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When birds wash ashore

Note: Watch Need to Know on Friday, June 4, as we explore the effects the Gulf oil spill is likely to have on regional wildlife.

Need to Know’s Dreux Dougall spoke to Lisa Margonelli, Senior Research Fellow at the New America Foundation and author of Oil on the Brain, about the oil industry, the environmental movement, and what might happen when we start seeing oil-covered birds washing up on the Gulf Coast.

Dreux Dougall: In a recent New York Times article, you wrote that much of the environmental movement has been shaped by oil spills.

Lisa Margonelli: I think most people would say that the environmental movement started with Thoreau and kind of evolved again with Rachel Carson and “Silent Spring.” But it didn’t actually become a political movement until the blowout in 1969 off the coast of Santa Barbara, when a citizens group formed very quickly after the spill. It was called GOO – Get Oil Out. It kind of galvanized people’s will around the country to do something. That was when some of the first environmental regulations came into being. The next year, 1971 or 1972, we had the Clean Air, Clean Water Act.

Then what you had in 1989 when the Exxon-Valdez spill happened was a whole other level of political advocacy on the part of environmental groups. Their power and their efficacy grew out of a real national, even international, revulsion at the oiled birds and the sense that Exxon had betrayed the public trust in spilling the oil.

Part of the effect of the first two oil spills was to keep in place moratoriums on drilling on the east and west coast. Also to make the process of drilling in what was considered pure unspoiled land, like the National Arctic Wildlife Refuge, very difficult.

The Gulf is not seen as pure. It was not seen as a sacrosanct area, so where there were moratoriums on the east and the west, there certainly wasn’t one in the Gulf. The Gulf is a source of a third of our domestically produced oil, refines a quarter of our gasoline, and has a lot of our marine oil terminals for a lot of imported oil coming in. They’ve always had spills, they have a lot of refineries, a lot of air pollution, and a lot of people work in that industry.

For this current spill, one of the things that is very strange about it, is that the oil, which is in enormous volumes, has so far stayed under water. It hasn’t oiled the wildlife yet. There have only been a few birds’ pictures in, and so in a way we’re waiting for the public reaction. It’s definitely very bad. In that time that we’re waiting for the public reaction, this sort of feeling of dread is building. There’s more and more signs of phenomenal incompetence on the part of the oil companies involved and on the part of the federal regulators, the Minerals Management Service, and to some extent, the government response seems to have been spun by the oil companies. So we don’t know the size of the disaster we’re looking at and it may take some time to come into focus.

Dougall: Who do you think is to blame for the Gulf Oil disaster?

Margonelli: Well, first of all, oil spills don’t happen if people don’t use oil. I’m not going to blame the American public, but we use 25 percent of the world’s oil. When you are using oil, there is a certain inevitability that there will be a spill. Any individual spill can be prevented, but there’s an inevitability about spills. There’s no question that this one could have been prevented. Whose fault is it? My sense is that’s it’s everyone’s fault that is involved.

There were many levels of control that were breached, from the pressure expanding out of the hole, which normally doesn’t happen, to the blowout protectors failing, to the final defense against the blowout also failing – which is that they will drive the rigs off the well, very fast, to disconnect it and put out the fire. What happened in this case was that the fire that came up from the blowout set two of the engines from the rig on fire, which is supposed to be impossible. So you have multiple levels of failure. And I think the other thing is that the regulator is definitely at fault in this.

There’s currently a cap on oil companies’ liability for spills like the one in the Gulf. Taxpayers would be stuck paying the rest. Some are likening this to a bailout for the oil companies. Should this cap be lifted?

Margonelli: Oh yes. The cap is basically an artifact. When the Exxon-Valdez had the spill the liability for oil shippers was raised to almost infinite. Ships contain a finite amount – if you crash your ship you won’t spill anymore oil than is what’s in your ship. But in order to ship oil, you have to carry a certificate of insurance showing that you can cover this high liability, even if you’re carrying a small amount of oil. What that meant was that the insurance industry gets in on the act of influencing the shippers behavior and saying what’s acceptable and what’s not. We also criminalize the oil spills. Captains of ships who spill oil can be held up on criminal charges.

None of that is in place for the spills from a rig, which is an enormous, limitless amount of oil potentially, depending on what’s in the reservoir.

So that $75 million cap is laughable, and it’s just an example of how out of touch we were. But the other thing is, both BP and Transocean were self insured, which means that there was no insurer in on the act. So what we need to do is raise the liability, get insurers in on the act of influencing that behavior in addition to the regulators. We might consider criminal charges too because that might change people’s idea of estimating risk.

Dougall: After the Exxon-Valdez spill, there were a lot of protests and boycotts of Exxon. But so far, there haven’t been that many protests against BP. Why do think that is?

Margonelli: I believe there is a protest of BP across the country today, but it may be rather small. I think people are still somewhat in shock. You know, the oil birds have not shown up, and that tends to be like dropping the crystal in the supersaturated solution. Everything all of a sudden moves very, very fast. So I think that might be waiting to happen.

I will say one thing about BP, though; they tend to be the cheapest oil brand in any market. So the people who are choosing BP might be choosing them by price. But I have no doubt that there will soon be a backlash against BP. There absolutely has to be a regulatory backlash even if there’s not a popular one.

You mention gas prices. Will the spill ultimately affect gas prices or will they remain relatively low?

