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Why would BP care about the environment or the people along the Gulf coast?

7 June, 2010


Look at the man who funded the exploration for oil in Iran, William Knox D’Arcy.

He also noticed the mounting costs of his extravagant life-style. He was thus prompted to reconsolidate his position through investment in a new mining venture.

The opportunity came in 1900 when Sir Henry Drummond Wolff, a former British minister to Teheran, approached him to invest in Persian oil exploration. Early in 1901 D’Arcy sent to Teheran an emissary who in May obtained a concession to search for oil over 480,000 sq. miles (1,243,195 km²). D’Arcy agreed to provide all necessary finance for the search. But at the end of 1903 he had spent £150,000 with no result. His financial position was now desperate. He had to mortgage his Mount Morgan shares at a time when they had dropped to £2 10s. each. By May 1905 he had used £225,000 and could spend no more. He began negotiations with the French branch of the Rothschild family for the sale of the concession. But on 20 May the British owned Burmah Oil Co. stepped in with an offer. D’Arcy agreed to it and made over the rights to his concession in return for 170,000 Burmah Oil shares and a payment to cover expenses he had incurred.

On 26 May 1908 Burmah Oil finally found the biggest oilfield yet known in the world in D’Arcy’s old concession. This led in 1909 to the formation of a new company, Anglo-Persian Oil, which later became Anglo-Iranian Oil and ultimately British Petroleum. The British government paid £2 million for a controlling interest in the field. D’Arcy was appointed to the board of the new company, where he remained until his death. His wealth was restored: for the second time in his career a gamble had paid off most lucratively. Bold emphasis mine

Look at how the British gained that controlling interest:

As he [Winston Churchill] was to show in 1923, when he secretly accepted £5,000 — the equivalent of perhaps millions in today’s money — from Burmah Oil [soon to be British Petroleum] to lobby the British government to allow Burmah to collar Persian oil resources.  bold emphasis and [insertions] mine.

This was during the time that Anglo Persian Oil was buying up Deutsche Bank interests in Middle East oil.  See my previous post here

The following information has all been gleaned from the  Wikipedia entry on BP.

BP is now

the third largest energy company and the fourth largest company in the world…{and is} among the largest private sector energy corporations in the world, and one of the six “supermajors” (vertically integrated private sector oil exploration, natural gas, and petroleum product marketing companies).

During its period of growth and expansion, BP acquired

Britoil…the remaining publicly traded shares of Standard Oil of Ohio…BP bought many of the stations in the Southeastern United States {sold after the merger of Standard Oil of California and Gulf Oil) …acquired Amoco, ARCO and Burmah-Castrol…BP has recently looked to grow its oil exploration activities in frontier areas such as the former Soviet Union for its future reserves.[35] In Russia, BP owns 50% of TNK-BP with the other half owned by three Russian billionaires. TNK-BP accounts for a fifth of BP’s global reserves, a quarter of BP’s production, and nearly a tenth of its global profits.

Environmental Incidents:

1993–1995: Hazardous substance dumping

The charges stemmed from the 1993 to 1995 dumping of hazardous wastes on Endicott Island, Alaska by BP’s contractor Doyon Drilling. The firm illegally discharged waste oil, paint thinner and other toxic and hazardous substances by injecting them down the outer rim, or annuli, of the oil wells. BPXA failed to report the illegal injections when it learned of the conduct, in violation of the Comprehensive Environmental Response, Compensation and Liability Act.[41]

2005: Texas City Refinery explosion

The incident came as the culmination of a series of less serious accidents at the refinery, and the engineering problems were not addressed by the management. Maintenance and safety at the plant had been cut as a cost-saving measure, the responsibility ultimately resting with executives in London.

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There have been several investigations of the disaster, the most recent being that from the U.S. Chemical Safety and Hazard Investigation Board[44] which “offered a scathing assessment of the company.” OSHA found “organizational and safety deficiencies at all levels of the BP Corporation” and said management failures could be traced from Texas to London.

2006–2007: Prudhoe Bay

In August 2006, BP shut down oil operations in Prudhoe Bay, Alaska, due to corrosion in pipelines leading up to the Alaska Pipeline

In May 2007, the company announced another partial field shutdown owing to leaks of water at a separation plant. Their action was interpreted as another example of fallout from a decision to cut maintenance of the pipeline and associated facilities. [49]

On 16 October 2007 Alaska Department of Environmental Conservation officials reported a toxic spill of methanol (methyl alcohol) at the Prudhoe Bay oil field managed by BP PLC. Nearly 2,000 gallons of mostly methanol, mixed with some crude oil and water, spilled onto a frozen tundra pond as well as a gravel pad from a pipeline. Methanol, which is poisonous to plants and animals, is used to clear ice from the insides of the Arctic-based pipelines

2006-2008: Texas City refinery fatalities

From January 2006 to January 2008, three workers were killed at the company’s Texas City, Texas refinery in three separate accidents. In July 2006 a worker was crushed between a pipe stack and mechanical lift, in June 2007, a worker was electrocuted, and in January 2008, a worker was killed by a 500-pound piece of metal that came loose under high pressure and hit him.[

2007: Propane price manipulation

Four BP energy traders in Houston were charged with manipulating prices of propane in October 2007. As part of the settlement of the case, BP paid the US government a $303 million fine, the largest commodity market settlement ever in the US. The settlement included a $125 million civil fine to the Commodity Futures Trading Commission, $100 million to the Justice Department, $53.3 million to a restitution fund for purchasers of the propane BP sold, and $25 million to a US Postal Service consumer fraud education fund

2008: Oil price manipulation

In May 2010, the Supreme Court of Arbitration of the Russian Federation agreed in support of the country’s antimonopoly service’s decision to a 1.1 billion Ruble fine ($35.2 million) against TNK/BP, a 50/50 joint venture, for abusing antitrust legislation and setting artificially high oil products prices in 2008, TNK and BP declined comment.[

2009: North Sea helicopter accident

On April 1 2009, a Bond Offshore Helicopters Eurocopter AS332 Super Puma ferrying workers from BP’s platform in the Miller oilfield in the North Sea off Scotland crashed in good weather killing all 16 on board.

2010: Deepwater Horizon oil spill

BP was running the well without a remote control shut-off switch used in two other major oil-producing nations, Brazil and Norway, as a last resort protection against underwater spills. The use of such devices is not mandated by U.S. regulators.

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Scientists have been requesting the right to monitor the amount of oil that is actually being released per day, but “‘The answer is no to that,’ a BP spokesman, Tom Mueller, said on Saturday, May 15. ‘We’re not going to take any extra efforts now to calculate flow there at this point. It’s not relevant to the response effort, and it might even detract from the response effort.'”

There is a lot more information in the Wikipedia article, including some information about controversial project BP is still engaged in.    Given BP’s history and disinterest in the messes it creates, it is no surprise that the company had no plan for such an emergency or misled everyone about the extent of the leaks.  I would suggest that they were not looking for a way to cap the pipeline, but to do exactly what they are doing now – capturing as much of the leaking oil as possible.

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2 Comments leave one →
  1. womantowoman permalink
    8 June, 2010 21:15

    Excellent post on the broad, wide, long and powerful reach of British Petroleum.

    No wonder they are in charge of not only the Gulf Region, but Barack Obama’s response!

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