What’s wrong with BP?

1) The Alberta Tar Sands

In December 2010, BP announced it was going ahead with a £1.6 billion investment in its first tar sands extraction project. ‘Sunrise’- a 50% partnership project with Canadian firm Husky Energy – is due to start producing oil in 2014. Two other tar sands leases, Terre de Grace and Pike, are in the early stages of development. BP is now making major investments in this risky, capital-intensive, highly-polluting unconventional oil.

This move represents a final abandonment of any pretence by BP to be going “Beyond Petroleum”. As explained elsewhere on this site, tar sands are one of the most polluting forms of fossil fuel on earth, and trample on Indigenous rights.

BP tries to defend its actions by saying that rather than open-cast mining it will be using Steam Assisted Gravity Drainage (SAG-D) to extract oil from the Canadian tar sands. In its 2011 Sustainability Review BP states that SAG-D has a smaller physical footprint than open-cast mining, and points out that it does not create tailings ponds. However, it fails to mention that this extraction method still causes great damage to the local environment, by fragmenting habitats along seismic lines, drawing heavily on local aquifers and polluting the groundwater. It also carries the significant risk of steam blowouts, which could cause death or serious injury to staff, community members and wildlife.

Because SAG-D requires the burning of large amounts of natural gas, it has a significantly higher carbon footprint than conventional oil. Because of this high carbon footprint, if all the currently accessible oil in the tar sands were burned it would take us 12% of the way towards the climate change “point of no return” all by itself.

As well as being unacceptably destructive, the business case for investing in the tar sands is looking increasingly shaky. French oil giant Total recently pulled out of one of its Canadian tar sands projects, citing the high costs and fragile profit margins that are besetting the whole industry. Total was willing to take a $1.65 billion loss rather than press ahead with what it saw as a bad investment.

The risk factors that led Total to this decision are increasing, not decreasing. The tar sands are landlocked, making them difficult and expensive to get to market. The pipelines that present the industry’s only solution to this problem are facing huge opposition on all sides, and look unlikely to be built any time soon. The Keystone XL pipeline has become a matter of huge political controversy in the United States, with President Obama under pressure to refuse the project and thousands of protesters pledging to block its construction. At the same time, over 130 First Nations along the proposed route of the Enbridge Northern Gateway Pipeline are united in opposition to the scheme, and are challenging it every step of the way. As a result, the price of tar sands crude has fallen.

Meanwhile, the Beaver Lake Cree First Nation in Alberta are progressing with their legal challenge against tar sands exploitation on their lands. If successful, their action could call into question all future tar sands leases in Canada, piling yet more uncertainty onto the beleaguered industry. The Fuel Quality Directive in the EU, though delayed, looks set to increase the costs of importing tar sands oil to Europe, and will encourage other countries to follow suit with regulations of their own to discourage the import of highly polluting fuels such as tar sands.

When combined with the falling price of domestic US oil, the high labour costs on such dangerous production sites, and the high number of leaks and spills from tar sands projects and pipelines being reported, these factors make the Canadian tar sands an increasingly risky investment prospect.

2) The Deepwater Horizon drilling disaster

On April 20th, 2010, an explosion at BP’s Deepwater Horizon drilling rig killed 11 workers and caused a rapid stream of crude oil to begin gushing into the Gulf of Mexico. It flowed unabated for the next three months, releasing just under 200 million gallons into the ocean – the largest marine oil accident in US history.

Delegates representing communities along the US Gulf Coast – where the effects of the disaster continue to devastate coastal ecosystems, local livelihoods and residents’ health – attempted to gain entry to BP’s London AGM in 2011. They were turned away, despite having valid proxy cards and having travelled thousands of miles to question the Board in the wake of the Gulf of Mexico disaster. In 2012, delegates from the Gulf Coast did manage to get into the meeting with us and confront the Board.

Bryan Parras, from Houston, explained to shareholders and the media: “BP claims that the spill has been cleaned up. This isn’t true. Oil is still impacting our communities, causing sickness, and triggering a collapse in fish stocks and local livelihoods. Many face overwhelming medical bills from illnesses associated with the spill and clean-up. To add insult to injury, local communities must bear the burden of proof that the 200 million gallons of oil and 2 million gallons of chemical dispersant released into the Gulf has caused lasting and detrimental effects, even though the most basic common sense would suggest exposure to raw crude oil and the dispersant Corexit is bad for ecosystems and people’s health. It’s important that people hear the truth.”

Derrick Evans, from Gulfport Mississippi, said “The story BP is trying to sell to the media is that the causes and consequences of the spill have been effectively addressed and the company has moved on. We want everyone to know that what we are seeing on the ground is very different. We are seeing oil surface in areas deemed ‘clean’ by BP, while tarballs filled with dangerous bacteria continue to wash ashore. We are finding record numbers of dead dolphins and a whole host of other dead animals along the Gulf Coast. Stress due to loss of livelihood and uncertainty is exacting heavy tolls upon communities, and people are sick from toxic exposure. Despite this, BP is already developing new deepwater wells, including some in the Gulf of Mexico. If this type of risky drilling practice is allowed to continue then it’s only a matter of time before there’s another disaster.”

For more information, see:
The Gulf Coast Fund for Community Renewal and Ecological Health
Bridge the Gulf

3) Other Sources of Extreme Oil

BP is determined to write off the Deepwater Horizon disaster as a tragic one-off. Unfortunately, these kinds of accidents are likely to become common occurrences if BP proceeds with its current business plans. Rather than shifting towards sustainable energy sources, the company is making ever-increasing investment in difficult “frontier” oil developments in inhospitable and fragile environments, such as deep offshore rigs and Arctic waters.

At the same time, it has sold off its solar energy division, has put its only wind power business up for sale, and is pushing into large-scale biofuels, which have little or no climate benefit in their current form and have been linked to rainforest destruction, the violation of land rights and rising global food prices.

The International Energy Agency’s Chief Economist Fatih Birol recently admitted that all the cheap and easy oil has now been found. We stand at a crossroads – we can either switch to a more sustainable transport system (with better public transport, and vehicles powered by renewable electricity), or charge headlong into difficult and dangerous “extreme” oil sources. The risks of spills and leaks are far higher for deep offshore drilling, especially in the Arctic circle, and the damage to ecosystems could be devastating.

4) Climate Change.

In its 2012 Sustainability Review, BP admits that if we carry on down our current path of increasing global fossil fuel use, we will be committed to temperature rises of over two degrees.

A two degree rise will almost certainly trigger “runaway” global warming, bringing with it massive infrastructure collapse, a global food deficit leading to mass starvation, disease, population shifts, extreme weather disasters, and ultimately an unrecognisable planet. Rather than proposing an alternative path, BP seems to calmly accept this terrifying future, and bases its entire business plan on increasing fossil fuel demand and rising CO2 emissions. The company is unashamedly basing its future profits on the end of civilisation as we know it.

In this, it is no different from any other major oil company. However, its ongoing (and disgraceful) attempts to brand itself as a “sustainable” company, such as its role as Sustainability Partner to the 2012 London Olympics, make it particularly vulnerable to criticism. Focusing on BP’s hypocritical attitude to climate change can help us to expose the profit-driven ideology behind the fossil fuel industry as a whole.