Poisoned Legacy: The human cost of BP’s rise to power
By Mike Magner
(St Martins, R185 )
BP is one of the big three oil companies and it is ranked in the top five companies in the world based on revenue. Its revenue is close to SA’s gross domestic product, but this all depends on who is counting, and a couple of billion dollars here or there does not seem to matter.
The heart of the story is the rise and fall of a maverick oil company that once espoused its green credentials before it began earning a reputation as a corporate villain, a company where the cost of human life was factored into the cost-benefit analysis when budgeting for company operations.
The book focuses on several major incidents involving BP that expose a company that, beyond not being as eco-friendly as it hopes the world would believe, is more interested in cost-cutting and profits than human lives and the environment.
In March 2005 a major explosion at a BP refinery in Texas, the third-largest refinery in the US, took 15 lives and injured 180 workers.
An investigation revealed that the tragedy could, in part, be attribbuted to cost-cutting measures that compromised safety.
BP had aggressively pushed for reductions in operating costs over the objections of its own on-site managers and external consultants.
Oil spills in the pristine environment of Alaska caused by a rusting pipeline transporting oil from Prudhoe Bay to the US were also attributed to attempts to lower production costs.
BP in this case actively pursued whistle-blowers and activists who were trying to notify authorities about problems with the pipeline.
Part of the problem was that shutting down the pipeline for extended maintenance reduced the income for the local Alaskan government as well as having an effect on the price of oil around the world.
The most notorious incident is, of course, the loss of the deep-water drill rig and 11 crew members in the Gulf of Mexico and the subsequent oil spill that dominated the news around the world for months.
BP needed new oil resources because the Alaskan oil reserves in Prudhoe Bay were being drawn down, and the deep-water oil reserves in the Gulf of Mexico provided this opportunity.
This was an ambitious oil exploration project in 1 500m of water and then the better part of 4km into the so-called Macondo field in the Gulf of Mexico, about 5.6km below sea level.
Transocean was contracted by BP to do the drilling – even though it had caused 73 percent of all oil spills in the Gulf between 2007 and 2010.
The drilling project seems to have been plagued by failures and concerns, and though most were picked up and noted in reports and e-mails, not all issues were addressed due to time and cost.
The drilling rig cost $500 000 a day to rent and the project was already $40 million over budget.
When the drilling was com- pleted and the final sealing of the well was to be done and tested so that the drilling rig could be moved off to its next job, a massive bubble of methane leaked through the well pipe and exploded on the rig. The seals had failed to contain the pressure.
This was the worst-case scenario for deep water exploration and BP had not prepared for it.
All the safeguards had failed. There is a lot of finger-pointing about who should take responsibility: the owners of the drilling rig, the company that supplied the cement that was used to seal the well or the owner of the well itself, BP.
Magner details how the various government agencies and regulatory bodies that are supposed to oversee oil exploration and drilling are understaffed and too close for comfort to the people they are supposed to regulate.
The message you gets from the book is that the deep pockets of the big oil companies allow them to become a law unto themselves.
Fines, litigation, settlements with plaintiffs and the like are handled by a horde of lawyers and PR people who get paid from the enormous profits an oil company generates. When companies become this large, the impression is that all their problems can be handled by spin doctors, lawyers and wheelbarrows full of cash.
For the most part, the book is interesting.
However, the final section does not hold the interest and imagination of the reader as it should.
The stories of the victims it lists read rather like a roster of names of unknown people. What the book does show brilliantly is that the endless chase after growth and profit comes at the cost of safety.
Profit and morality are not good bedfellows in big business. Doing the right thing is not likely to be rewarded. Business is about profit and growth – and profit is often at a cost to human lives and the environment.
When it comes to the bid to explore the Karoo for shale gas, I wonder: if something does go wrong, will those deep pockets of big oil companies be able to fix and restore that glorious landscape?