Sheila McNulty Oil companies could harm their US drilling prospects with refuge spill

At a time when the Obama administration is talking about permitting drilling in several sites off the coastlines of Virginia and Florida for the first time in more than 20 years, the oil industry should be on its best behavior. After all, it must prove to the US public that it is environmentally responsible enough to drill in areas that have long been protected. That is why this week’s oil spill in the Delta National Wildlife Refuge in Louisiana is a much bigger deal than the environmental damage being caused.

The US Coast Guard says that 18,000 gallons of crude oil was released when a barge conducting dredging operations for ExxonMobil was attempting to anchor in place, leading to suspicions that one of the long pipes being used must have hit the Cypress Pipe Line, which is owned by Chevron and BP. An area of 160 square miles has been affected, the Coast Guard says, explaining that is 16 square miles of marsh and 120 square miles offshore.

From the Coast Guard’s statement:

Upon receiving the initial report of the spill, CPL immediately closed off the affected section of the pipeline and initiated its emergency response procedures to minimize the environmental impact of the spill… More than 50 people and 16 vessels are at the scene conducting and managing cleanup operations and environmental protection efforts, which include recovery of the oil and attempting to keep wildlife out of the impacted area.  So far, there are no reports of any birds or other animals impacted in the incident.

The spill is small compared to more notorious incidents in the past, but the timing could not be worse for Big Oil’s environmental reputation. In an era in which the oil industry drills in 10,000 feet of water and extracts oil and gas from rocks, it should have the technology to ensure its staff can see a pipeline in the shallow waters of the refuge. For now all details are being filtered through a joint command of all those involved, led by the Coast Guard, and an investigation is underway.

But whatever the answers that eventually emerge to those questions, the oil industry itself cannot have accidents like this – big or small – particularly when the prospect of new offshore leases is on the table.

Related links:

Obama’s offshore drilling announcement: The details are less dramatic than the headlines – FT Energy Source