How to Think About Oil Spills
The perils of overreaction.
Jun 21, 2010, Vol. 15, No. 38 • By STEVEN F. HAYWARD
This article needs to begin with a big mea culpa. In the April 26 edition of The Weekly Standard (which went to press on April 16), I wrote: “Improvements in drilling technology have greatly reduced the risk of the kind of offshore spill that occurred off Santa Barbara in 1969. . . . To fear oil spills from offshore rigs is analogous to fearing air travel now because of prop plane crashes in the 1950s.” On April 20, the Deepwater Horizon platform exploded, touching off the worst oil spill in American history.
Ouch. I’ve understandably been receiving indignant emails from environmentalists wondering whether I care to opine about the seaworthiness of the Titanic while I’m at it. The basic point was nonetheless correct. While we still don’t know the precise cause of the failure of the blowout preventer on the Deepwater Horizon (a technology that has successfully prevented spills in more than 150 offshore drilling accidents over the last 40 years), early accounts suggest that the same factors that cause most airplane crashes came into play: complacency and sloppy maintenance.
Environmentalists have been quick to call the BP/Deepwater spill the offshore drilling equivalent of Three Mile Island, the 1979 nuclear accident that put the last nail in the coffin of the already declining nuclear power industry. The comparison with Three Mile Island is ironically appropriate. As some environmentalists have come to regret, the limitation of nuclear power after 1979 resulted in the expansion of coal-fired electricity instead, but coal is now environmental enemy number one because of its high greenhouse gas emissions. A halt to offshore drilling now would be equally ill-advised.
As with Three Mile Island, the hysteria of the media and the political class over the Deepwater spill is likely to lead to increased risk and adverse environmental tradeoffs. It is understandable that the Deep-water spill is generating such intense fury. The 24/7 “spillcam” is giving a whole new meaning to “live-streaming video,” and unlike tanker spills, which are bounded by the contents of the tanker, the open-ended nature of an offshore platform spill generates more dread. Even with the semi-successful effort to begin capturing some of the leaking oil, the Deepwater spill will probably persist until relief wells can be finished possibly in August. By then the Deepwater spill will likely have leaked over 200,000 tons of oil into the Gulf of Mexico. By comparison, the Exxon Valdez tanker spilled 37,000 tons into Alaska’s Prince William Sound; the 1969 Santa Barbara spill (which was stopped in about 10 days) amounted to only 12,000 tons.
But the extraordinary nature of this platform spill—the first in this country in 40 years (last year’s Montara spill in the Timor Sea was the first major platform spill anywhere in the world in more than 20 years)—is no excuse to take leave of reason, or avert our gaze from thinking seriously about risk tradeoffs. Right now the United States gets more than 1.6 million barrels of oil a day from the Gulf of Mexico, and if we curtail Gulf exploration and production, we shall have to make up the difference with more imported oil.
Despite post-Exxon Valdez safety measures, tanker oil spills occur more frequently and release more oil than offshore drilling accidents, by a wide margin. Over the last 50 years, offshore drilling spills, including the Deepwater Horizon, have unleashed a little more than 1 million tons of oil; tanker accidents have spilled 4 million. For every offshore drilling spill, there have been seven tanker spills, many much larger than the Exxon Valdez, only the 40th largest tanker spill on record.
Even if the Deepwater Horizon spill lasts into the fall, it will still not even be the largest offshore spill in the Gulf of Mexico. That dubious achievement belongs to the Ixtoc 1, a Mexican platform near Yucatán that blew out in 1979 in circumstances similar to the Deepwater Horizon (the blowout preventer failed after a gas surge from the well). It took Mexico’s famously inept Pemex almost 10 months to stop the leak, by which time 460,000 tons of oil had leaked—still the largest accidental spill in world history (Saddam Hussein deliberately fouled the Persian Gulf at the end of the first Gulf War with 1.2 million tons).
The Ixtoc 1 spill started in June 1979. Oil began washing up on 125 miles of Texas coastline by early August. It is estimated that only 4,000 tons of oil made it to U.S. shores, which was about 1 percent of the total amount of oil spilled. About 30,000 tons was estimated to have reached Mexican shorelines. Pemex, by the way, refused to pay damages to the United States, citing sovereign immunity—an important contrast to the stance taken in the Deepwater spill by BP, which is assuming full responsibility (as it should).
