Broken Promise: Shame on BP for using "Shaggy Defense" on Gulf oil spill

Graham Hill

The Devil in the Detail, Assigning Blame and Hypocrisy

Hi Bob

An interesting polemic.

The Gulf Oil Spill is a disaster on too many fronts. It is a disaster for the Gulf ecosystem, heavily polluted by the leaking oil. It is also a disaster for those who live and work in the Gulf, who have seen their livelihoods disappear. It is a disaster for BP, Transocean and Halliburton, who all bear responsibility for what has and hasn't happened. It is a disaster for the US Minerals Management Service, who woefully mismanaged their dual role of promoting and regulating oil exploration. It is a disaster for the Obama administration, which has shown that it is incapable of competently managing a disaster on this scale. And it is a disaster for the whole American nation, which is unable to ween itself off its dependency on cheap oil. The only people who will probably benefit from this multi-faceted diaster are the gangs of rapacious lawyers eagerly lining up to sue anyone with even the remotest involvement in the oil spill; a different type of disaster in itself.

The Gulf Oil Spill is only superficially like the Tylenol recall. Firstly it is on a hugely larger scale. Both in terms of the number of people affected and the cost of repairing the damage. Secondly it is much more complicated due to the nature of drilling in a hostile environment one mile down in the ocean (where the pressure would crush a US military submarine like an old tin can). And finally it is much more difficult to assign responsibility due to the contracts that the three parties have with each other. And with the US government through the highly regulated nature of oil exploration.

Have the brands of BP, Transocean and Halliburton been damaged? Sure they have. On the short-term. Have the values of the three companies gone down? Sure they have. On the short-term (and I note that Halliburton's is already recovering). But oil is not like a painkillers. We have become totally dependant upon oil and its refined products. And that provides oil brands, including BP's, with a certain long-term resilience. In fact you might argue that branding, of the kind that consumers recognise, may be almost irrelevant in this case due to the disaster's size and magnitude.

What is clear is that the oild spill disaster is not over. It could be months before it stops leaking. What is also clear is that all sorts of people will try and benefit from others' huge misfortune; starting with those rapacious lawyers, proceeding through grandstanding congressional politicians and no doubt continuing with some marginally affected people who will look to dip deeply into the 20 Bn fund the Obama administration bullied out of BP. Don't get me wrong. The polluter should pay. There is no question about that. But the devil is in the details of the question about who is ultimately responsible. Finding this out will take some time.

What also strikes me about the oil spill disaster is how differently the current US administration treats it, say, in comparison to Union Carbide's Bhopal disaster in India all those years ago. For those with short memories, Union Carbide's Bhopal plant leaked poisonous cyanide compounds into the air at its Bhopal plant in India, which killed thousands of people living nearby immediately, tens of thousands over the following years and is still harming new born babies today. Union Carbide has managed to avoid taking much of the responsibility for the disaaster. Apparently, they were helped in doing this by the US administration of the day. It is so much easier to avoid having to take responsibility when disaster strikes in a poor country like India. Even when tens of thousands of people not only loose their livelihoods, but also loose their lives.

Graham Hill
Customer-centric Innovator
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