More than talk needed to win public confidence in oil industry

When the chief executives of the world’s major oil companies go before a Congressional subcommittee on Tuesday, they will attempt to differentiate themselves from BP publicly for the first time. According to someone who has seen the planned remarks by the chiefs, they will say that by adhering to best practices, companies can avoid accidents like the one gushing oil into the Gulf.

It is a risky position to take, for while the industry’s deepwater record is good – the companies speak of the successful drilling of the vast majority of about 14,000 deepwater wells drilled in oceans worldwide – accidents do happen. Take a look at this weekend’s oil spill from a Chevron pipeline in Utah. Although it was caught relatively quickly, the pipeline leaked into a community park in a residential area and then migrated into a drainage creek. Chevron has yet to say how much oil flowed out. But damage was done.

Birds and fish were caught up in the crude oil. The number of fish affected is unknown, but Chevron says it captured about 200 birds and cleaned them; three or four had to be euthanised by the vet. The accident is in no way comparable to the US’ biggest-ever oil spill, now leaking into deepwaters of the Gulf. But it does underscore that there are no absolute guarantees in the oil industry, just as there are no guarantees in the airline or vehicle industry, or any industry for that matter. Accidents do happen. And one big accident – regardless of the reason – will set back any of these other majors as far as it has BP.

The majors will have to redouble efforts to ensure accidents of any sort do not happen onshore or offshore. Every misstep adds to the record building against the companies in the eyes of the public and politicians. As one major said, this week’s hearing before a subcommittee of the House energy and commerce committee is going to be “tough”. The companies are likely going to come in for a public whippping for being part of an industry that had a disaster of this scale and has been unable to contain it, regardless of who or what caused the spill. While they will try to explain how their companies apply a host of safeguards to prevent such disasters, the bottomline is actions speak louder than words.

The industry will have to show it deserves to win back the confidence of a public that had grown to include President Barack Obama, who had been moving to open new offshore areas to dilling before the spill. It is unclear how long that will take.

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