Revolution #219, December 12, 2010
The Gulf Oil Disaster... And the Deep Cover-up
On April 20, 50 miles off the coast of Louisiana in the Gulf of Mexico, a surge of gas burst up from deep under rock and water, through the "Macondo" well being drilled by the oil giant BP. It exploded in an inferno of flame and smoke. Eleven workers were killed. The "Deepwater Horizon" drilling platform was destroyed, ripping apart piping 5,000 feet deep on the Gulf floor. A toxic gusher was let loose, which poured more than 200 million gallons of crude oil and natural gas into the rich waters of the Gulf before it was capped nearly three months later. It was an almost immeasurable environmental catastrophe that killed workers, ravaged wildlife, savaged ecosystems from the deep waters of the Gulf to the environmentally vital shores. It threatened human health and created an economic disaster for the many thousands whose living depends on the Gulf's waters.
On May 21, a month after the explosion, President Barack Obama announced the formation of a "National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling." He promised it would get to "the root causes of the disaster and offer options on what safety and environmental precautions we need to take to prevent a similar disaster from happening again."
Six months later, on November 22, the commission released a preliminary report. The "take home message" was accurately summed up in an editorial, typical of mainstream coverage of the commission's report:
"Not every bad thing that happens is a result of malevolent [bad and vicious] forces at work. A great many of them are caused by foolishness, haste, overconfidence, inexperience and failure to communicate. The preliminary conclusions of the chief investigator of the special commission looking into the causes of the summer's giant Gulf of Mexico oil spill suggest that there were enough of those more simple human failings taking place on the Deepwater Horizon drilling platform to account for the disaster. There is no particular reason to believe, said staff chief Fred Bartlit, that the fatal explosion and disastrous flood that followed had to be the result of any criminal intent or even a contemptible desire to do dangerous things on the cheap." (Salt Lake Tribune)
But there were powerful "malevolent" forces behind this crime. And "criminal intent" doesn't even get to the heart of the problem, although there was enough of that to go around. From demands of investors for more and faster profits, to BP's desperate moves to stay one step ahead of cutthroat rivals, to the strategic demands of a system that relies on oil for profit and power... all the players in this nightmare could no more have walked away from the insane risks and horrible cost of drilling miles beneath the ocean for oil than a desperate addict could pass up a hit. Regardless of anyone's intent, the Gulf oil catastrophe was and is the convulsive product of the most essential dog-eat-dog laws defining the capitalist system.
Risking Lives and the Environment to Save Money and Time
Risking Lives and the Environment to Save Time and Money
* Refusing to Test the Well: On April 20, BP canceled the cement bond log test, needed to tell if cement had sealed the well (or needed to be patched). It would have taken 9 to 12 hours and cost $118,000, and if problems had been found, BP could have been forced to do a new cementing job, taking a month and costing up to $30 million.
* Overlooking - or Misinterpreting - Key Tests: Hours before the blowout, several "negative pressure tests" showed that the blowout preventer (designed to seal the well in case of emergencies) was leaking, the cement seal was faulty, and gas and fluid were rising up through the well. Operations should have been halted immediately, yet the crew decided the tests were fine and they could proceed to seal the well. This "baffled" the commission, but there are indications that BP cost-cutting (using two doses of testing fluid instead of one to save the cost of disposing of one) may have skewed the test, and that conflicts between BP, Transocean and Halliburton, and an overall corporate culture UC Berkeley professor Bob Bea described as "embedded in risk-taking and cost-cutting," may have led to communication and decision-making breakdowns and a rush to finish the well. ("Scientists, drilling experts say BP valued speed over safety in oil rig disaster," Times-Picayune, 11/26/10)
* Replacing Drilling Mud with Lighter Seawater: Normally wells are plugged before heavy drilling mud, used to hold down liquids and gases, is replaced with lighter seawater. But BP decided to replace the drilling mud first. "Maybe they were trying to save time," BP's top rig official speculated. "At the end of the well sometimes they think about speeding up." The decision was catastrophic: the well blew before BP could plug it.
A Times-Picayune investigation summed up: "E-mail messages and reports by BP engineers in the weeks before the accident make reference to money or time savings as they debated methods for closing the well. In each case, they went the cheaper way."
In the month before the Macondo well exploded, there were several dangerous surges or "kicks" of gas from the well—a clear sign that there was gas at extremely high pressure in the well and/or that the drilling procedures were unsafe. On April 14, BP drilling engineer Brian Morel emailed a colleague saying, "this has been a nightmare well which has everyone all over the place."
