BP OIL SPILL | Disaster hits shipping, too

By Lloyds List Comment (2010/05/03)

THE disaster unfolding in the US Gulf and threatening the Louisiana, Mississippi and Alabama coastlines has been dubbed by President Obama a “potentially unprecedented environmental disaster”. BP, struggling mightily to seal the gushing well, is faced with a diabolically difficult task as the looming environmental catastrophe draws closer by the hour.

BP was actually leasing the well from Transocean, which owns the rig, and it initially sought to make Transocean accountable. BP’s senior managers soon grasped that it was liable for the cleanup and the environmental damage.

The wavering aside, BP’s distress is understandable, and as a shipping journal we sympathise with its sudden plight.

We can be forgiven for an initial reaction of “thank God this did not come from a ship”. The likely course of events would have been instant calls for more stringent measures against owners with a knock-on effect of tighter regulation, higher insurance premiums and, within the bounds of possibility, a new tax on shipping. Yet, the relief is short-lived, because the magnitude of the disaster will make it a shipping problem.

The two relevant international funds covering oil pollution from tankers are the International Convention on Civil Liability for Oil Pollution Damage and the International Oil Pollution Compensation Funds.

Influenced by the 1999 Erika and 2002 Prestige oil spills, and mounting costs of clean-ups generally, a protocol came into force in 2005 providing for an IOPC Supplementary Fund to increase the compensation under the CLC. The total amount of compensation payable for one incident is limited to special drawing rights of about 750m, or around $1bn at current conversion rates.

No one can yet estimate the full liability to be shouldered by BP, but each major spill brings an increase in claims and liability pricetag.

The Erika casualty brought 7,100 claims amounting to $520m. Prestige yielded 1,300 claims worth $1.7bn. The 2007 Hebei Spirit spill brought 126,000 claims worth $43.2bn.

Environmentalists dub the funds’ contribution to clean-ups as inadequate. Claims are settled with only a portion of IOPC Fund, because the fund provides compensation for the economic cost of the cleanup and the loss of income by those affected by the oil spill. P&I clubs foot the rest of the bill.

Environmentalists argue that both should be tapped to cover for environmental damage. As the impact of the Gulf spill builds, so too will pressure on shipping to bear additional cost of future cleanups.

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4 responses to “BP OIL SPILL | Disaster hits shipping, too

  1. Pingback: Tweets that mention BP OIL SPILL | Disaster hits shipping, too « Safe Seas -- Topsy.com

  2. isochroma

    What a beautiful leak – twenty thousand barrels of lovely lube a day. I love the oily mass that bulges outwards from a bent pipe. A brown Rorschach blot of the automobile culture.

    An endless orgasm of brown to win the King’s crown. The ejaculate of Hell sent by the wind-whipped swell.

    My most fervent hope is that all efforts to stop and mitigate this masterwork are failures. The incontinent flow of hydrocarbons shall continue for the decay of all.

    I would love to see a sea of greasy Devil’s blood flowing into the ocean forever more. The spew that flew right on through.

    Then the World can move on into its next phase, the Dark Phase of death, decline and destruction. Soon, all the works of humans will decay and so too will themselves be brought to the altar of slaughter, to account for their crimes of existence.

  3. omi

    OMINOUS RESOUNDING SILENCE IN THE FACE OF CATACLYSMIC DISASTER.

    How can the scope of this ecological disaster be met with the silence of prayers- the silence of scientists and political organizations? No celebrity or world leader is willing to call for more action?

    It is time to look to our one world and one life force that unites and sustains us…

    We face challenges larger than corporate entity- larger than national pride or ego.. our home – this one earth is now facing destruction in a singular silence that is truly a crime against not just humanity- but all life forms.

    Where are the voices that could call out for the best minds and resources on the planet to come together and solve a problem that will devastate a huge piece of our planet and ecologies into the future in untold and ways with permanence that we can not yet understand.

    It would be an epic movie— saving the planet by working together, using the best and most immediate resources of the planet.. from all countries. Perhaps a script writer could stir a bit of action—but is it that the President is afraid that some other country would have the skills and tools to limit disaster in the American arena?

    Where are the religious leaders- that we are not asked to pray for creation and see our common fragility?

    God, by whatever the name

    Is saddened for sure

    And each soul shares the blame

    For a silence dishonoring the gift of the earth….

    Use your voice and your prayer
    How much power have the people of this planet given to a single company- which certainly can not pay the bill and restore the planet—? And how much power to a president who has such a national ego that his administration is selling out our planet’s future rather ask for international and immediate assistance and expertise?

  4. isochroma

    The oilmass grows like a joyous cancer full of many new kinds of life. Welcome to happy motoring.

    It’s time to drive to a slicker, browner future: put your keys in the ignition because Big Oil needs your dollars to make more oily art.

    For those who have already contributed, thank you for your kind support!

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