Wednesday, June 23, 2010

Obama politicising the BP disaster

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The oil spill in the Gulf of Mexico is proving to be a major political mess. BP has come under a lot of criticism for its handling of the issue. I actually think they have been trying very hard to do things, though I suspect many of the measures are intended to serve 'perceptions' rather than achieve their goal of extinguishing the spill. Was that not always the fault of President Obama. Even before the facts had been established, it was Obama who really made this a political football. From the get-go, he was looking for a scalp....wanting to establish blame. Why? Of course because he realised that leaders are defined by the way they handle crises. His goal:
1. Appearances - Make sure that BP look like they are doing something, so he looks like a strong, decisive leader. I look at the engineering of these so-called solutions and think they have little chance of success.
2. Establish blame - Obama wanted to make sure that his administration was not blamed for the folly.

The implication of Obama's moves were to place BP on the political backfoot. He turned the CEO into a politician, so he had to run off to Russia to allay fears in Russia that BP was not a good partner.
What might be drawn from this experience? Might it be that governments do not make good regulators. Might it be that deep-sea oil drilling is fraught with risks which have never been dealt with before.

Under our legal system is the CEO of BP obliged to fall on his (company's) sword and declare that they are responsible? Should they not make controlling the spill a priority. I actually think they have done a very good job to disperse the oil considering the amount of it being discharged.

BP has been criticised for its response was:
"Everything we can see at the moment suggests that the overall environmental impact of this will be very, very modest" " said BP CEO Tony Hayward.
BP is being criticised in this context for seeing some 'positive' in its investment in the Gulf oil industry, as well as signs that the people undertaking the clean up are doing a good job. There is of course no convincing those who only want to see problems, and who want to lay blame. I have yet to see any beached engrossed in oil. The oil is being dispersed offshore and eaten by bacteria. The problem of course is heavy metals will remain in the water for a year, so fishermen will need compensation.
BP is being criticised for presenting some positive feedback about BP. The hotel and tourist industry is benefiting in the region, as is the construction industry, which has built a new town. Some fisherman actually appreciate that the oil rigs have actually provided nutrients or breeding grounds for the fish. Coral grows on the offshore rigs. Petroleum engineers also stay in these hotels, so these businesses appreciate the oil industry. Are they solely saying it for the sake of future money? Perhaps. However let's acknowledge that this outcome would be worse if government was running the show, and would be better if our regulators were private interests with a stake in the outcome, and not politicians fuelled by perceptions and spin.
Even the far worse Exxon Valdez spill in Alaska was not as bad as this because the oil was closer to the coast, and readily washed onshore. It was a cold climate. In this case, the oil spill is offshore, BP was quickly engaged in remedial measures to disperse the oil, ensuring it did not reach the shore. Surely a positive of offshore, deep drilling. The warmer climate also allows bacteria to more quickly break down the oil droplets. This is why this 'disaster' is a beat up. Why it is a problem is that the company has yet to cap the well. So the problem is not resolved. The greatest concern is the prospect of hurricanes. Maybe that will lead to natural dispersal. I'm not sure.
I don't see us wanting oil any less in future, so let's wait until we have compelling evidence of negligence before we critique the company, lest they focus on the politics and less on the operational remedial measures.
I personally see nothing wrong with the BP CEO going sailing. Maybe he was collecting oil samples. Seriously though, if we hold people to impossible standards like 'no relaxation until you solve the problem' then facts are lost for the sake of perceptions. If he is negligent, and its more likely a company-wide issue, then we would need to reflect on what he has done to remedy it. This is the job of the board. Not the media or Obama.
"The Gulf of Mexico is a very big ocean, and the volume of oil we are putting into it is tiny in relation to the total volume of water" said BP CEO Tony Hayward.
This strikes me as a reasonable point. We often see the environmentalists misrepresent or exaggerate pollution, but in fact the notion that 75,000 barrels a day of unstable petroleum is going to contaminate trillions of gallons of 'salt' water is nonsense. If they can contain it, and a hurricane risk is avoided, then I see no reason why they cannot avoid a disaster. I think he made this statement to 'balance' the exaggeration. Yet critics will argue that this is exaggeration.
Andrew Sheldon

ConvinceMe.Net - Anyone up for a debate?