Yet BP still chose the riskier of two possible designs for the steel pipe, or casing, to line the last 1,200 feet of the well. A more expensive option—called a "liner/tieback" design—is supposed to provide protection against the kind of upward flow of gas that set off the horrific explosion on the Deepwater Horizon rig. But BP chose the more dangerous "single-liner" design, according to internal BP emails, to save time and $7-$10 million. The well was behind schedule, and each extra day of drilling cost BP another $1.5 million. By the time of the blowout, the well was $40 to $60 million over budget. (See "Documents Show Early Worries About Safety of Rig," New York Times, 5/29/10.)1
In addition, BP rejected urgent alarms and appeals from experts and contractors to install additional "centralizers" to insure that cement pumped around the well casing would seal it and prevent gas from surging upward. "It will take 10 hours to install them [21 centralizers]," a BP official emailed on April 16. "I do not like this." After the decision, BP engineer Brett Cocales emailed, "Who cares, it's done, end of story, will probably be fine." It wasn't. Partly because BP used too few centralizers, the cement job failed and gas surged up through the Macondo well.
And there were many other such decisions, chalked up by the commission to "human error" (see sidebar online at revcom.us).
The Insane Logic Behind Risky Big Bets
There is a pattern here—not isolated and random "human error," but consistently putting profit over all. And an examination of the period leading up to the Gulf disaster reveals more than a pattern, it reveals the roots of this pattern in the nature of this system.
When the Deepwater Horizon exploded, BP was the world's fourth largest private corporation and one of the most profitable—making $17 billion in 2009. But in the 1980s, BP was a much smaller corporation, crippled by the 1979 Iranian revolution and the takeover of its oil reserves there, and weaker than bigger rivals. (BP was originally formed in 1908 in Iran as the Anglo-Persian Oil Company, earning enormous returns through its imperialist monopoly control and exploitation of Iranian oil.)
In the late 1980s new managers took over who aggressively expanded the corporation with risky big bets: mergers and acquisitions of other oil corporations. BP rapidly grew to be the world's second largest oil company, behind only Exxon-Mobil (which it aimed to overtake). One way it grew had been to become a leader in deep water and ultra-deep water drilling—where the greatest untapped energy reserves and profits are to be found. This is why BP is so deeply invested in the Gulf of Mexico—one of the most dangerous places to drill—producing 25 percent of the oil produced there.
But by the end of its buying spree in the early 2000s, BP's Chairman Lord Browne openly worried that BP's "big bets" might not pay off and that it could be crushed by competitors unless BP radically reorganized its far-flung operations and slashed costs.
A series of horrendous, high-profile disasters ensued: in September 2004 an accident at BP's Texas City refinery killed two workers and injured another. A March 2005 blast at the same refinery killed 15 workers and injured 180. (The year before, BP had ordered refinery costs cut by 25 percent. BP's internal report on the Texas City blast blamed workers' mistakes, not cost-cutting and poorly maintained equipment.) Four months later, in July, BP's Gulf "Thunder Horse" offshore platform nearly sunk after a hurricane. In March 2006, a BP pipeline in Alaska ruptured, spilling more than 260,000 gallons of oil, the largest spill ever in the North Slope. In each instance, workers and others had warned BP that safety was being compromised and danger loomed.
After these disasters, BP replaced Lord Browne as its Chairman with Tony Hayward, who pledged to make safety his first priority and to spend $14 billion upgrading BP facilities. To whatever degree Hayward was serious about this pledge, the compulsions of capitalist cutthroat competition and profit maximization soon undercut it. First, financial markets—which control the capital BP and other corporations need to function—reacted negatively, and BP stock sunk. Internally, BP was worried that its less efficient operations had led to a "growing gap between us and Shell," as well as with Exxon-Mobil. In 2009, falling oil prices hurt BP's bottom line. In response, between 2007 and 2010, BP laid off 7,500 employees and cut costs—$4 billion in 2009 alone.
We live under a system of capitalism, and that system operates according to certain unbreakable rules. One of the most basic rules of capitalism is that individual capitalists (or "blocs of capital") must and do battle each other for survival. Any capitalist who does not constantly seize any advantage to undercut their competition—fight for control of market share, and cheapen costs—runs the risk of being driven under by others. Sometimes being driven under takes the form of big corporations collapsing or being bought out. Sometimes the rivalry inherent in capitalism gets expressed through horrible wars of slaughter, either between empires or to further subjugate the oppressed. But the underlying rule is the same: expand or die. And this law was in effect at every stage of the events that led up to, and in the wake of the explosion on the Deepwater Horizon.
Dog-Eat-Dog Still in Effect as the Ecosystem Faces Disaster
This basic commandment—expand or die, maximize profits or go under—was in full effect during the disaster, while oil was still pouring into the Gulf. BP's stock was plunging. Its longtime rivals, Shell and Exxon-Mobil, were not rushing to help BP clean up the Gulf. They were sitting back as the Gulf was being savaged, watching BP twist in the wind and reportedly "licking their chops" in hopes of taking over BP and strengthening their global position. ("Imagining the Worst in BP's Future," New York Times, 6/7/10)
In the wake of the Gulf disaster, Hayward was forced out and Bob Dudley took over as BP's Chairman. On October 18, he emailed BP employees that the criteria for evaluating fourth quarter performance would be "each business's progress in reducing operational risks and achieving excellent safety and compliance standards" and by managing "every risk we face" to prevent future disaster.
