SocialismToday           Socialist Party magazine

Issue 208 May 2017

Blood for oil profits

BP Blowout: inside the Gulf oil disaster

By Daniel Jacobs

Brookings Institution Press, 2016, £18.95

Reviewed by Becci Heagney

"BP put profits before people, profits before safety, profits before the environment". Those are the words of one of the prosecuting lawyers in the ‘environmental trial of the century’, quoted in BP Blowout. Daniel Jacobs is an academic in sustainability and management and takes the reader into the dark depths of corruption in the oil industry, looking at the causes and aftereffects of the explosion and huge oil spill in the Gulf of Mexico in 2010.

He doesn’t hold anything back in pointing the blame at BP. In the first chapter he writes: "Corporate homicide. The largest offshore oil discharge and the worst environmental disaster in American history. The most expensive manmade corporate disaster on record. All at the hands of one of the largest multinational corporations in the world. And all avoidable".

What he does hold back on, though, is his conclusions in the chapter aptly titled, ‘Have We Learned or Only Failed?’ Given that the entire book exposes how the oil spill was caused by the drive for profit by big business, that the lack of regulation is directly a result of lobbying by the oil industry, and even that the record fines BP was forced to pay fall short of what was necessary to deal with damages, Jacobs’s offering for a way forward represents a tiny drop (of oil?) in the ocean.

On 20 April 2010, 50 miles off the coast of Louisiana, a blowout at BP’s oil well occurred. Fluids and natural gas shot up from the well, causing an explosion in which eleven workers were killed. Two days later, the Deepwater Horizon oil rig sank and the pipe connecting the well to the rig snapped, spilling oil into the Gulf for months. The well was finally plugged 87 days later; 134 million gallons (3.19m barrels) of oil had leaked out.

The initial chapters of BP Blowout take us through the mistakes and omissions made by BP, both in the run-up to the blowout and after. Concern from engineers about the safety of the well was dismissed as ‘paranoia’ by management. The bottom of the well was three miles down when most wells are 1,000 feet or less. BP had cut safety corners in drilling, violating federal regulations, and had rushed to close the well, making mistakes. Deepwater Horizon was due to go to other wells, so there was a rush to ‘get the job done’. BP managers ignored final test results showing that the well had not been plugged properly.

BP had no blowout scenario plan, as it was considered to be ‘not required’. Its oil spill response plan was copy and pasted from another job, containing references to wildlife that did not exist in the Gulf. Panic ensued as they tried to stop the spill. One coastguard coined the term "political boom", referring to the material used to soak up oil, because it "didn’t do anything and we knew it wasn’t going to do anything", but it gave the appearance of something being done!

Other chapters detail the exploitation of workers who either had their lives destroyed or were used to help with the clean-up. Four thousand five hundred onshore workers were recruited through unemployment programmes, and even prisoners were used as cheap or free labour. Fishermen, paid $3,000 a day for the use of their boats, had to sign away their rights in case of harm in a 17-page contract. Workers who travelled in search of work – mainly migrant workers – were given minimal training and housed in ‘flotels’: steel boxes with 30 square feet per worker. In the years following the clean-up, these workers were 30% more likely to suffer with health problems than the average population.

Almost as an aside, Jacobs deals with how this experience of working-class and poor people in the towns along the Gulf coast is not out of the ordinary. Known as being in ‘hurricane valley’ and the home to many oil spills over the years, disaster is something people are used to. Explosions tend to happen every other year. There is an area the size of Connecticut in the north Gulf sea that is a ‘dead zone’ because fish cannot survive there.

It is for these reasons that Jacobs’s conclusions fall so short of the mark. He is clearly critical of the industry but, if he thinks that the details he has revealed will ‘shock’ the capitalist class into changing their ways, he is sorely mistaken! What is required is a fundamental change in the way in which politics and industry are run. That means nationalisation and democratic workers’ control.

No laws changed in the US as a result of the blowout. Jacobs himself describes the bureaucratic changes as "an exercise in putting old wine in new bottles". A member of the House Energy and Commerce Committee (one of many committees to take part in ‘oversight hearings’ involving BP) was a senator for Houston, where BP’s US headquarters are located, and had received $1.5 million in campaign contributions from oil companies. One bill that proposed heavier regulations was passed in the House by just 16 votes but was stonewalled in the Senate and never passed. The interior department imposed a moratorium on all offshore drilling but this was reversed in the courts. The judge responsible was later found to have shares in ExxonMobil and Allis Chalmers Corp, also involved in drilling in the Gulf.

The main thrust of Jacobs’s conclusions is that companies should "honour their responsibilities to their stockholders and stakeholders", by "setting priorities that transcend the balance sheet". In reality, BP was honouring its responsibility to them when it cut corners on safety to keep costs down and maximise profit! Jacobs proposes that companies with ‘poor records’ should be banned from offshore drilling, using the ‘three strikes and you’re out’ rule. BP has had many more than three disasters already. He does not deal with how this could be enforced, considering that a temporary moratorium was overturned in the courts.

In Jacobs’s view of an ideal world, "a corporation need not choose between being sustainable and being profitable. It can and should be both". This completely misunderstands the ‘logic’ of capitalism, which is the constant drive for profit through the exploitation of workers, and of the environment.

Lessons clearly have not been learned by the industry or government since the BP blowout. More permits for offshore drilling than ever before have been approved in the US in the last few years. The fatality rate of workers on oil rigs is four times higher in the US than in Europe. BP pled guilty to manslaughter and was fined $18.7 billion (to be paid over 15 years with extraordinarily favourable interest rates of 0.82%) in the one of the biggest pay-outs in US history. But when it is making an average annual profit of $16.5 billion, that is nothing compared to the wider societal cost.

Under capitalism, money is power. No individual from BP was convicted for the eleven deaths and untold misery of people who live in the Gulf, yet 75 people were imprisoned for filing false compensation claims against BP. No amount of hoping that the capitalist class will change will work. We can’t control what we don’t own. The only way to defend people and the environment, and to have meaningful investment in renewable energy, is to take power from big business and democratically control the industry.

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