Flash Back: Gulf Of Mexico Oil Spill In Retrospect
By Alok Raj Gupta, Founder & CEO, ENVECOLOGIC
It has been over 7 years since the Gulf of Mexico oil spill, more popularly known as Deepwater Horizon oil spill, took place. The scale of damage – both environmental and economic was so high that it is imperative to evaluate how far we have come since then in terms of insulating ourselves from oil spill risks. It is because we cannot afford hydrocarbon wastage and associated ecological damage if this magnitude anymore.
Let us take a quick look at what had exactly happened. On April 20th, 2010, a geyser of seawater erupted from the marine riser onto the Deepwater Horizon rig, owned and operated by offshore-oil-drilling company Transocean and leased by oil company British Petroleum (BP), situated in the Macondo oil prospect in the Mississippi Canyon. This was soon followed by the eruption of drilling mud, methane gas and water, leading to the worst known oil spill to have ever occurred in the history. The well from which this rig was extracting oil was situated on the seabed 4,993 feet below the surface and extended approximately 18,000 feet into the rock. The blast was caused by natural gas which rose up the drill riser reaching the rig where it ignited and caused an explosion, resulting in deaths of 11 workers, injuring 17 others. The rig later capsized on 22nd April 36 hours after the initial explosion, causing the oil to flow freely upwards as the rig no longer existed.
BP tried shutting down the channel through which oil was extracted using Blowout Preventers (BOP) but the device malfunctioned. This throws some light on the kind security and quality measures and standards this company had been maintaining. After the initial explosion, the damaged Macondo wellhead leaked an estimated 3.19 million barrels (over 130 million gallons) of oil into the Gulf of Mexico over the course of 87 days, making the spill the largest accidental ocean spill in history. The oil spill contaminated more than 1,100 miles of coastline, at least 1,200 square miles of the deep ocean floor, and 68,000 square miles of surface water.
Impact on Marine Lives
The leaked oil spread abominably. Some floated to the ocean’s surface to form oil slicks, which can spread more quickly by being pushed by winds. Some hovered suspended in the midwater after rising from the wellhead like a chimney and forming several layers of oil. What ensued were the widespread destruction of aquatic flora and fauna and poisoning of the sea water.
According to researchers from the Oregon State University (OSU), the affected water contained 40 times more polycyclic aromatic hydrocarbons (PAHs) than the pre-spill period. PAHs are often linked to oil spills and include carcinogens and chemicals that pose various health risks to humans and marine life. From an average death rate of 63 dolphins a year, the number shot up to 311 dolphins a year for the year 2011. Seabirds were initially harmed by crude surface oil as even a small bit of oil on their feathers impeded their ability to fly, swim and find food by diving. Subsequently, they were dying in hoards due to oil ingestion as they tried to clean themselves or because the substance interfered with their ability to regulate their body temperatures. The brown pelican, recently delisted as an endangered species, was among the species most affected. Researchers are currently studying how oil may have affected land birds that live in the marshes along the Gulf coast. Almost 320,000 turtles got affected due to the oil spill, a number that is much higher than the earlier predicted one. Coral reefs got turned into graveyards as oil completely engulfed them.
Economic prospects in the Gulf Coast states became dire as the spill affected many of the industries upon which residents depended. More than a third of federal waters in the gulf were closed to fishing at the peak of the spill, due to fears of contamination. The Gulf of Mexico commercial fishing industry was estimated to have lost $247 million as a result of postspill fisheries closures. One study projects that the overall impact of lost or degraded commercial, recreational, and mariculture fisheries in the Gulf could be $8.7 billion by 2020, with a potential loss of 22,000 jobs over the same time frame. The tourism industry in the Gulf coastal economy reportedly lost up to $22.7 billion through 2013.
It In July, last year, BP went on record to say that it expects its Deepwater Horizon explosion and oil spill cost exceeded $60 billion to cover multiple comprehensive settlements. In just about 50 days, its stock price fell by 52% in 50 days, its lowest level since August 1996. By the end of July, 2010, the company’s loss in market value totalled $60 billion, a 35% decline since the explosion. In the second quarter of 2010, BP reported a loss of $17 billion, its first loss in 18 years. The hydrocarbon giant also lost its position as the second largest oil company to become the fourth largest oil company by 2013.
HSE Negligence Can Make or Break Fortunes
BP’s reputation, assets and legacy built over a century were shaken due negligence towards HSE practices on a single rig. The purpose of going through the environmental and economic impact, even after 7 years of the incident, was to establish that the HSE risks cannot be ignored at any cost. After the spill there has been an emergence of new regulations, working methodology, safety measures and development of new industry wide practices along with new government imposed safety norms and checks.
To begin with, BP’s new CEO Bob Dudley completely revamped the company’s approach to safety, setting up a new safety and risk division with sweeping powers to oversee and audit its operations.
Interestingly, even before the Macondo well was finally sealed, four of the world’s biggest oil companies, ExxonMobil, Royal Dutch Shell, Chevron and ConocoPhillips agreed to pool $1 billion to form a joint venture to develop a Gulf of Mexico oil spill response and containment system. Under the plans, the venture committed to developing equipment to prevent another spill on the scale suffered by BP’s Macondo well.
Note that even after the Gulf of Mexico mega oil spill, 32 major oil spills took place between 2011 and 2017, resulting in the direct loss of 28,349 tonnes crude oil in terms of spillage. Let us not even get into the economic loss of cleaning up, other industries and environmental cost, which would run into unimaginable losses. Oil spill prevention and response has still not received the kind of urgent attention it needs. As I mentioned in one of my previous articles, investment in health, safety and environment is like paying premium for risk coverage. One may not see annual returns but if ever misfortune strikes, a robust HSE safety net mitigates the damage significantly.