The cost of the Macondo well disaster

| JULY 2010 | SOURCE: Global Oil Insight

BP is at last making progress in containing the flow of oil leaking to the surface, although it is still far from sealing the well and work is continuing round the clock. The accident will undoubtedly raise questions about the specific operation of the Macondo well, as authorities seek to apportion blame, and the scale of potential accidents with which future drillers must be able to cope. A much broader question, which will probably be avoided, is what level of risk are we as oil consumers prepared to accept in order to ensure the continuous supply of the fuel on which we have come to depend?

• 
• LOGIN OR REGISTER TO SAVE ARTICLE AS A REFERENCE

The blowout on the Macondo well in the Gulf of Mexico and the subsequent sinking of the Deepwater Horizon drilling rig is a tragedy for the eleven crew members who lost their lives and the families they leave behind. For the local marine environment and those whose livelihoods depend on it, the accident is a potential catastrophe, the scale of which will depend on the effectiveness of the attempts to contain and curtail the flow of oil from the well, to clean up the oil that has escaped, and to protect those affected from the economic fall-out of the leak.

The accident and its aftermath will raise a host of issues, investigations and law suits that will keep lawyers busy for years to come. The drilling of the Macondo well itself will be scrutinised as the companies involved seek to limit their exposure to the blame, if not the cost, for what went wrong. Industry practice will be scrutinised to determine whether safeguards and spill response plans are adequate and properly implemented. The opening up of US offshore acreage to oil and gas exploration may be set back once again, as the world’s most profligate user of hydrocarbons firmly reinforces its not-in-my-backyard  attitude to drilling in much of its coastal waters. The most optimistic hope that the accident will trigger a reassessment of the  US’s dependence on oil and lead to concrete steps to reduce the country’s consumption of fossil fuels.