Sunday, August 27, 2006

Seattle Firm Warned BP About Pipeline

Now we find out that a Seattle firm warned the oil giant BP (who has had record profits the past few years, along with the other oil barons, who would have guessed it by the appallingly low gas prices we've been paying?) that its Alaska pipeline was in decay and in need of better monitoring and major maintenance.

From the article at the Jump below:

"In the aftermath of last March's spill, BP acknowledged that the transit lines in western Prudhoe Bay had gone without an inspection by the remote-operated device since 1998, and it has been scrambling to make those inspections."

Was BP being short-sighted when it comes to profits like a lot of other giant corporations, where quarterly profits are often (read: always) take precedence over the long-term health of the company?

No, they weren't. In the case of oligopolies, and certainly monopolies, such moves are often made for both short- and long-term profit taking. Its very easy to make money when you're one of only a few practicing the same or similar tactics.

I, for one, am almost always against government regulation. But in some cases it's absolutely necessary. Where infrastructure is concerned, it's generally acceptable, even necessary, that only one or a few public or private (i.e., non-government) entities are allowed to participate. For example, for many years, it was necessary, in order to provide universal service, to have AT&T be the sole provider of telecommunications services. In 1984, when the government officially successfully ordered the breakup of AT&T, it was pretty well established that other companies could serve the public better than the monolith AT&T.

The same might be necessary in the oil services / supplies industry. There are only a few major players. And they know. And they exploit it.

Why is it that a single region is relied upon for refining oil into gas (Gulf Coast)? Katrina, and of course all of the other storms that wreaked havoc on New Orleans and other Gulf Coast cities and towns, ravaged a major portion of the country's oil refineries.

Why is that? Everybody knows that in order to prevent huge outages due to regional events that one must spread out the regional services over multiple regions. The West and East Coasts are certainly capable of refining oil.

But the government has neither ordered nor encouraged the manufacture of any substantial oil refining plants.

Thus, we will for the foreseeable future be held hostage by the major oil companies. Or will we? If somebody came up with a viable energy source other than fossil fuel, we could rid ourselves of the reliance on the oil industry. Why, we've been saying this for decades, haven't we? The oil lobby is so powerful that we cannot even be allowed to know which companies participated in the Enron-Cheney energy task force meetings of a few years ago.

So I don't think we'll rid ourselves of our substance abuse problem soon. Only after several major, unthinkable calamities might we even get serious about it.

The answer lies in something similar to a 12-step program: First, we must admit we have a problem. Only then will we be in a position to take action to rid our collective souls upon a foreign (in more ways than one) substance.

But we haven't even acknowledged that there's a problem. Sure, people bitch about the fact that they had to pay $100 to fill their Hummers. But they don't bitch as much as you'd think. We all know people who drive over 100 miles a day, one way, to work. Do you think they've seriously looked at finding alternatives?

I anticipate that people won't really start reconsidering habits until they're near death's door. Financial calamities cause people to rethink their priorities. But until then we can consider the profits of the oil companies safe. Safer still with government protection, subsidies, and a willingness to continue the "War on Terror" with all those "terrorists" in the Middle East, where coincidentally most of the oil power is concentrated.