The Dangers of Big Oil

Probably the biggest reason I get annoyed over the demonization of oil companies is that an incredibly diverse range of men and women are all being painted with a broad brush. “Oh, but we aren’t talking about them”, the demonizer will say. “We are talking about the CEOs and fat cats.”

But you see, you are talking about them. Big Oil is not the CEOs and fat cats. They own a very small percentage of the oil company stocks, and they make up maybe 0.1% of the workforce of Big Oil. No, when you direct your ire at Big Oil, you are directing your ire at pension funds, retirement accounts, and a lot of hard-working oil company employees who deserve much better.

Some of these people are out risking their lives to bring gasoline to your local service station:

U.S. Oilfield Deaths Skyrocket With Demand

(AP) Less than two months into the job in the oilfields of West Texas, Brandon Garrett was sliced in half by a motorized spool of steel cable as he and other roughnecks struggled to get a drilling rig up and running.

Garrett’s grisly end illustrates yet another soaring cost of America’s unquenchable thirst for energy: Deaths among those working the nation’s oil and gas fields have risen at an alarming rate, The Associated Press has found.

At least 598 workers died on the job between 2002 and 2007, according to the U.S. Bureau of Labor Statistics. During that period, the number of deaths per year rose by around 70 percent, from 72 victims in 2002 to 125 in 2006 and a preliminary count of 120 in 2007.

“This is a very, very hazardous industry with a very high rate of injuries and fatalities,” said Peg Seminario, director of safety and health for the AFL-CIO. “Safety and health problems are not getting the attention they need. With the growing demand for oil and petroleum products, the production pressures are going to increase and the safety and health problems are going to get worse.”

The irony is that the industry – at least it was certainly true of my former employer ConocoPhillips – is incredibly focused on safety. Safety is drilled into your head day after day, so that you are always thinking about it as you go about your job. I have worked in a number of other industries and for a number of other employers, and in my experience the oil industry is the most safety-conscious industry around. But we deal with high temperatures and pressures and volatile compounds, and an attention lapse can be fatal.

But if you want to understand a bit better why I am often so quick to defend oil companies, this story may help you understand. Big Oil for me just doesn’t have the same face that it does for so many politicians who are quick to condemn the industry. And as bad as those fatality numbers are, oil companies don’t even crack the top ten of the most dangerous industries:

The 10 most dangerous jobs in America

Occupation Fatalities per 100,000

Timber cutters 117.8
Fishers 71.1
Pilots and navigators 69.8
Structural metal workers 58.2
Drivers-sales workers 37.9
Roofers 37
Electrical power installers 32.5
Farm occupations 28
Construction laborers 27.7
Truck drivers 25

Two Dead in Pipeline Explosion

This is one case in which I was a bit slow to process the information. I heard about this pipeline explosion not too long after it happened, but the seriousness was not immediately apparent to me:

Explosion At A US-Canadian Pipeline Sends Oil Prices To $95.17 A Barrel

It’s amazing to me how all the stories seem to treat the two deaths as an afterthought:

New York, NY (AHN) – Oil prices soared up on Thursday by $4 following an explosion at a pipeline interrupting the supply of the crude oil to the U.S. Midwest from Canada.

The fire that broke out late Wednesday cut Canadian oil supplies through the pipelines. Canada provides the U.S. with at least 15 percent of imported crude.

Oh yeah, and two people died. Let’s briefly mention that, and get back to the supply issue:

The explosion killed two workers fixing the Enbridge Energy Inc. pipeline in northern Minnesota. “It is a major incident with major supply issues in an important area,” Paul Horsnell, head of commodities research at Barclays Capital in London, told Bloomberg. “It will put pressure on prompt demand in the Midwest.”

Due to the incident, four pipelines supplying 1.5 million barrels a day were closed till further notice, although the fire was extinguished.

Maybe I am hypersensitive about that point, but it annoys me how we just so casually mention the deaths.

The government is offering to tap the SPR:

U.S. says oil reserve ready to offset pipeline blast

WASHINGTON (Reuters) – The U.S. Energy Department said on Thursday it was prepared to make oil supplies from the Strategic Petroleum Reserve available to refineries to help offset the disruption in Canadian oil imports caused by an explosion at the Enbridge pipeline.

“Crude oil from the nation’s Strategic Petroleum Reserve is available to alleviate a severe supply disruption and remains available if necessary,” a department spokeswoman told Reuters. She said the department is “reaching out” to Midwest refineries to assess their supply situation and see if they need oil from the emergency stockpile.

She pointed out that the explosion occurred at one of the four Enbridge pipelines that was undergoing maintenance, and a second pipeline has shut as precautionary measure.

However, the other two pipelines are currently moving more than 650,000 barrels of Canadian crude oil a day to the U.S. market, down from the four pipelines’ normal combined rate of 1.1 million barrels a day, the spokeswoman said.

Did I mention that two people died?