Politicians and the public would realise that the ecological and social cost of offshore drilling was becoming unacceptable, the thinking went.

If you morph the lessons of the Deepwater disaster as well as the Exxon Valdez, it is that the risks of deepwater drilling are huge. Everyone though realises that we were lucky in the Gulf, where the warm waters are more able to breakdown the oil compared to the cold waters of the Arctic.

In the the Arctic some 5 million barrels of oil spilt would have been a complete ecological catastrophe as the oil would take years – decades even – to break down.

But the lessons of Deepwater has not been learnt. The oil industry is just carrying on regardless.  Going ever deeper, going ever further into the Arctic.

Take this week’s news about Cairn Energy that says it has found natural gas off Greenland’s western coast.

In the words of respected energy correspondent , Guy Chazan, from the Wall Street Journal, the find is “bolstering hopes that the area could become one of the world’s last significant untapped hydrocarbon provinces.”

Although the find is currently too small to be commercially viable, Chief Executive Bill Gammell said he was pleased with the results. “We’re encouraged because we’ve established there are hydrocarbons in a basin that nobody has ever drilled before that’s the size of the North Sea.”

A new North Sea in the Arctic.

As Guy Chazan argues: “Some of the world’s largest energy companies have gravitated to Greenland’s iceberg-strewn waters in recent years, lured by estimates of its enormous resource potential. The U.S. Geological Survey says the area could hold around 50 billion barrels of oil and gas, more than the total proven reserves of Libya.”

But after Deepwater, when we have witnessed what can go badly wrong when the industry pushes the boundaries of new frontiers, should the industry be there at all?

A Greenpeace protest ship has arrived in the area to protest against Cairn’s, but a Danish warship prevented the protest vessel from entering an exclusion zone around the rig.

Greenpeace argues that “companies like Cairn Energy who chase the last drops of oil at any environmental cost are pushing us in the wrong direction. It’s time to go beyond oil.”

The commentators said Deepwater was a game changer, but the game hasn’t changed at all.

Its as if Deepwater never happened. Because the game is still all about oil..

And the fact that Shell gave UNEP $10 million dollars to examine the cause of oil spills in Ogoni means that – for many people in the Delta – they do not believe the results, even before they are announced.

Now that it has been leaked that UNEP is going to conclude that 90 per cent of spills are from sabotage or bunkering, the news has rightly been met with outrage.

Shell is to blame for only ten percent.  Or so they say…

The problem for both Shell and UNEP is that we have been here before. In the nineties, when Shell was under intense pressure for its ecological devastation of the Delta and complicity in human rights abuses,  the company responded with an unprecedented PR campaign.

Part of that campaign was to convince people that oil was not the real villain in the Delta. Shell set up the Niger Delta Environment Survey that would “catalogue the physical and biological” diversity of the whole Delta.

Leaked minutes of a meeting between Shell and the contractor show that the purpose of a supposedly independent survey was that it “would solve the dual purpose of absolving themselves [Shell] of all responsibility” as well as addressing the concerns that not enough was being done to mitigate the impacts of oil and gas in the Delta.

The NDES lost all its credibility when the respected academic Claide Ake resigned after the murder of Ken Saro-Wiwa, arguing that the NDES was “too late” and “does not represent a change of heart”. Ake also complained that the oil companies like Shell were not doing more to respond to the complaints of the communities.

And one of those complaints is pollution.  This blog is far too short to go into the long list of evidence of pollution in the Niger Delta.

But it is suffice to say that chronic pollution by Shell’s operations is a complaint that has gone on for decades.

Yes, sabotage and bunkering do occur and yes, bunkering has got much, much worse, but to suggest that  Shell is only responsible for 10 per cent of the spills seems to many observers just not credible.

The problem is getting reliable and independent data.

One data set does exist, which I should stress is just one data set. It is old in that it covers a period from 1982-1992, but that is ten years out of the fifty or so years that UNEP looked at. The data set also covers the whole of the Niger Delta, not just Ogoni. The data is from the Oil Spill Intelligence Report. It also covers spills over 10,000 gallons – so only large spills. So there are lots of caveats to the data, but what it does do is that it gives the causes of the spills.

