Deepwater Horizon Oil Spill: Implications

Abstract 

This research process assesses the Deepwater Horizon oil spill and its implications. Regulatory systems in managing deepwater oil drilling activities functioned inefficiently before the disaster occurred leading to poor preparedness. The discussion provides a historical background on the incident and emergency management implementation. It analyzes the political, ethics and financial implications of the disaster. Using lessons learnt in class, this study determines the validity of the decisions made to mitigate the oil spill. The lessons learned show how the implications of the oil spill were instructive to the US and other nations currently involved in ultra-deepwater oil drilling.

Introduction 

Emergency management processes ensure that governments and companies are adequately prepared for catastrophic events. The Deepwater Horizon oil spill exemplifies an event in which the US government and BP PLC emergency management was deeply criticized for failing to prepare for, mitigate, respond to and recover from the emergency. Despite having direct implications on the US, countries such as Brazil experienced broader effects (Birkland & DeYoung, 2011). The gulf oil spills have far-reaching effects to the regions natural systems and people to date (Birkland & DeYoung, 2011). Governments are yet to determine the cost implications of the gulf incident. The ensuing discussion analyzes the way both the US and BP PLC failed to prevent one of the greatest oil spills in history by addressing political, ethical, and financial implications of decisions made, validity of decisions and lessons learned.

Historical Background 

The Deepwater Horizon oil spill occurred on April 20, 2010. It took place about 49 miles from the Louisiana coast in the Gulf of Mexico, at an area commonly referred to as the Macondo Prospect. The incident resulted in the deaths of 11 men after a 33000-ton oilrig exploded (Schwartz, 2020). The Deepwater Horizon oilrig belonged to the Transocean Company but was leased to the BP Company for oil extraction at the Macondo Prospect (Schwartz, 2020). According to Birkland and DeYoung (2011), the spill deposited 4.9 million barrels of oil at the gulf, which was 19 times more than the Exxon Valdez spill. BP workers had almost completed working on the well and were ready to install a seal in order for production to begin (Schwartz, 2020). The automatic seal failed, releasing toxic fluid gases from the well leading to the explosion. According to Ebinger (2016), the oil spread out over 1300 miles to the shorelines of Texas and Florida and Brazil.

Implications of Decisions 

Decisions made to mitigate the oil spill incident had ethical, political, and financial implications. Prior to the explosion, BP oil had encountered several issues of ethical decision-making (Birkland & DeYoung, 2011). By 2003, BP had implemented over $4 billion dollars in operating management systems, sustainable energy sources, a code of conduct and establishing a director of business ethics (Schwartz, 2020). Incidents occurring in 2004 and 2005 at BP’s Texas City refinery and in 2006 BP pipeline burst in Alaska made it clear that ethics were not on the company’s agenda (Schwartz, 2020). Farber (2014) indicates that BP used a single-tube well design, which had been declared unfit for deepwater oil exploration because it provides fewer barriers to prevent the out spill of gas and oil. Financial implications led to BP contributing about $20 billion to a trust fund and $18.9 billion dollars to the affected states (Schwartz, 2020). The latter amount would be paid over a period of 18years (Schwartz, 2020). Concerns arose on whether the company would be at a capacity to undertake mitigation decisions based on its bankruptcy issues after investing in unprofitable non-petroleum ventures. Decision implementation encountered political implications due to the administrative mechanisms used by Congress (Birkland & DeYoung, 2011). Farber (2014) contends that the GCCF failed to replicate the superior qualities it was expected to deliver through lower transaction costs in compensating the large number of claimants.

