Sunday, October 10, 2010

The Gulf Oil Spill

Cross-posted from the Imagine Magazine blog

At the time of writing, the ruptured pipe has been capped, for now, after 85 days of spewing oil into the Gulf of Mexico. Although estimates have varied wildly, BP originally claimed ‘almost nothing has escaped’ (Toronto Star, 13/06/2010), it is now estimated that the total is around seven hundred million litres, or seventeen times the Exxon Valdez spill in Prince William Sound, Alaska. It is the biggest oil disaster ever and could get worse as it is not clear how much stress the cap can take before blowing again, and relief wells needed to complete the job have yet to be finished.

In addition, Hugh Kaufman, of the Environmental Protection Agency, criticizes BP for its use of the dispersant, Corexit, and describes it as ‘the Agent Orange of the Gulf’ (Toronto Star, 17/07/2010). Seven million litres of the dispersant have transformed the oil into droplets that cannot be burned or skimmed, and thus will impact the environment for many years to come. The use of Corexit, Kaufman says, is short term gain for long term pain. Friends of the Earth’s count so far of the dead is 1 387 sea birds, 444 sea turtles, and 53 mammals.

The Exxon Valdez spill accounted for 36 000 dead birds, but the Gulf spill may have more economic impact given the amount of sea-based industry on that coast and longer lasting environmental effects because whereas Alaska has a rocky shoreline that does not absorb oil easily, the Gulf coast of sand and sediment will act like a sponge.

The spill is causing widespread failure in an already weak ecosystem. In this sense, the current spill could be more accurately compared to the 1979 Ixtoc spill of 450 million litres, 1 000 kilometres off the coast of Texas that took one month to reach the coast there.

British Petroleum Inc. is the world’s third largest energy company with 2009 revenues of $246 billion. In 2 000 it re-branded itself as the industry’s most sensitive company with an ad campaign of $200 million entitled ‘Beyond Petroleum’, sporting a new green logo similar to that of our Green Party. It committed to alternative energy systems and did succeed in reducing its CO2 emissions by ten per cent and becoming the third largest maker of solar panels. Yet its revenues continued to come ninety per cent from oil, and its record tells a very different story from its new brand.

In 2001, BP was forced to pay a $10 million penalty and spend $500 million in upgrades for violating federal clean air laws at eight US refineries; In 2005, a Texas refinery explosion killed fifteen workers and the company was penalized $87 million by the US Occupational Safety and Health Administration, the biggest fine in the agency’s history; In 2006, BP’s Alaska operations were found to have leaked one million litres of crude oil from eroded pipelines and was forced to replace twenty-six kilometers of pipeline; In April 2010, the Deepwater Horizon oil rig exploded and sank killing eleven workers, due to the failure of a blow-out-protector to activate. BP’s initial response was to downplay the damage, to refuse to let scientists have access to the site to determine the flow from the well, and reporters from informing the public, and to blame the Swiss-based company from which BP leased the equipment. CEO Hayward said, “This was not our accident’ (Toronto Star, 13/06/2010). BP did act quickly to buy top Google and Yahoo! search results so that the first result for phrases such as ‘oil spill’ would yield ‘Learn more about how BP is helping’.
The above is not just a list of deadly accidents, but more a result of planned cost cutting. Former CEO John Browne (who became Lord Browne of Madingley) balked at the choice between economic growth and more careful environmental stewardship, contrary to its own advertising campaign. He stated, “If you say to people, ‘Do you want to develop the world and have a good living standard, or do you want a safer environment?’ people are terrified by the choice” (Toronto Star, 9/05/2010).

Under Browne’s term in office, an expense-paring regime figured prominently in maintenance reductions that allowed the Alaskan pipeline erosions and lax safety standards that contributed to the Texas explosion. His successor, Tony Hayward, continued with the cost cutting by slashing $4 billion from operating costs which, obviously, impacted safety even further. Internal documents show that BP itself had concerns before the blow-out occurred. In March, 2010, after several weeks of problems on the rig, BP was struggling with a loss of well control and in June 2009, company engineers had warned that the metal well casing might collapse under pressures at that depth, and concluded that the cement job to seal the pipe was unlikely to be successful. (Ina Urbina of the New York Times, reported in the Toronto Star, 30/05/2010). In other words, BP officials knew the casing violated its own safety standards. The blow-out preventer that was supposed to slice through the pipe and cut off the oil flow, failed. It had never been tested at that depth. In fact, BP’s performance has been so bad that confidence in the company has plunged and investment in the company is considered dead money as stocks have been stagnant since 2000 which compares badly with Conoco Phillips (up 145% in the same time), Chevron (78%), and Exxon Mobil (71%).