What the data show is that 27 out of Shell’s 67 spills worldwide were in Nigeria during that ten year period. Of these 27 incidences - that spilt 1.6 million gallons  - only 4 were due to sabotage.

So that means some 15 per cent was due to sabotage and 85 per cent was due to Shell.

I know there are limitations to the data – but this snapshot disputes the UNEP findings.

And in the words of one ex-Shell employee, who was head of environmental studies in Nigeria for Shell for two years: “Any Shell site I saw was polluted, any terminal that I saw was polluted. It was clear to me that Shell was devastating the area”.

The trouble for UNEP is that its report seems to have lost credibility, even before it is published.

And we know there are senior UNEP insiders who were worried about taking Shell’s corporate shilling for that very reason.

Because it now looks like UNEP has fallen victim to Shell’s PR campaign to convince people it was never to blame for the pollution, despite all the evidence to the contrary…

At the end of last week a Brazilian court fined the local units of Shell  and BASF a total of BRL1.1 billion ($654 million) in compensation and medical costs to workers who were harmed by contamination at a chemicals plant in Paulinia, Sao Paulo.

The Paulinia unit was built by Shell in the late 1970s and was sold to Cyanamid in the early nineties. BASF later bought Cyanamid and shut the Paulinia plant down in 2002.

The ruling covers former employees of all three companies.

The former workers suffered health problems because of contamination at the plant. Dozens of former employees have been diagnosed with prostate, thyroid and other types of cancer, circulatory, liver and intestinal illnesses, as well as infertility.

The two companies will also have to pay 64,500 reais in damages to each former worker and any children born during or after their service at the plant. The payments cover medical treatment, exams and individual damages.

BASF and Shell said they will appeal the decision.  BASF said the ruling was “absurd,” as the contamination was “caused and acknowledged by Shell,” according to the report.

Shell said there was no “technical evidence” to suggest that there were any problems that could have harmed people’s health.

Secondly, pollution in Nigeria: in the country, the long-standing row over who is to blame over the country’s chronic pollution continues.

Amongst the communities in the Delta, there is total outrage and disbelief after a $10 million, 3-year study into the pollution by UNEP is set to exonerate Shell.

The study by UNEP - which has been paid for by Shell - is due to report that only 10% of oil pollution in Ogoniland has been caused by equipment failures and company negligence. It concludes that that the rest has come from bunkering oil and sabotage.

The head of the UNEP team, Mike Cowing, said that the 300 known oil spills in the Ogoniland region of the delta caused massive damage, but added that 90% of the spills had been caused by “bunkering” gangs trying to steal oil.

His comments have caused deep offence amongst the Ogoni. Ben Ikari, an Ogoni activist, told the Guardian: “Nobody from Ogoniland would be surprised, because the federal government of Nigeria and Shell are the same cabal that killed Ken Saro-Wiwa and others.”

Nnimmo Bassey, chair of Friends the Earth International and director of Environmental Rights Action, Nigeria’s leading environment group, said:

“It is incredible that the UN says that 90% is caused by communities. The UNEP assessment is being paid for by Shell. Their conclusions may be tailored to satisfy their client. We monitor spills regularly and our observation is the direct opposite of what UNEP is planning to report.”

Cowing defends the UN report.

“UNEP is not responsible for allocating responsibility for the number of spills being found in Ogoniland. Rather, we are focusing on the science. The figures referred to are those of the Ministry of the Environment and the Department of Petroleum Resources.”

And I’ll tell you more about those figures tomorrow…

The competition is running until tomorrow noon, if anyone wants to have a go. So far the entries are pretty predictable:
BP=Best Poison
BP=Better Pollution
BP…Gas for your car and stomach.
BP…makes your car and stomach lurch.
BP…Blame the Public

The competition comes on the back of an article in the Post exploring just how battered BP’s image is in the wake of the Deepwater disaster.

