The Gulf of Mexico saga goes on and on with no signs of an end. It is almost 55 days since the explosion and fire on the Deepwater Horizon rig. Apart from the initial loss of life (11 men) on the rig, other losses too keep on rising to the extent that it is now difficult to compare this incident with any other previous one in the industry.

Initial reports estimated the volume of oil gushing from the well to be 2,000 barrels per day. This was shortly raised to 5,000 barrels a day and BP stuck with this figure in spite of doubts being raised.

Estimate

The estimates kept on rising and now the official estimate stands at 40,000 barrels per day with the average throughout the episode put at 30,000 barrels a day.

I wonder if releasing the truth in bits and pieces is deliberate or if the US is unable to make such an estimate?

Perhaps all those concerned were hoping for a quick resolution to the problem, not knowing that a solution was going to be slow and painful.

It seems that the US is more interested in blaming BP and raising the extent of its accountability rather than tackling the problem and its catas-trophic consequences. They could play the blame game later.

There is no doubt that BP is responsible and could be held accountable. But it is also surprising to note how there is no mention of some other companies such as Deepwater Horizon, Halliburton and even Cameron who are also involved in the matter.

Halliburton was working on the rig just before it blew up and some observers think they could be responsible for the explosion.

Even Dick Cheney's connections with Halliburton through "unexercised stock options and deferred salary" are being questioned.

If President Obama is looking for an "a** to kick" he'll find quite a few, including some in his Interior and Mineral Management Service departments which, according to a commentator in the New York Times, have "degenerated into a cesspool of corruption".

Forget the companies directly involved, but given that the incident is the first of its kind and immediately seen to be difficult, it is my view that a national emergency should have been declared and resources from all oil companies and related industries should have been mobilised to cap the well or curb the flow of oil and help prevent this catastrophic incident.

Instead, the media and the US government are focusing only on BP. This problem is likely to become a transatlantic issue between the US and Britain. British Premier David Cameron has discussed things with President Obama and some people are already speculating about the fate of BP if its market value falls below its assets.

BP's assets in the US must make some mouths watery with all those fields, refineries and 11,000 marketing outlets.

Now let us assume that capping the well is difficult and it will take a long time. But why does this kind of attitude prevail towards cleaning efforts on the shores of affected states?

Why does everyone need to be paid upfront before the clean-up efforts can begin? Why is it not possible to mobilise people rotating on a continuous basis to clean up the shores?

Puddles of oil can be seen all in front of us and nothing is being done about it, minuscule teams can be seen collecting tar balls on some of the beaches. I heard that some puddles will be burned only for the authorities to prevent a remedy as no environmental damage assessment was made.

I would imagine that burning the oil would harm the environment more than just leaving it on the shores.

Holiday

As for the offshore industry, the best thing perhaps will be to take a long holiday and wait for the end of the moratorium and the multitude of regulations or change in regulations that will come in the aftermath of this disaster.

If it takes two new wells to kill the leaking well in the Gulf of Mexico, is it possible that every future deepsea well will be accompanied by two wells in case it blows?

This is a very expensive solution, but it is not unimaginable, given the catastrophic consequences of another failure.

In the meantime, let us give onshore oil a chance before we sink in troubled deep waters.

 

The writer is former head of Energy Studies Department in OPEC Secretariat in Vienna.