British Petroleum is not to blame!

Everybody is to blame! When a disaster involves the oil industry, Halliburton, US government regulators, nationalism and even, on the far right fringes, Norman Tebbit - what would you really expect? The only company to escape blame, please note America, is British Petroleum, a company that has not existed since 2001.

The presidential commission investigating the Gulf of Mexico oil spill has concluded,

The well blew out because a number of separate risk factors, oversights, and outright mistakes combined to overwhelm the safeguards meant to prevent just such an event from happening. But most of the mistakes and oversights at Macondo can be traced back to a single overarching failure—a failure of management. Better management by BP, Halliburton, and Transocean would almost certainly have prevented the blowout by improving the ability of individuals involved to identify the risks they faced, and to properly evaluate, communicate, and address them. 

So far only Chapter Four of the report has been published but the commission states, as explicitly as any official report ever can, that this disaster came about because of the culture of the industry. This can not be filed in the 'cock-up' folder. 

The blowout was not the product of a series of aberrational  decisions made by rogue industry or government officials that could not have been anticipated or expected to occur again. Rather, the root causes are systemic and, absent [sic] significant reform in both industry practices and government policies, might well recur. 

The whole mismanagement is neatly summed up in an e-mail from Brett Cocales to Brian Morel, two BP engineers on April 16. Cocales had argued that 21 centralizers, components that ensure the integrity of the concrete well, were necessary but then concluded the e-mail by saying, 

"But, who cares, it’s done, end of story, [we] will probably be fine and we’ll get a good cement job. I would rather have to squeeze [remediate the cement job] than get stuck above the WH [wellhead]. So Guide is right on the risk / reward equation."

For me, however, nothing in the report is quite as sinister as Cocales' rather throwaway reference to to the 'the risk / reward equation'. Those four words sum up the cynicism at the heart of this industry's business philosophy. What they are saying is: how little can we do to be seen to comply with basic safety and and environmental standards without threatening the profitability of the business. Clearly, they are prepared to take substantial risks, with lives, the environment and people's livelihoods. Yet the profits are huge. In 2009 BP made a profit of £25.1 billion. The company is valued at £95 billion. In a recession that is a pretty good yield. £1 in every £7 paid as dividends from FTSE 100 companies was paid by BP. 

What possible reason is there for pushing so hard on the margins of safety- “it will probably be fine.” It is pure greed. The bottom line is how much money can we make without going to jail. Last year Halliburton, who were heavily criticised in the report for using cement to seal the well that they knew had already failed nine stability tests, pleaded guilty in a US court, alongside former subsidiary KBR, to paying Nigerian officials more than $180 million in bribes to win a $6 billion gas contract.  KBR executive, Albert “Jack” Stanley was sentenced to seven years in prison and were fined a record $579 million. According to the LA Times, in December 2010 Halliburton and KBR have agreed a further payout: about $250 million and in return other Halliburton and KBR executives will stay out of jail. According to the report, the extra 15 centralizers, which were on site and may well have stopped the tragedy, were disregarded because they would have taken an extra 10 hours to install. It's about priorities, isn't it?

So Brett Cocales "Who cares?" I suppose the families of the eleven men who died on the rig might care. The thousands who have lost their livelihoods and anyone who cares for the environment would be a little concerned. Professor Ed Overton, an environmental scientist at Louisiana State University told the BBC that the oil will not totally vanish, some animals and coral may never return while it will take dolphins, sharks and whales up to 20 years to recover their numbers. At least one in ten birds is expected to die but in the long term no one really knows what to expect, "We know almost nothing about the effect of oil on the ecology in the deep ocean," says Professor Overton. 

The report concludes that it is impossible to apportion a precise share of blame to the individual companies. BP failed to address the true risks of the operation. Transocean, who managed the rig, had recently experienced a similar problem at another site but failed to advise their staff on the Deep Water Horizon rig. According to the report their staff were inexperienced and poorly trained in emergency drills. Many warning signs were missed or ignored. Hallibuton provided substandard materials and remarkably the explosion occurred shortly after Joseph E Keith, an employee of the Halliburton subsidiary Sperry Sun, failed to realise that the well was filling with dangerous levels of crude oil and natural gas because he was in the canteen, having a smoke and a cup of coffee. Finally, the US government was condemned for failing to provide the oversight necessary to prevent these lapses in judgment and management by private industry. In other words the regulators believed the companies when they promised they were being safe. 

