Showing posts with label BP. Show all posts

Wednesday, June 16, 2010

BP Is a Corporate Criminal

Jim Hightower at the 2008 Texas Book Festival,...

Published on Wednesday, June 16, 2010 by Creators Syndicate

BP Is a Corporate Criminal

Gosh, how quickly things turn. One day, you're a strutting peacock — the next day, you're just another gasping, oil-covered bird.
In early April, BP was strutting about in full corporate splendor, showing off the $9 billion in profits that it had soaked up in just the first three months of this year. It was also basking in a corporate re-imaging campaign, depicting itself as a clean-energy pioneer and declaring that BP now stood for "Beyond Petroleum."
Since its Gulf of Mexico well blew out on April 20, however, BP has proven to be beyond belief. The wider and deeper that this catastrophe spreads, the more we discover just how oily this giant is.
From the time it was known as the Anglo-Persian Oil Company and set out to grab and control the rich petroleum reserves owned by what is now Iran, BP has been a recidivist global criminal. In the past three decades, it grew huge by swallowing such competitors as Standard Oil of Ohio, Amoco and Arco. Along the way, it has been implicated in bribery, overthrowing governments, plunder and money laundering, plus having established one of the worst safety and environmental records in an industry that is notoriously reckless on both counts.
And now, its rap sheet grows almost daily. In fact, the Center for Public Integrity has revealed that the oil giant's current catastrophic mess should come as no surprise, for it has a long and sorry record of causing calamities. In the last three years, the center says, an astonishing "97 percent of all flagrant violations found in the refining industry by government safety inspectors" came at BP facilities. These included 760 violations rated as "egregious" and "willful." In contrast, the oil company with the second-worst record had only eight such citations.
While its CEO, Tony Hayward, claims that its gulf blowout was simply a tragic accident that no one could've foreseen, internal corporate documents reveal that BP itself had been struggling for nearly a year with its inability to get this well under control.
Also, it had been willfully violating its own safety policies and had flat out lied to regulators about its ability to cope with what's delicately called a major "petroleum release" in the Gulf of Mexico.
"What the hell did we do to deserve this?" Hayward asked shortly after his faulty well exploded. Excuse us, Tony, but you're not the victim here — and this disaster is not the work of fate. Rather, the deadly gusher in the gulf is a direct product of BP's reckless pursuit of profits. You waltzed around environmental protections, deliberately avoided installing relatively cheap safety equipment, and cavalierly lied about the likelihood of disaster and your ability to cope with it.
"It wasn't our accident," the CEO later declared, as oil was spreading. Wow, Tony, in one four-word sentence, you told two lies. First, BP owns the well, and it is your mess. Second, the mess was not an "accident," but the inevitable result of hubris and greed flowing straight from BP's executive suite.
"The Gulf of Mexico is a very big ocean," Hayward told the media, trying to sidestep the fact that BP's mess was fast becoming America's worst oil calamity. Indeed, Tony coolly explained that the amount of oil spewing from the well "is tiny in relation to the total water volume." This flabbergasting comment came only two weeks before it was revealed that the amount of gushing oil was 19 times more than BP had been claiming.
Eleven oil workers are dead, thousands of Gulf Coast people have had their livelihoods devastated and unfathomable damage is being done to the gulf ecology. Imagine how the authorities would be treating the offender if BP were a person. It would've been put behind bars long ago — if not on death row.

National radio commentator, writer, public speaker, and author of the book, Swim Against The Current: Even A Dead Fish Can Go With The Flow, Jim Hightower has spent three decades battling the Powers That Be on behalf of the Powers That Ought To Be - consumers, working families, environmentalists, small businesses, and just-plain-folks.

Tuesday, June 8, 2010

Oil Profits Ignore Actual Cost of Oil

Image by SkyTruth via Flickr

Published on Tuesday, June 8, 2010 by The Guardian/UK
The Oil Firms' Profits Ignore the Real Costs
The energy industry has long dumped its damage and, like the banks, made scant provision against disaster. Time to pay up

by George Monbiot
Has BP ever made a profit? The question looks daft. The oil company posted profits of $26bn last year. There's no doubt that BP has been pumping money into the pockets of its shareholders. The question is whether this money is what the company says it is. BP calls it profit. I call it the provision the firm should be making against future liabilities.

