believer in an absolute standard of right and wrong, should suddenly find myself to the left of ... the Oil Drum! For not only am I lately finding a curious reluctance to discuss anthropogenic climate change over there, but I am also finding posters who are horrified at the thought that the Federal Government might ever force BP to make full restitution for the mess they have caused.

But true restitution is a sign of true repentance (Luke 19:8). Not only does BP not seem repentant, but the entire oil industry seems reprobate – what with Shell Oil winning leases for offshore drilling near Alaska and Canada issuing permits for drilling off its coasts – all in the aftermath of the Deepwater Horizon leak. Morality won't stop these people from continuing to make a mess. Our only hope for oceans that retain even some semblance of life is for another sweeping credit crunch that destroys the ability of oil companies to finance deepwater projects.

As to credit crunches, a curious thing has been happening. In 2008, as oil prices spiked to nearly $150 a barrel, credit markets crashed. Some argue to this day over whether or not the two phenomena were related. As a result of the crash, oil prices fell to nearly $30 a barrel. Now they are back over $70 a barrel. But we recently saw another credit crunch, this time involving not just banks, but the countries of the Eurozone. Oil had been trending above $83 a barrel just before that crisis. Now the price of oil has fallen to the low $70's (and is starting to rise again). But notice that this credit crunch did not deflate prices to nearly the same extent as the 2008 credit crisis.

To me this is a validation of Oil Drum analyst Tony Erickson's earlier prediction that there would be a significant decline in global oil production throughout 2010 – for oil prices are remaining stubbornly high even as deflationary events continue to happen throughout the world. (Tony Erickson is one of the good guys in my opinion, by the way.) But that's just my guess. As I am not an expert on oil, I don't pretend to be an expert on money matters either. ;)