Five-year Fallout From the Macondo Disaster

Macondo Disaster

Macondo Disaster

The Deepwater Horizon oil spill in the Gulf of Mexico passed its fifth anniversary this week with BP still waiting to put a cap on its financial losses.

Crude flowed from the stricken Macondo well for nearly 90 days before it was finally capped. Containment proved arduous, but the US judicial system has proved even more of a marathon.

For all that, the company, the wider industry and even the coastline have staged something of a recovery from the worst US maritime pollution incident in history.

The industry’s reputation was tarnished, but the oil and gas sector has moved on, albeit with safety higher up the agenda. There are still plenty of critics who will argue about significant ongoing damage to the environment and wildlife.

BP said last month that the Gulf of Mexico was “rebounding” – only to be slapped down by those still waiting to publish a final Natural Resource Damage Assessment. And the claims of health problems resulting from the detergents used in the clean-up campaign continued to be made at BP’s annual general meeting last week.

But the London-based oil company has surely not shirked its responsibilities, having paid out $40 billion already in the way of clean-up costs, fines and compensation after being found grossly negligent by a court in New Orleans.

BP’s share price has yet to recover from the blowout, which led to 11 deaths and allowed four million barrels of oil to flow into the ocean – some of which washed up on the beaches of Florida and Louisiana.

But despite constant references to the group being the next takeover target, BP has fought back and remains active as a successful driller in the Gulf and around the world.

Meanwhile, Transocean, owner of the Deepwater Horizon, and other contractors involved, such as Halliburton, have also been damaged, but managed to move on operationally and financially. The wider industry, currently beset with different woes resulting from a low oil price, is now drilling wells far deeper than the one that caused such trouble in April 2010.

It is estimated that after the six-month moratorium that blocked all new wells being drilled, 1500 have since been sanctioned in the US Gulf.

But while the industry continues to probe into ever more environmentally sensitive terrain such as the Arctic, Macondo serves as a permanent warning that safety remains key. Meanwhile, Marine Well Containment Company has been created by companies in the US Gulf to handle any drilling emergency. A Center for Offshore Safety has also been established to help share industry-wide knowledge and experience.

In the last five years, policy makers have also been active. The US Department of the Interior has created two separate agencies to deal with the industry – the Bureau of Ocean Energy Management and the Bureau of Safety & Environmental Enforcement (BSEE). New safety rules have been in place since 2012 to improve well design and integrity, while the number of safety inspectors working in the US Gulf has almost doubled to 92 over the five-year period.

BSEE figures show that hazardous incidents in the US Gulf were down more than 14% in 2014 compared to 2009. One worker died last year compared to four in the year before the blowout. But it is also worth noting that these accidents have occurred despite drilling activity being down significantly on the days of Macondo. This comes partly as a result of the intervening boom in onshore shale exploration. As fracking changed the energy landscape in one way, the Deepwater Horizon disaster did in another.

Source: Upstream 24 April 2015

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