Smooth Operator

I woke up to the news that BP will likely be the subject of thorough criminal investigations in the United States and may even see itself banned from operating in America altogether. As I waited for the kettle to boil and recovered from a false alarm involving an empty teabag box, I found myself grinding my teeth as I heard excerpts of a speech by Barack Obama to the following effect: “[this] oil spill is the greatest environmental disaster of its kind in our history; if laws were broken leading to this death and destruction, my solemn pledge is we will bring these people to justice". I wasn’t grinding my teeth because I disagree with the strong stance being taken by the White House. Far from it in fact. This is an extremely welcome development! I wasn’t grinding my teeth because I don’t think that there should be a criminal investigation into BP’s role in this spill. There should be. Immediately, if not sooner! And I definitely wasn’t grinding my teeth because I have excessive sympathy with Big Oil (though I do need to watch my tongue when speaking of Big Oil now!). I was grinding my teeth because for all the strong words and welcomed scrutiny of Big Oil, all of our attention seems to be focused on what is happening off the gulf of Mexico. One can’t be faulted, based on media coverage and leaders’ strong words, for believing that the gulf oil spill is the only presently on-going spill. It’s not. One can’t be faulted for believing that this is one of the first times that Big Oil has selectively shared information with government authorities, international agencies and the media. It’s not. One perhaps can’t even be faulted for agreeing, whole heartedly, with the Obama administration when it says that BP should pay every dime in compensation for this oil spill. Hold that thought though, because as easy as it is to blame Big Oil for, well, a lot, let’s not kid ourselves here. Someone gave Big Oil the green light to go ahead with offshore drilling. Someone did this despite a plethora of academic and scientific evidence that the risk of a colossal spill is extremely high with this sort of extraction method. Someone assured Big Oil that it was in compliance with regulatory standards when it purchased and began using this kind of drilling equipment from a third party. So before we tell off Big Oil (and we should!), let’s make sure we reserve some harsh words for our administrations who legislated to permit off-shore drilling. Let’s ask ourselves who here has primary responsibility for the safety of individuals and the environment. Let’s ask ourselves if we are really all that surprised that this oil-spill happened. Then ask who here has been criminally negligent.

The oil spill off the gulf of Mexico is a disaster. It deserves every bit of media coverage it is getting, if not more. It deserves to have the Obama administration, if not the entire international community, come together to hammer out tighter operating standards for Big Oil. But it does not deserve to be cast as the greatest environmental disaster of its kind. Because in a land far, far away, gallons of oil are gushing out of corroded pipes, poisoning drinking water and destroying livelihoods of some of the worlds poorest as we speak. Big Oil knows this. In fact, repeated complaints have been made to Shell and others operating there, but no one’s listening. No one ever comes. One of the differences between this distant spill and the one off the gulf of Mexico is that the distant spill has been going on for half a century. That’s right. 50 years. Take any one of those 50 years, and you will find that more oil was spilled in this far away land than has been spilled off the gulf of Mexico. Another difference is that a spill in the Niger Delta just isn’t sexy. We don’t care about what goes on there, much like we don’t care about the war in the DRC or the prospect of famine rearing its ugly head again in Ethiopia. Except, I do care. I know lots of you do too. So if you get the chance, challenge people when they say “this is the worst disaster of its kind”. It’s just not.

I almost spit out some of my fourth cup of tea when I read this statement from Barack Obama (at this point I would just like to say that I am not saying the US, or President Obama, is the only one that is wilfully blind to the politics of Big Oil. I mention him repeatedly only because he has featured most heavily in the media recently. So please, no more wrist slapping!): "There has been a scandalously close relationship between oil companies and the agency that regulates them". Um, no kidding. There is a lot that could be inserted here about Big Oil, beds and government regulators but, as I said, I have to be more careful now. So I’ll just say this: this is far from the first time that Big Oil has successfully managed its size and power to negotiate favourable contract terms and selectively share information with regulators. In Uganda, Big Oil has negotiated some of the most shocking contracts with the government that I have ever seen. Not only has Big Oil (read as their very, very talented lawyers!) managed to convince the government to in effect pledge not to enact any new environmental standards, tax regulations or even, arguably, human rights laws, but they have also convinced the Ugandan government to compensate Big Oil if the international price per barrel of oil drops below a certain designated amount. Read that again. The government of a developing African economy will have to pay Big Oil to extract said African economy’s own natural resource. WHAT!? If Uganda ever refuses, it will promptly be dragged before an international arbitral tribunal who will slap them with a damages award/fine likely to be larger than the GDP of the country. Just ask Argentina. The same will happen if Uganda decides that it would like to enforce a higher minimum wage, or better protect the environment or…you get the gist. Suffice it to say that America is not the only one to have been out-smarted by Big Oil.

Before I sign off, I have a question (I genuinely have no idea what the answer is): do you think that if the company involved in the oil spill had not been BP, but rather an American oil giant, the reaction of the US would have been exactly the same? If it had been American pensions, rather than British ones, that were likely to be knocked by this criminal investigation, do you think it would proceed in the same manner. I wonder….