文章 Articles

The real cost of cheap oil

BP’s rig disaster in the Gulf of Mexico is only unusual for being so near the United States, writes John Vidal. In other locations, Big Oil is rarely pressed to clean up its mess.

Article image

Big Oil is holding its breath. BP’s shares are in steep decline after the debacle in the Gulf of Mexico. President Barack Obama, the American people and the global environmental community are outraged, and now the company stands to lose the rights to drill for oil in the Arctic and other ecologically sensitive places.

The gulf disaster may cost it a few billion US dollars, but so what? When annual profits for a company often run to tens of billions, the cost of laying 5,000 miles (8,000 kilometres) of booms, or spraying millions of gallons (litres) of dispersants and settling 100,000 court cases is not much more than missing a few months’ production. It’s awkward, but it can easily be passed on.

The oil industry’s image is seriously damaged, but it can pay handsomely to greenwash itself, just as it managed after Exxon Valdez, Brent Spar and the Ken Saro-Wiwa public relations disasters. In a few years’ time, this episode will probably be forgotten – just another blip in the fortunes of the industry that fuels the world. But the oil companies are nervous now because the spotlight has been turned on their cavalier attitude to pollution and on the sheer incompetence of an industry that is used to calling the shots.

Big Oil’s real horror was not the spillage, which was common enough, but because it happened so close to the United States. Millions of barrels of oil are spilled, jettisoned or wasted every year without much attention being paid.

If this accident had occurred in a developing country, say off the west coast of Africa or Indonesia, BP probably could have avoided all publicity and escaped starting a clean-up for many months. It would not have had to employ booms or dispersants, and it could have ignored the health effects on people and the damage done to fishing. It might have been taken to court eventually and could have been fined a few million dollars, but it probably would have appealed and delayed a court decision for a decade or more.

Big Oil is usually a poor country’s most powerful industry, and is generally allowed to act like a parallel government. In many countries it simply pays off the judges, the community leaders, the lawmakers and the ministers, and it expects environmentalists and local people to be powerless. Mostly it gets away with it.

What the industry dreads more than anything else is being made fully accountable to developing countries for the mess it has made and the oil it has spilled in the forests, creeks, seas and deserts of the world.

There are more than 2,000 major spillage sites in the Niger delta that have never been cleaned up; there are vast areas of the Colombian, Ecuadorian and Peruvian Amazon that have been devastated by spillages, the dumping of toxic materials and blowouts. Rivers and wells in Venezuela, Angola, Chad, Gabon, Equatorial Guinea, Uganda and Sudan have been badly polluted. Occidental, BP, Chevron, Shell and most other oil companies together face hundreds of outstanding lawsuits. Ecuador alone is seeking US$30 billion from Texaco).

The only reason oil costs US$70 to $100 a barrel today, and not $200, is because the industry has managed to pass on the real costs of extracting the oil. If the developing world applied the same pressure on the companies as Obama and the US senators are now doing, and if the industry were forced to really clean up the myriad messes it causes, the price would jump and the switch to clean energy would be swift.

If the billions of dollars of annual subsidies and the many tax breaks the industry gets were withdrawn, and the cost of protecting oil companies in developing countries were added, then most of the world’s oil would almost certainly be left in the ground.


Copyright Guardian News and Media Limited 2010

Homepage photo by Marcus Bensasson shows a section of swamp cordoned off after an oil spill in the Niger delta.

Now more than ever…

chinadialogue is at the heart of the battle for truth on climate change and its challenges at this critical time.

Our readers are valued by us and now, for the first time, we are asking for your support to help maintain the rigorous, honest reporting and analysis on climate change that you value in a 'post-truth' era.

Support chinadialogue

发表评论 Post a comment

评论通过管理员审核后翻译成中文或英文。 最大字符 1200。

Comments are translated into either Chinese or English after being moderated. Maximum characters 1200.

评论 comments

Default avatar
匿名 | Anonymous





Oil and GDP

BP's oil spill has partially driven related industries, and also somewhat increased GDP, especially in such tertiary industries as legal services, a turn of events which is presumably very much welcome amidst the urgent need for national transition. Naturally, if the price of oil reflected its' true social cost, and trade was fairer and more transparent, the environment would certainly benefit.

However, this would not be enough. The increase in cost could inhibit consumption, and reduced demand could lead to a fall in prices, which could in turn stimulate consumption. Oil may be constantly decreasing, perhaps you really can't waste it forever, but the high price of oil-based fuel is bound to spur the development of substitute fuels, particularly the consumption of coal-- merely a so-called shift which cannot resolve the fundamental cause of the problem.

The process of industrialization is the uninterrupted advance of technology, satisfying the ever- increasing demand and appetite for fuel through inexpensive substitutes, with natural resources bearing the brunt of the costs. This is leading us to a dead end, and we need new ways of thinking. You cannot resolve the problems created by present mechanisms through these same mechanisms:

If you sit yourself in a barrel, can you lift yourself out?

You can't.

(Translator: Ruaridhi Bannatyne)

Default avatar
匿名 | Anonymous

1)石油和木材及纸浆相似处; 2)游说; 3)没有答案的问题

1, John Vidal的评价是对的。同样也适用于木材和纸浆行业 - 但有一点不同。大多数热带森林(印度尼西亚,还有种植园)的木材出口是多个国家在从事经营,并不是来自美国,或是欧洲。欧洲团体只活跃在非洲和巴西部分地区,但其大部分的输出凭有FSC认证(即合法并对森林进行可持续管理)

1) Parallels between oil and timber & pulp; 2) lobbying; 3) unanswered questions

1) John Vidal is right in his assessment. The same also applies in the timber and pulp industries – with one difference. The multi-nationals which account for most exports from tropical forests (and in Indonesia, also plantations) are neither from the USA nor Europe. European groups are active only in parts of Africa and Brazil, but most of their output is FSC-certified (i.e. legal and from forest which is being sustainably managed).

2) Those who would benefit most from BP being banned from further oil concessions in Alaska and the Gulf of Mexico are of course big oil groups in the USA. No doubt some of the negative campaigning against the oil industry is supported by those big oil groups, with a view to pinning the blame on BP not the industry per se.

3) Why has the USA government not suspended all pumping of oil from deep sea wells until the reason for the failure is made clear, truly “fail-safe” devices are designed, and legislation passed making the use of such devices mandatory for both new and existing wells? Is the failed BP rig located in sea far deeper than any other rig and, importantly, does it tap into oil whose pressure is much greater than anywhere else?

Default avatar
匿名 | Anonymous


石油泄漏是很花钱的,环境危害很大。discovery 报道过著名的石油泄漏事故,以及影响。现在这样只能赖BP

Oil Spills

Oil spills are very expensive, and do a great deal of harm to the environment. Discovery has reported on famous oil spills, as well as their influence. BP is to blame in this accident.

Default avatar
匿名 | Anonymous


(for commenter: thanks a lot for your support and correction!)

Mistake in the translation

According to the source text "西方的BP" should be "西方, BP" since "Occidental" is the name of an oil company; "西方" does not describing BP. Anyway otherwise smashing translation. 謝謝!