The US's worst-ever environmental disaster took yet another bad turn after British Petroleum's (BP) latest efforts to stop the torrent of oil from the Deepwater Horizon well failed.
Public discontent is growing, with increasing calls for a government takeover of the operation and seizure of BP’s assets.
The Deepwater Horizon oilrig exploded on April 20, killing 11 workers and releasing between 19.7 million and 43 million gallons of oil into the Gulf of Mexico.
The failure of BP’s “top kill” operation — the pumping of heavy mud to stop the flowing well – on May 30 has highlighted BP's utter lack of preparedness for disasters like this. Its series of makeshift measures have all failed.
Plumes of oil, some up to 80 kilometre long and 120 metres deep, have been found. About 160km of Louisiana’s coastline — including ecologically sensitive nature reserves — has been contaminated by oil.
Prosanta Chakrabarty, a Louisiana State University fish biologist told the British Guardian on May 31: “Every fish and invertebrate contacting the oil is probably dying. I have no doubt about that.”
BP has conceded it may not be able to stop the flow of oil until August, and has resorted to makeshift efforts to divert oil into surface ships.
However, the August target is far from assured. The attempt to drill relief wells to reduce pressure requires hitting a target the size of a dinner plate with a drill more than two miles into the earth, Associated Press said on June 1.
David Rensink, incoming president of the American Association of Petroleum Geologists told AP: “If they get it on the first three or four shots they'd be very lucky.”
To make matters worse, the summer hurricane season officially began on June 1, with its potential to spread oil across the Gulf of Mexico and the Caribbean.
The US National Oceanic and Atmospheric Administration said there is a 70% chance of eight to 14 hurricanes this season, the BBC reported on June 2.
Meanwhile, BP has been involved with another spill. On May 25, an estimated 210,000 gallons of oil spilled from an oil pipeline in Alaska co-owned by BP.
Alyeska Pipeline Service Co., which operates the pipeline, said a loss of power at a pump station during the testing of a fire command system caused relief valves to open, releasing crude oil into a secondary containment system, UPI reported on June 1.
Public pressure has intensified on BP. This has caused the oil industry-friendly US government to react with noises about criminal prosecutions over the Gulf disaster.
Associated Press reported on June 1 US Attorney General Eric Holder’s vague threat: “We will closely examine the actions of those involved in the spill. If we find evidence of illegal behaviour, we will be extremely forceful in our response.”
Given the minimal regulation of the oil industry in the US, “illegal behaviour” may be hard to prove.
US President Barack Obama has taken his idea of “thorough” action by forming an independent commission to investigate the spill and formulate suggestions for regulation of offshore drilling, which will report in six months time.
Obama has also recently backed greenhouse gas reduction legislation proposed by Senators John Kerry and Joseph Lieberman, which also offers US states financial incentives to open their coastlines to more oil drilling, Bloomberg.com reported on May 12.
BP is liable for the costs of the clean up, which the Guardian reported to be an estimated US$22 billion if the leak continues until August as predicted.
However, when it comes to compensating those affected by this disaster — hundreds of thousands of workers and small business owners whose livelihoods have been destroyed — it is a different story.
Under US law, operators of offshore rigs are only liable for $75 million in economic damages to individuals, companies or the government in case of accidents.
In the first three months of 2010, BP made $5.5 billion in profit, Alternet.org said on May 27. This makes the total potential compensation payments equal to about one day’s profit. It is little wonder BP felt it could neglect safety.
Transocean, the owner of the Deepwater Horizon rig BP was leasing, also has its liability capped at $65 million. The British Sunday Times reported on May 9 that Transocean insured its rig for more than it was actually worth, making it $270 million in profit from the rig's destruction.
The spill is as yet another example of the shifting of the cost of catastrophic mistakes by corporations onto the public, similar to the Wall Street bailouts of 2008.
Zach Carter said in a May 26 Alternet.org article: “Nobody working at Goldman Sachs, J.P. Morgan Chase or Citigroup seriously believes the U.S. government would ever allow their firm to fail, and the various bailouts of 2008 and 2009 proved them right.
“That scenario radically distorts the market, making massive and unnecessary risk-taking the rational choice for bigwig bankers. If their bets pay off, the bank books huge profits. If the bets backfire, the government will bail out the bank ...
“It is a form of theft, and the exact same scenario exists with the liability cap on offshore drilling.”
In the case of BP, US law protects them from the real costs of ecological disasters, meaning it is economically rational for them to cut corners on safety without fear of financial pain if something goes wrong.
Unsurprisingly, this debacle has brought outrage from the US public, particularly those directly affected on the Gulf coast. The Los Angeles Times said 200 people rallied in pouring rain on May 30 to demand BP and other oil giants be driven out of the Gulf of Mexico.
Rallies were held in across the US over June 3-5 to demand BP’s assets be seized. More are planned in the coming week, with more than 50 planned actions in total.
The rallies demanded the seizure of BP’s assets to stop the company dodging its responsibilities and to fully compensate ordinary people for the damage done in its reckless pursuit of super-profits.