“It’s probably the most notorious branding crisis in memory,” Tom Zara, director of corporate branding at Interbrand tells the paper.

And given some of the recent corporate scandals and financial collapses, that is no understatement.

The paper continues: “No one is arguing that BP doesn’t deserve the public relations bruising, said David Kotok, who monitors the oil industry as chief investment officer for Cumberland Advisors. Cumberland estimates that BP will pay out $50 billion to $80 billion in fines, legal damages and settlements related to the oil spill, but even after those checks are written there is still a big unknown in terms of a brand comeback.”

“There is a human and psychological factor that is impossible to measure,” Kotok tells the paper, “’BP’ becomes the identification of the perpetrator of the trauma and it’s a long-term relationship damaged.”

But BP’s problem is that it keeps being in the news as the villain. The oil may have stopped but the dirty tactics of the company have not. The longer these go on, the harder it will be for BP to rebuild the brand.

Yesterday’s NYT reports how “Lawmakers have criticized BP PLC for attempting to ‘muzzle’ scientists researching the Gulf of Mexico oil spill with confidentiality agreements and blocking the “open exchange of scientific data and analysis.””

The other problem for BP is that more and more evidence is now coming out that the US government was widely off the mark when it said that 75 per cent of oil was accounted for.

The more the scientific controversy continues, the more uncertainty for the Gulf residents on issues such as seafood safety will persist. And that can only be bad news for BP.

University of South Florida marine scientists have now found oil in sediments of a vital underwater canyon and observed evidence “that the oil has become toxic to critical marine organisms.”

Lab tests conducted aboard the research vessel Weatherbird II on the effects of oil have found that phytoplankton – the microscopic plants which make up the basis of the Gulf’s food web – and bacteria have been negatively impacted by surface and subsurface oil.

That could be disastrous news for the fisheries and other marine life.

Furthermore, Ian MacDonald, an oceanographer at Florida State University, will tell a House Energy and Commerce subcommittee that only 10% of oil discharged into the ocean was “actually removed from the ocean.”

He will tell Congress that the Obama administration was “misleading” when it claimed that about three-quarters of the oil was broken up or accounted for.

And ironically the more the Obama administration misleads, the more people will blame BP too.

The report comes days after President Obama swam in the Gulf at Panama City Beach and made of point of eating seafood for the cameras.

“Beaches all along the Gulf Coast are clean, they are safe, and they are open for business,” Obama told reporters.

But are they? That is the lingering question all along the Gulf Coast. What impact will the BP spill have on clean up workers, the local population, the ocean and the seafood?

As the fears and worries continue it means that days into the shrimping season, there is an ongoing debate as to whether it is safe to eat seafood.

The residents of the Gulf will not be reassured to read the JAMA paper

Firstly on general health the JAMA paper argues that “The oil spill in the Gulf of Mexico poses direct threats to human health from inhalation or dermal contact with the oil and dispersant chemicals, and indirect threats to seafood safety and mental health.”

Secondly, on the health of clean-up workers: The scientific paper notes that in Louisiana in the early months of the oil spill, more than 300 individuals, three-fourths of whom were cleanup workers, sought medical care for symptoms such as headaches, dizziness, nausea, vomiting, cough, respiratory distress, and chest pain.

Although these symptoms are typical of acute exposure to hydrocarbons, the paper notes it is “difficult to clinically distinguish toxic symptoms from other common illnesses.”

Thirdly the threat to seafood: “In the near term, various hydrocarbons from the oil will contaminate fish and shellfish” argues the JAMA paper.

It notes that although vertebrates can clear polycyclic hydrocarbons from their systems, “these chemicals accumulate for years in invertebrates”.

In the longer term “trace amounts of cadmium, mercury, and lead occur in crude oil and can accumulate over time in fish tissues, potentially increasing future health hazards from consumption of large fin fish such as tuna and mackerel.”

Co-author of the paper is Gina Solomon, who is a public health expert in the department of medicine at the University of California at San Francisco.

