June 12th 2010


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Articles from this issue:

COVER STORY: Financing of terrorism in Australia

EDITORIAL: BP scandal spreads beyond Gulf of Mexico

OPINION: Super-profits tax creates climate of uncertainty

FOREIGN AFFAIRS: Beijing thwarts sanctions against North Korea

CANBERRA OBSERVED: Rudd Government planned showdown with miners

FOREIGN TRADE: China slowdown spells trouble for Australia

PAID PARENTAL LEAVE: Rudd and Abbott overlook stay-at-home mothers

REPRODUCTIVE HEALTH: The chilling reality of late-term abortion

ILLICIT DRUGS: Labor and Greens defeat DLP bid to ban bongs

GLOBAL FINANCIAL CRISIS: Regulators crack down on speculation

OPINION: Time to reclaim Australian history

ENVIRONMENT: Al Gore's actions speak louder than words

GREAT BRITAIN: Who will rescue Britain from its present madness?

Economic illiteracy (letter)

Statistically insignificant (letter)

ALP branch-stacking (letter)

The truth and Kevin Rudd (letter)

AS THE WORLD TURNS: In praise of pessimism

BOOK REVIEW: THE WORLD TURNED UPSIDE DOWN: The Global Battle Over God, Truth, and Power, by Melanie Phillips

BOOK REVIEW: WHAT'S WRONG WITH ANZAC? The Militarisation of Australian History, by Marilyn Lake and Henry Reynolds

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EDITORIAL:
BP scandal spreads beyond Gulf of Mexico


by Peter Westmore

News Weekly, June 12, 2010
Among the world's largest oil companies, the British-based BP has carefully nurtured its reputation as an enlightened energy company, deeply concerned about the environment.

It has invested hundreds of millions of dollars in alternative energy and spent millions more in funding organisations such as the World Resources Institute, the Center for Clean Air Policy (CCAP) and the Forum for the Future.

Interestingly, six weeks after the Gulf of Mexico oil disaster, the Washington-based World Resources Institute's web site had nothing to say about it, although it had issued numerous releases about deforestation, supporting biodiversity, action to manage ecosystems to fight poverty, and even nutrient pollution in the Gulf of Mexico.

In contrast, just four days after the Chinese coal carrier, the Shen Neng 1, ran aground on the Great Barrier Reef off north Queensland, the World Resources Institute had issued a media release which declared that "when the Shen Neng 1 ran aground on the Great Barrier Reef off Queensland … reef conservationists and scientists worldwide gave a collective shudder".

It added: "The area where the ship foundered is a restricted area due to its environmental sensitivity. Though ongoing efforts may prevent a major oil spill, the area of reef that the vessel landed on could take decades to recover." (Katie Reytar, "Great Barrier Reef accident highlights risks to reefs", World Resources Institute, Washington DC, April 7, 2010).

Last September, two months before the UN Climate Change Summit failed in Copenhagen, 500 business leaders, including BP, signed the "Copenhagen Communiqué", which called for global emissions to fall by between 50 per cent and 85 per cent by 2050, and for "an ambitious, robust and equitable global deal on climate change that responds credibly to the scale and urgency of the crises facing the world today".

It urged global leaders to reach an agreement for "deep and immediate cuts" in CO2 emissions by industrialised countries, to "deliver the economic signals that companies need if they are to invest billions of dollars in low-carbon products, services, technologies and infrastructure".

The New York Times has accessed BP's internal documents which show that the company had repeatedly cut corners with regard to the safety of its drilling operations in the Gulf of Mexico.

BP documents show that as long ago as June 22 last year, BP engineers expressed concern that the metal casing on the drill hole might collapse under pressure. "This would certainly be a worst-case scenario," Mark E. Hafle, a senior drilling engineer wrote. "However, I have seen it happen so know it can occur" (NYT, May 29, 2010).

Violating safety standards

BP went ahead with the metal casing after getting specific approval from senior executives in the company, although it violated BP's own safety policies and design standards.

According to the New York Times, company officials knew that the metal casing, sealed with cement, was less safe than an alternative technology. (NYT, May 26, 2010).

Using a different type of casing would have provided two barriers to the escape of oil and gas, instead of the one which was employed by BP.

There was also a failure of the blowout gas preventer which had been malfunctioning before the explosion on the Deepwater Horizon platform in April.

A BP document described the use of the metal casing as the "best economic case", indicating that the decision to use it was based on cost considerations, not safety.

The director of the Petroleum Extension Service at the University of Texas, Greg McCormack, described BP's use of the metal casing as "without a doubt a riskier way to go", and other engineers supported him.

Investigators are also looking at a series of failures on the rig in the months before the explosion, as well as the circumstances surrounding the failure of the blowout preventer.

BP reported to US government regulators a series of problems with gas leaks from the rig in the months before the explosion, seeking approval for methods of dealing with the problems.

In March, a month before the explosion, BP wrote to the regulators reporting on drilling mud falling into the well, sudden gas releases known as "kicks", and a pipe falling into the well. BP admitted that they were struggling with a loss of "well control".

Other reports show this was not an isolated event.

