'Big Oil' cuts corners on safety to boost profits

A PRELIMINARY report by the US National Commission (set up by president Barack Obama following the fatal Deepwater horizon oil rig blow-out in the Gulf of Mexico last April) has accused three companies - BP, Transocean and Halliburton - of cutting corners over safety in order to cut costs ie to boost profits.

Ironically, this finding has helped boost a recovery in BP's share price which had collapsed by more than half in June 2010 following the blow-out and oil spill.

This is because the report identifies critical mistakes made by BP but also its contractors Halliburton (which cemented the well) and Transocean (which ran the Deepwater Horizon rig). BP shareholders are no doubt hoping that spreading the blame for the disaster will reduce BP's financial liabilities.

The commission also criticised the failings of the former offshore regulator, the Minerals Management Service, for being 'hopelessly inadequate'. This is a mild rebuke. It is common knowledge that MMS's cosy relationship with big oil amounted to the regulator 'rubber stamping' the ridiculously flawed safety plans of the industry.

For instance, just four days before the 20 April explosion on the Deepwater Horizon rig, BP asked the MMS for permission to alter its plan for the Macondo oil well "in a way that was potentially in breach of regulations. After just 90 minutes, the MMS official approved the request." (FT 7/1/11).

It remains to be seen whether the MMS's successor - the Bureau of Ocean Energy Management, Regulation and Enforcement - performs any better. But even before the lessons of 'the greatest environmental disaster in (human) history in the US' are learnt, president Obama, last October, lifted a six month moratorium banning deepwater drilling off the US coast.

Profits

With a Republican majority in the House of Representatives (following last November's mid-term congressional elections) the American Petroleum Institute, which represents leading oil and gas companies in the US, has renewed its call for increased offshore drilling.

Big oil has additional cause to celebrate as the UK parliamentary Energy and Climate Change Committee of MPs also decided recently not to impose a moratorium on the development of 100 or so deep water oil sites in the North Sea - notwithstanding its own concerns about the lack of safety contingency plans in the industry.

Only four months before the Macondo well in the Gulf of Mexico blew up Transocean narrowly avoided a similar catastrophe occurring in the North Sea. Despite a warning advisory note being circulated it seems that no-one aboard the Deepwater Horizon rig saw it.

With oil prices hovering around $100 a barrel there are huge profits to be made by big oil. The privately-owned oil industry, with its insatiable drive to maximise profits, will continue to cut corners on safety thereby risking more workers' lives and widespread environmental pollution.

With capitalist politicians seemingly in the pockets of big oil, only socialist nationalisation of the energy industry can ensure effective safety over oil and gas production.

Moreover, only through a democratic socialist plan of production could viable, green alternative energy sources such as wind, wave and solar power be developed to meet society's needs.

• Tory shipping minister Mike Penning has overturned a previous all-party ban to allow the potentially dangerous practice of ship-to-ship oil transfers (typically by Russian tankers) off the Suffolk coastal town of Southwold - an area of outstanding beauty and bird sanctuaries.

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