Gulf oil spill: don’t run away from risks

Offshore drilling unit lowers a containment chamber in the Gulf of Mexico to deal with Deepwater Horizon spill (May 6, 2010)

The oil spill in the Gulf of Mexico from the accident on the BP-owned drilling rig known as Deepwater Horizon occurred almost three weeks ago, and it has incurred a terrible toll. Eleven died, hundreds have had their economic livelihoods disrupted, and there is significant damage to the environment.

BP, assisted by the US government and others, is still struggling to stop the oil slick from spreading. The well is spewing 5,000 barrels of oil a day. The latest attempt on the weekend – installing a giant container dome – did not work. Workers are trying to prevent the spill coming on to the Louisiana coastline, and from disrupting commercial fishing further. It may take months to clean up.

Accidents like these are unacceptable, and efforts need to focus on lessening the risk that something like this happens again. But it is not useful to over-state the extent of the problem associated with the spill, as some have done. President Obama call it “a potentially unprecedented environmental disaster”. But as the New York Times pointed out, the spill is far from an environmental “apocalypse”; we just don’t know what the extent of the environmental damage will be. Therefore, it is not helpful for Obama to speculate.

Nor is the accident the worst big spill: the biggest was the spill from retreating Iraqi troops blowing up terminals in Kuwait during the Gulf War of the 1990s; and the Exxon Valdez spill was much larger than the latest Gulf one. Such big spills are thankfully rare, occurring about every 20 years – for example Exxon Valdez was in 1989; and the one before that was a leak off of Santa Barbara in 1969.

Nansen Saleri, an industry expert, says the oil industry may not have anticipated the latest catastrophe because of “the extraordinary safety record of offshore US drilling over the last four decades." BP says that the accident is “unprecedented” – and it appears that is true. There was a “blowout”, which is not new, but the normally reliable safety mechanism did not work, which is new. As the Financial Times noted, “All rigs are fitted with equipment to prevent such accidents. But the Deepwater Horizon’s failed."

Some have jumped on the accident to call for halting offshore drilling. The left was opposed to President Obama’s announcement in March that he was allowing offshore drilling, and now they are calling on Obama to reverse course. California Governor Arnold Schwarzenegger changed his mind and now opposes offshore drilling. And certain Democrats in congress have said they will not support the White House’s proposed climate change bill unless drilling is stopped.

But despite toll the accident has taken, the fact that it occurred is not a good reason for discontinuing with offshore drilling. The technology that has been developed for offshore drilling is impressive in terms of scale and innovation. The Deepwater Horizon rig was set up in 5,000 feet of water. The rigs require the use of highly advanced robots (which have also been used in the clean-up effort). This technological foundation needs to be built upon, not ditched.

Some say that drilling is inherently risky, and blame BP for not being “precautionary” enough to foresee the possibility of such an accident. Today’s Times quotes Richard Charter, an advocate with Defenders of Wildlife: “The oil industry went off the deep end with a new kind of risk, and they didn’t bother to build a response capability before they had a big disaster.” Governor Schwarzenegger asks: “Why would we want to take that kind of risk?”

Yes, critics are correct that offshore drilling technologies incur risks – but BP and other major oil firms are in the business of taking risks. And many other pathbreaking technological developments require risks. By all means, improve regulation and monitoring of the sites, but don’t stop them altogether.

Big-scale technology programs, like the NASA space program, do occasionally have accidents; they almost come with the territory when you are pushing boundaries. As John Gapper noted in the FT, the vision of BP’s CEO, Tony Hayward, is

breathtakingly ambitious and, like the space program, prone to periodic, shocking failures. That is not because it is being careless – so far, the evidence is that it had industry-leading contractors operating tested equipment – but because of the inherent nature of the task.

Accidents are arguably necessary for the process of progress to occur, as we learn from those mistakes. Indeed, the fact that the safety record up to the recent Gulf spill had improved significantly is an indication how industry and regulators had learned from the Exxon Valdez accident.

The reality is that we have huge and growing energy needs, and we need oil to meet those needs. Alternative sources should be supported, but our immediate energy needs mean that oil is still an important part of the mix. And to increase our oil supply, offshore drilling has to be a component.

The Gulf of Mexico spill shows that we need to get better at offshore drilling. It’s not a reason to give up.