What are governments doing to protect the environment and ensure the safety of the workers? The answer is plenty, for the capitalist class, that is. The World Socialist Movement holds that the modern nation state, with clearly defined and defended borders, with a strong central government backed by well equipped armies and police forces, and a legal system that is their own creation, are crucial to the operation of the capitalist mode of production.

Government is the executive arm of the capitalist system and forms the basis of capitalism with the enactment of private property laws. It is its job to maintain and revise those laws to ensure the private ownership of the means creating and distributing wealth in the interests of the owning capitalist class. The government’s collaboration with the capitalist enterprises encompasses protection of the latter’s national and international rights to operate as freely as possible through diplomacy, bribes, and even war, if necessary, and create a not-so-level playing field of economic activity, tipped, naturally, in favour of their capitalists. Sure, they are elected every few years in a quasi-democratic exercise where the largest voting block is usually the ‘did not vote’ group, but we have no choice in that the major parties with the money, organization, and clout to get elected, all vie to run capitalism in the interests of the capitalists. The Gulf oil spill provides several insights into this process of governmental collaboration.

Thomas Walkom (Toronto Star, 29/05/2010) writes that the American regulation of the offshore oil industry has been revealed to be a sham. After all that has come out regarding BP’s record, they are still in charge and have used their authority to refuse access to scientists and reporters to the site to determine and report on the magnitude of the oil spill, as noted above.

Canada’s regulations for drilling in the harsher arctic conditions are even weaker. Paul Martin’s Liberal government relaxed the rules for arctic drilling and the current Harper Conservative government has eased the rules even further. The Newfoundland government strongly supports Chevron’s drilling in the stormy Orphan Basin, 450 kilometres into the North Atlantic where a spill would be impossible to contain. Tax revenues for the province and profits for the investors must take preference over any environmental considerations. Even the Nunavut government, dominated by the supposedly eco-friendly Inuit, supports seismic testing in the Eastern Arctic. The BP oil spill has revealed the immense clout of the large economic sectors and enterprises.
Obama’s moratorium on arctic oil exploration is due to be lifted next year. Despite the hopes of Marcie Keever, spokesperson for Friends of the Earth, that this latest oil spill will trigger a public demand for an end to the era where the oil industry writes its own regulations, and will spawn a sea change in the need to get off fossil fuels altogether, the US climate bill now passing through Congress gets weakened every day with amendments, and will do little to fulfill Keever’s hopes. Some Non-Governmental Organizations estimate that Nigeria has suffered oil spills equivalent to the Exxon Valdez every year since 1969 but a compliant and corrupt government has done nothing to solve the problem over four decades (Toronto Star, 06/06/2010)

At the present time, companies operating in US territory risk a maximum fine of $75 million for oil spills which would equal less than two days’ profit for BP. The oil industry is only following a pattern that is discernable in all major sectors of the economy – pharmaceutical, food, mining, tobacco, etc. Their financial clout is used to support donations to politicians’ election funds, to produce mass propaganda to sway public opinion, to fund thousands of lobbyists whose job it is to remind politicians of their loyalties, and to refute scientific evidence that is detrimental to their industry. The top civil service jobs, particularly in the industrial regulatory bodies, and those of top executives in an economic sector are frequently swapped back and forth, creating an old boys’ club whose members inhabit the same social circles creating a smooth ride around government rules and regulations.

Many left wing and one-issue groups complain that this state of affairs came about with globalization and ascendancy of greedy multi-national corporations. To socialists, this state of affairs is simply the normal operation of the capitalist system. It has been going on since philanthropists and governments tried to alleviate the appalling conditions in factories and mines in the early nineteenth century.

In 1865, Marx wrote, concerning the attempts of the factory acts of the time to introduce safety legislation to stem the large number of industrial deaths and accidents,

“The factory owners of the time formed a “trade union” to resist the factory legislation, the so-called ‘National Association for the Amendment of Factory Laws’, based in Manchester, which collected a sum of 50 000 pounds in March 1855…to meet the legal costs of members prosecuted by the factory inspectors and conduct their cases on behalf of the Association…The factory owners promptly formed their Association, its most prominent members including many who themselves were J.P.s, (Justices of the Peace) and in this capacity had actually to apply the act…The head of the Factory Inspectorate, Leonard Horner, was persecuted and slandered by the factory-owners in every conceivable way.” (Capital, Vol. III, pp184/185, Penguin classics edition).

Rather than this type of evasion of spending for safety and environmental concerns being a modern phenomenon of globalization, then, it is, and has always been, a feature of the operation of the capitalist mode of production. It will remain so until the profit system is replaced with a common ownership system of production for use, i.e. socialism.

(This article originally appeared in the Fall 2010 issue of 'Imagine', the official journal of the Socialist Party of Canada.)