It sounded all very assertive and hairy-chested when US President Barack Obama vowed to the US people yesterday that British energy giant BP would pay for the "massive" damage caused by the oil slick menacing the country's Gulf coast. But it was, in the last analysis, just so much hot air, merely a collection of empty words signifying nothing very much. Because the truth is that, however it's dressed up, in the end, it won't cost the oil multinational anything at all. Oh, it will undoubtedly finance the work to cap the leaking well and it will almost certainly foot the bill publicly for the clean-up operation. But the cost will, in the end, be borne by the people of the whole world and not the fat cats at BP or their greedy shareholders. An estimated 1.6 million gallons of oil have spilled since the BP-operated Deepwater Horizon rig exploded and sank, costing 11 workers their lives. BP, which reported profits of $5.6 billion in the first three months of 2010, up from $2.4 billion a year ago, will certainly not struggle as much as the drivers across Britain and the world are doing to fund those profits. Its shareholders won't have to pull in their belts and its directors won't go to prison for shattering one of the world's more delicate natural habitats or for wasting the lives of 11 working people.
It won't rebuild the lives of the fishing crews in the area whose livelihoods are being damaged and wrecked by the after-effects of the spill and it won't replace the sea life that will inevitably be destroyed. Instead, the cost of the spill will appear on the balance sheets of the company as part of the costs of production and will contribute to jacking the price of oil upward yet again to safeguard the shareholders' dividends. It's a good bet that the company won't be prosecuted for its inadequate 2009 environmental impact analysis of the Deepwater Horizon well, in which it declared that an accident leading to a crude oil spill and serious damage to beaches, fish and mammals was inconceivable. The one area in which it might make some change is in the Obama administration's decision to expand offshore oil exploration along the US coastline. Clearly, there will be huge pressures, at least in the Louisiana area and from environmental campaigners across the US, to modify that controversial decision. And the worse the leakage from the damaged well becomes, the higher that pressure will mount. US coastguard chief Admiral Thad Allen has warned that the volume of spewing oil could climb to 100,000 barrels a day in the event of a total wellhead failure. But oil companies and the government lack the technology to stem damage from a well gushing oil.
Republican spokesman John Boehner said just last week that "the Obama administration continues to defy the will of the American people who strongly supported the bipartisan decision of Congress in 2008 to lift the moratorium on offshore drilling." Clearly, the environment means little to the Republicans, traditionally the mouthpieces of Big Oil. It will be interesting to see just what it means to Mr Obama. While keen to stress environmentalist credentials, he has warned that the US has just 2 per cent of the world's oil reserves but consumes 20 per cent. The Iraq war was about access to oil. The expansion of offshore drilling is about access to oil and even political support for Israel has been largely about maintaining a friendly force in the oil-rich Middle East. It will be a true test of Mr Obama's courage to confront the demands of an oil-dependent electorate and the political clout of Big Oil. It's a confrontation that it would be nice to think he could win, but it's doubtful that he will even have the balls to take it on. He is, after all, a capitalist president in the world's biggest capitalist power and it's capital that rules there, whatever the president may say in public.