The unfolding environmental catastrophe in the Gulf of Mexico must convince governments everywhere that the economic costs of poor regulation of the oil industry can be staggering. Tens of thousands of barrels of reddish oil from the stricken Deepwater Horizon offshore well have turned much of the Gulf into a life-sapping zone. The oil has paralysed the economy of coastal communities, mainly in Louisiana. If computer-modelling studies published by the National Center for Atmospheric Research in the United States turn out to be reasonably accurate, the vast swathe of oil could harm more areas of the Atlantic coast over the next four months — the first signs are already visible in Florida. Such gloomy scenarios and the distressing images of dying oil-soaked birds, sullied beaches, and worried citizens pose a serious challenge to President Barack Obama. His immediate task is to exert sufficient pressure on oil giant BP to ensure that the gusher on the ocean floor is capped. After four major failed manoeuvres, there appears to be some progress in the latest effort to cap the well and pump the oil out by ship. Yet permanent relief wells may have to wait for quite a while. The disaster raises serious questions about safety in the global offshore oil industry. In the U.S., the evidence indicates that rules and regulations governing deepwater drilling were weak and often not enforced.
The hope is that the criminal and civil enquiry will throw light on the reports that BP was granted a series of exemptions by the regulator, the Minerals Management Service, on safety testing and contingency plans for accidents. Public statements by BP indicate that it scrambled for solutions after the event, and had to employ untested methods to stop the flow of oil. Containment equipment, meant for use in the event of a blowout in the mile-deep well, was not readily available when disaster struck. It was fabricated later, resulting in a fortnight's delay. The U.S. regulator suffers from a serious conflict of interest, as it has to both encourage oil production and police the process. This has apparently led to a standard regime of exemptions in safety enforcement. All this clearly indicates that the oil industry, which has been paying out billions of dollars to investors, must be made fully accountable. What emerges from the BP incident is the absence of a response plan to manage deepwater disasters. That is scary, considering there are as many as 50 such operations in the Gulf of Mexico alone. There are many global conventions against pollution of the seas. It is imperative, therefore, that countries permitting oil exploration publish their regulatory requirements on the Internet along with records of compliance by an industry that never sacrifices big profits.