Validity of Decisions 

Majority of the decisions made to mitigate the disaster portray complacency in political, ethical, and financial aspects. Emergency management is based on four core principles including mitigation, preparedness, response, and recover. BP oil was not prepared to handle a disaster of such magnitude considering its numerous ethical concerns in operations between 2003 and 2010 (Schwartz, 2020). The $20 billion dollars contributed for mitigation was insignificant since most of the implications are still being addressed to date leading to more costs. According to Birkland and DeYoung (2011), federal response from the US was slow in implementing decisions, because most officials were not aware of their roles in the issue. The idea of “shared governance” negatively affected response process due to lack of clear designation of duties between local, state and federal governments (Birkland & DeYoung, 2011). The minerals management service (MMS), was charged with selling oil leases to companies without ensuring the safety of offshore exploration machinery (Birkland & DeYoung, 2011). In terms of recovery, both US government and BP were not financially capable of sustaining the recovery process, which has lasted for more than a decade. Farber (2014) indicates that Louisiana is losing about 32000 acres of wetlands every year due to the disaster. Notably, most of the decisions made after the Deepwater Horizon oil spill were wrong and inconclusive towards providing a lasting solution.

Lessons Learned 

Decades later, the Deepwater Horizon oil spill has extensively affected current and future offshore oil extraction (Schwartz, 2020). The incident shows that more regulatory insight is required when addressing ultra-deep oil drilling (Ebinger, 2016). Future emergency management must pay keen attention to the four phases of mitigation, preparedness, response, and recovery. Preparedness begins with the US department of interior conducting strict assessment of drilling company’s expertise, financial and technological capacity to undertake deep horizon drilling (Ebinger, 2016). In terms of management, Deepwater Horizon was unprecedented in terms of duration, scale, and scope. Although the Oil Pollution Act of 1990 (OPA 90) had been used successfully to deal with over 1500 spillage accidents annually since its establishment, the Deepwater Horizon indicated that preparedness and planning was inadequate (Ebinger, 2016). Specifically, this incidence brought out the differences in the already established systems of responding to oil spills. Major lesson learnt from this is ensuring that regular reviews are carried out on the preparedness and planning programs (Ebinger, 2016). In fact, disaster management teams should be funded to improve on the ways they respond to oil spills in the future. Poor coordination of emergency management services indicates that Homeland Security must apply contingency planning in the event of an emergency (Ebinger, 2016). Lesson learnt is that, the Homeland Security should embark on developing an Area Contingency Plan (ACP), which should be implemented alongside the National Oil Hazardous Substance Pollution Contingency Plan (NCP). By so doing, in case of an oil spillage, the plan would be sufficient to deal with any worst case discharge of oil or any hazardous substance (Ebinger, 2016). The ACP will be adequate to prevent any substantial threat of a discharge from offshore facility or a vessel (Ebinger, 2016). Global leaders must work together to provide energy access to millions of people through sound environmental processes (Ebinger, 2016). In addition, companies must address their code of conduct and ensure every decision is made from an ethical perspective.

Conclusion 

The Deepwater Horizon oil spill established that mining companies could not work effectively without oversight from the government. Both the US and BP PLC failed to prevent one of the greatest oil spills in history. Emergency management services were below the expected standards leading to poor decision-making. If MMS had exercised stringent measures in checking BP’s previous operations and incidents, it would have identified vulnerabilities and terminate all operations in the Gulf of Mexico. As more demand for energy in the world pushes oil drilling into deeper waters, policymakers and private companies must commit to implementing proven technology and regulatory insight.

References

Birkland, T., & DeYoung, S. (2011). Emergency Response, Doctrinal Confusion, and Federalism in the Deepwater Horizon Oil Spill. Publius: The Journal of Federalism , 41(3), 471-493. https://doi.org/10.2307/23015116 

Ebinger, C. (2016, April 20). 6 years from the BP Deepwater Horizon oil spill: What we’ve learned, and what we shouldn’t misunderstand. Brookings Institution . https://www.brookings.edu/blog/planetpolicy/2016/04/20/6-years-from-the-bp-deepwater-horizon-oil-spill-what-weve-learned-and-what-we-shouldnt-misunderstand/ 

Farber, D. (2014). Lessons from the BP Oil Spill. RECHTD , 6(3), 232-245. https://doi.org/10.4013/rechtd.2014.63.01 

Schwartz, M. (2020). Beyond petroleum or bottom-line profits only? An ethical analysis of BP and the Gulf oil spill. Business and Society Review , 125(1), 71-88. https://doi.org/10.1111/basr.12194