Despite an angry letter from two US senators and a warning from Barack Obama about spending big money on their shareholders while nickel-and-diming coastal people, despite the fact that it has no idea what its total liabilities in the Gulf of Mexico will be, BP seems to be planning to pay a dividend this year. It's likely to amount to more than $10bn. As the two senators noted, by moving money "off the company's books and into investors' pockets", BP "will make it much more difficult to repay the US government and American communities".

Pollution has been defined as a resource in the wrong place. That's also a pretty good description of the company's profits. The great plumes of money that have been bursting out of the company's accounts every year are not BP's to give away. They consist, in part or in whole, of the externalised costs the company has failed to pay, and which the rest of society must carry.

Does this sound familiar? In the 10 years preceding the crash, the banks posted and disposed of stupendous profits. When their risky ventures failed, they discovered that they hadn't made sufficient provision against future costs, and had to go begging from the state. They had classified their annual surplus as profit and given it to their investors and staff long before it was safe to do so.

Last week the British government bumped into another consequence of failing to take future costs into account. Chris Huhne, the new secretary of state for energy and climate change, revealed that nuclear decommissioning liabilities will cost the government £4bn more than it was expecting to pay over the next three years. This will cancel out two-thirds of the vicious cuts the government has announced and swallow most of his department's budget. As Huhne pointed out: "It is a classic example of short-termism. I cannot think of a better example of a failure to take a decision in the short run costing the taxpayer a hell of a lot more in the long run."

The decommissioning costs imposed on society by nuclear power will be dwarfed by those that are imposed by the fossil fuel industry. They include, but are not confined to, the money that will have to be spent on adapting to climate change. The United Nations estimates this cost at $50bn–$170bn a year, but a report last year by British scientists suggested that this is around three times too low, as it counts only a small proportion of likely impacts.

The UN has hired the consultancy Trucost to estimate the costs dumped on the environment by the world's 3,000 biggest public companies. It doesn't report until October, but earlier this year the Guardian published the interim results. Trucost had estimated the damage these companies inflicted on the environment in 2008 at $2.2 trillion, equivalent to one third of their profits for that year. This too is likely to be an underestimate, as the draft report did not try to value the long-term costs of any issue except climate change. Nor did it count the wider social costs of environmental change.

A paper by the New Economics Foundation in 2006 used government estimates of the cost of carbon emissions to calculate the liabilities of Shell and BP. It found that while the two companies had just posted profits of £25bn, they had incurred costs in the same year of £46.5bn. The oil leaking into the Gulf of Mexico from the Deepwater Horizon well is scarcely more damaging, and its eventual impacts scarcely more expensive, than the oil that is captured by neighbouring rigs then processed and burnt as intended.

The total costs imposed by the oil companies, which include the loss of human lives and the extinction of species, cannot be accounted. But even if they could, you shouldn't expect the companies to carry them. They might be incapable of capping their leaks; they are adept at capping their liabilities. The Deepwater Horizon rig, which is owned by Transocean, is registered in the Marshall Islands. Most oil companies pull the same trick: they register their rigs and ships in small countries with weak governments and no international reach. These nations are, in other words, incapable of regulating them.

Flags of convenience signify more than the place of registration: they're an unmistakable sign that responsibilities are being offloaded. If powerful governments were serious about tackling pollution, the first thing they would do would be to force oil companies to register their property in the places where their major interests lie.

US lawyers are drooling over the prospect of what one of them called "the largest tort we've had in this country". Some financial analysts are predicting the death of BP, as the fines and compensation it will have to pay outweigh its earnings. I don't believe a word of it.

ExxonMobil was initially fined $5bn for the Exxon Valdez disaster, in 1989. But its record-breaking profits allowed it to pay record-breaking legal fees: after 19 years of argument it got the fine reduced to $507m. That's equivalent to the profit it made every 10 days last year. Yesterday, after 25 years of deliberations, an Indian court triumphantly convicted Union Carbide India Ltd of causing death by negligence through the Bhopal catastrophe. There was just one catch: Union Carbide India Ltd ceased to exist many years ago. It wound itself up to avoid this outcome, and its liabilities vanished in a puff of poisoned gas.

BP's insurers will take a hit, as will the pension funds which invested so heavily in it; but, though some people are proposing costs of $40bn or even $60bn, I will bet the price of a barrel of crude that the company is still in business 10 years from now. Everything else – the ecosystems it blights, the fishing and tourist industries, a habitable climate – might collapse around it, but BP, like the banks, will be deemed too big to fail. Other people will pick up the costs.

