Averting an Australian ‘Deepwater Horizon’: the power of the people

 

This post is by Professor Tina Hunter, the co-Director of our Centre for Energy Law

Today some of us will go to the movies. A few of us will see the new action thriller called Deepwater Horizon. The movie is the ultimate action thriller, starring Mark Wahlberg as the action hero. However it is no Hollywood tale; rather it is a real-life story, and one that is not a thriller but a horror for those who were involved. Let me explain.

On the evening of 20 April 2010, only hours after executives from BP had visited the drilling rig Deepwater Horizon in the Macondo field of the Gulf of Mexico to celebrate seven years of work injury free, the rig was ripped apart by an explosion. The causes of the explosion and consequential oil spill are complex, but were essentially caused by a loss of control of the oil well below the rig. As the Presidential report noted, ‘the immediate causes of the Macondo well blowout can be traced to a series of identifiable mistakes made by BP, Halliburton and Transocean that reveal such systematic failures in risk management that they place in doubt the safety culture of the entire industry”. The impact of this accident is well known, with 11 men losing their lives, and the resulting oil spill the worst oil spill ever recorded in a single event.

The reason for the severity of the oil spill is the loss of control of the well. Unlike an oil spill from a ship, such as the Torrey Canyon disaster in 1967, where the volume of oil spilled is confined to the cargo, the spill from an out of control well just keeps going. And going. Until a well is stopped from leaking (capped), it will continue to leak. This is what happened in the case of Deepwater Horizon, where it took 87 days to cap the well and stop the flow of oil. In that time, approximately 4.9 million barrels of oil leaked into the rich fishing grounds of the Gulf. Such a spill caused a massive impact on fishing, severely impacting on the livelihood of those in the Gulf Region.

By now some readers will be thinking ‘so what – this was a long time ago?’ The reason for reopening the Deepwater Horizon wound is not because of the current film, but rather something much more important – the possibility that it could happen again in Australian waters.

In late 2010, as part of the annual petroleum licensing round, the Australian Government granted BP (yes, the same BP) a licence to explore for petroleum in the Great Australian Bight (GAB), over an area of almost 25,000km2, located approximately 500km off the coast of South Australia. The water depth in the license area ranges from 140m to approximately 4,600m. In comparison, the well in Deepwater Horizon was drilled at a depth of 1,500m.

So, to clarify – the Australian Government granted BP, who lost control of a well in 1,500m of water and caused the largest ever oil spill, the right to drill in waters up to 4,600m deep.

Furthermore, the physical environment in the GAB is not at all like the Mexican Gulf. Rather, it is part of the Southern Ocean, known for some of the most brutal weather on earth, causing the death of many sailors.

Normally the granting of an offshore petroleum license raises barely a response from the Australian public. At the time of the grant of license, there were some concerns. These were in fact attributable not to Deepwater Horizon, but to an earlier offshore oil spill in Australian Waters: the Montara Oil Spill. The spill was a result of the failure of the cementing of the well by Haliburton (yes, the same Haliburton that did the cementing for the Deepwater Horizon well), and the company with the license, PTTEP Australia. The following inquiry and report identified a number of causal factors, as well as major problems with the way that offshore petroleum activities are regulated.

At the time of the Montara Inquiry I expressed my concerns regarding the regulatory framework for Australian offshore petroleum activities. As a result of the Inquiry, the Australian Government undertook to reform the offshore regulation framework. However, the federalist structure created many difficulties, something I commented on in 2011. The Australian government pressed on with the reform, with a new system of regulation shifting regulation of offshore petroleum from the states to the Commonwealth, for the first time in the forty-year history of offshore petroleum extraction. In 2014 I analysed the legal changes that had occurred, concluding that the legislative changes, whilst going some way to addressing the problems, were not addressing the root cause of the well control accident of Montara.

In 2013, BP made an application for Commonwealth approval under the Environmental Protection and Biodiversity Conservation Act 1999 (EPBCA) the general-purpose act for environmental protection. This approval would allow drilling in an area that was a protected marine reserve, and the home of migratory whales and dolphins. BP was proud that even if an oil spill did occur, it would take 33 days to reach the shores of South Australia, so everything would be ok. Besides, BP stated, they had learned their lesson from Deepwater Horizon, and would not spill again. This is at a time when the Norwegian Petroleum Regulator (PTIL) requested BP to demonstrate why they should be allowed to continue on the Norwegian Continental Shelf after an oil leak in 2012. Although the EPBCA application was approved, many people (including me) made submissions to the government, stating that the BP Submission for approval was poor, and there were many flaws in the study. Unfortunately the public submissions in this instance were not released. The reasoning for the approval under the EPBCA was the government felt that the Regulator, the National Offshore Petroleum and Environmental Management Authority (NOPSEMA) would require greater controls under specific petroleum legislation.

