BP’s Bob Dudley has said that the company’s oil spill in the Gulf of Mexico “will change the industry forever”. That is not quite how other companies see it.
There is no doubt it has long-lasting ramifications for BP and the US government, whose lax regulators are seen as having contributed to the disaster.
But around the world, from Norway to Australia and among BP’s peers, remarkably little has changed, at least on the side of prevention.
Company executives argue that the accident was preventable and that their own safety systems were robust enough to need no significant reform.
As Pete Slaiby, vice-president of Shell Alaska, told the BBC: “The Gulf of Mexico may have been a wake-up call for some, but not for Shell.”
John Watson, chairman and chief executive of Chevron, the US’s second-biggest oil company, testified before the US Congress that soon after the Deepwater Horizon disaster he had ordered a review of the company’s offshore operations. This swiftly concluded that Chevron’s “deepwater drilling and well-control practices are safe and environmentally sound”, he said.
Around the world oil companies have been giving regulators the same message.
It appears regulators have found the industry’s arguments persuasive and are – at least for now – not insisting that they do any more.
The government of the UK, which is about to approve the deepest well ever drilled in the country’s waters, said: “We have conducted an initial [review] . . . This shows our regulatory system to be robust and we are recruiting additional environmental inspectors to double our environmental inspections, of drilling rigs, to ensure compliance.”
Australia, which had suffered its own major blow-out and spill just months before the Deepwater Horizon accident, was unmoved.
Martin Ferguson, Australia’s resources minister, said: “Shutting down the industry and putting the nation’s energy security, jobs and the economy at risk does nothing [to ensure safe oil exploration].”
In Libya, not only has there been no moratorium, but the government has allowed BP to go ahead with its deepwater drilling programme.
This caused some consternation among Italians and prompted Rome to approve a ban on drilling within five miles of its coast and 12 miles from protected marine areas. This ruling will only apply to future drillings and will barely affect the most promising areas off western Sicily, which Shell believes holds some of Europe’s most important reservoirs.
Environmentalists said Italy’s response to Macondo had been little more than a figleaf.
In Norway, where, as in Canada, public pressure was great, a moratorium was considered, but in the end the government proceeded with the vast majority of its auction of offshore exploration blocks, and a general moratorium was dismissed.
The biggest changes will come in the US, where the industry had for decades resisted any tougher rules.
The American Petroleum Institute, the industry’s main lobbyist, whose strong influence over the US regulator was seen as having indirectly contributed to the accident, is again taking a proactive role in trying to help shape the way the new regulation develops.
It argues that lawmakers must not forget that the industry is growing and is critical to every sector of the economy. “Any policy changes must bear that in mind,” the API said. “We can protect the environment without jeopardising our economic safety.”
One way the industry is demonstrating this is by announcing plans to fund a large response vessel capable of containing spilled oil.
Several oil company executives have said the major red line for the industry was the idea a second emergency relief well, like the one being drilled by BP, would need to be drilled at every deep offshore well, just in case of a blow-out.
In his testimony, Rex Tillerson, ExxonMobil chief executive, said in response to that idea: “I would say you just doubled your risk.”
Another executive noted that such a measure would double a company’s cost.
But companies are resigned to the fact that they will have to submit to more rigorous and comprehensive US rules, such as presenting a safety case.
This would include thorough information of their drilling programmes and the way they intended to develop their projects, and details about how they minimise the risk of a blow-out.
This safety case is very similar to the regulation imposed in the UK in response to the explosion of the Piper Alpha natural gas platform, which killed 167 in the North Sea in July 1988. At the time, the US considered but eventually dismissed doing the same after companies heavily lobbied that such measures should remain voluntary.
Additional reporting by Guy Dinmore in Rome
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