She advised that doctors may be warning pregnant women and children to strictly limit the amount of fish they eat, due to high levels of heavy metals.“It’s like iron filings to a magnet,” she said. “Several years from now the concentration will go up in fish at the top of the food chain — tuna, mackerel, swordfish.”

Government scientists disagree with the JAMA paper. “We don’t agree that’s currently a problem,” said Vicki Seyfert-Margolis, from the office of the chief scientist of the FDA.

But she would say that, wouldn’t she?

What I didn’t say is that they would be blatantly challenged by scientists as wildly wrong.

Scientists from the University of Georgia have been at the forefront of monitoring the spills impact, especially the deep underwater plumes.

In a study released yesterday they argue that up to 80% of the oil spilled is still present and remains a threat to the Gulf ecosystem and fisheries.

The report is authored by five prominent marine scientists. “One major misconception is that oil that has dissolved into water is gone and, therefore, harmless,” said one of the scientists, Charles Hopkinson, director of Georgia Sea Grant and professor of marine sciences in the University of Georgia Franklin College of Arts and Sciences.

Hopkinson added: “The oil is still out there, and it will likely take years to completely degrade. We are still far from a complete understanding of what its impacts are.”

Hopkinson argues that most of the oil classified by the government as dispersed, dissolved or residual was actually still in the waters of the Gulf. Using a range of likely evaporation and degradation estimates, the group calculated that 70% to 79% of oil spilled into the Gulf still remains.

In what seems a rudimentary mistake for the US Government to have made, the independent scientists said it was impossible for all the dissolved oil to have evaporated because only oil at the surface of the ocean can evaporate into the atmosphere and large plumes of oil are still trapped in the deep water.

Other scientists agree that rather than the perception that the US government has tried to portray – that the spill is over - this is just the beginning.

Chemist Dana Wetzel said that Government’s conclusion felt like the “closing credits of a movie.”

“It’s like they were saying ‘the end,’” Wetzel, program manager at Mote Marine Laboratory in Sarasota, Florida, said in an interview with Business Week last week. “I’d say we have just gotten through setting up the plot.”

No prizes for who will be the villains of the show…

While this political milestone is somewhat meaningless, it does give political commentators a moment to measure how things are going.

When British Prime Minister David Cameron took power, he said he wanted the new coalition administration to be “the greenest government ever.”

Coming from a political party that is historically hostile to environmental issues, this was a bold claim by Cameron.

However, the Prime Minister knows that for many Liberal Democrat voters climate change and other environmental issues are high on their priority. If the Coalition is to survive then it will have to deliver.

Already the signs are not good.

The Liberal Democrats – the junior partners in the Coalition – have traditionally been opposed to nuclear power. Take Chris Huhne, the new Minister of State at the Department for Energy and Climate Change.

This was him two years ago:

“An 80% [carbon reduction] target can be met through wind, wave and tidal power together with the use of carbon capture and storage technology.”

He added: “Ministers must stop the side-show of new nuclear power stations now. Nuclear is a tried, tested and failed technology and the Government must stop putting time, effort and subsidies into reviving this outdated industry.

“The nuclear industry’s key skill over the past half-century has not been generating electricity, but extracting lashings of taxpayers’ money.”

Pretty unequivocal stuff.

This was Huhne last week speaking on the BBC. He said he was actually in favour of nuclear being part of the UK’s energy mix because he had “no intention of the lights going out on my watch.”

“We are on course to make sure that the first new nuclear power station opens on time in 2018,” said Huhne.

So the first major policy U-turn. And here comes the second:

The Observer reported yesterday that the coalition “is watering down a commitment to tough new environmental emissions standards” this raises the possibility of dirty coal-fired power stations such E.ON’s infamous Kingsnorth plant going ahead.

A flagship policy that both political parties called for in opposition and which they last year tried to force on the Labour government, will now not be implemented in the coalition’s first energy bill to be published this year.

Introducing a so-called “environmental performance standard” (EPS) for power companies would have restricted greenhouse gas emissions from coal and gas plants and encouraged companies wishing to build to use more efficient technology.

