THIS BP story just isn’t going away. Nobody should be underplaying the pain and suffering caused by the environmental catastrophe that has befallen the Golf of Mexico. We must all hope that the spill is halted speedily. But Barack Obama’s nationalistic declaration of war on a firm he insists on calling British Petroleum has spiralled out of control, with dire implications not only for BP’s army of pension fund and other investors, who are being expropriated, but also for the economy, the price of oil and much else.
If we want progress and growth, we cannot criminalise all errors, let alone all accidents (some will always happen, even under the most secure environments). Firms that pollute should be forced to pay out a realistic and proportionate amount to compensate those who have lost out; in this case, many, many billions. But they shouldn’t be slapped with extreme fines or shut down. Several US firms are just as involved as BP in the current spill. So why isn’t Obama threatening them too? Oil firms always engage in risk-sharing deals with governments (to whom they pay large amounts for concessions) to work out in advance the liability of potential accidents; again, we are not hearing about this.
There were 126 people on the Deepwater Horizon: just eight were employed by BP, which owned a two-thirds stake in the project. Anadarko, a Texan firm, owns a quarter of it; Transocean, another American company, owned and ran the rig; a blow-out preventer that didn’t work was manufactured by an American company called Cameron, while Halliburton, the US services firm, was also an important contractor and responsible for cement work.
We don’t yet know how to share out the blame, though BP is most responsible, morally and legally. But just imagine what would have happened had Halliburton, once run by Dick Cheney, been involved in such a crisis during the Bush years – the exposes, conspiracy theories, documentaries and hysteria would have been overwhelming. The present silence is breathtaking in its hypocrisy.
There is now a move in the US to injunct BP to stop it from paying a dividend; this outrageous attempt at extra-territoriality must be resisted by the UK government. Companies, like individuals, deserve a fair trial, not an automatic lynching by the mob. There has so far been no proper investigation and yet the US authorities are taking for granted that BP cut corners. Maybe it did; but we need proof.
After this, why should Royal Dutch Shell, Exxon or anybody else invest money in trying to make sure we don’t run out of oil? If anything goes wrong the punishment increasingly looks as if it will be the corporate equivalent of the death penalty. It is just not worth it. One by-product of this intolerance of any risk is that the price of oil could soon rise; and because dictatorships don’t care about pollution, new oil reserves will only be exploited in dodgy countries, further skewing the geopolitics of energy.
David Cameron is terrified of destroying his green credentials by saying anything nice about BP, though he started to shift last night, via George Osborne. One can deplore the pollution without agreeing to the destruction of BP, as Osborne well knows. There were rumours yesterday of a Chinese bid for the firm to cash in on its knock-down share price; the coalition should remind Obama that for the US this would be akin to jumping out of the frying pan into the fire.