BP has repeatedly breached US safety and environmental standards on its oil rigs and refineries. Of the 851 safety and environmental breaches at US refineries between June 2007 and February 2010, BP accounted for 821 of them, over 97 per cent of the total, according to a recent study by the US Center for Public Integrity.

While there are undoubtedly questions over the lack of oversight by US regulators, prime responsibility for the oil spill is with the company which cut corners during the drilling operation, while spending millions of dollars polishing its environmental credentials.

Peter Westmore is national president of the National Civic Council.



REFERENCE:

Katie Reytar, "Great Barrier Reef accident highlights risks to reefs", World Resources Institute (Washington DC), April 7, 2010.
URL: www.wri.org/stories/2010/04/great-barrier-reef-accident-highlights-risks-reefsEDITORIAL: BP scandal spreads beyond Gulf of Mexico

by Peter Westmore

News Weekly, June 12, 2010.

Among the world's largest oil companies, the British-based BP has carefully nurtured its reputation as an enlightened energy company, deeply concerned about the environment.

It has invested hundreds of millions of dollars in alternative energy and spent millions more in funding organisations such as the World Resources Institute, the Center for Clean Air Policy (CCAP) and the Forum for the Future.

Interestingly, six weeks after the Gulf of Mexico oil disaster, the Washington-based World Resources Institute's web site had nothing to say about it, although it had issued numerous releases about deforestation, supporting biodiversity, action to manage ecosystems to fight poverty, and even nutrient pollution in the Gulf of Mexico.

In contrast, just four days after the Chinese coal carrier, the Shen Neng 1, ran aground on the Great Barrier Reef off north Queensland, the World Resources Institute had issued a media release which declared that "when the Shen Neng 1 ran aground on the Great Barrier Reef off Queensland … reef conservationists and scientists worldwide gave a collective shudder".

It added: "The area where the ship foundered is a restricted area due to its environmental sensitivity. Though ongoing efforts may prevent a major oil spill, the area of reef that the vessel landed on could take decades to recover." (Katie Reytar, "Great Barrier Reef accident highlights risks to reefs", World Resources Institute, Washington DC, April 7, 2010).

Last September, two months before the UN Climate Change Summit failed in Copenhagen, 500 business leaders, including BP, signed the "Copenhagen Communiqué", which called for global emissions to fall by between 50 per cent and 85 per cent by 2050, and for "an ambitious, robust and equitable global deal on climate change that responds credibly to the scale and urgency of the crises facing the world today".

It urged global leaders to reach an agreement for "deep and immediate cuts" in CO2 emissions by industrialised countries, to "deliver the economic signals that companies need if they are to invest billions of dollars in low-carbon products, services, technologies and infrastructure".

The New York Times has accessed BP's internal documents which show that the company had repeatedly cut corners with regard to the safety of its drilling operations in the Gulf of Mexico.

BP documents show that as long ago as June 22 last year, BP engineers expressed concern that the metal casing on the drill hole might collapse under pressure. "This would certainly be a worst-case scenario," Mark E. Hafle, a senior drilling engineer wrote. "However, I have seen it happen so know it can occur" (NYT, May 29, 2010).

Violating safety standards

BP went ahead with the metal casing after getting specific approval from senior executives in the company, although it violated BP's own safety policies and design standards.

According to the New York Times, company officials knew that the metal casing, sealed with cement, was less safe than an alternative technology. (NYT, May 26, 2010).

Using a different type of casing would have provided two barriers to the escape of oil and gas, instead of the one which was employed by BP.

There was also a failure of the blowout gas preventer which had been malfunctioning before the explosion on the Deepwater Horizon platform in April.

A BP document described the use of the metal casing as the "best economic case", indicating that the decision to use it was based on cost considerations, not safety.

The director of the Petroleum Extension Service at the University of Texas, Greg McCormack, described BP's use of the metal casing as "without a doubt a riskier way to go", and other engineers supported him.

Investigators are also looking at a series of failures on the rig in the months before the explosion, as well as the circumstances surrounding the failure of the blowout preventer.

BP reported to US government regulators a series of problems with gas leaks from the rig in the months before the explosion, seeking approval for methods of dealing with the problems.

In March, a month before the explosion, BP wrote to the regulators reporting on drilling mud falling into the well, sudden gas releases known as "kicks", and a pipe falling into the well. BP admitted that they were struggling with a loss of "well control".

Other reports show this was not an isolated event.

BP has repeatedly breached US safety and environmental standards on its oil rigs and refineries. Of the 851 safety and environmental breaches at US refineries between June 2007 and February 2010, BP accounted for 821 of them, over 97 per cent of the total, according to a recent study by the US Center for Public Integrity.

While there are undoubtedly questions over the lack of oversight by US regulators, prime responsibility for the oil spill is with the company which cut corners during the drilling operation, while spending millions of dollars polishing its environmental credentials.

Peter Westmore is national president of the National Civic Council.



REFERENCE:

Katie Reytar, "Great Barrier Reef accident highlights risks to reefs", World Resources Institute (Washington DC), April 7, 2010.
URL: www.wri.org/stories/2010/04/great-barrier-reef-accident-highlights-risks-reefs




























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