Gulf of Mexico disaster: nationalise the oil giants

Gulf of Mexico oil spill spirals towards New Orleans, photo NASA Earth Observatory image (Click to enlarge)

AFTER THE explosion which sank the BP-leased Deepwater Horizon oil rig in the Gulf of Mexico, causing eleven deaths and threatening an environmental catastrophe, many people must be wondering what is to be done with the oil companies - not least the relatives of the workers killed in the 20 April explosion and the laid-off workers in the Louisiana fishing industry. The abysmal environmental and safety record of the oil industry calls for far-reaching measures.

Pete Mason

BP (British Petroleum) was publicly ordered by US President Barack Obama to pay for the current clean up operation in the Gulf of Mexico, including the expenses incurred by the US military in what has become a national disaster.

Yet it was Obama who recently opened the US coastline to off-shore drilling (now on hold pending an investigation into the oil spill) after a 27-year "not in my backyard" moratorium expired in 2008.

Despite the spill, Obama has confirmed that "domestic oil production is an important part of our overall strategy for energy security" (Guardian online, 1 May 2010), betraying hopes he would take on the energy giants and remove the US's dependence on oil.

Systemic failures

The latest BP disaster may well spill more oil than current record-holder, ExxonMobil's 1989 Exxon Valdez supertanker disaster in Alaska.

Meanwhile, oil giant Chevron is fighting $27 billion damages as 30,000 Ecuadoreans say their "land, rivers, wells, livestock and their own bodies were poisoned by decades of reckless oil drilling in the rainforest (Guardian, 30 April 2010)." In 2005, BP was responsible for the Texas City refinery disaster which killed 15 workers.

Demanding the sacking of Tony Hayward, BP's chief executive, who takes a salary of £4 million, is insufficient. Former BP boss John Browne was given the push after the Texas City refinery disaster and the Alaskan oil pipeline fracture in 2006. In October 2009, the US Occupational Safety and Health Administration fined BP a record $87 million for failing to correct safety hazards (MSNBC, 30 Oct 2009), as US government investigations uncovered a "systemic and cultural disregard for safety" (Houston Chronicle, 1 May 2010). Fines and sackings clearly failed to solve the underlying problem.

Profit system

These company executives are so far removed from the problems faced by the ordinary oil workers, let alone indigenous and other peoples facing widespread pollution, they may as well live on Mars. Safety is not their primary concern, making a profit is.

Behind the company executives are shareholders who worship profit, inevitably driving companies to cut corners on safety to increase their dividends. Here we find the disease at the heart of the system, central to the operation of large companies in a capitalist society, which leads to the systemic disregard for safety. £13 billion was wiped off BP's share price in ten days as the culpable company owners and top managers fled the scene.

The socialist solution is to take such major firms out of the hands of the executives and shareholders. Important utilities should not be operated at the whim of the markets.

We say:

Nationalise the oil giants under workers' control and management, removing the executives and shareholders without compensation (except to those small shareholders who can prove genuine need).
The companies could then be run for need not profit under a democratically agreed plan, and only then, in collaboration with a nationalised energy industry, could a swift and total conversion to renewable energy sources be possible.

That is what a socialist society would do. But until then, the pursuit of short-term profit will keep the oil flowing, in or out of the oil pipes.

BP declared a doubling of profits to £3.7 billion in the first three months of this year, smashing shareholders' expectations. Chevron's quarterly profit also doubled to £3 billion (New York Times 30 April 2010).

Yet in the league of crimes against the earth and its people by big corporations, perhaps only the arms industry tops the oil industry. In fact, the two industries often work hand in hand, most recently in the US-led occupation of Iraq in pursuit of cheap oil.

Big oil and climate change

IF UNCHECKED, global warming could be more destructive than all the wars of the last two centuries. The oil companies can take much of the blame. Recently, the Independent ran a cover story on the gas flares that bring "death and destruction to Nigeria" (27 April 2010).

More than 100 gas flares, which can be seen from space shining more brightly than Lagos, burn 'unwanted' natural gas in the Niger Delta and are "filling the atmosphere with toxins, seeding the clouds with acid rain and polluting the soil". This pollution is increasing Nigeria's infant mortality rate and reducing people's life expectancy.

The gas burnt off could fuel the equivalent of a quarter of Britain's power needs, or the entire energy needs of German industry. Instead, it sends up to 50 million tonnes of carbon dioxide into the atmosphere, equivalent to the pollution from more than 800 million cars, while more than half the people in Nigeria have no access to a reliable electricity supply. A roll call of oil industry giants, Shell, Exxon and Chevron are named.

But if anyone doubts the danger of global warming due to the burning of fossil fuels, ExxonMobil may have seeded those doubts.

Investigative journalist George Monbiot has shown that money from ExxonMobil, directly or indirectly, funded 124 organisations which promote falsehoods or half truths, such as: "the science is contradictory, the scientists are split, environmentalists are charlatans, liars or lunatics" and so forth (Monbiot, Heat, pp. 27-28). And these outfits turn up on TV and radio without fail.

Monbiot, however, having suggested a highly workable, non-nuclear alternative to powering the UK without the need of fossil fuels (Heat, Allen Lane, 2006), came face to face with the question which socialists address - what power will take the oil industry under its control?

Despite his exposés of the problems of capitalism, Monbiot ducked the question and has now turned to nuclear power as an alternative 'green' energy source - despite the industry's poor safety history and the unsolved problems of disposing of nuclear waste.

The Socialist Party, on the other hand, says no to nuclear power and campaigns for a new mass workers' party which would implement democratic public ownership of the major companies and banks that dominate the economy, so that production and services can be planned to meet the needs of all and to protect the environment.

Safety concerns ignored

LEAKED DOCUMENTS show that BP had previously downplayed the possibility of a catastrophic accident at the rig.

They suggest, in a 2009 exploration plan and environmental impact analysis for the well, that an accident leading to a giant oil spill and massive environmental damage was unlikely or virtually impossible.

According to the International Herald Tribune: "BP had not foreseen [gas pockets] as a serious problem, declaring a year earlier that gas was likely to pose only a 'negligible' risk. The [US] government warned the company that gas build-up was a real concern and that BP should 'exercise caution'."

Indeed at the very moment when the rig exploded, a group of BP executives were on board celebrating the project's safety record.

Another critical issue regarding the company's lax safety regime was the use of subcontracing as part of BP's cost-cutting programme.

An article in the Sunday Times by Tom Bower explained: "To increase BP's profitabilty and share price Browne [BP's former chief executive] had encouraged the departure of hundreds of BP's skilled engineers. To save money, Browne believed BP could use subcontractors... Investigations of the accidents [at BP operated sites] blamed cost savings and the inadequate skills of BP's own personnel for poor supervision of the subcontractors."

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In The Socialist 12 May 2010:

MPs and party leaders haggling over their jobs... preparing to cut ours!