Analysts believed that the report was generally 'good news' for BP. In the Telegraph, Jason Kenney, an oil and gas analyst said. "It's a bit of pressure relief for BP, because it'll be able to spread the burden and hopefully recover costs from partners." BP's final liabilities are estimated to be £25.8 billion unless the US authorities pursue negligence charges, which would carry unlimited damages. It is a possible threat to  all three companies, but the general feeling amongst commentators is that 'gross' negligence will be difficult to prove. Despite this uncertainty analysts expect the BP share price to rise over 20% this year. President Obama is expected to allow deep water drilling to resume in the Gulf of Mexico within the next few weeks. So, in effect, despite a temporary blip in profits (although a pretty substantial blip), the companies will be able to carry on. The report's contention that it is now clear that both industry and government need to reassess and change business practices seems a forlorn hope. 

Following Lazbot's post yesterday I was struck by one aspect of the environmental damage that had not come under much scrutiny. According to Dr Larry McKinney, director of the Harte Research Institute for Gulf of Mexico Studies, "there has been a plus side, for fish, severe as the damage might be, it will be mitigated by the break in fishing. They have closed such large areas of the Gulf that the pressure has been reduced and will allow more fish to remain alive and reproduce." Stocks of fish like red snapper could be back to normal within two to four years. It's uncomfortable thought that some aspects of the environment may be better off despite the disaster. 

The report fails to identify the true culprits in all of this. The oil industry might well be driven by greed and run by despicable people but they are only exploiting our own greedy and despicable qualities. The report acknowledges that deepwater drilling provides the nation with essential supplies of oil and gas. In our precarious environmental position essential is a pretty damning indictment of all of us. 

Perhaps Norman Tebbit was right after all? "Get on yer bikes." 

We're doomed, doomed, doomed!

It's my pleasure to present the first guest post of the year. Can anybody help? Lazbot thinks so... 

Has anyone out there got a theory for why an otherwise normal, pushy and rude city motorist takes such pleasure in gratuitously thanking, with a tribal style open palm, another motorist that displays generous or thoughtful behavior towards him/her? I’m only asking because I’m hanging a lot of hope on it, not in a small way you understand but in a way that ensures the survival of the planet.

The human race faces peril and is certain to vanquish as the earth heats to intolerable temperatures, the oceans vapourise and we kiss our variable bottoms farewell. I’m not talking about global warming - well not yet anyway. This scenario isn’t on the planetary timetable for another five billion years when the sun runs out of hydrogen, swells and scorches our planet. Not meaning to sound too species-centric about it all but us humans will have surely skipped the solar system by then and only the dolphins will be left to grace the boiling ocean soup.

Five billion years is a long time to get ourselves sorted. In fact five billion years is more time than our middle aged solar system has been around. It is five times longer than the history of life forms of greater than one cell, 20 times longer than mammals have been around, and 20,000 times longer than the history of anything that looked liked us human folk.

To put this into perspective imagine yourself on the now not so wobbly millennium bridge on the River Thames pointing an outstretched finger at the clock faces of the Big Ben Tower. Imagine a timeline running from the Blackwall Tunnel through your shoulder to the clock face of Big Ben. Our galaxy would have formed someway behind you near the Canary Wharf towers. At your shoulder appear our original homo genus ancestors, with homo-sapiens appearing appropriately enough at your knuckle, Neanderthals disappear at the moon of your finger nail and our entire Abrahamic history fits into a healthy clipping of your peter pointer finger. Our entire industrial history wouldn’t even get stuck in your teeth. We have up until the big hand of Big Ben to leap the planet, before the sun turns nasty and earth frazzles. We obviously have a lot of time left to get it right.

The one problem at the moment that threatens us reaching our Big Ben moment intact is that our planet currently appears to be unwell, got a bit of a temperature you know. Ignoring for a moment the skeptics (though I welcome any to contribute), let’s agree that it is safe to assume that our planet is getting warmer because us humans that inhabit the planet, in the time it took to grow a comparative fraction of a finger nail, have become of sufficient number and industry to alter the composition of atmosphere to a significant degree. This significant degree has altered the environment that hosts life on the planet sufficiently to place many life forms on the planet at risk. Worse still Earth scientists talk of an impending event horizon, a tipping point that could be reached in the next few decades from which recovery will be impossible and the earth’s physiology will be radically changed for a very long time. 

One understanding of the earth proposed by some earth scientists is that our planet, or at least the thin film of life around it, behaves as an organism itself, self regulating its temperature and chemical composition. As such, the increasingly networked human life that exists on the planet can be seen as kind of bacteria (or perhaps a scrotal fungal infection?) happily residing within this organism. For our entire finger bar the clipping of a clipping this has been in symbiosis bar the odd ice age. As we stand on our bridge however it appears that networked humanity will either kill its Giaian host or be killed by it. Earth “tough bitch” that she is will most probably survive but it seems like she might be about to sneeze, and if she does there will be a lot of us lot drenched in its cyclonic snot.

In reality the prospect of humans becoming completely extinguished seems remote. There are too many of us and we’re too clever to be confined to history by a few more metres of sea, desertification and snow in July. However as memorable government literature of the nuclear threatened 80s told us  – ‘society is like a great forest and the aim of a great forest in peril is to preserve the major trees and not the brushwood’. There will undoubtedly be plenty of dead brushwood gracing the warm oceans of our warmer planet.

