BP spill lessons for Latin America?

Three weeks ago I was snorkeling over some of the best live coral I’ve ever seen at Puinare, a half hour in motorboat off the beach in Puerto La Cruz, Venezuela. I was in awe at the tens of thousands of blue minnows, the plentiful parrot fish, the little christmas-tree-shaped organisms that disappeared in a blink with the slightest disturbance in the water. In March, 131 oil tankers loaded up with cargo in Puerto La Cruz and the adjacent port of Jose and steamed out to sea. Thirty miles offshore, PDVSA just completed its second and third wells in the Mariscal Sucre natural gas development project. And in waters almost as lovely, a few thousand km south, Petrobras and partners are drilling the biggest oil find in decades, in conditions similar to the Gulf of Mexico.

The big BP oil spill in the Gulf of Mexico is a reminder of what can happen when oil and water mix. This is the same kind of drilling that is supposed to be the future of Brazil. Shallower-water offshore reservoirs are under development or exploration not just in Venezuela but in Colombia, Guyana, Suriname, Argentina, Chile and Peru — that is to say, every South American independent state with a coastline, other than Ecuador — plus Mexico. You also find talk, if not much action, about offshore drilling in Cuba, Aruba and Barbados, among other islands.

So what’s the lesson here? Obviously, the U.S. screwed up its regulation and control. Is there anything that South America and the Caribbean can learn from that error?

The U.S. has a big, widespread and powerful environmental movement with the money and technology to monitor water quality independent of the government. This is generally absent in Latin America.

The U.S. has laws allowing independent environmental lawsuits against polluters, without the cooperation or even notification of state authorities. I’m not aware of anything like that here.

Oil companies operating in the U.S. are private, while all of the biggest explorers in South America and Mexico are state-controlled.

Given these differences, I’d say that the biggest lesson is probably the need for extreme independence of environmental authorities and protection for whistle-blowers. Not likely to happen.

One advantage in South America and Mexico is that private oil companies are used to being pushed around, while in the U.S. they are used to having control. Maybe state oil companies should be treated the same way.

7 thoughts on “BP spill lessons for Latin America?

  1. Steven

    But who is to do the pushing? When the state controls (a) production, (b) regulation, and (c) the press, bad things happen. And it’s not just a Latino thing … remember the killer fogs in London, early 1950’s? Some days over 100 people died EVERY day.

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  3. sapitosetty Post author

    Thanks Steven. For all of Venezuela’s weirdness, there is still a lot of room for domestic pressure groups to make noise. Just cause most of the anti-Chavez groups haven’t figured out how to do it doesn’t mean it can’t be done. There are small environmental groups in the country; I think they and the international movement should work together to monitor water and safety measures and make sure that things don’t go bad.

    1. Kepler

      Thanks, Setty, for your blogging. It is really so frustrating: it seems as if our oppo leaders would only react about environment issues if they have some first-hand experience with pollution next time they go to Morrocoy for sailing.
      “no te metas con la educación privada”
      “la propiedad privada es sagrada” is the only thing these blokes seem to think about (and mind: I agree with them, they are just not the main issues by far for most Venezuelans)

  4. Gringo

    So what’s the lesson here? Obviously, the U.S. screwed up its regulation and control. Is there anything that South America and the Caribbean can learn from that error?

    The lesson is that BP ignored oil industry standard operating procedures and paid the price.
    It as if the decision maker on the rig went from an experienced engineering hand to a college freshman majoring in Outer Mongolian Gender Studies at San Francisco Community College, who got 300 on the Math SAT- and cheated to get that.- and whose only work experience was registering voters for ACORN.Whoever was making the decisions at BP kept passing the buck down the decision tree. Here is a review of the buckpassing, as best I recall. Please correct me if I am wrong.

    1) Perhaps the most basic way to check on cement integrity is to call on Schlumberger to run a wireline test. Schlumberger has been the best in the world at wireline testing for a century, and they are not cheap. BP sent Schlumberger home that morning without running the test.
    2) A less expensive way to check on the integrity of the cement is to run some pressure tests. BP at first said pressure tests were unsatisfactory and inconclusive. Then BP said the results were good. I conclude from all this that the results are murky.
    3) Another way to check on cement integrity is to pump drilling mud down the drill pipe and then up the wellbore to check on gas at the bottom of the hole- called “bottoms up” in the oil field. BP stopped this test well short of completion.
    4) If you have negative to inconclusive results on the above, you pump down the bottom plug with the high density mud behind it to keep the pressure in. If you are certain that there is cement integrity, you can speed things up and replace the heavier drilling mud with much lighter seawater, which ordinarily you wouldn’t do until the bottom plug is set. They weren’t certain, and they went ahead.
    5) Kaboom.
    In looking at how the decisions kept getting passed down the line, I can see how some think sabotage was involved. I don’t know any company man I worked with who would have been so stupid. Interesting that a big crowd of BP honchos visited the rig that day. Maybe decisions were made to try to look good to the big bosses. Who knows?

    1. sapitosetty Post author

      Gringo — thanks for the extensive and informative comment. My response to you is, of course. In any accident, there are a whole series of individual errors, no matter whether it’s medical malpractice, a car crash or me forgetting my keys. You generally need at least two things to go wrong at the individual level, and in this case it seems many more things went wrong. But that’s not the point.

      I am looking for the systemic issues. BP was operating in one of the more responsible enforcement regimes in the Americas. My question is, does that mean that maybe places with weaker governments and crappier labor and environmental enforcement should hold off for now on exploration in environmentally sensitive areas? Or is there some other way to to create control systems that will ensure that nothing so destructive happens in the Caribbean, the Putumayo, or the Amazon?

      PS: I don’t appreciate your dig at San Francisco Community College, which gave me a top-level course to become an emergency medical technician for just $60. It is, or at least was, a fantastic institution of higher education.

      1. Gringo

        I apologize for the dig at SFCC. The dig was intended for such San Franciscans as Nancy Pelosi- not my favorite poiltician- and those who consider “Outer Mongolian Gender Studies” and the like to be valid fields of learning. My point was that such a person – with the 300 Math SAT- could not have done any worse than the BP people on that fateful day. Which is a helluva insult.

        Regarding BP “operating in one of the more responsible enforcement regimes in the Americas:” the main issue was not the government control regime, but BP. BP cut corners left and right. BP ignored the cardinal rule of drilling economics: never cut costs downhole. Buch of F#@# idiots. I can’t believe the decisions they made.

        One place in which government regulation did intersect was that BP and all oil companies are required to file drilling plans for wells with the MMS.

        In reading about the disagreements between Transocean and BP regarding the Macondo well in the WSJ, one Transocean honcho referenced his then-current disagreement with BP by stating that he was simply following an older BP drilling plan, which BP wanted to change.

        From what I have read, BP made an awful lot of changes in its drilling plan. In many and probably most instances, changes in drilling plans are no big deal. As an AMOCO engineer explained to me years ago [BP and AMOCO latere merged], bright but inexperienced engineers tend to be those who draw up the drilling plans in the central offices. The realities of the rig later necessitate changes. This is standard operating procedure.

        However, the changes that BP made in its drilling plans on the Macondo well went well beyond the ordinary. The MMS should have picked up on this, instead of letting all those changes in the drilling plans be waved on through. The MMS was asleep at the switch, in letting all those changes through.

        IOW, the fault was not lack of regulations, it was 1) an oil company that violated standard operating procedures and 2) MMS not rasing a red flag on all the changes of drilling plans.

        Environmental control of drilling operations is much laxer south of the Rio Grande.

        Macondo: quite a literary name for quite an historic well.

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