Houston-based oil-tech giant Halliburton has just announced that it is witnessing a boom in deep sea drilling activities. With this obscene remark, Halliburton has shown not only poor phrasing, but also extremely poor timing. The same company that helped build Deepwater Horizon, the oil-drilling platform which sank to the bottom of the Gulf of Mexico three months ago and caused the biggest oil spill in American history, says: we are expecting business as usual, everything is running well, and in fact, we are earning more than ever! As CEO Dave Lesar reported on July 19: "I am very pleased with our second quarter results. Total revenue grew 17 percent and operating income grew 70 percent sequentially, driven by increased activity in the unconventional natural gas and oil basins in North America."
Just to cite some numbers: Halliburton's net income from current activities between April and June - the months affected by the crisis - has been 474 million US dollars, compared to 206 million for the first quarter of 2010. According to its recent press release, "all product service lines contributed to this increase, with production enhancement exhibiting especially strong sequential growth followed by completion tools, cementing, and directional drilling." Halliburton estimates that the deepwater drilling suspension imposed by the Obama Administration until the end of November will negatively impact its earnings by only up to $0.08 per share per quarter for the second half of 2010. Of course, investors have to be assured and stakeholders have to be satisfied. Regardless, how can this company be so boldly inconsiderate to publicly announce - in the midst of the crisis, while BP was still struggling to stop the oil spill and millions of liters per day were running in the ocean - that they are making lots of money?
What is even worse is that Halliburton does not expect a serious impact on its business from a more severely regulated environment. "The events in the Gulf of Mexico have not stifled our enthusiasm for increased deepwater activity in the coming years," Lesar said. The company even hopes to earn more from stronger safety regulations in the future. How can Halliburton be so sure that it will survive unscathed by this crisis? Is it still well protected by lobbyists, or is this simply wishful thinking? I hope the latter. But just in case it is the former: we, the public and the media, should make sure that the US Government does not allow this sector to remain unreformed.
Big oil companies like BP and Halliburton, who have earned a lot of money in the past from globalization, must now be forced to heavily invest in adequate safety measures to minimize the risks associated with drilling operations. Just like the financial sector, the energy sector needs new rules and regulations to ensure that such a disaster never happens again. The suspension of deepwater drilling in the Gulf is a first step in the right direction. Mexico is also affected by the oil spill and drilling in the Gulf. Canada has big oil projects on the way in Alberta, which directly neighbor the US. So it is in the national interest of the US to invite those two countries to adopt its new regulations under a trilateral regime. With new CEO Bob Dudley, an American will lead the British oil giant for the first time in the company's history. Since BP is also drilling in Europe's North Sea, and since drilling activities will be taking place ever farther from shore, transatlantic standards for oil drilling should be found in the long run.
Oil is still the most important facilitator of the global economy. Everybody needs it every day, private consumers and industries alike. But the prize that we have paid in the Gulf is far too high. The damage caused will take years to undo, if nature can in fact ever recover. Given this new reality, new regulations must be found as quickly as possible in order to be able to return to business as usual.
Christoph Suess is a Trainee at the Hanauer Anzeiger and holds a diploma in International Relations from the Free University Berlin.
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August 4, 2010
Felix F. Seidler, Atlantische Initiative, Platinum Contributor (329)
Look at the running competition between Norway, Denmark, Canada, the US and Russia in the Arctic. All these countries are seeking access to the oil, gas and minerals up there. The Arctic Ocean, however, has an average depth of more than 1000m and its deepest point at 5500 meters. Though, future deep water drilling will be likely in this region with its extreme conditions.
Brazil´s recent discovered oil fields are located in a depth of 2000m. Further discoveries of deep water oil and gas fields are too expect (for example in the Indian Ocean).
An extremely hard environment, lots of technically difficulties for operations in such depths and the huge cost are no barrier any more. Big oil will never learn, because we all as the consumers demand "more and more and more". If our resource demands would not be fulfilled, we all would start complaining. Thus, deep water drilling is a huge future market and further accidents are likely to happen. Absolut technical controll in depths of 1000m, 2000m or more is utopian.