Fortunately we have recognised the danger. David Cameron proposed to put a wind turbine on the top of his west London house. There is perhaps no better example than this of why we are well and truly stuffed.  Whilst we scrabble about nervously looking at the billions of expectant middle classes in the BRIC nations (China, India, Brazil and Russia), we’re slightly stuck for any ideas outside of the paradigm of our finger nail clipping. Development becomes ‘sustainable development’, the pyramid selling of our future continues, our mantra of GDP growth goes unchallenged,  and they continue to push us towards the brink faster than our technological solutions can hope to pull in the opposite direction.  

I guess the bible got us off to a bum start, putting us at the centre of the universe, then gifting us the protestant work ethic to boot. As we now look back at the golden age of the Garden of Eden, so future generations, a finger nail or two nearer the clock face will look wistfully back at our planet full of Adam and Eves in their rainforestWii Playstations too.

The key to our survival is the the thing that’s about to bruise us, the big slap round the face that we are about to be served by the planet. Too late for eco home salvation. In fact chatting with an eco home designing friend the other day, he confided to me that eco homes aren’t actually the answer. More solar panels, ground source or heat pumps or friendly timber or locally produced clay tiles are not the answer. The answer is a bit more boring in his (esteemed) opinion – warmer clothes, smaller houses and plenty of meditation. Bad news isn’t it.. David Cameron was actually right to abandon his Chiswick wind turbine and concentrate on his Happiness Index instead.

But what has this to do with the benevolent motorist? Well every time I see the raised hand of a motorist acknowledging some good - I feel a slither of hope for the future. It’s like watching my neolithic ancestor’s first prang of consciousness, putting down his club and wondering if there really is a third way. I’ve thought about it and I still don’t understand the evolutionary sense of this motor gesturing but I think that it might be the start of something big. Can anyone help?

Things Can Only Get Better tries to publish a guest post each week. Does anyone think the Coalition is right...about anything? Does anyone want to stand up for Clegg? Is the earth getting cooler? If you would like to contribute a carefully considered and beautifully written essay or just want to post a rant like the rest of us please let me know. All welcome. canthingsonlygetbetter@googlemail.com

The Great Recession?

The philosopher, George Santayana, in his work The Life of Reason said that 'Those who cannot remember the past are condemned to repeat it.' It is an argument that I regularly hear recycled to justify the teaching of history. It has even been cited by visitors to this blog. As the recent Auschwitz debate showed - it is a powerful mantra. Unfortunately, it seems to have passed George Osborne by. With every step that the Coalition takes towards rectifying the budget deficit, I can't help but wonder whether our Government wouldn't benefit from a history lesson:

At the beginning of 1937, the US President Franklin D Roosevelt, could feel proud. His 'New Deal' reforms had pulled his country from the brink of utter despair caused by the Great Depression. His administration had created a framework of welfare and union rights that ushered in a new relationship between business and the 'common man.' In 1936 he had won a second term by a larger margin than any President in over a century. In his second inaugural address he felt able to boast that, "we have come far from the days of stagnation and despair. Vitality has been preserved. Courage and confidence have been restored. Mental and moral horizons have been extended."

Yet in little over a year the economic recovery and the New Deal coalition of the liberal North and conservative South were in tatters. Four million people lost their jobs and unemployment, which had dropped from 25% to 14%, rose back to 19%. Industrial production fell by 33 percent, national income dropped by 12 percent, and industrial stock prices plummeted by 50 percent. In Congress the conservative 'Southern Democrats' deserted Roosevelt and no more 'progressive' New Deal legislation was passed after June 1937. In the rest of the country Republicans were gaining ground.

Franklin D Roosevelt

Having been happy for the government to step in to save capitalism most of American big business were looking to see Roosevelt step aside and let them again take control once again. For the first time since 1929 the conservative forces in the US were able to combine behind a coherent programme of opposition. The 'Conservative Manifesto' denounced strikes, demanded lower taxes, a balanced budget, defended the rights of private enterprise against government reform and warned of the dangers of creating a permanently dependent welfare class. Sound familiar? The New Deal came under a concerted attack from inside and out.

The cause of the "Roosevelt recession" occurred largely because the President, along with some of his advisers - led by Secretary of the Treasury Henry Morgenthau - were determined to balance the federal budget and control imaginary inflationary pressures. The result was a decision to reduce government spending. In 1936, the government contributed $4.1 billion to consumer purchasing power, versus less than $1 billion in 1937. Furthermore, regressive taxes were eating into the national income and reducing consumption from the poorest part of society.