An EPS was personally championed by David Cameron, his Chancellor George Osborne and Lib Dem leader Nick Clegg when in opposition as they all opposed Kingsnorth.

For example, in 2006 Cameron first proposed the idea. In June 2006, he said: “I can announce today that a Conservative government will follow the Californian model, and implement an Emissions Performance Standard. This would mean the carbon emissions rate of all electricity generated in our country cannot be any higher than that generated in a modern gas plant.”

He added “Such a standard would mean that a new generation of unabated coal power plants could not be built in this country.”

In July 2008, his Chancellor Osborne repeated the pledge verbatim.

Greenpeace energy campaigner, Joss Garman, tells the paper: “David Cameron made the introduction of new rules to stop the most polluting power stations one of his flagship green policies, and Nick Clegg helped ensure it was a key part of the coalition agreement.

Garman adds: “Both Lib Dem and Conservative MPs voted for the introduction of such a measure just a few months ago, and if they U-turn on this and fail to put this measure into their new energy law, how can they claim to be the greenest government ever?”

How indeed?

The IEA has warned that the spill from BP’s Macondo’s well “places the ability of the industry to access important new reserves on a knife edge“.

Its latest monthly oil market report adds: “Some 30 per cent of existing global oil, and nearly 50 per cent of new supplies by 2015, needs to be sourced from offshore, much of it from deep water.”

The IEA has raised its “lost oil” production estimate due to drilling restrictions from 60,000 barrels a day this year to 100,000 barrels a day in 2011.

However, in good news for the industry, the IEA said that “fortunately” few oil-rich countries’ governments were considering blanket bans on deepwater development inthe wake of the Deepwater disaster, just that regulations would be tightened.

“Operating and regulatory standards may be tightened, and sensitive frontier areas may see permitting delays,“ it added.

So the disaster has tightened the rules of the game, it hasn’t completely changed the game.

As I have noted before, BP is one of the few companies with the financial muscle to be able to withstand the billions it will pay out in fines and compensation.

So the IEA has warned that the legislation is currently being considered in the US that could increase the financial liabilities so much that small and medium-sized oil companies are driven out of deep water development altogether.

The IEA warned that legislation resulting from the oil spill “will need to balance project oversight, enforcement and operating standards on the one hand with continued deepwater access and supply security on the other”.

And it is that balance that had gone completely wrong before the disaster.

The Greenpeace ship, the Arctic Sunrise will “host independent scientists who will be researching the impacts of oil and chemical dispersants on Gulf ecosystems and marine life,” said John Hocevar, Greenpeace USA Oceans Campaign Director.

“From the very start, the full scope of the Gulf oil disaster has been obscured by BP and even our own government,” said Hovevar.

Further evidence of this obscuration was explored in a great article earlier this week in the St. Petersburg Times.

It outlines how scientists from the University of Florida – who had uncovered a huge six-mile plume of oil underwater- were told to “shut up” by the two agencies sponsoring their research: the Coast Guard and the National Oceanic and Atmospheric Administration.

The University of Florida has created an oil spill task force with 29 faculty members to coordinate research and response efforts related to the spill. It is a key academic instution analysing the spill’s effects.

“I got lambasted by the Coast Guard and NOAA when we said there was undersea oil,” USF marine sciences dean William Hogarth tells the paper. Some officials even told him to retract USF’s public announcement, he said, comparing it to being “beat up” by federal officials.

Hogarth’s team gave their data to NOAA, expecting to get either a shared analysis or the samples themselves back. So far they have received neither.

Other scientists suffered a similar treatment. Vernon Asper, an oceanographer at the University of Southern Mississippi, who was part of the same research effort, also tells the paper. “We expected that NOAA would be pleased because we found something very, very interesting. NOAA instead responded by trying to discredit us. It was just a shock to us.”

Asper alleges that NOAA Administrator Jane Lubchenco, called the scientists “inept idiots”.

