The unfolding oil slick disaster in the Gulf of Mexico is shaping up as potentially the most serious setback of its kind in the history of the petroleum industry. The ecological damage could be unparalleled, depending on how long BP takes to cap the well and how much crude reaches shore. In terms of the industry’s credibility with the public, the damage is already massive and may well get much, much worse.
U.S. President Barak Obama, already no friend to oil, has been handed an extraordinary opportunity to tax, regulate, restrict, and ultimately strive to replace hydrocarbons. In Canada, we can kiss goodbye to drilling offshore B.C., Georges Bank off Nova Scotia, and maybe the Arctic for years to come.
BP’s blowout demonstrates in an unprecedented way why Canada’s bitumen deposits are superior to virtually any comparable energy source on the planet in terms of the environment, military security, and sheer volume. But getting that message across in the face of anti-oil rhetoric would take more communications savvy than the current Alberta government has ever been able to muster.
Ironically, no major petroleum producer paints its own public image as green as BP. And in terms of investment, the British company arguably walks the talk. Since 2005, its alternative energy subsidiary has invested around US$4 billion in wind, solar, biofuels and advanced technologies like hydrogen power, and carbon capture and storage. Environmentally, however, that’s pretty much where the good news ends.
In 2005, an explosion at BP’s Texas City refinery killed 15 workers and injured more than 170 others. So far, BP reports, it has paid more than $1.6 billion to compensate victims. In 2009, the U.S. Occupational Health and Safety Administration fined the company $87 million for failing to correct safety hazards related to the refinery explosion. The Wikipedia entry (see “Texas City refinery”) makes for pretty discouraging reading.
Last year, under contract to BP, the Deepwater Horizon rig drilled the deepest well ever completed. Technically, it was a striking achievement but events have proved it too bold. On April 20, the semi-submersible rig caught fire and later sank while attempting to complete another ultra-deep offshore well. Eleven workers died.
Unfortunately, it appears that BP is operating beyond its real-life ability to efficiently cap a blowout. A Gulf shellfish industry worth billions annually faces an unknown degree of damage. To top it all off, on May 1 a BP oil platform sank while being towed to a scrap steel facility in Louisiana. No one died but what does yet another accident say about BP’s management?
Politically as well as ecologically, the current Gulf slick presents much more peril than the Exxon Valdez spill in 1989. Thanks to to a drunken captain, the Exxon tanker released 250,000 barrels of crude, which severely contaminated 200 miles of coast and polluted another 1,500 miles to a lesser extent. To state the obvious, it makes a huge difference that the Alaska shoreline is thinly populated and relatively remote.
Like all tanker spills, the long-term damage from the Valdez incident is virtually non-existent, a fact not really recognized by the public. Few non-petroleum people grasp that micro-organisms are very efficient at gobbling up protein-rich crude. The images that stick almost indelibly in people’s minds are dying seabirds and outraged fishermen.
When the actual scale of the Gulf disaster gets clearer, the Alberta government will have an unusual opportunity. Premier Ed Stelmach could call a media conference in Washington and run advertising across the U.S. His message: producing Alberta bitumen involves no wars, it creates no major environmental risk, and the unsightly surface mining disturbances around Fort McMurray will be cleared up as planned in due course. While carefully avoiding any appearance of taking satisfaction in the Gulf tragedy, the Alberta leader could soberly state his case to a definitely interested audience.
That stance would provoke outrage among our political adversaries, mainly the green lobbies. They’ll holler – but so what? Most Americans realize that green lobbies are always outraged. In this situation, Stelmach has an unrivaled opportunity to break into the American consciousness with the positive potential of Alberta’s resources.
What happens if the Alberta government does nothing? In the public mind of North America, the oilsands will be tarred alongside the Gulf disaster. It’s all oil, it’s all bad. Sadly, the stumble-tongued Stelmach will probably do nothing and I can’t really blame him. Maybe Energy Minister Ron Liepert will tackle this unenviable but important task.
In the long run, the world needs affordable energy and oil remains the best answer. The industry will survive on the strength of its amazing energy-intensive molecules. In the meantime, we’re in for a rough ride.
