An Application of the Precautionary Principle to the BP Oil Spill

In the spring of 2010, the Deepwater Horizon oil spill resulted in the discharge of an alarming 4.9 million barrels of oil into the Gulf of Mexico (Layzer 2016, 367). The consequences of the spill were extreme: eleven men declared dead, severe ecological damage, and billions of dollars spent on clean-up efforts (Layzer 2016, chap. 11). While the spill took place on the site of BP’s Macondo well, and the British company absorbed a significant portion of the clean-up cost, several other actors shared responsibility for the disaster. This includes Transocean—which owned and leased the Deepwater Horizon Rig, Halliburton—which was hired to cement the well, and the Minerals Management Service (MMS)—the regulatory body responsible for overseeing oil and gas development in the U.S. (Layzer 2016, 341). Poor judgement of risk by these three actors ultimately led to the severity of the spill, which could have been avoided had they abided by the precautionary principle. In this paper, I will discuss the theory behind the precautionary principle, examine how poor risk assessments by three of the players in this case (BP, Transocean, and Halliburton) led to the spill, and conclude with how the oil spill could have been avoided using the ideals of the precautionary principle.

When undergoing risk assessment, many environmentalists advocate for the precautionary principle. One definition of the principle states that “when an activity raises threats of harm to human health or the environment, precautionary measures should be taken even if some cause and effect relationships are not fully established scientifically” (Rosenbaum 2011, 144). From an economic perspective, this principle is often troubling because it discourages business ventures, and subsequently short-term gain, even if there is only a potential for serious risk.  That said, the precautionary principle “has several advantages over traditional risk assessment” in that it calls for preventative action, places the burden of proof on the proponents of an activity, helps develop a wide-range of alternative actions, and encourages public participation by demanding transparency (Rosenbaum 2011, 146).

There were several instances leading up to the Deepwater Horizon oil spill in which BP ignored serious risks associated with human and ecological health. As one of the largest oil companies in the world, executive management at BP worked tirelessly to cut costs and improve efficiency. Thus, the company often “opted for the less costly or time-consuming option without calculating the accumulating risk of doing so” (Layzer 2016, 361). For example, when BP began to seal the Macondo well, they decided to use a “long string” production casing instead of the recommended “tie back” method, which forms several barriers against escaping hydrocarbons (Layzer 2016, 349). While this saved BP 7-10 million dollars, it left the well significantly more susceptible to a spill (Layzer 2016, 361). To compound this risk, BP elected to only use six centralizers “to position the drill string evenly in the center of the hole,” which went directly against the advice of Halliburton to use twenty-one centralizers (Layzer 2016, 349). This created huge risk, as the only reason Halliburton approved the cheaper “long string” production casing was because they thought BP would use twenty-one centralizers (Layzer, 2016, 349). Looking at these two examples alone, BP clearly failed to accurately account for risk in their decision-making process, and consistently prioritized cutting costs and improving efficiency over safety.

While BP absorbed most of the economic and reputational costs of the oil spill, Transocean and Halliburton also made poor risk assessments that contributed to the disaster. Surveys conducted after the spill revealed that Transocean employees were concerned about the reliability of equipment on the Deepwater Horizon, but did nothing to address it. Months before the explosion, the company “had left 390 repairs undone, including many that were ‘high priority’” (Layzer 2016, 362). Despite these concerns, Transocean employees chose not to report problems with the rig as they were worried about job security, especially considering BP’s bottom-line business culture. In addition, Transocean failed to prepare BP workers for a “worst-case scenario,” demonstrating just how little the company considered risk when dealing with their clients (Layzer 2016, 362). Halliburton also underperformed in accurately assessing risk leading up to the Deepwater Horizon oil spill. One of the primary factors that led to the spill was the use of a “foamed cement compound” to seal the well that “did not meet industry standards” (Layzer 2016, 362). While Halliburton did warn BP about this problem after conducting a preliminary test, it never forwarded the results of the second and third tests, which also indicated the cement mixture was unstable (Layzer 2016, 362). This clear disregard for industry standards reveals the high level of risk the company was willing to take to maintain its business relationship with BP. Had Halliburton, Transocean, or BP adopted the values of the precautionary principle, it’s highly likely this spill would have never occurred.

The Deepwater Horizon oil spill is therefore a valuable case study for understanding the benefits of the precautionary principle. As previously noted, the precautionary principle calls for “preventative action in the face of uncertainty” (Rosenbaum 2011, 145). If this logic had been adopted, many of the high-risk actions undertaken by BP, Transocean, and Halliburton could have been avoided. For example, Halliburton would not have used a cement mixture that failed three consecutive tests, as it was unlikely to succeed in sealing the Macondo well. Furthermore, the precautionary principle “promotes the exploration of a wide range of alternatives” to a potentially destructive action (Rosenbaum, 2011, 146). Had this rationale been considered, BP likely would have considered the “tie back” method over the “long string” casing to seal the well, as it was a safer and still viable option. Thus, the Deepwater Horizon oil spill could have been avoided had the precautionary principle been effectively employed.

Bibliography

Layzer, Judith A. 2016 The Environmental Case: Translating Values into Policy. London: Massachusetts Institute of Technology.

Rosenbaum, Walter. 2011. “Common Policy Challenges: Risk Assessment and Environmental Justice.” Environmental Politics and Policy 6: 128-161.