The Viewpoint in the Flyer's May 27th issue by Joe Conason is but one of a seemingly endless criticism of BP malfeasance, cozy associations of oil industry and government, lack of government oversight, intervention, and capabilities, unparalleled eco-disaster, and a lack of presidential "whip ass." The column was naive at best and just plain wrong at worst. However entertaining to the faithful, it misses the mark by a bayou mile.
To be sure, the blowout of the blowout preventer is a mechanical and procedurual failure that was avoidable, and those responsible should be punished. To those who rail that BP's safety record, mostly in areas other than exploration, is spotty and that the Horizon failure is indicative of a culture of unsafe practices, well, that may be the case. No excuses here. They are responsible for the equipment failures that resulted in the blowout.
But the important question is: Why drill at all? It's because we consume more and more hydrocarbons. Think of the go juice needed for our many personal tools and toys. Our larger homes (not just square feet but with bigger rooms with higher ceilings and more glass) mean more electric power consumption. Walk around your house in the dark and see how many little lights are on — computers, printers, modems, hard drives, dish washer, washer/dryer, security systems, thermostats, entry and garden lights, etc. There has also been a stunning increase in public lighting — streets, plazas, etc.
The U.S. Energy Information Agency says that in 2009 (not a peak year) the U.S. consumed about 19 million barrels of petroleum per day. Fifty-seven percent is imported. Seventy-one percent of our consumption is for motor fuel. Canada is our largest supplier, at twice the size of Mexico, which is number two, followed by Saudi Arabia, then Venezuela. Not many people have said, "I want to pay more for energy, and I want to use less." Most have said, if not directly, "I want to have the same size vehicle that uses less gas, and I want lower gas prices."
The real cause of the Horizon blowout is demand. The reason BP took a higher risk in drilling at the 5,000-foot level was because of a combination of environmentalists with good intentions, coastal home owners, government agencies, and Congress. These groups drove legislation that prevented drilling in shallow water along the entire Pacific Coast and most of the Atlantic Coast, as well as the Alaska tundra. Where else can one drill in the U.S.? The big practical reserves are in Alaska, which is mostly off-limits. The most accessible but more risky reserves are in the deep-water Gulf, where water pressure and temperature result in conditions where engineering solutions are marginal. BP fulfilled a consumer demand — and exhibited self-interest — by drilling where proven reserves could be brought to refineries with a positive cost/return ratio.
Until this disaster, I suspect that most of our media megaphones couldn't have named one town near the Louisiana Gulf Coast, except New Orleans. They wouldn't have been able to tell you that a major dead zone (an area where marine life is stressed because of lack of oxygen) now exists in the Gulf of Mexico along Louisiana and parts of Texas as a result of excessive nutrients traveling down the Mississippi from farmland. Midwestern and Delta farmers poisoned the marine life, and Hurricane Katrina smashed the Louisiana Gulf wetlands long before BP's errors coated it in oil. I know. I grew up near the swamps of south Louisiana.
We lack an energy policy that is honest, workable, and progressive and that also avoids national economic ruin. Many on the left and some on the right want the following to happen: The president should ban BP (CEO, management, employees) and declare that there will be no more drilling for oil except in places where an oil spill cannot possibly reach American shores. In addition, government should become both the manager of all natural resources and the first responder for all energy crises (maybe all crises of any sort). The best consideration is that this is naive, but it is actually wrong-headed in the extreme. This is not an energy policy nor a reasonable job for government.
We do not need more rants. What we need is a president who will tell the truth. We can improve oversight, but we must continue drilling in risky places in America. If not, then we must be prepared to pay a lot more for energy while importing more. It's nobody's fault. It just is. There is no tooth fairy. Get over it.
Bill Waters is a retired Fortune 100 business executive, retired captain in the U.S. Naval Reserve, and a board member of various Memphis-area nonprofit organizations.