News - 23 February 2016

BP oil drilling in Great Australian Bight is too risky

This opinion piece by Lyndon Schneiders was published on 23 February 2016, The Australian

On April 20, 2010, BP’s Deep­water Horizon oil rig in the Gulf of Mexico exploded. The oil rig sank to the bottom of the Gulf of Mexico two days later and oil gushed out of control from the seabed for 87 days. As the crippled rig burned and listed into the ocean, 11 workers went missing. They were never found, presumed dead.

The rig was undertaking exploratory oil drilling as part of BP’s Macondo prospect. By the time the oil spill finally was stopped, the US government estimated that about 4.9 million barrels of oil had contaminated the Gulf of Mexico.

The Deepwater Horizon disaster was described by President Barack Obama as the “worst environmental disaster America has ever faced”, and it is estimated that up to 180,000sq km of the Gulf of Mexico and several hundred kilometres of coastline were affected by the spill.

A bipartisan national commission of inquiry established by Obama found the disaster could have been prevented and “the immediate causes can be traced to a series of identified mistakes by BP, Halliburton and Transocean that reveal such systemic failures in risk management that they place in doubt the safety culture of the entire industry”.

Since the disaster BP has pleaded guilty to a range of felonies, including manslaughter. In July last year, BP agreed to a $US18.7 billion payout to the US Department of Justice, the states of Alabama, Florida, Mississippi, Texas and Alabama, and 400 local government entities. It was the largest single settlement with a single company in US history.

Forbes Magazine has estim­ated that the total cumulative cost to BP since the disaster is $US43.8bn ($61.1bn).

In comparison, the Australian government’s total revenue in 2014-15 was $385bn.

The Deepwater Horizon disaster occurred in waters that were about 1.5km deep and in an area with extensive history and expertise in oil drilling and response to oil spills.

Now BP is planning to undertake exploratory oil drilling in Australia’s remote, wild and pristine Great Australian Bight off the coast of South Australia. The drilling is due to begin once an environment plan, prepared by BP and unavailable for public scrutiny, is approved by a regulator, the National Offshore Petroleum Safety and Environmental Management Authority.

NOPSEMA originally was established to oversee workplace health and safety for workers on offshore drilling rigs following the Montara oil spill in the Timor Sea in 2009.

Responsibility for overseeing the preparation of the environmental impact assessment of BP’s oil drilling project was taken from the federal Environment Department following the election of the Abbott government in 2013.

In early 2014, Environment Minister Greg Hunt formally delegated responsibility for the environmental assessment and approval to NOPSEMA as part of the Abbott government’s strategy to remove the national government from environmental decision-making to reduce “green tape”.

BP’s oil drilling in the Great Australian Bight is planned in waters on the edge of the Australian continental shelf much deeper than those of the Gulf of Mexico.

The Great Australian Bight is notable for its extreme weather, its strong winds and currents, and as a key habitat for many threatened and migratory marine species, including a calving and breeding ground for the endangered southern right whale.

Previous attempts by Australian oil and gas company Woodside to drill in the Great Australian Bight in 2003 were abandoned because of huge swells of more than 10m high.

BP’s drilling leases also include substantial areas of the Great Australian Bight Marine Park.

Detailed modelling of the likely environmental impact of an oil spill of the scale of the Deepwater Horizon disaster on the Great Australian Bight — on its environment, on industries such as commercial fishing and tourism — does not exist in the public domain.

BP obviously sees the approval of the environment plan as a formality; construction is almost complete on a $700 million harsh environment semi-submersible oil rig in the Hyundai Heavy Industries shipyard in South Korea. This is the same shipyard and company that was responsible for construction of the Deepwater Horizon rig.

The decision by BP and other oil giants, such as Chevron, to look to open up a new frontier fossil fuel field in the Great Australian Bight following the Paris climate change agreement seems disingenuous.

In the lead-up to Paris, BP made fine and noble statements to the effect that climate change was real. The Paris agreement includes a commitment by the world’s governments to keep global warming below 2C. Meeting the 2C target is likely to mean most new fossil fuel fields will need to remain undeveloped.

It almost defies belief that a company such as BP — which has been buffeted by the huge liabilities accrued by Deepwater Horizon, recently laid off 7000 workers and clocked a $US6.5bn loss earlier this month — wants to open a new oilfield in one of the world’s most inhospitable and remote locations in a post-Paris agreement policy environment.

Yesterday the Australian Senate voted to establish a public inquiry into the BP proposal to drill for oil in the Great Australian Bight.

This inquiry provides a much needed opportunity for decision-makers and the wider community really to consider whether drilling for oil in the Great Australian Bight is in the national interest.

The public scrutiny associated with this inquiry also may provide an opportunity for investors in BP to consider whether the company’s long-term interest is best served by this risky venture.

Lyndon Schneiders is the national director of the Wilderness Society.