Obama's 9/11

You might actually get shocked after reading the title & all the bizarre images of 9/11 tragedy may pop-up in your mind. You may start wondering when such a terrible thing happened in Obama’s reign. But breathe; the superpower is not under attack (at least, not so far) from terrorists, but this time it is under strike by worst thing ever. The Mexican gulf oil spill!! While September 11, 2001 rang a loud bell in deaf superpower’s ears & sounded a “Wake up, god damn it!!” call for Bush administration, I am not sure if Obama & co. has heard the same thing this time around. I’ll come back to it later, for the time being- & as this is meant to be a review article- I am duty bound to explain it to you how this tragic set of incidences happened.

Tragedy-

April 20^th, another hot day in the sub continental summer & I was in Indore on an official visit. Indian media was totally obsessed with ‘who will be in the final of this year’s IPL edition’- type of stories, likes of CNNs & BCCs began putting news of some blown out rig in the Mexican gulf squeezing out lot of crude oil. That rig didn’t just explode; it sounded a galvanizing call for all of us. It can be very convenient to sit back in your chair with A.C blowing a wonderful chill up your spines & say ‘its Uncle Sam’s problem & he ought to sort it out with BP’ (whose rig it was). It ain’t just his problem, it’s everybody’s problem. With global demand for conventional fuels day by day, it is hard to imagine how it’s NOT our problem.

So, as the days progressed, it was feared to be the worst oil spill of the decade. Many reporters started comparing it with the Exxon Valdez oil spill occurred in Alaska in 1989 in which an oil tanker thrashed into a reef & spilled around 260,000 to 750,000. It ranks as the 1^st in terms of volumes of oil released in an accident. This time BP looked all set to change the history. The accompanying satellite image will show you the exact locality of the BP oil spill in the Mexican gulf

It is estimated that up to 5-10 thousand barrels of crude oil has leaked per day. One can find an amazing (disheartening to watch, I should say) clip on bbc’s link http://news.bbc.co.uk/2/hi/8651333.stm on how this spill progressed day by day. If you notice carefully, the spill crossed the estimated spread distance for the day many a times. There is a wildlife protection zone & many a times the spilled water reached the coast line (not to mention the damage to the wild life caused by it). There are reports of deaths of thousands of birds & fishes. Once birds shoot themselves into contaminated water, oil coats their wings & feathers in such a wonderful way that they lose their ability to fly back within no time. Oil prevents the exchanges of gas molecules into the water & hence fish can no longer be able to breathe oxygen & eventually die out of suffocation. These are just the external effects. Many marine organisms die out because they consume highly polluted oil which leads to the annihilation of their red blood cell. It also damages their kidneys & internal organs. We are not very sure about what exactly happens to the microscopic life forms. There are certain bacteria found to be the degraders of this contamination but largely this micro flora & fauna are subjected to the wrath of contamination.

BP’s response-

In US, the responsibility for the cleanup work is fixed on the defaulter’s shoulders. So, whether BP liked it or not, it had to bear the cost of compensation to be paid to the fishermen, cost of cleanup work & importantly, the cost of repairing the well. The oil giant tried to block the spill in the every possible way. Some efforts were thwarted by the formation of gas hydrated (ice like crystals) which blocked the lowering of rescue dome. The major problem was the sheer depth of the damaged site. At a depth of 2-3 km below the water level you have to work with razor sharp precision. There are remote operated vehicles for help but the control is manual & in the foggy conditions everything looks cloudy, it gets even harder to work. As an initial response to contain the oil spill, BP used collectors, chemical dispersants, and spill burning methods to contain the spill. But when you have 10,000 barrels of oil leaking every day, you need to be smarter than that. So, BP engineers came out with the measure famously known as “Top Kill” to inject mud & blocking material into the Blow out Preventer (BOP) which was leaking the oil faster than imagined. But the out flow of oil was so much that BP had to announce its failure on 29^th May.

The leaking piece of pipe which was attached to BOP was removed & now, the oil was escaping to the surface directly from the BOP. So, BP engineers lowered a fitting cap into it & tried to fit in the capping stack over the BOP. On 15^th July, it went in BP’s favor & the leak stopped for the first time since 20^th April!

What’s next?

Although there have been the talks begun for a while about BP’s future- as to if it will have to unwillingly accept the bargainer who will be sniffing an opportunity amidst this tragedy- one thing is clear that after paying approximately US $ 3.5 bn towards cleanup, BP is no longer a mighty giant. Have a look at some figures here-

BP Facts

Clean-up:

·         Cost to date: $3.1bn approx

·         Escrow account promise: $20bn

Shares:

·         Share price on 20 April (before leak began): 656p

·         Share price lowest point (on 25 June): 296p (55% fall)

·         2009 profits: £10bn

·         2010 dividend: £1.8bn in Q1; Q2-4 cancelled, saving £5.4bn

Debt:

·         Total debts: £17bn, of which £4.9 due by end-2011

·         2009 cashflow: £21bn

·         Credit ratings: A2/A (Moodys/S&P)

·         Credit default swap spread (5 years): 4.1% per annum

This was what may lie ahead for BP economically. Now I come to the point which I began in the beginning; “Obama’s 9/11” dogma! Here is an interesting graph predicting what is waiting for the world in the next few decades when it comes to green house emission.

This is the current estimates of global oil consumption. (I am not sure how it would look like in black & white, but in color, the image is pointing at US as a major consumer, followed by Canada, Australia, & China, Brazil, India as emerging oil thirsty nations). But the next graph will change your perception of “Its only Uncle Sam’s problem”. The graph clearly marks today’s developing, fast developing, emerging etc nations ahead of US when it comes to green house gas emissions. That’s what worries me more than anything.

I can’t dare imagine the emissions from industries when the number of cars on the roads is supposed to hit 1.2 billion mark by 2030. If all of them still keep on consuming the same conventional fuel, Apocalypse is surely nearing! That’s why I think that we need to come out of our traditional mentality of ‘blame it on US’, if we too keep on trading the path powered by conventional dirty energy sources. I am in no mood to advocate ‘go back to jungle’ slogan (because if we all would leave our jobs & turn back to jungles, there won’t be any jungles left!!). Rather I insist on adapting our economies in order to embrace efficient & non conventional energy sources. There needs to be lot of money invested for finding & successfully harvesting these sources. Our coal, crude oils are the tiny but powerful time bombs which are on the brink of exploding at any time. Their explosion won’t be as hard as 9/11 planes jetting into twin towers but theirs will be a slow poisoning effect. If at all somebody feels that Bush administration woke up after 9/11, realized the importance of action to be taken against what it deemed to be terrorism & mobilized its resources for the cause, Obama needs to wake up to the call that this is our time in order to mobilize our resources behind R & D for non conventional energies. At the same time governments of BRIC, SAARC etc need to put their acts together for deploying their resources on development of efficient energy sources. It ain’t just Nuclear energy, but rather scores of clean energy sources like solar energy; hydrogen energy sources, tidal energy, wind source etc. need to be hunt down. So, even after high rhetoric of President Obama against BP high authorities, if he & the world at large understand the need of the hour, we are half way through on saving the climate.