Like many others, I did not have much hope in NOPSEMA. Although they had managed safety for over 10 years, they were effectively a newly formed agency for environmental management, regulating wells under the same criteria (Good Oilfield Practice- GOP) that had been in place when the Montara spill had occurred, and of which I have been quite scathing. Indeed, public momentum against BP drilling in the GAB was rising, with grassroots organisations such as the Great Australian Bight Alliance and others fighting to stop the drilling. This response was unprecedented in Australia. Never before had we seen such response to an activity that occurs far out to sea. Not even after Montara was such a response seen. Clearly, the public was concerned about BP’s track record, and its role in Deepwater Horizon.

Such public scrutiny on BP’s plan in the GAB placed the regulator NOPSEMA, under the spotlight. BP’s initial application to NOPSEMA in 2015 for approval to drill a well was rejected, with NOPSMEA requiring further information. The plan for approval was resubmitted in March 2016, and NOPSEMA again requested BP to modify the plan, to which BP submitted a second plan in August 2016. The result of the reassessment was due mid October October.

During this period, the Australian Senate’s Environment and Communications References Committee took the unprecedented step of launching an Inquiry into the potential environmental, social and economic impacts of BP’s planned exploratory oil drilling project, and any future oil or gas production in the Great Australian Bight, which I was privileged to be a part of. I have long written of deficiencies in the Australian offshore petroleum regulatory regime, and the capacity of the regulator, NOPSEMA. These concerns have now been expressed publicly, with Emeritus Professor Bob Bea, the founder of the Centre for Catastrophic Risk Management at Berkley University expressing major concern over the regulator’s role, with Professor Bea noting that ‘the current Australian regulatory approach to the BP drilling operations as “hope for the best”’. The secrecy within which NOPSEMA had undertaken the assessment, and failing to make public any of the conditions, meant the process lacked transparency, with the Australian Senate calling the regulator ‘weak and secretive’.

Before the approval to drill could be granted or rejected by NOPSEMA, BP announced, on 11 October 2016, its withdrawal from drilling in the GAB. This withdrawal was met with mixed reactions. Predictably, many from the community exhibited sheer elation. Quite possibly, the assessors in NOPSEMA are secretly wiping their brow and thinking ‘thank goodness – now we don’t have to make a decision’. But for a small minority of the population, there is disappointment. The Federal Resources Minister, Matt Canavan, expressed bitter disappointment about the BP decision not to proceed, and observed that the celebratory response to the announcement showed ‘the ugly side of green activism’. (But if the ugly side of green activism saves the lives of people and animals by preventing a result of a Deepwater Horizon-type incident, maybe it is not so ugly after all).

I applaud the decision of BP in withdrawing from the GAB. As far as I can see it is one of the more sensible decisions they have made in the last ten years. However, I applaud much more the tenacity of ordinary Australians that have worked tirelessly to stop this unnecessary drilling in a Marine Reserve where the only likely benefit will be 100 new jobs and some taxation. Tangentially, it can be noted that that tax system has been labelled, like the offshore petroleum regulator, as weak and lacking transparency.

Some nights, when I am up late working on an article related to offshore petroleum, the faces of the men who died on Deepwater Horizon still haunt me. We will never know what it was that caused the ignition of the gas that rushed up the well. What we do know is that whatever it was, it killed 11 people and caused environmental devastation on an unprecedented scale. Had the Australian petroleum regulator NOPSEMA and BP had their way, it could have been the faces of Australian men and women that might have tortured me, along with the vision of whales, dolphins, tuna, and other marine life gasping for life and struggling for warmth and buoyancy in the cold, dark Southern Ocean. For now, that will not happen. Such is the power of the Australian people in averting an Australian Deepwater Horizon.

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One thought on “Averting an Australian ‘Deepwater Horizon’: the power of the people

  1. Ondotimi Songi October 20, 2016 / 11:32 pm

    It is pleasing to know that BP was very rational in its decision to withdraw its application because I think the potential risks outweigh the benefits for the Australian people. Importantly, it is hoped that companies operating in developing countries would be more civil in their approach in dealing with governments and local people. For instance, it is sad that Shell Nigeria is still battling with the government over its responsibility in the Bonga oil spill, one that is as unprecedented as the Makondo spill. I hail this ‘ugly green activism’ for bringing to fore the pertinent issues for discourse and to see that it paid off utltimately.

    Like

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