BP Stands for Bad Petroleum

bp oil spillSaturday the White House warned BP that it expects the oil giant to pay all damages associated with the disastrous oil leak into the Gulf of Mexico, even if the costs exceed the $75 million liability cap under federal law. BP responded Sunday saying its public statements are “absolutely consistent” with the Administration’s request.

When you hear dueling public statements like these, watch your wallets. You can safely assume BP’s lawyers are already at work to ensure that the firm pays not a cent more than $75 million — not to taxpayers bearing cleanup costs, not to consumers whose gas bills will rise, not to businesses along the coasts that will lose a fortune. And BP won’t pay more unless or until there’s a law requiring it to.

BP has been making public statements about its supposed corporate social responsibility for as many years as it’s behaved irresponsibly. It’s the poster child for PR masquerading as CSR.

It was just eight years ago British Petroleum shortened its name to BP and began promoting itself as the environmentally-friendly oil company with a vision that went “Beyond Petroleum” to embrace solar cells and wind power. In a $200 million advertising campaign organized by Olgilvy & Mather, BP transformed its corporate brand insignia from a shield to the more wholesomely natural green, yellow, and white sunburst. BP’s chief executive, Lord John Browne, issued warnings about global warming and said the company had a social responsibility to take action.

Notwithstanding its new image, BP continues to be one of the largest producers of crude oil on the planet. Although it committed itself to devoting $8 billion to alternative fuels over ten years, the sum was tiny compared to BP’s annual profits from oil that have averaged over $20 billion and its annual capital expenditures of over $14 billion.

Nor has the firm distinguished itself by its commitment to the law. Several years before the Gulf oil rig explosion, an explosion at BP’s Texas City plant killed fifteen workers and triggered a $21.3-million fine from safety regulators.

In March 2005, corrosion of BP’s pipes and equipment on the North Slope in Alaska led to a spill of 270,000 gallons of oil, the largest spill ever recorded in that fragile territory. Critics said BP wasn’t spending enough money to prevent such spills. Only in 2006, after it was forced by the U.S. government to inspect all its pipelines with an automated device that crawled through the pipes, did the company discover so much additional corrosion and leakage it had to shut down a sixteen-mile feeder line to the Trans Alaska Pipeline.

In August 2006, Congress demanded BP executives appear in person to be held accountable. At the ensuing hearing, members from both sides of the aisle accused BP executives of crass negligence. Representative Joe Barton (R-Texas), chairman of the oversight committee, excoriated them: “If one of the world’s most successful oil companies can’t do simple basic maintenance needed to keep the Prudhoe Bay field operating safely without interruption, maybe it shouldn’t operate the pipeline.” Barton went on: “I am even more concerned about BP’s corporate culture of seeming indifference to safety and environmental issues. And this comes from a company that prides itself in their ads on protecting the environment. Shame, shame, shame.”

Committee members then grilled the BP executives about why the company had failed for as long as fourteen years to do the sort of internal inspection and maintenance on its pipelines that were performed every two weeks on the Trans-Alaska Pipeline, into which the BP pipelines feed. The BP executives solemnly promised to be more careful in the future.

But neither the members of Congress nor the BP executives mentioned the most pertinent fact: Frequent inspections of the Trans-Alaska Pipeline were required by law but no similar inspections were required on feeder pipelines such as those owned by BP. If the panel was serious about getting BP to change its ways it would have introduced legislation to close this loophole. The panel did not introduce such legislation because the hearings were for show. Barton and his colleagues on both sides of the aisle had pushed many bills favorable to the oil industry and weren’t about to impose any burdens on it.

robert_reich.jpgAd campaigns about corporate social responsibility are cheap. So are public scoldings by politicians about a corporation’s irresponsibility. Watch not what they say but what they do. The only way BP will pay more than $75 million — and the costs of the spill will easily top that — is if they’re required by law to do so.

by Robert Reich

This article first appeared on Robert Reich’s Blog. Republished with permission


  1. SK says

    It’s not just BP. They’re not better or worse than any other oil company. The problem is that the rich people own our government. Until we take back our government from corporatists like Obama and others in Congress, we’ll continue to pay higher taxes and higher prices to support wealth redistribution from the middle class to the rich (with some benefit to the poor and the deliberately impoverished, as Obama’s “Insurance Industry Profit Protection and Enhancement Act” is designed). Meanwhile, the environment is left in the hands of those who profit from destroying it.

    Time to (peacefully) take back control of our government. If 2-3 million of us spent an hour a month each in the WH and offices of Congress members heckling lobbyists and demanding freedom of information access to everything from their lunch gifts to payouts in the form of lobbyist-paid trips, we could effectively shut down their corporatist plans and force them to take care of the needs of the majority working and middle class citizens instead. We could even capture some of the Tea Party anger and direct it to progressive causes.

    But first we need to get past the idea that Obama is on our side. He’s clearly not, at least not yet.

  2. says

    Obama pledged that BP will pay. Supppose that, unlike his other pledges, he actually means it in full. Suppose BP pays the ‘full costs’ – where somehow, we can agree how to convert irremediable horrendous damage to biological resources into equivalent dollar costs.

    Well, how will BP pay? By selling more oil. Yes, the expectation is that by consuming more oil we (oh excuse me, BP) will pay for the effects of drilling for it.

  3. Marshall says

    There is another oil drilling operation I am more concered about than BP, XOM, CVX, or COP and that is China/Cuba drilling in the gulf. Their saftey record is a complete unknown. I recall a spill from a well in Mexico that messed up Texas coast and Mexico paid little or nothing to clean up the mess. Wonder how much Cuba or China would pay? We need to advance our ability to deal with spills, develope new protetive products, and keep drilling.


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