Beach crews aren't the only people cleaning up after the Deepwater disaster.
- By Charles HomansCharles Homans is a special correspondent for the New Republic and the former features editor of Foreign Policy.
Are you a politically stable country with untapped oil reserves that won’t soon be trapped behind a daunting web of post-spill moratoriums and regulations? If so, the world’s energy companies would like to have a word with you. Expect newfound interest in Australia’s offshore oil reserves, for instance.
But the big winner here is Canada, whose oil reserves, mainly in the form of Alberta’s gargantuan oil sand deposits, are the second largest in the world behind Saudi Arabia’s. Extracting crude from oil sands — a process that combines the kid-glove delicacy of oil drilling with the subtle artistry of strip-mining — is the most pollution-intensive and expensive way to get oil out of the ground, a grueling endeavor that levels forests and leaves toxic runoff in its wake. But Canada’s oil sands are anticipated to become the largest source of U.S. oil imports this year anyway — and since the BP spill, Canadian boosters have been busy talking up Alberta oil as a safer, cleaner alternative to offshore drilling in the Gulf of Mexico. On a diplomatic visit to Washington in May, Jim Prentice, the Canadian environmental minister, claimed that the hazards of oil-sands production were “probably less than the kind of risks associated with offshore drilling.”
Plenty of people have thrown cold water on this notion — environmentally minded investment groups and oilfield service company executives have both pointed out that oil sands will hardly be immune to the newly skittish regulatory and investment climate surrounding post-BP oil drilling, and Canadian Liberal leader Michael Ignatieff has made political hay of opposing the expansion of Canada’s oil-shipment infrastructure since the BP spill.
But it’s more likely that oil-sands operators will benefit from the newfound apocalypticism in the world’s view of petroleum: the understanding that for even the safest-seeming sources of oil, all bets are off. “After enduring years of criticism for safety and environmental risks, the oil sands players are deriving quiet solace from the [BP] spill, as observers realize the challenges inherent in developing new oil sources whether on or offshore,” Citigroup Capital Markets analyst Robert Morris told Canada’s Financial Post this week.
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YESTERDAY’S FOSSIL-FUEL VILLAINS
Before April 20, if you had asked anyone in the United States what words they associated with “oil spill,” chances are he or she would’ve quickly offered up the name of the most infamous shipwreck since the Titanic. But that was then. BP executives have replaced Exxon’s in the Capitol Hill perp walks, and in the popular imagination an ominously billowing underwater aperture has supplanted the great black hulk lodged on Bligh Reef. As FP’s Steve LeVine notes, while Exxon Mobil shares have slipped along with the rest of Big Oil’s — albeit just 9 percent since the beginning of the spill, versus BP’s cataclysmic 51 percent fall — the disaster in the gulf has allowed the company to retreat into the shadow of its competitor’s newfound notoriety and focus attention on its post-1989 record as a comparably responsible drilling-rig operator.
Massey Energy CEO Don Blankenship is probably breathing a bit easier, too. After an April 6 explosion at one of his company’s West Virginia coal mines killed 25 miners — the worst such accident since 1984 — Blankenship’s name and that of his company were synonymous with the grim wages of fossil-fuel dependency. (Blankenship’s Dickensian public image didn’t help.) The CEO’s troubles are hardly over, as Massey is currently the subject of a criminal investigation by federal prosecutors, but at least the TV cameras are off Blankenship’s lawn. He might think about sending a case of champagne over to Tony Hayward’s yacht club.
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Three months ago, Louisiana Gov. Bobby Jindal’s most memorable appearance on the national political stage was his turn delivering the Republican Party’s official rebuttal to President Obama’s 2009 State of the Union address — a performance dour and uncharismatic enough to all but kill speculation that he was the GOP’s Next Big Thing. Since the spill, however, Jindal has transformed himself into a gubernatorial action hero, placing himself at the center of mitigation efforts on his state’s tar-stained beaches and logging more helicopter-borne photo ops than anyone since Robert Duvall in Apocalypse Now. His approval ratings at home have jumped to 86 percent — the highest of any governor in the country — according to Public Policy Polling, restoring his cachet within a party badly in need of presidential-grade politicians.
