Fossil Fuel Folly

What BP is really doing.

This is a cautionary post. It is not a cautionary tale, something made up to illustrate a point. Rather it is constructed out of information gleaned from public sources. Conventional wisdom holds that competition is the only and best way to provide abundance for all. Pursuit of profit results somehow in maximum good for maximum numbers. Yet the very word competition implies a winner. In a competitive event there is supposed to be a winner. A 100 meter dash, a baseball game, a competition to win market share, all usually result in a winner. But it is a zero sum game. If there is a winner, there is at least one loser. The result of neoliberal corporate economic competition is the killing of the planet, and graphic evidence is at hand.

Since late April, oil has been gushing into the Gulf of Mexico at a disastrous rate, and thus far no one knows how to stop it. The corporation responsible for this is BP (formerly British Petroleum, now congratulating itself as Beyond Petroleum in its ads), the world’s third-largest oil company. BP spends significant amounts trying to convince the consumer that they are not like other oil companies; they are trying to be green. The epithet “green” is vague and imprecise, but according to the BP Web site (excerpted 26 July, 2008):

“We see our own role as pursuing efficiency in our own operations, creating lower carbon products for customers and contributing to an informed debate. Energy efficiency not only delivers greenhouse gas (GHG) reductions but improves our underlying business performance and is measured using carbon intensity performance measures. Our current energy efficiency programme follows a successful initiative in which we reduced our GHG emissions to 10% below their 1990 levels between 1998 and 2001. We now have an ongoing programme designed to prepare our businesses for the emergence of further carbon markets beyond the EU [European Union – DB] and to improve our competitiveness. We are rapidly increasing our supply of alternative and renewable energy through BP Alternative Energy – from innovative new solar and wind businesses to advanced biofuels and hydrogen power plants where CO2 is captured and stored underground. It is hoped that these will provide customers with clean, reliable energy and they form an important part of BP’s action to reduce GHG emissions as well as building our alternative and renewable energy businesses.”

This all sounds nice and cozy despite the double-talk about “efficiency”, “further carbon markets” and increased “competitiveness,” contradictory goals. BP has established a BP Alternative Energy Group, ostensibly to promote alternative energy operations within BP. They even have an interactive map on the site showing the locations and descriptions of BP’s forays into wind, solar, hydrogen, and so on. They even count gas as an alternative energy form. Unfortunately, the locations displayed are sparse indeed.

The dirty truth is that BP devotes only a miniscule portion of their operating budget to these activities, and historically there have been numerous problems with their “normal” operations as well . The explosion and collapse of the Deepwater Horizon oil rig in the Gulf of Mexico, which bids fair to be the worst environmental disaster in history, is not the first disaster in BP’s operations. In 2005 BP’s refinery in Texas City, Texas blew up, killing 15 workers and injuring 170. BP was fined $21.3 million. Even with the current bias against regulation, and the pro-business, anti-citizen environment within the U.S. Justice Department, this incident provoked an investigation. There have been numerous accusations of poor and faulty maintenance.

In 2006, BP was fined $2.4 million by OSHA (Occupational Safety and Health Administration, another usually toothless governmental entity) for safety violations.

The EPA (U.S. Environmental Protection Agency, yet another largely moribund agency) started a criminal investigation of BP in 2005 for negligent management of Alaska North Slope pipelines. When a BP pipeline in Prudhoe Bay ruptured from internal corrosion in March of 2006, the investigation was expanded to include this incident as well. According to the Cohen Web report, “Richard Woollam, BP’s chief pipeline inspection expert in the United States, took the Fifth Amendment under oath rather than explain what he knew about corrosion in the company’s oil pipelines in Prudhoe Bay.”

All this from a company that claims to be strenuously advancing a green agenda. BP is not an exception, but close to the norm of behavior of the giant oil companies of the world.

Other oil giants don’t even bother to try to be green, claiming only that they have done nothing illegal. Texaco (acquired in 2001 by Chevron) ran numerous production installations in Ecuador with its partner, the state-owned oil company Petroecuador from 1972 to 1992. According to a lawsuit brought in 2003 by an Ecuadorian lawyer on behalf of some 30,000 local residents who allege damage from the practices of Texaco, the company simply dumped its’ wastes into pits with no treatment whatsoever. For its part, Texaco (now ChevronTexaco) claims it did nothing wrong and furthermore that the practices it followed had only minimal environmental effect. In Nigeria, colossal oil spills are commonplace.

A giant rig was employed by BP to drill for oil in the Gulf, precisely because competition demands it. Ironically but predictably, the corporation responsible for this debacle is a predator that propagandizes a myth that they are diligently working to develop new sources of energy. Maybe trivial amounts have been expended, but at bottom BP is seeking profit, and they will take it any way they can get it. This does not make them special, it rather confirms them as a typical modern corporation. Modern corporations, those that are not part of the FIRE (Finance, Insurance, and Real Estate) sector, are in the business of making products, frequently not needed or wanted, creating demand for those products, and convincing the public they cannot live without that product. In 1893, for the Columbian Exposition, one hundred what we would now call “futurists” were asked what they thought life would be like in 100 years. In that year, virtually none of the products we now consider essential were even imagined. There was the telephone, true, and the telegraph (the what?), electric lights, and a few others around. None of the experts even mentioned the automobile. The biggest issue seemed to be the “servant problem.” A predictable rejoinder is to refer to medical progress and other such factors to prove that we are so much better off today. There is an answer to that position, but it will have to be deferred to another post.

Should you be under the illusion that oil companies, and the Federal government for that matter, have your interests at heart, consider the following. Supposedly, after the spill from the oil tanker Exxon Valdez, laws were passed that made those responsible for oil spills actually responsible, and would have to pay real money. The Oil Pollution Act of 1990 was an act to establish limitations on liability for damages resulting from oil pollution, and to establish a fund for the payment of compensation for such damages. Under the Act, the limitation of liability is ” … for an offshore facility except a deepwater port, the total of all removal costs plus $75,000,000.” Executives at BP are already claiming the debacle was not their fault, or even their doing, but they say they are going to pay all “legitimate” costs. Oh, boy! What the heck is a “legitimate” cost? Tell you what: BP is not going to pay for this spill. They will pay a certain amount, trivial when you consider they made a $6 billion profit last year alone, and the rest will be paid by poor schmucks such as you and I. It will also be paid by the local Gulf Coast residents, many of whom will never recover from this fiasco, economically, physically, or emotionally.

In general, corporations do not pay the costs of the damage they do, not matter how loudly they claim to the contrary. When a natural resource is depleted, there is no cost to the corporation that does the depleting, except that there is less for them to exploit. In times past, corporations were allowed tax breaks, such as the infamous oil depletion allowance, to compensate them for their losses! Such is the nearly absolute control present-day corporations have over us and our interests.

We often hear rationalizations that drilling in the Gulf of Mexico or in the Arctic will lessen our dependence on “foreign oil.” The fact is, oil is fungible. Absent a specific production allotment contract, light sweet crude from anywhere goes on the market and may end up anywhere in the world. Sour heavy crudes do the same, just through a different market mechanism. The fact is, a large portion of the oil we burn each day comes from Canada, not from the Middle East. But the sycophantic U.S. Congress, and sadly the Executive as well, simply asks “how high?” when corporations say “jump!”

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