Egged on by catch-all protest coalitions, a "seize BP" campaign is
organising demonstrations in major cities calling on the US government
to snatch the British company's US assets. A "boycott BP" action group
advocates shunning BP service stations. Placards abound with slogans
such as "God bless America – go to hell BP" and "BP – billionaire
polluters". The wife and children of BP's chief executive, Tony
Hayward, are under police protection following threats.
Urged by political strategists to act
more angrily, Barack Obama shed his uncharacteristic cool
this week and declared that if it was up to him, BP's boss would be
fired. The White House now wants BP to pay not only for cleaning up the
Gulf, but also for the cost of jobs lost on 33 other oil rigs because
of a government-imposed six-month moratorium on offshore drilling. And
the US department of justice is threatening legal action to halt BP's
dividend payouts to investors.
Anthony Weiner, a usually sensible Democratic
congressman, declared: "Whenever you hear someone with a
British accent talking about this on behalf of British Petroleum, they
are not telling you the truth."
With something close to relish, financial
pundits are mooting a BP bankruptcy. A New York Times columnist, Andrew Ross Sorkin, guessed that the cost
of the gulf disaster could reach a staggering $40bn (£27bn), making
corporate collapse a real possibility (calmer industry experts put the
cost at $5bn to $15bn). A prominent, albeit retired, oil analyst, Matthew Simmons, has been touring
television studios to declare that the oil spill was "entirely BP's
fault" and that the company will be bust within months. Predictions of
doom are self-perpetuating in business and BP's stock price has duly
plummeted by 40%. The company's market value has fallen by nearly
£50bn, even though BP makes a profit of more than £11bn annually.
Perhaps it's time, though, to pause for
breath. It isn't yet clear exactly what happened on the Deepwater Horizon platform in the hours
leading up the catastrophic fire on April 20 that sent the rig under
water, killed 11 people and left BP's Macondo spewing oil. This
accident may well be down to BP's failings – but shouldn't we wait
until we know for sure before we become not only judges but
executioners?
Of the 126 people working on the
Deepwater Horizon, only eight were BP employees. BP had a 65% share in
the well, while a partner, Anadarko, had 25%. The rig was owned and
operated by a US firm, Transocean. A failed blow-out preventer was
made by another US firm, Cameron, while Halliburton, the oil services
firm once run by Dick Cheney, carried out cement work that was supposed
to seal the well.
BP was calling the shots on the project
– and it is tempting to rush to judgement on the British firm, given
its dismal US record. Neglect and lax safety oversight caused an
explosion at BP's Texas City oil refinery in 2005,
killing 15 workers. The following year, poor maintenance prompted BP's
pipelines in Alaska to spring a leak, sending oil gushing into the
Arctic wilderness.
There have been allegations, as yet unproven, that BP was cutting
corners on the Deepwater rig – perhaps by filling the well with
unstable water, rather than drilling mud. Nevertheless, there are
plenty of questions outstanding. Just this week, a US congressional
committee asked Transocean to explain apparent poor staffing on the rig
on the night of the gulf disaster. There were 18 employees on shift
that evening, the lowest number in a fortnight of records, and there
were no engineers, electricians, mechanics or subsea supervisors. BP
isn't allowed to suggest that others might share responsibility –
that amounts to "finger pointing", which prompts howls of political
outrage.
Irrespective of liability, it is worth pondering whose interests a
BP bankruptcy would serve. Although based in London, the company has
been effectively Anglo-American since its 1998 merger with Amoco – it
employs 80,300 people, of whom 29,000 are in the US. Some 40% of its
shares are held in the UK, while 39% are held in the US. A collapse of
BP would destroy livelihoods, damage pension funds and wipe out savings
on both sides of the Atlantic. For critics of "big oil", that's hardly
a cause for tears. But BP's failure wouldn't dent America's reliance on
fossil fuels even slightly. Ironically, the real beneficiaries would be
other big oil companies.
The US government isn't likely to let a
Russian, Chinese or Middle Eastern buyer pick up the assets of a
crippled BP. The richest, most likely buyer of valuable remnants would
be ExxonMobil,
which, lest we forget, is a company that defines hardline. Until very
recently, Exxon spent millions funding groups that deny global warming.
Of all the major energy companies, it has been the slowest to invest in
renewable energy – in 2007, it made a profit of $40bn but put just
$100m into a research project on wind, solar and green technology. And
before the Gulf of Mexico disaster, Exxon was the worst oil-spiller in
US history.
BP hasn't done itself many favours. Initially, the company
woefully underestimated the scale of the spill. And BP's chief
executive has produced a string of cringeworthy remarks. The company
was ill-prepared for such an unprecedented disaster but has finally
made some progress in plugging the leak. Yet BP has consistently
promised to foot the bill for cleaning up the gulf and to meet all
valid compensation claims.
Many will argue that BP deserves to die, and anger is entirely
understandable. But critics should be careful what they wish for.
America is a nation with a tradition of due process and everybody –
even "big oil" – is entitled to a fair trial.