Was such a move met with cheers and plaudits from the managers of massive chunks of capital? Was it upheld as a brilliant example of how "the market" in all its wonder moves to correct imbalances? Another expression of how "if there is a need, there is no better system than capitalism to move with creativity, and even compassion"?
What do you think happened?
This move was immediately attacked by Wall Street analysts, who called it "highly unusual" and worried that it "could spook shareholders who are also concerned about BP's profits and operational efficiency." (Andy Rowell, "Safety Versus the Bottom Line," Oil Change International, 11/19/10)
The Global Dimension
Oil is immensely profitable—four of the world's seven most profitable corporations are oil companies. But the factors that drove BP and its partners and financial backers to burrow deep beneath the fragile ecosystems of the Gulf of Mexico, and then another mile into the ground beneath it, also included political and military factors essential to the survival of capitalism, and of the U.S. and its allies in particular.
These are times when the U.S. faces challenges to its sole-superpower status from many rivals, and when its domination of the oil-rich Middle East is being confronted by forces who, though not radical or representing anything positive, do threaten U.S. domination. All this adds yet another dimension to the system's rabid quest for oil, anywhere, at any risk.
As we go to press, Barack Obama has announced a seven-year ban on drilling in the section of the Gulf where the disaster took place, along with areas along the Atlantic Coast. What this ban actually means requires more analysis than can be done in this article, and it is not at all clear that it will actually go into, or stay in, effect. But whenever environmental concessions are made, such moves under capitalism are always extremely limited, partial, and under constant assault. They are made within the framework of, and in service of the same system that is ravaging the environment around the world. Obama's ban leaves untouched other—at least as dangerous—offshore drilling in other parts of the U.S. And it was immediately met with demands it be overturned, from "both sides of the aisle."
And even when temporary and limited concessions are made, those adjustments in things like oil drilling are overwhelmingly confined to the rich countries, while pollution and destruction continue unabated in the poor countries. For example, as a result of drilling by Western oil companies, almost six million barrels have oozed and washed through Nigeria's main river delta over the last 50 years. Most of it has been concentrated in a thousand-square-kilometer [about 247,000 acres] area called Ogoniland. The once-fertile land is dotted with puddles of crude oil. In many areas wild plants and cultivated crops like cassava are dead. Palm trees no longer yield much wine. The inland waterways and mangrove swamps, once rich in shrimp, crab and other fish, are lifeless. The birds are gone. The sea, for many people a source of life, has become a source of sickness and death. (See "The Gulf of Mexico and the Niger River Delta: oil spills worlds apart," A World To Win News Service, June 21, 2010.)
Another such example is Ecuador, where an area of rainforest the size of Rhode Island was made toxic by U.S. oil companies.
A System Unfit to Rule the Planet
All down the line, from the way financial markets reacted when a BP executive gave lip service to putting a priority on safety, to the way the logic of capitalism was internalized and applied by high-level and middle managers in their decision-making, to the geopolitical exigencies that provided an added push to "drill, baby, drill," the terrible disaster in the Gulf was a product of capitalism.
Capitalism is the reason the rulers of this planet are tearing up the rainforests, fishing the seas devoid of sea life, wiping out precious and rare species, and filling vast areas of the ocean with toxic waste.
Things do NOT have to be this way!
The special issue of Revolution on the environment (available at revcom.us/environment) includes "Some Key Principles of Socialist Sustainable Development." Those principles concentrate an orientation that enables a whole different kind of society—a socialist society—and lay out how such a socialist society would begin to tackle the environmental emergency, with a global and internationalist perspective—one that puts the interests of humanity, and the planet, first.
People do not need capitalism to "make things happen." With communist revolution, people could begin to bring to life the words of Karl Marx, the founder of communism: "From the standpoint of higher economic forms [socialism and communism], private ownership of the globe by single individuals will appear quite as absurd as private ownership of one human by another. Even a whole society, a nation, or even all simultaneously existing societies taken together, are not the owners of the earth. They are simply its possessors, its beneficiaries, and must hand it down to future generations in an improved state."
1. Obama's Commission argued that oil and gas shot up through the center of the casing, not through the gap outside, so that BP's decision to use cheaper casing did not contribute to the disaster. Other analysts argue that this isn't true, and that even if gas did burst up through the central piping, BP's decision could still have contributed to the explosion. (Here, the Commission agrees with BP's investigation, not the claim by BP's partner in the well, Halliburton, that gas did erupt along the outside of the casing. So while serving the needs and functioning of the capitalist system overall, the Commission may also be playing a role in resolving conflicts among different capitalists.) Whether in fact the more expensive, and slower method would have prevented this particular disaster, there is no dispute that in its own calculations, BP went with the faster, cheaper technique despite alarms and warnings that this would be more dangerous. [back]
This system and those who rule over it are not capable of carrying out economic development to meet the needs of the people now, while balancing that with the needs of future generations and requirements of safeguarding the environment. They care nothing for the rich diversity of the earth and its species, for the treasures this contains, except when and where they can turn this into profit for themselves... These people are not fit to be the caretakers of the earth.
Bob Avakian, Chairman of the
Revolutionary Communist Party, USA
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