Margonelli: The price of oil per barrel today is already on low demand. In the medium term, this is actually going to affect gas a lot. The United States has three percent of the world’s reserves. We use 25 percent of the world’s production of oil – very disproportionate. Most of our reserves are fairly exhausted, so we’re pumping out old wells and working things over. This deepwater oil in the Gulf of Mexico was the only thing expanding fast. Between 1995 and 2003 it grew more than 500 percent. By 2020, the Gulf of Mexico, and particularly this stuff from deep water, was supposed to make up 40 percent of our domestic oil production. An enormous amount of oil was supposed to come from there, and it was seen by the public as magic, if it was seen at all. There were no rigs to look at. If you saw anything at all, there was this sort of magical extraction machinery that looked like something out of Jules Verne.

I suspect we are not going to find one simple cause of this blowout but rather a whole cascade of things. So you cannot go back to business as usual in the Gulf. You cannot keep drilling in deeper and deeper reservoirs under the water. Deepwater oil was our unspoken plan B or, I’ve joked, our methadone for oil addiction. This may be about to disappear. That has profound implications for the cost of gas.

Dougall: You’ve mentioned that you have a moral dilemma about offshore drilling. Can you explain?

Margonelli: What we tend to do in the United States, as people who are concerned about the environment, we say “no offshore drilling.” But because we confined that to mostly the east and west coasts, what that means is “no offshore drilling in my backyard.” So we have moved it to the Gulf where there is a lot of oil. And we rely more and more on imports. Basically all oil comes from someone’s backyard. In Nigeria last year there were 2,000 active oil spills. So we’ve essentially been importing the oil and offshoring the bad effects, like the spills.

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  • tijuana

    we have protests all over facebook against bp and for boycotting bp.

  • Gordon

    I think it’s a bit simplistic to say, “oil spills don’t happen if people don’t use oil”. Petroleum products include far more than just gasoline, such as non-fuel materials like plastic.

  • Nikita Mitchell

    A very informative piece. Some very interesting points were made, especially when you asked who we have to blame for the oil spill. Margonelli is speaking the truth when she points out that we, too, are culpable in all of this. Situations like this occur because there is a demand for oil. The demand exists because of the American population’s ridiculous use of this limited resource. Yet how many of us as individuals are doing anything about it?

    Definitely some food for thought.

  • Vandana

    No doubt this is a major disaster, however it seems as individuals we want it all without making any lifestyle and/or standard of living adjustments, which are taken for granted. We’d also like to hold everyone accountable other than ourselves. There are few who would refelect deeply on the cause. As an example, I’d like to share the clip on the TV about concerned coastline residents angry at BP whose sport fishing was going to be impacted, however they were in a motor boat run by gas. BP is accountable, but it could possibly be any other oil company. Our society is a reflection of who we are as individuals and as indviduals we are a reflection of our society. Less is not more anymore, more and more until some other bubble bursts. Are we not oblivious to our own wants and the impacts?

  • Paul

    An archetype-reaction pattern to collective pain seems to dominate the American mindset. When bad events like the present one explodes on the scene, the search is immediately on for a culprit whose punishment is used to alleviate the pain felt by the Nation. Although sober justice must be meted out, perhaps the emotional “capital” left behind by such pain is better spent on addressing the underlying needs that drives bad collective behavior? And I am referring to more than just: ‘we’re all to blame,’ but perhaps looking about what to do about the addiction to economic growth, might be a useful place to start? We must eat; so we must work; so we must create jobs; the companies that survive competition are those that save money by automation; automation is driven by energy; the cheapest energy is the one demanding the least amounts of investments, like oil, finally leading to “the culprit” we seem not to have the strength to face: the addiction to economic growth makes sustainable stewardship of life, next to impossible.

  • Ian Tucker

    Your wrong the oil industry hasn’t done anything wrong then from using a BOP that didn’t work and probably didn’t wait long enough for the cement to dry because of some argument who knows all that matters is clean this spill up and GOD SAVE THE GULF. Hey take politics out of it. Why do you think they started attacking the the MMS. Well I wonder not just because they had some wild characters working there, but because they wanted to politically use the the OIL SPILL FOR ELECTION PURPOSES> Come on folks realize this crap and don’t let it influence you think above the BS. People trying to implement there agendas.

  • Kim Johns

    In my opinion, the thoughts of both Vandana and Paul are very perceptive and accurate. Fixing blame is a U.S. national pass time. But the practice is faulty in that naming the culprit does not often solve the underlying problem. And so the problem rears its head elsewhere, at another time, and often in a different guise. In disasters such as this one, we Americans would suffer less pain and would recover from it much faster if we willingly assumed collective responsibility for it. Responsibility is not blame. Unfortunately, the latter is resorted to at every turn because it is easier to assign blame than it is to take personal responsibility. .

  • G Smith

    Blaming the Americans for using oil is an easy excuse. We all know if we were given better choices on energy we would use it more wisely I like the piece on the residents who live on Denmark Island. We need those kind of choices.

  • Mick

    I have lived on the Gulf Coast for the last 25 years.What people wont believe is the Oil that has leaked out will never go away.My life as i have known it has changed until I Die.It does not matter how much they clean It will be there for the rest of my life and so on.What you dont want to hear is reality and that BP officers should be in jail until it is Capped off,and cleaned up.They have ruined the rest of my lifeAnd for my Aminals friends I use to see everyday.They need to be Jailed that way they will see they have really messed up.I dont care how many people they hire for every one 10 will loose their job for years
    How can I swim like i use to everyday with Oil,Tar,And oil dispersant which all are Carsengentics that will be here for the next century.I have not been swiming this year.I use to be in the gulf everyday.Can I sue for my lifestyle change.They are Criminals.!

  • Mick

    Out of this I feel the American People will see that the Oil Companies have lied to us and there is no shortage of Oil all they have done in the last decade is lie to the Country and make us believe there is a shortage you need to see theprofits of the Oil Companies in the last 2 Decades

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