Compelling Energy Journalism

BP’s Blather

By admin • September 24, 2010 • Filed in: Uncategorized

BP’s oil spill is not just an environmental disaster. It is also proving to be a calamity for other drillers.

The implication for American energy policy will be far-reaching: BP will be to off-shore development what Three Mile Island has been to nuclear production. Just as more off-shore drilling was given the green light, the process has been stopped in its tracks by a “temporary” federal ban.

True, drilling for natural gas can take place in shallow waters. That territory is much easier to navigate than the deep waters where both oil and natural gas are found and where the BP accident occurred. But that’s cold comfort to natural gas explorers that will also be tarred with this spill.

As for BP, it has a long road ahead of it. For all its blather about being the greenest of all oil companies, in the end it will remembered as the conglomerate that caused the worst oil spill ever in the United States. To “fix” the matter, it needs to maintain open and accurate communications with all stakeholders. It also needs to pay for the whole mess and to waive its legal right to limited liability.

To that end, it has owned up. But its major mistakes have been to try and drill this deepwater well on the cheap and then to try and minimize the “blowout” by saying that it would not spread. BP is discovering what a lot of companies have learned the hard way: better to avoid the problems up front than to gamble and pay a huge price later on.

The trouble, though, extends beyond BP. It’s now a crisis for the entire off-drilling industry whose future prospects have been severely damaged. ###

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