Factoring in the Real Cost of Oil

Newly-released video shows oil spewing from the damaged oil well a mile underwater in the Gulf of Mexico. BP

Michael T. Klare is a professor of peace and world security studies at Hampshire College. His most recent book is Rising Powers, Shrinking Planet: The New Geopolitics of Energy. This piece originally appeared on TomDispatch.

Yes, the oil spewing up from the floor of the Gulf of Mexico in staggering quantities could prove one of the great ecological disasters of human history. Think of it, though, as just the prelude to the Age of Tough Oil, a time of ever increasing reliance on problematic, hard-to-reach energy sources.

Make no mistake: we're entering the danger zone. And brace yourself, the fate of the planet could be at stake.

It may never be possible to pin down the precise cause of the massive explosion that destroyed the Deepwater Horizon drilling rig on April 20th, killing 11 of its 126 workers. Possible culprits include a faulty cement plug in the undersea oil bore and a disabled cutoff device known as a blow-out preventer. Inadequate governmental oversight of safety procedures undoubtedly also contributed to the disaster, which may have been set off by a combination of defective equipment and human error.

But whether or not the immediate trigger of the explosion is ever fully determined, there can be no mistaking the underlying cause: a government-backed corporate drive to exploit oil and natural gas reserves in extreme environments under increasingly hazardous operating conditions.

The New Oil Rush and Its Dangers

The United States entered the hydrocarbon era with one of the world's largest pools of oil and natural gas. The exploitation of these valuable and versatile commodities has long contributed to the nation's wealth and power, as well as to the profitability of giant energy firms like BP and Exxon.

In the process, however, most of our easily accessible onshore oil and gas reservoirs have been depleted, leaving only less accessible reserves in offshore areas, Alaska, and the melting Arctic. To ensure a continued supply of hydrocarbons -- and the continued prosperity of the giant energy companies -- successive administrations have promoted the exploitation of these extreme energy options with a striking disregard for the resulting dangers. By their very nature, such efforts involve an ever increasing risk of human and environmental catastrophe -- something that has been far too little acknowledged.

The hunt for oil and gas has always entailed a certain amount of risk. After all, most energy reserves are trapped deep below the Earth's surface by overlying rock formations. When punctured by oil drills, these are likely to erupt in an explosive release of hydrocarbons, the well-known "gusher" effect. In the swashbuckling early days of the oil industry, this phenomenon -- familiar to us from movies like There Will Be Blood -- often caused human and environmental injury. Over the years, however, the oil companies became far more adept at anticipating such events and preventing harm to workers or the surrounding countryside.



Now, in the rush to develop hard-to-reach reserves in Alaska, the Arctic, and deep-offshore waters, we're returning to a particularly dangerous version of those swashbuckling days. As energy companies encounter fresh and unexpected hazards, their existing technologies -- largely developed in more benign environments -- often prove incapable of responding adequately to the new challenges. And when disasters occur, as is increasingly likely, the resulting environmental damage is sure to prove exponentially more devastating than anything experienced in the industrial annals of the nineteenth and early twentieth centuries.

The Deepwater Horizon operation was characteristic of this trend. BP, the company which leased the rig and was overseeing the drilling effort, has for some years been in a rush to extract oil from ever greater depths in the Gulf of Mexico. The well in question, known as Mississippi Canyon 252, was located in 5,000 feet of water, some 50 miles south of the Louisiana coastline; the well bore itself extended another 13,000 feet into the earth. At depths this great, all work on the ocean floor has to be performed by remotely-controlled robotic devices overseen by technicians on the rig. There was little margin for error to begin with, and no tolerance for the corner-cutting, penny-pinching, and lax oversight that appears to have characterized the Deepwater Horizon operation. Once predictable problems did arise, it was, of course, impossible to send human troubleshooters one mile beneath the ocean's surface to assess the situation and devise a solution.

Drilling in Alaska and the Arctic poses, if anything, even more perilous challenges, given the extreme environmental and climatic conditions to be dealt with. Any drilling rigs deployed offshore in, say, Alaska's Beaufort or Chukchi Seas must be hardened to withstand collisions with floating sea ice, a perennial danger, and capable of withstanding extreme temperatures and powerful storms. In addition, in such hard-to-reach locations, BP-style oil spills, whether at sea or on land, will be even more difficult to deal with than in the Gulf. In any such situation, an uncontrolled oil flow is likely to prove lethal to many species, endangered or otherwise, which have little tolerance for environmental hazards.

The major energy firms insist that they have adopted ironclad safeguards against such perils, but the disaster in the Gulf has already made mockery of such claims, as does history. In 2006, for instance, a poorly-maintained pipeline at a BP facility ruptured, spewing 267,000 gallons of crude oil over Alaska's North Slope in an area frequented by migrating caribou. (Because the spill occurred in winter, no caribou were present at the time and it was possible to scoop up the oil from surrounding snow banks; had it occurred in summer, the risk to the Caribou herds would have been substantial.)

If It's Oil, It's Okay

Despite obvious hazards and dangers, as well as inadequate safety practices, a succession of administrations, including Barack Obama's, have backed corporate strategies strongly favoring the exploitation of oil and gas reservoirs in the deep waters of the Gulf of Mexico and other environmentally sensitive areas.

On the government's side, this outlook was first fully articulated in the National Energy Policy (NEP) adopted by President George W. Bush on May 17, 2001. Led by former Halliburton CEO Vice President Dick Cheney, the framers of the policy warned that the United States was becoming ever more dependent on imported energy, thereby endangering national security. They called for increased reliance on domestic energy sources, especially oil and natural gas. "A primary goal of the National Energy Policy is to add supply from diverse sources," the document declared. "This means domestic oil, gas, and coal."

As the NEP made clear, however, the United States was running out of conventional, easily tapped reservoirs of oil and natural gas located on land or in shallow coastal waters. "U.S. oil production is expected to decline over the next two decades, [while] demand for natural gas will most likely continue to outpace domestic production," the document noted. The only solution, it claimed, would be to increase exploitation of unconventional energy reserves -- oil and gas found in deep offshore areas of the Gulf of Mexico, the Outer Continental Shelf, Alaska, and the American Arctic, as well as in complex geological formations such as shale oil and gas. "Producing oil and gas from geologically challenging areas while protecting the environment is important to Americans and to the future of our nation's energy security," the policy affirmed. (The phrase in italics was evidently added by the White House to counter charges -- painfully accurate, as it turned out -- that the administration was unmindful of the environmental consequences of its energy policies.)

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