There is an alternative, but it is unlikely to materialise. Just as Norway has treated its oil money not as profit but as provision against a tougher future, so the governments in whose territories oil companies work should force them to pay into a decommissioning fund. The levy should reflect the costs that economists are able to calculate, plus a contingency for those we can't yet foresee.

This would outrage the oil firms, as it would render many of them unprofitable. But there's a simple answer to that: the money currently defined as profit is nothing of the kind.
© Guardian News and Media Limited 2010

George Monbiot is the author of the best selling books The Age of Consent: a manifesto for a new world order and Captive State: the corporate takeover of Britain. He writes a weekly column for the Guardian newspaper. Visit his website at www.monbiot.com

Thursday, May 20, 2010

Avoid Getting Stuck In Tar Sands

Image via Wikipedia

Published on Thursday, May 20, 2010 by The Capital Times (Wisconsin)
Don’t Switch to Tar Sands and Other Dirty Fuels

by Bruce Nilles and Kate Colarulli

As we’ve watched the Gulf Coast clean up from the massive BP oil disaster, besides BP picking up its own PR mission to improve its image, we’ve also noticed another disturbing PR campaign: The coal industry and the tar sands industry are both starting to use this disaster to tout the supposed “cleanliness” of their respective energy sources.

There are more and more “clean” coal ads appearing alongside oil cleanup articles, and the tar sands (also known as oil sands) industry has already made the outrageous claim that it is “safer” than offshore drilling. One executive said “that while there can be failures with conventional oil and oil sands projects, the damage would be much smaller and more modest than with offshore spills.”

This could not be farther from the truth, of course. One could compare the tar sands industry in Canada to a massive and permanent oil spill on land. When the tar sands industry destroys the environment from the get-go, who needs a spill?

Here’s a fact for you: The Canadian tar sands operations are intending to expand to the size of Florida (and have already destroyed 200 square miles).

The mining and production of oil from tar sands creates three times the carbon emissions as that of conventional oil. As if its global warming pollution were not bad enough, tar sands mining also results in the destruction of the Canadian boreal forest, a vital carbon reservoir for 11 percent of the world’s carbon and a global nesting ground for 166 million birds. In other words, not only does tar sands development create vast quantities of new carbon emissions, it destroys the Earth’s natural ability to capture carbon through the forest.

Think BP’s bad behavior only crops up in oil? Think again -- BP is actively involved in the tar sands industry and has recently been cited for cutting corners on a tar sands project that would have impacted the drinking water for the 8 million people residing in the Chicago area.

In October, BP was caught trying to undercount the pollution that would result from a proposed expansion of its Whiting refinery in order to process tar sands. The tar sands expansion would increase the refinery’s discharges of ammonia into Lake Michigan by 54 percent and its discharges of suspended solids -- the byproducts of making gasoline -- by 35 percent. Surely the people of Chicago would thank BP for adding byproducts of making gasoline to their drinking water.

If that incident doesn’t scare you, one of BP’s tar sands operations, ironically named Sunrise, is situated above Canada’s biggest freshwater aquifer. Rick Boucher, vice president of the Metis Nation of Alberta, Region One, fears that “it’s just a matter of time before an accident causes injury or death, and pollution of this massive underground freshwater system.”

Instead of taking every precaution to protect this water resource, last month BP’s management successfully beat down “a resolution that would have required the company to report on the environmental, financial and reputational risks of developing Canadian tar sands projects.” The tar sands have been called “the greatest environmental crime in history,” yet BP is steadily increasing its involvement.

This BP oil disaster should be a turning point in our energy policy here in the U.S. We should not keep relying on dirty energy sources like coal, oil and tar sands. We have available technologies such as electric vehicles, solar and wind power that would allow us to get off oil. It’s time to make the switch.

There is no room in America’s future for coal, oil and tar sands -- don’t let the BP oil disaster help chain our country to more dirty energy.
© 2010 Madison.com
This is a recent blog post from Bruce Nilles, director of the Sierra Club Beyond Coal Campaign, co-written by Kate Colarulli of the Sierra Club Dirty Fuels Campaign. Nilles earned his bachelor’s and law degrees at the University of Wisconsin.

Local Bias

Wednesday, June 16, 2010