BP returns to the Gulf

The Obama administration has agreed to let BP resume dipping its beak in the waters of the Gulf of Mexico. The prospect is called Kaskida, situated a few hundred miles off the coast of Louisiana, at a depth of 6034 feet. In the event of another Macondo-style blowout, BP has a contract with the Marine Well Containment Company, a joint nonprofit established by BP’s competitors ExxonMobil, Chevron, ConocoPhillips and Shell in the wake of the Deepwater Horizon disaster. MWCC say they can quickly staunch the flow of oil with a 100-ton capping stack. They say this containment system can handle spills of up to 100,000 barrels per day at a maximum depth of 10,000 feet.

Why didn’t anyone think to have this system in place before BP’s Deepwater Horizon blew out? Why wasn’t Macondo plugged within the MWCC’s 24-hour response time, instead pouring nearly five million barrels of crude oil into the Gulf for three months? BP’s statement that they will meet or exceed tougher federal requirements for deep-water drilling is like adding airbags to already wrecked automobiles, or removing known terrorists from previously hijacked airplanes, a kind of muffled apology from a backwards-facing bureaucracy.

And what happened to President Obama’s promise, made after meeting BP’s chairman, Carl-Henric Svanberg, to ‘hold BP and all other responsible parties accountable’? That meeting ended with a commitment from BP to put $20 billion in escrow to compensate fishermen, shrimpers, restaurateurs and other Gulf residents whose livelihoods suffered because of the spill. Eighteen months later, only $5.3 billion has been paid out. Fewer than half of the 550,567 filed claims have been paid. This doesn’t square with BP’s assurance, trumpeted in full-page newspaper ads and prime-time TV ads while the oil was still flowing, that ‘all legitimate claims will be paid.’

BP’s Kaskida prospect is one of 165 permits issued for deep-water wells since February. The Obama administration ended its post-spill moratorium on deep-water drilling in October 2010. BP will also be allowed to participate in an auction of new deep-water Gulf leases to be held in New Orleans on 14 December, the first such auction since the Macondo spill. Another element of the spill’s aftermath is still playing out. The National Resources Damage Assessment will assign a dollar value to the plants, animals and water marred by the spill, all of which were theoretically held in public trust by the state and federal governments. The process could eventually lead to billions of dollars in additional damages.

Obama’s handing of the BP fiasco recalls his response to the financial crisis. In both cases, the failure of a complex system created a system-wide crisis and public outrage about a lack of sufficient government controls. And in both cases, the president failed to use this leverage. 'My administration,' he said in a 2009 White House meeting with top US financiers, 'is the only thing standing between you and the pitchforks.' What we got was 15 minutes of Congressional bluster, a few regulatory tweaks and two industries with the same bland faces at the helm and the same blind rapacity in their hearts. Perhaps one day the American public will vote in a president who can wield a pitchfork himself.