The economy seemed ready to plunge into an even deeper recession than in 1930. This and the potential loss of seats in Congress, forced FDR to change course. Influenced by the British economist, John Maynard Keynes, The General Theory of Employment, Roosevelt came to believe that government spending on relief and public works would revive the economy—even if such spending produced ever larger deficits. Their rationale for this approach was that the depression was the product of under-consumption and that putting money in the hands of consumers—"priming the pump"—would stimulate consumer spending and perk up the economy. Accordingly, FDR asked Congress for a $5 billion relief program, which passed in the spring and summer of 1938.

The sums involved were not large enough to completely solve the consumption problems but they did stave off a deeper recession. In the end it was not the moderate 'priming' of the New Deal but the huge government spending that the Second World War required that finally pulled America out of the depression. However, many broad lessons had been learnt and the extensive financial regulatory framework introduced by Roosevelt was not repealed until 1999. The repeal of the Glass–Steagall Act of 1933 effectively removed the separation that previously existed between Wall Street investment banks and depository banks. I think we now understand why that legislation was necessary.

But the big lesson is: 'Don't cut public spending or raise regressive taxes (like VAT) in a recession!'

This is a true story

This is a true story but some of the characters and locations have been changed to protect the guilty...

It first dawned on me that I had overdone it when I started getting out of breath playing Mousetrap with my three year old son. Starting with the Bathavonton Tiddlers night out just two and a half weeks ago - at 2am after a lot of cider and tequila, I swear I was the best dancer in the club - and finishing with a the last of the Quality Street in front of the Test Match last night, it has been yet another Saturnalian festival of over-indulgence in the Gillings household. Who would have believed so much ham and clotted cream could be squeezed into a standard British fridge? Who'd have believed that clotted cream would taste so good with turkey curry on a bed of Black Forest Gateau? 

When I say Gillings household, I mean just me. My family - damn their accusing moderation have an unnerving habit of saying "no more for me, thank you very much." "Just eat a little of what you want when you are hungry", says my lithe wife. What sort of attitude is that? I want it all! It's a boom and crash philosophy of life. Peaks and troughs. Feasts and fasts. My general plan is to eat and drink whatever I like and always more than is strictly necessary, avoid the bathroom scales at all costs and assume that lifting mince pies to my mouth burns a surprisingly large amount of calories. The most important aspect of the strategy is to ignore any unpleasant side effects until they are absolutely unavoidable. Over many years this plan has been consistently ineffective. However, in the glow of medium term second helpings it feels worthwhile to keep taking the risk. 

You see, I am not totally stupid. I realise that I there is a faint chance that I will have to pay for my excesses at some point in the future, but why not enjoy myself for as long as possible? The most important thing is to ensure I get more than everyone else while the going is good. Responsibility? Well, that's for the other chumps. The strategy always seems to work much longer than any sane person would reasonably expect. This binge, however, even by my own standards got out of hand. By New Years Day I would expect our food credit at the Bank of Liebherr to be running low and my culinary desires to be tempered by a gnawing realisation that my health might be at stake.

For once, New Years Eve did not result in a temporary conversion to moderation in all things. The usual regulatory controls had broken down. Instead, lacking the expected hang-over, 1st January 2011 saw the start of a second 'Battle of the Bulge' with an Ardennes pate offensive over-coming the defences of home-made trifle and a luxurious French chicken dish. My belt, an effective alarm - usually moves from being a practical to merely ornamental object by Boxing Day and with each notch it becomes a slightly uncomfortable challenge to my vanity. This year my continued gluttony turned my belt into a life threatening tourniquet. 

This morning the scales in our bathroom presented me with irrefutable evidence that I have been badly let down. Through no fault of my own I have put on a record amount of weight. I am a victim. It is clear to me now that the Christmas eating strategy was misguided and probably over-optimistic in its assumptions, while, the regulatory framework designed to stop this sort of horrendous over-indulgence ever occurring again was far too lax to control the forces at work. Unfortunately, the complexity of the situation makes it far too difficult to place responsibility on any one person but as a human being paying the dreadful price for these failures I feel let down, by my family, the food manufacturing industry and the government. 

In response to these systemic failures I  introduced a series of 'easing' measures to come into force immediately. These measures have been formulated to recognise that this is not simply an individual's problem but one that affects the whole family. In order to help with the reduction in the trouser waist deficit crisis, I have insisted that my family go on an immediate diet. This will see a reduction in the average household waist figures back to pre-Christmas levels. The level of cuts to the rest of the family are, of course, easily enforced, since I do the weekly shopping. We are one big happy family and it would be quite unfair if I were to take on the entire burden. To show that we are all in this together I have agreed to a voluntary undertaking to not be quite as greedy as I have been, and, in the future, to only be as greedy as I can get away with in the climate of resentment and bitterness that will inevitably develop.

Did you guess who I was talking about?

Happy New Year!