Is There a Bright Side of the Gulf of Mexico Disaster?

Although the U.S. petroleum industry is understandably in a state of panic after the recent spill in the Gulf of Mexico and some, both friend and foe, have even resorted to outrageous speculation that the accident would mean “the end of offshore oil,” there is a far more optimistic take to the events. Properly handled by the industry and credible experts, it may educate the American public – who during the past couple of years have become bigger and bigger victims of ideologically driven misinformation – on the realities of energy production. The April 20 blowout of a BP well that was drilled by Transocean’s state-of-the-art Deepwater Horizon rig brought to the surface pent-up emotions, ideologies and, of course, the unassailable fact of the excruciating technical challenges that come with drilling in 5,000-foot waters. Even more important are the reminders that always must go along with the quest for oil and gas and, just recently in West Virginia, coal: There is no such a thing as risk-free production of energy sources that are inherently volatile and explosive. What makes them such valuable and irreplaceable forms of energy also makes them dangerous. In the ensuing political and environmental clamor, one tragic result that seems to be constantly forgotten by the press and pundits is that 11 people lost their lives in the accident. Then the “blame game” took on BP as the obvious target. After all, they had been involved with a number of previous disasters – from the Texas City refinery fire that killed 15 people in 2005 to the near sinking of their huge Thunder Horse platform in the Gulf of Mexico to the temporary shutdown of the Alaska pipeline. These incidents may signal a BP laxity but they may also be simply coincidences or bad luck, and nobody yet really knows what happened on April 20. But BP has become, for both the enemies of the oil industry and even for some of its friends, the poster boy of disaster and perhaps carelessness. Extreme Reactions: To be certain, the oil industry did not need this catastrophe and the cleanup will be long, arduous and expensive. It happened at a time of acrimonious debate over the future of oil and all fossil fuels. For many, including key members of the Obama Administration and certainly many of his supporters, global climate change and other real or imagined dangers can be blamed squarely on oil. For the left, the Gulf of Mexico disaster was a self-fulfilling prophecy, and from some of their statements one can glean an almost bizarre and macabre satisfaction. For them the bigger the disaster the more it justifies their inherent position that oil is bad. To them it makes no difference how unrealistic or expensive alternative energy sources may be. Wind and solar, which to almost all knowledgeable people cannot even remotely replace a tiny portion of oil and gas anytime soon, if ever, are preferable to the prospect of a blowout and leaking well. The predictable threat of shutting down all offshore drilling came next, and some environmentalists have called for a permanent ban on all offshore oil. Considering that the U.S. already imports two-thirds of its 20 million barrels per day of oil use and that about half of U.S. domestic oil production comes from offshore fields, such a policy would have a devastating impact on U.S. oil supply. Imports would have to fill the gap. (Of course, for radical environmentalists the U.S. should stop using any oil, period, no matter what the dire consequences may be.) But despite the ideological overtones, a well blowout is in many ways similar to an airline accident. It can be because of pilot/operator error but it can also be because of basic physical problems, such as an unconsolidated formation, like the one in the Gulf of Mexico where the cement sheath may collapse, providing a huge conduit for a blowout. Such potential (and I am not saying that this is what happened but it is all too possible) has little to do with human actions, although safeguards are built exactly for those eventualities. A critical piece of the ongoing investigation is why the blowout preventer failed. It is possible that an entire sequence of problems and their chain reaction may never be known perfectly. There is another analogy between this event and an airline accident. They are both quite rare. And similar to the fact that people do not stop flying after an accident, so too this disaster should not divert people and the government into ridiculous positions. But the Obama Administration is not exactly a friend of oil or the industry, and this may be just the event they need to tell everybody “I told you so.” And of course there is always the scam of biofuels. It is no coincidence that just a week later, on April 28, Obama was saying “I believe in the potential of (ethanol) to contribute to our clean energy future, but also to our rural economies.” The Way Forward: But there may be a ray of hope and a semblance of sanity, thanks to the American public. Just two weeks before the accident, a Gallup poll for the first time showed that 50 percent of Americans want to develop U.S. energy resources even if doing so will lead to environmental “suffering” of some kind. (That marks a 16-point increase from just three years ago.) Assuming that the leak is capped in a reasonably short period of time, the accident may actually work in the industry’s favor. BP’s bad luck or even negligence notwithstanding, the industry’s track record in environmental stewardship is actually exemplary. Solving the problem and cleaning up the mess will send a resounding message of the industry’s “can do” attitude. It would also serve to point out how rare these instances are in an industry that serves such a vital function in the U.S. economy.