British Petroleum “Greenwashing” Backfired

The black, slimy ooze continues to relentlessly pour from deep beneath the Gulf of Mexico at the site of the British Petroleum drilling site to surface waters and the toxic mess is being swept to shore where precious wildlife is being wiped out in a torturous death.

The British Petroleum drilling rig that exploded and sank 40 miles off shore, killing eleven workers, is spewing at least 5,000 barrels of oil per day and is threatening to destroy estuaries along the Louisiana coast as well as severely impacting shorelines in Alabama, Mississippi and Florida. Hundreds of thousands of people who live along the Gulf Coast are bracing for an economic meltdown just as the devastated region was recovering from the Hurricane Katrina catastrophe.

British Petroleum has already spent $625 million so far on the cleanup and other costs related to the massive oil spill which breaks down to roughly $20 million a day since the disaster occurred on April 20th.

However, that is only a drop in the barrel compared to estimates ranging from $2 billion to $14 billion to clean up the horrific mess depending on how fast BP can seal the well and how much oil washes ashore.

The complete story of the oil rig blowout is yet to be told. However, one thing is perfectly clear, BP and its partners Transocean and Halliburton, failed to take adequate precautions to install a backup shutdown system that is the standard in much of the rest of the world. The U.S. government is complicit for not forcing BP and other oil companies to implement safety procedures to prevent a preventable disaster.

This is not the first time that British Petroleum has found itself in the midst of an ecological disaster that has claimed lives and wreaked havoc with the environment.

In 2005 an explosion at a BP refinery in Texas City, Texas killed 15 workers and injured hundreds more. The Occupational Safety and Health Administration fined the company a record $87 million for neglecting to correct safety violations.

Texas City, Texas - BP Oil Refinery

The following year, a leaky BP oil pipeline in Alaska forced the shutdown of one of America’s largest oil fields. BP was fined $20 million in criminal penalties after prosecutors said the company neglected corroding pipelines.  A report issued by the Alaska Forum for Environmental Responsibility stated “BP does not operate in a safe and environmentally sound manner and its management culture appears to place undue emphasis on cost cutting.”

Alaska North Slope - BP Pipeline

One has to wonder if there isn’t a pattern of neglect and irresponsibility on behalf of the company. Needless to say, the tragic episode in the Gulf is strike three.

Investors have fled BP’s stock and the company has lost nearly $37 billion in market value since the disaster took place. Shareholders have watched the stock drop like a stone down some 20 per cent year to date.

BP Chief Executive Tony Hayward

BP Chief Executive Tony Hayward is saying the British oil giant has enough cash to cope with the costs of the oil spill nightmare saying, “our financial strength will also allow us to come through the other side of this crisis, both financially secure and stronger as a result of what we have learned from this tragic incident and how we have responded.”

BP’s CEO is not only confronting a cash crunch he is confronting a PR horror show. The London based company had been touting itself as a company that was (BP) “Beyond Petroleum” and had pushed a slick public relations campaign on the world’s energy consumers with a new emblem of a blooming flower portraying the company as concerned about the environment and global warming, environmentally conscious and eager to develop alternative energy sources like wind power and solar.

A consumer survey in 2007 found BP had the most environmentally friendly image of any major oil company. The company reported that between 2000 and 2007 brand awareness catapulted from an invisible 4 percent to 67 percent and sales spiked skyward.

The Gulf disaster has wiped out years of ad spending for BP and has also put the spotlight on what a sham the green campaign was. The facts reveal BP has reversed investments in non-fossil fuels. In 2009, BP lowered investment in alternative fuels by $400-million. BP also announced it was shutting its solar manufacturing plant in Maryland. The company with $73 billion in revenue in the first quarter of 2010 had a minuscule, less than one percent, being derived from alternative energy.

But the PR Armageddon is only just beginning because the real environmental disaster is just in the early stages. How long will it take before the global public sees the disgusting sight of dead sea turtles, birds, fish, flora and fauna before they decide to pass by the pretty, little flowery BP emblem and head down the street to another gas station putting a crimp in profits.

BP has no alternative at this juncture in time but to press forward fast and furious to cap the leaking well and ameliorate the damage of the spill as fast as humanly possible. The longer the spill is not contained and oil drifts to shore destroying wildlife and livelihoods BP will suffer horrendous public relations hits day after day.

BP also needs to take concrete steps to repair it demolished reputation. First, it should publicly promise to pay for the entire clean-up and not tie the issue up in court as Exxon did for decades when the Valdez was steered into a reef in Alaska spilling 250,000 barrels of crude oil and destroying the pristine waters and shores of Prince William Sound.

Once this disaster is over BP must take resolute action in adapting stringent environmental policies for itself so this kind of disaster can never happen again. BP must install fail-safe shutoff systems at every well head it owns or leases on land or at sea. It must have a near infallible recovery plan to deal with any future oil rig disaster. These protocols should be binding by law and if not adhered to, executives should be sent to prison.

BP also needs to end its bogus “greenwashing” campaign and become serious about alternative energy, reducing dependence on fossil fuels and become a real champion for safe energy extraction.

If BP doesn’t make dramatic changes it should just give it up and change its name. Phillip Morris became Altria after it became evident the company lied about its knowledge of the deadly health effects of cigarettes. BP could be forced to due the same.

This is a watershed moment for BP. The public will never have trust again unless it sees a radically different company and BP will have to prove itself over many years to reverse the monumental reputational damage.