In the two years since the Deepwater Horizon disaster turned the Gulf of Mexico into a giant slick of Sweet Louisiana crude, oil companies have not demonstrably improved at responding to spills. This industry-wide inertia was apparent last month, when the Department of the Interior approved Shell Oil’s plan to address a potential spill in Alaska’s Arctic waters. While Shell’s plan clearly appeased the Interior Department, it relies on ineffective and debunked cleanup techniques — the same tired methods that failed BP in 2010. Shell needs to make dramatic new investments in spill response technology before it can be permitted to drill in the inhospitable Arctic Ocean.
For several years, Shell has been trying to drill exploratory wells in the Chukchi Sea, and the company appears poised to finally begin operations this July. The stakes are high, both for Shell — Alaska’s North Slope is estimated to contain 26 billion barrels of oil — and for the Chukchi’s vibrant, vulnerable ecosystem. Polar bears, bowhead whales, belugas, walruses, seabirds such as eiders and loons, and myriad other species are already threatened by shrinking sea ice, and would struggle to survive a spill. The region is also home to several groups of indigenous peoples, who rely on this biological abundance and adamantly oppose oil drilling.
Although regulatory agencies have avowed that Shell can exploit the oil safely, the company's plan for dealing with the exigencies of a spill is woefully inadequate. Shell’s response plan leans heavily on booms — fat, floating tubes intended to surround and contain oil — and oil-skimming boats. These same collection techniques have been tried and found lacking in every oil spill of recent vintage, including the Deepwater Horizon. As William Freudenberg and Robert Gramling write in their book Blowout in the Gulf, “Oil spills are not new phenomena, but in no case … has anyone ever been able to get more than about 5%–10% of the oil back in the boat. That, moreover, is a generous estimate.” Before the Deepwater Horizon, BP’s response plan claimed that the company could contain a spill of up to 500,000 gallons per day; in reality, their skimmers and booms were completely flummoxed by “only” 60,000 gallons per day.
Nonetheless, the momentum for Arctic drilling seems unstoppable, as one government agency after another has approved Shell’s permits. Environmentalists may no longer be able to prevent Chukchi drilling — although a number of organizations are lining up their legal challenges — but they may be able to amend the way it’s conducted, much as environmental groups in the Northeast have influenced the fracking process without blocking it.
I don’t think Shell, or anyone else, should be allowed to drill in the Arctic: oil companies lack the technology to clean up spills in calm seas, let alone the world's roughest waters. But if it has to happen, here are three ways that Shell’s operations could be made cleaner, safer, and more conducive to the public interest.
First, and most obvious, oil companies need to invest in researching and developing better cleanup methods. The disjunction between the sophisticated technology that companies use to extract oil, and the primitive techniques with which they struggle to scoop it up, is a travesty. This is an industry that has essentially figured out how to conduct brain surgery through 20,000 feet of seawater and rock – and the best method they have for containing surface oil is encircling it with glorified inflatable pool toys?
The problem is that companies have never been made sufficiently responsible for the public harm they incur: the Oil Pollution Act, passed in 1990, caps liability for economic damage at $75 million. By comparison, damages from the BP spill are surely in the tens of billions. Removing the cap — or increasing it to $10 billion, a proposal Congress raised, and then promptly forgot about, after the Deepwater Horizon — would make liability more commensurate with damages, and force companies to invest seriously in containing and removing oil.
Second, while Shell has admittedly made some progress in spill prevention technology — for example, its blowout preventer is now armed with an extra set of shear rams, the last line of defense that failed BP — the true breakdowns aboard the Deepwater Horizon were errors of human judgment. In keeping with a culture that prioritizes time and money over caution, the rig’s operators assessed risk sloppily, failed to communicate with each other, and cut corners. While the Interior Department has toughened its oversight since 2010, it isn’t clear that the cavalier, expediency-obsessed ethos of offshore drilling has changed. Shell, and all oil companies, must not only improve their equipment, but also retrain the people who use it. This training should emphasize better communication between the various contractors working on the well, a more risk-averse mindset, and a “flatter” hierarchy that encourages rig workers to report concerns to superiors.
Finally, government needs to claim a larger percentage of royalties from extracted oil. Right now the federal government takes 18.75% of revenues from offshore drilling (states get nothing at all), a lower rate than oil and gas companies pay in most other countries, including Canada. Oil companies have long exploited loopholes in federal statutes to pay bargain-basement rates, and in some cases no royalties whatsoever, on offshore extraction.
If that doesn’t irk you, it should: we, the public, own that oil. Think of the Outer Continental Shelf not as distant seabed, but as your own property. If an oil company wanted to reap profits from your backyard — and dump the vast majority of the risk onto your shoulders — you’d demand steep rewards, wouldn't you? Offshore oil belongs to taxpayers, and companies should pay them fair rates.
The country doesn’t need Arctic oil — as PolicyMic pundit Kate Brandt explained, we’re already drilling domestically at a furious pace, and demand-side interventions are much more likely to drive down gas prices than is increased supply. The Arctic’s riches are too enticing to remain buried, however, and Shell’s plans to drill there this summer appear irrevocable. Nevertheless, the oil industry has not yet demonstrated that it is capable of ameliorating its messes, and drilling should only be permitted if it’s accompanied by far greater investments in cleanup technologies.
Weigh in: Should oil companies be allowed to begin offshore drilling in the Arctic Ocean?
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