Tuesday, June 8, 2010

Petroleum Gate: the real slick in the Gulf

May 6th, 2010, I wrote the following passage in response to news of the oil rig blowout in the Gulf. I posted it at www.everyauthor.com Yesterday the BP CEO was reported to have made remarks confirming the suspicions I raised in the passage I wrote over a mont6h ago, to wit: we aren't responsible and here's $50M towards cleanup costs to show what good guys we are at BP. Keith Kohl of Energy & Capital has raised the possibility that BP won't survive this mishap.

Petroleum Gate

Peter Johns-Houghton toyed with his English Breakfast tea, then sipped it delicately. Then he spoke. His voice was even, but his expression was deadly serious.

"Our government is chagrined by BP's response. Their actions reflect on us of course. Many of the Board are close friends with Cabinet Ministers and we enjoy a good chunk of taxes from them as well as the employment of many of our voters, but, I fear this will end badly," he said.

"How so?" I asked innocently. I had my suspicions of where this was leading but I wanted to get him on record.

"The drilling company running the rig when it exploded is a sacrificial lamb, nothing more," he replied.

"But its market cap is a hundred million easily. Pounds," I observed.

"Yes, and BP will spend another 50 million washing seabirds and otters as a PR campaign. That’s petty cash. You have to understand that the oil corporations have the best lawyers money can buy, and their primary purpose is to protect the Corporation. These people are a great deal sharper than the lawyers the government can afford. The Deep Horizon rig was funded by BP, but it is owned by the drilling company. It was set up that way as a buffer to protect BP from greater liability. They own the oil of course, but their liability stops there."

"Then who..?" I blurted, shocked to hear this revelation from his lips, though I suspected as much. It had the ring of truth about it.

"The US taxpayer will pay, of course. Obama has already come out and said they will clean it up. Perhaps he, or his advisors, have already checked with Legal on it, but they know what BP knows - they aren't going down over a bunch of herring and some whooping cranes. Of course the shrimp industry is gone, but it was doomed the day they anchored the first offshore drilling platform in the Gulf of Mexico. It's amazing it has lasted this long really."

"But Obama has been, albeit reluctantly, telling us that he will support offshore drilling to sever US dependence on Middle East Oil!"

"Ironic isn't it." Peter beckoned the waiter and indicated he wanted more hot water. “The price dropped precipitously after last summer's peak at $147 per barrel. You'd think they would have moved to take advantage. Look I don't know if I want to tell you this.."

The waiter interrupted and Peter paused until he was out of earshot. I was dry mouthed in anticipation of what he might say next.

"I'm not really into conspiracy theories but what I'm going to tell you might seem like that. This must be off the record. If it got out that I told you this I may be prosecuted under the Official Secrets Act, but I'll have to take that risk. I’m getting out of politics anyway, should have retired five years ago. The stakes are too high. None of this is confirmed officially but it may come out anyway. Some things are too big to hide."

"What are you getting at?"

“The Deep Horizon explosion may have been an act of terrorism," he said. His tea steamed until it cooled as I digested the implications of his words.
The dominoes fell rapidly as I followed the sequence of his thinking as I imagined it.
If offshore drilling went ahead and US oil independence was assured, OPEC would still sell their oil in Europe and to China, so they had no interest in a Gulf Coast disaster, except for the Islamic Jihad, but no one had claimed responsibility.


"CIA?" whispered Peter, looking around nervously.

"Why?" I queried disingenuously.

"Remember Dole pineapple and the Dulles brothers?" he asked.

I took that as rhetorical. I leaned in to hear more.

"Who else knows you're meeting with me today?" he said quietly.

"My Editor. My secretary, maybe my wife, if she listens to me anymore." Things with Gloria had deteriorated since I began following the Peak Oil crisis last year."

Peter pointed at the TV over the bar. CNN was running a banner that the DOW was down 900 points initially this morning, but had recovered to only 400 points down in the last hour.

"There is a play going on. Two actually. Big money is playing the Euro. betting the Greek-Portugal-Spain situation is going to explode. And Oil speculators are trying to push oil over a hundred again. Too much money was tied up in new operations last year when it went to $147, and they need it to get there again or they will lose big. Plus, Interests in the Canadian fields in Saskatchewan and Alberta want oil over a $100 again too."

I could fill in the blank.

"And stopping offshore oil exploration is a good way to push it over the threshold." I said.

"Exactly," said Peter.

My guts had turned to water as we watched the stock market ticker in silence and I fought back nausea. I knew I had a huge story here but it was classic conspiracy theory. No one would go on record and I had no proof that CIA had blown up a rig in the Gulf of Mexico, but damn, it made a cruel sort of sense. If they would let their own Trade Towers go down, would they balk at a few sea gulls and Louisiana shrimp? Then an inkling of an idea grew in the back of my mind.

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