It was USF scientists who last month announced they could match the oil droplets in the undersea plumes to BP’s well.  “What we have learned completely changes the idea of what an oil spill is,” USF scientist David Hollander said then. “It has gone from a two-dimensional disaster to a three-dimensional catastrophe.”

But what is happening is that the media continue to look at this as a two dimensional disaster. Some tabloid reports this week have shown reporters sitting on beaches and because there is no oil on them any more saying that the disaster has been exaggerated and has been cleaned up.

But it is the effect of this spill on the deep ocean and its inhabitants that is really scaring scientists.

Last week, researchers from the USF prepared to depart on another 10-day research expedition to the northern Gulf on the ship R/V Weatherbird II (pictured above).

Crucially they will return to the same area that USF scientists discovered the underwatered clouds of oil oil.

They hope to study the effect of oil on the smallest members of the food stream — plankton and microscopic organisms. They’ll also be looking for signs of dispersants and for oil in the sand.

“This is probably the first comprehensive study of this magnitude,” Bill Hogarth said.

The USF research mission will be criticial in unravelling the secrets of the deep.

And if the Greenpeace research trip can assist looking at the impact of oil and dispersant in the deep ocean, then that can only be a good thing too.

His prediction essentially came true as the spill lawsuits grinded backwards and forwards through the courts as Exxon did everything in its power to delay and derail the legal process.

As the focus of BP’s disaster shifts momentarily from the ocean to the courtroom it looks likely that lawyers not yet born look set to work on this one too. And BP looks set to have lost round one.

The oil giant had been trying to get the legal action against it moved to Texas, where any jury and judge would be seen as much more sympathetic.

But the case will now be heard in New Orleans after the Judicial Panel on Multidistrict Litigation argued that the “geographic and psychological ‘center of gravity’” lay in the City.

“Without discounting the spill’s effects on other states, if there is a geographic and psychological ‘center of gravity’ in this docket, then the Eastern District of Louisiana is closest to it,” said the Judicial Panel.

So now over 300 lawsuits, including wrongful-death claims by families of the 11 workers killed in the original explosion, will be heard by New Orleans-based U.S. District Judge Carl Barbier.

It looks set to be one of the biggest legal cases in U.S. history.

However many more cases could soon be filed. Texas lawyer Brent Coon called the 300 filed so far as the “front end of a wave”, as he estimates tens of thousands of people have retained a lawyer but not sued.

“The majority of the cases have not entered the court system,” said Coon, who represents hundreds of fishermen, restaurant owners, retailers and others who have sued BP or its partners. He estimates that the total number of claims “already far exceeds $20 billion.”

Some injured workers, out-of-work fishermen and others may also try a twin track approach: simultaneously pursuing a lawsuit while seeking a claim under the BP fund. If they receive money from the fund, however, they would probably have to drop legal action.

Although Judge Carl Barbier has already come under pressure after it was revealed he once held bonds issued by Transocean and Halliburton two companies caught up in the disaster, the decision to hold the hearings in New Orleans is being seen as a good news for the plaintiffs.

John Coffee, a professor at Columbia Law School, said the selection of New Orleans was a “victory for plaintiffs”. He said: “The decision is not surprising to me because the eastern district of Louisiana is the logical centre of gravity.”

Louisiana governor Bobby Jindal also said: “This decision is welcome news for Louisiana and our people, who have been at the epicenter of this tragic event. Today’s ruling fittingly notes if there is a ‘geographic and psychological center of gravity’ when it comes to the oil spill, Louisiana is certainly closest to that point”.

He added: “Our people have been severely impacted by the spill, and ultimately, these hearings are about bringing justice to them so they can be made whole again.”

The bad news for BP is that the criminal investigation into the spill is also centered in New Orleans. A team led by senior Justice Department environmental crimes litigator Howard Stewart has rented about 22,000 square feet of office space just blocks from the federal courthouse.

But at least some of the litigation will happen in Houston. Separate civil claims filed by BP investors will be consolidated under U.S. District Judge Keith Ellison in the oil city.