10 June 2010

In the defense of BP

In the court of public opinion, the verdict for British Petroleum is already in: guilty. The vitriol, and polemics, spewing out against British Petroleum over the Gulf coast oil spill has reached epic proportions. Politicians, pundits, and even individuals, are frothing at the mouth with anger at the evil corporation that ruining both the economy and environment.

Policy makers are threatening to fine, and tax, BP into oblivion. The general public is aghast that a big corporation could take such liberties with the public trust.

It's about time that someone stood up for poor, beleaguered, BP!

I wouldn't want to give the impression that I think BP is a well managed company, or that their poor decisions didn't contribute to the Gulf disaster. However, it's important that we don't lose perspective in the rush to castigate BP, and vent our spleens.

For one thing, the impacts from oil spills are rarely as long lasting, or disruptive, as they first appear. The oil that first washes up on shore, and kills thousands of fish, birds and sea mammals, is very dramatic. Ten, or even five, years later things look differently.

The 1989 Exxon Valdez spill in Alaska proved to be less harmful on the environment, and the local economies, than many people had predicted during the time of the initial accident. In fact, some reports show that more damage may have been caused by the clean-up than the spill itself. Ironically, many of the loudest complaints about the Valdez spill were from local businesses who saw the cost of labour skyrocket as many locals opted to work in high-paying clean-up crews rather than toil for the lower local wages.

True, there are disagreements as to the real long term impacts of the Valdeez spill (i.e. you can't prove what the population of salmon would have been without the spill when there are so many other factors at play). But these disagreements in the impact assessments of the Valdeez spill actually prove my point: if the damage was truly catastrophic there wouldn't be any argument.

Unfortunately, we are on the cusp of a major over-reaction to the spill. If oil exploration is curtailed by newly empowered (and zealous) regulators, we will see energy prices remain higher than they otherwise would for decades. Killing BP out of spite will also send a chill down the spine of every oil company, causing them to reduce exploration. Why drill for new wells when the consequence of a failure is death?

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