More bizarrely, the spill has also lifted the profile of Haley Barbour, the longtime Washington lobbyist turned Republican governor of neighboring Mississippi and long-shot 2012 presidential hopeful, who has commanded headlines by insisting that the BP spill isn’t actually that big of a deal. Barbour has variously pooh-poohed comparisons to the Exxon Valdez spill, blasted the “liberal elites [who] were hoping this would be the Three Mile Island of offshore drilling,” and urged tourists not to let the spill keep them away from Mississippi’s beaches. His sunny view of the crisis has not exactly convinced the American public — respondents in a Washington Post/ABC News poll earlier this month overwhelmingly believe the spill is a disaster, and fault BP’s and the Obama administration’s handling of it — but it has gained traction with conservative activists trying to somehow capitalize on post-spill discontent with the Democrat-run federal response while also opposing further restrictions on oil drilling.
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LAWYERS AND DEMOCRATIC LOBBYISTS
In the wake of an oil spill, the only footwear thicker on the ground than gumboots and hip waders is white shoes. A catastrophe like BP’s is a bonanza for lawyers — there are class action suits to file and fend off, politicians to be sweet-talked, and images to burnish. Exxon’s legal bills for the Exxon Valdez spill eventually totaled $1 billion; BP’s tab — for a spill that is now larger than Exxon’s, stretches across four states, and has prompted no less than seven congressional inquiries to date — is sure to dwarf that sum.
The three companies involved in the spill — BP, Halliburton, and Transocean — have already retained three of the most powerful (and expensive) law firms in the United States — Wilmer Hale, Patton Boggs, and Skadden, Arps, Meagher & Flom — for the big-ticket work, plus half a dozen smaller firms to handle more localized complaints and a phalanx of top-shelf lobbying and public relations shops in Washington. And while the spill has been a political headache for Washington’s Democratic leadership, it’s been a payday for well-connected Democrats out of office: the BP and friends team now includes Democratic super-lobbyist Tony Podesta, former 9/11 commission member and Bill Clinton-era Justice Department official Jamie Gorelick, and former Democratic Rep. Bill Brewster, according to the Washington Post. (A few high-ranking Republican staffers turned lobbyists are on the payroll too.)
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Like aid organizations after earthquakes and gun shops during Democratic presidencies, environmental groups tend to see their coffers and membership rolls grow following high-profile ecological catastrophes. Indeed, a quick perusal of the most prominent groups’ websites turns up a welter of oil-spill-related appeals.
But what the oil spill giveth, time taketh away. Consider the experience of Greenpeace: In the mid-1980s, the global environmental organization, best known for daring at-sea protests of nuclear tests and whaling ships, was hovering on the fringes of respectability, its American office operating with a fiscal year 1985 budget of just $24 million. Then Chernobyl happened, followed a few years later by the Exxon Valdez spill, launching the issues most closely associated with Greenpeace — nukes and oceans — to the top of the nightly newscast. By 1990, the budget of its American branch, Greenpeace USA, had exploded, to $63.7 million. (The French government’s rather unwise decision to blow up a Greenpeace ship in New Zealand, killing two of its crewmembers, contributed as well, garnering the group an $8 million settlement and much international sympathy.) But as the urgency of the public’s interest in the issues faded, the group’s budget shrunk again, back to $38 million by 1995.
According to Northeastern University public policy professor Christopher Bosso, author of Environment, Inc., this sort of spending binge is the exception rather than the rule — most environmental organizations know their post-catastrophe windfall will be short lived, and plan accordingly. The biggest long-term gains, he says, come when groups can turn a disaster into a “focusing event,” harnessing the public’s short-term horror to shift the paradigm of public policy. The Chernobyl and Three Mile Island nuclear plant meltdowns, for instance, precipitated a quarter-century rejection of nuclear power by all but a handful of countries, such as France and Japan. Haley Barbour was right about that much, at least.
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