The ecological effects of the Ixtoc 1 disaster should be borne in mind when we hear claims that the Deepwater spill will inflict large and long-lasting effects. According to a 1981 study by the Royal Swedish Academy of Sciences, about half of the Ixtoc 1 oil evaporated, and another 25 percent sank to the bottom of the ocean, much of it broken up by wave action and chemical dispersants. The Swedish Academy study estimated that oil from the Ixtoc 1 poisoned a 5,800 square mile area, devastating crab, shrimp, and fish stocks, and leading to large oxygen-killing plankton blooms. Overall fish landings fell by up to 70 percent in Mexican and Texan coastal waters. On the other hand, the 5,800 square mile area represented about 2.5 percent of Mexican Gulf Coast waters. Finally and most ironically, Hurricane Frederick struck the Texas coast in September 1979, and washed away 95 percent of the oil that had reached shoreline beaches and marshes. The current fears of the effects of tropical storms and hurricanes in the midst of the Deepwater spill might be misplaced.
It will be some time before we have a precise idea of the nature and extent of environmental damage from the Deepwater spill. It should be borne in mind, however, that ocean ecosystems tend to have faster recovery times than ecosystems on land, owing to the area available for the dilution and dispersal of the oil droplets, the constant aerating turbulence of ocean waters, and the ease of repopulation from adjacent areas once the anoxia (lack of oxygen) has passed.
A recent study of seven basic ecosystem types, and their most typical perturbations, found that of ecosystems that make a recovery from various catastrophic events (and, it must be noted, not all do), ocean ecosystems disrupted by oil spills were the fastest to recover, often within a span of one to four years. As the New York Times noted in a 1993 story, the Persian Gulf recovered surprisingly faster than anticipated from the 1.2 million ton spill Saddam Hussein engineered in 1991: “The vast amount of oil that Iraqi occupation forces in Kuwait dumped into the Persian Gulf during the 1991 war did little long-term damage, international researchers say.” By contrast, forest lands disrupted by fire or deforestation can take more than 40 years to recover.
Besides increasing our reliance on tankers, there are two other reasons curtailing offshore production in the Gulf may not reduce the ecological risk to the Gulf Coast. First, other nations are unlikely to curtail their own offshore exploration in the Gulf. Cuba is drilling for oil within 100 miles of south Florida; Mexico has extensive drilling operations in the Gulf (and as mentioned above caused the largest single spill in history). Both Venezuela and Brazil are expanding their offshore exploration and production in deep water, and are likely to expand to the Gulf of Mexico if the United States scales back.
Second, while the Deepwater Horizon spill represents an acute short term shock to Gulf waters and the Gulf Coast, the chronic seasonal depletion of oxygen in the Gulf (aka the 8,500 square mile “dead zone” below the Mississippi River Delta) may be aggravated by one of the policy responses that has been suggested in the aftermath of the Deepwater Horizon: increased ethanol production. The Nebraska Corn Growers Association has been especially enthusiastic, offering several tweets such as “Offshore oil drilling far from fail safe. The spill will boost the appeal of renewable energy, such as ethanol. . . . There is a fuel option that doesn’t result in oil spills in the ocean. It’s known as ethanol. . . . When was the last time you saw a headline for an ethanol spill in the ocean?”
Actually, it is possible to point to an ethanol-related environmental calamity in the Gulf every year. Hypoxia—oxygen depletion—in the Gulf fluctuates from year to year depending on a range of variables, but over the long term has gotten worse. A major contributor to this trend is dissolved inorganic nitrogen runoff from the Mississippi River basin, basically surplus fertilizer, which will increase with additional ethanol production.
A 2008 study published by the National Academy of Sciences observed that “nitrogen leaching from fertilized corn fields to the Mississippi-Atchafalaya River system is a primary cause of the bottom-water hypoxia that develops on the continental shelf of the northern Gulf of Mexico each summer.” The study concluded that our current ethanol production goals will increase dissolved inorganic nitrogen flowing into the Gulf by as much as 34 percent, and could make it impossible to achieve federal targets for reducing Gulf hypoxia: “Expanding corn-based ethanol production would make the already difficult challenges of reducing nitrogen export to the Gulf of Mexico and the extent of hypoxia practically impossible without large shifts in food production and agricultural management.”
In short, there is considerable risk that overreaction to the BP/Deepwater spill will have second-order environmental impacts that could be cumulatively worse than the spill itself, both for the Gulf and for other environmental arenas. Even if the costs of the spill exceed $15 billion (to be borne by BP) as now seems likely, the benefits of continued offshore oil production still exceed the costs by a wide margin. Economist Peter Passell estimates a net economic benefit of nearly a trillion dollars from continued offshore production. This will not be a popular position to hold so long as live streaming video of the oil spill continues and the media continue to cover the spill in a state of near hysteria. But it is at precisely such times that rational analysis needs to be heard.
Steven F. Hayward is the F.K. Weyerhaeuser fellow at the American Enterprise Institute and a contributor to AEI’s Energy and Environment Outlook.
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