A fig leaf or a real fix? Big Oil’s plan for the next major underwater oil spill

Last week, in response to the three months that it took BP to temporarily shut down the oil spill caused by the Deepwater Horizon oil rig disaster in the Gulf of Mexico, a handful of other major oil companies took action.

Like everyone, I watched the travails of fellow Big Oil firm BP as it struggled to come to terms with US’ largest oil spill and the financial and political damage it has inflicted on BP (not even counting the economic and environmental impact on the external victims, the Gulf of Mexico communities and fishing and tourist industries). Finally, Big Oil firms decided to get ahead of the industry-wide problem — the uncertainty about deepwater drilling.

Exxon Mobil announced it was joining forces with Chevron, Royal Dutch Shell, and ConocoPhillips to create a $1 billion rapid-response joint venture capable of capturing and containing some 100,000 barrels of oil in water depths of 10,000 feet. Exxon Mobil is acting as the lead partner in the engineering construction phase of the project, with the ultimate plan being for the four companies to set up a non-profit organization (Marine Well Containment Company) to manage the venture. BP will join forces with the new joint venture once it has gotten out from under its current crisis in dealing with the oil spill and clean-up in the Gulf of Mexico.

Some skeptics might think that this is just another public relations exercise by Big Oil players, anxious to pacify the public and politicians in the Gulf states about deepwater drilling, with some token effort to take the heat off of them. The skeptics can point to executives of these same companies being embarrassed at a recent Congressional hearing when it was demonstrated that their Gulf of Mexico oil spill response plans were basically photocopies of one of the company’s plans to take care of an oil spill in Alaska. Not only were the plans exposed as woefully inadequate, in the light of the Deepwater Horizon disaster, they also all included information about protecting walruses, a creature that is non-existent in Gulf waters. Skeptics can also point to the massive multi-billion dollar PR offensive that BP has taken to convince the public, primarily through TV ads, that the company is cleaning up the Gulf of Mexico and will “make things right,” a claim that is often at odds with the perceptions of the affected parties along the coast.

Having said all that, $1 billion ($250 million per company) is serious money to invest in a non-profit organization. If this entity can prevent oil spills and/or quickly contain them, then confidence in the industry may rapidly return.

The date for the joint venture company to be operational? Twelve to eighteen months from now.

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Photo by lagoshep, used  a under a Creative Commons license.