For more than three months, oil has been spilled in the Gulf of Mexico. In these three months the world has been presented with an unprecedented flow of images of the environmental impact of the oil industry. Birds and beaches drained in oil were not limited to some beaches like we see after the crash of an oil tanker but came on an unprecedented scale. I am not an environmental specialist, but I guess that in the next months, we’ll be reading a lot of reports about the damaging effects of the spill on the local environment. It takes some time before the exact impact of such a massive oil spill can be measured.
For BP, the impact can be measured in terms of billions of dollars already spent on the clean-up, and likely to be spent in the future on further clean-up, damage repair and fines. Today it was announced that the total sum of fines could run up to 13,4 billion euro. And what will be the longer term consequences of the reputational damage for BP after being involved in such a massive environmental disaster? The company once tried to be a front-runner of greening the oil business with its ‘beyond petroleum’ campaign and its green flower logo. It is now bound to be the public enemy n°1 of environmentalists for many years to come. If you open the website of the UK branch of Greenpeace, you get a pop-up that attacks BP (www.greenpeace.co.uk). The many parodies on BP’s beyond petroleum slogan that we currently see, make clear that as a company you have to be very careful when you launch a ‘look how green we are’-campaign. You have to make sure that you can live up to the expectations that you create.
For buyers of energy, the interesting question is: will the Gulf of Mexico spill help us to really move ‘beyond petroleum’? Could it be the big cathartic event that helps mankind to get rid of its petroleum addiction? And by what energy will petroleum be replaced? Energy not consumed due to energy savings programs? Renewable energy? Natural gas, of which we have recently found out that we may have more available than we thought? Nuclear energy?
I am not too hopeful about individual action. One of the television reports on the oil spill showed a woman from Louisiana who was railing against the government for not doing enough to stop the tragedy. The camera zoomed out and showed that she was speaking from the window of a giant SUV car. Usage of energy-rapacious equipment such as SUV’s have caused petroleum consumption in the US to continue to grow in the past decades. This consumption growth makes it necessary to drill for oil in difficult circumstances such as the deeper parts of the Gulf. However, most people prefer to blame the government rather than questioning their own energy-consuming behavior. ‘BP’ or ‘Obama’ are more likely scapegoats than ‘me’. So far, I have met with very few people that argued: ‘have you seen what happened in the Gulf of Mexico? I am considering to buy a more fuel-efficient car and reduce how much I use it by using my bike, the train or my feet more often’. Is there anybody out there that has cancelled the flight to his summer holiday resort because of the oil spill?
The most important reaction to look out for, will be the political reaction. US as well as EU officials have already responded to the disaster by imposing moratoriums on deep-sea drilling for oil. Now that the hole has been plugged will these bans be reversed in a ‘back to business-as-usual’ scenario? I don’t think so. By plugging the hole, BP has avoided that the problem will become worse. But there is still a lot of rubbish in the sea and on the shores, and the negative consequences of the oil spill will continue to be in the news for quite some time to come. It is likely that any license for deep-sea oil drilling will at least be seriously challenged in the next years.
There is a danger, however, that a more critical approach of drilling licenses could create a worldwide Nimby, or ‘not in my backyard’ syndrome. We don’t drill for oil near our own shores, but we buy the oil drilled in countries where governments are less environmentally sensitive. This would mean that the West becomes even more dependent on importing oil from underdeveloped or developing countries. This could increase the risk of more conflict in the style of Iraq …
The only way of avoiding that is by having the drilling bans flanked by a policy for investment in renewable energy and fuel efficiency improvement. Blocking BP from drilling for petroleum in the Gulf of Mexico, Alaska or North-Sea will not move us ‘beyond petroleum’. A new vision on energy policy is necessary. And maybe, the Gulf of Mexico oil spill might help president Obama to sell such a policy to its countrymen. If this succeeds, BP will indeed have helped the world to move beyond petroleum. However, not in the way that it once imagined.