CITY FOCUS: History repeats itself in the Gulf
The similarities are almost eerie. A disastrous eruption of gas from an underwater well triggers a fire on a Gulf of Mexico oil rig. A massive oil spill results, coating the shoreline and devastating wildlife. Efforts to stem the sub-sea gusher stretch out into months, triggering widespread public fury over the oil industry's safety record.
The 1979 Ixtoc disaster was the worst peacetime oil spill in history, as Mexican state operator Pemex struggled for months to staunch the flow from a stricken well in the Gulf.
Just over 30 years later, BP remains immersed in a similarly desperate attempt to tackle a Gulf of Mexico spill. And the battle to quell the Deepwater Horizon gusher is following a depressingly familiar course.
Like BP, the Mexicans undertook hapless 'top kill' style efforts to quash the flow and tried to cap the gusher with a funnel-like mechanism they called the 'sombrero'.
Ultimately, however, it took the drilling of two relief wells to intercept the black tide escaping from beneath the ocean floor - a strategy BP is also now following.
The question is how has the energy industry managed to land itself in a near-repeat of the Ixtoc disaster, despite claiming to have learned the lessons of decades ago?
Hard sell: BP CEO Tony Hayward stands aboard the Discover Enterprise drill ship during recovery operations at the Deepwater Horizon oil spill site
According to Larry McKinney, executive director for the Harte Research Institute for Gulf of Mexico Studies at Texas A&M University, BP's struggle to contain the Macondo leak reflects a significant failing: while the latest technology is adequate to contain spills in relatively shallow water, the rules of the game change profoundly when you're operating in deep water.
The Ixtoc spill took place in 160 feet of water, but the Deepwater Horizon gusher is a mile below the surface of the sea. This reflects a strategy openly espoused by American policy-makers who were until recently focused on reducing the country's reliance on Middle Eastern oil.
The majors have been encouraged to venture into tougher environments such as ultra-deepwater and Arctic drilling as easy-to-find onshore oil prospects dry up.
Despite the toughening of regulation that followed the 1989 Exxon Valdez disaster, advances in safety technology do not appear to keep pace.
McKinney said: 'We have got complacent and moved our technology into deep waters from shallow waters without adequate consideration of the challenges associated with dealing with deepwater spills.'
As a result, efforts to cope with the Gulf of Mexico disaster amount to a 'giant lab experiment,' he argues.
'The technological hurdles drilling in deep water or the Arctic are much greater than in shallow water,' agrees Patrick Lewis of the environmental group WWF. 'This has been a wake- up call for America.'
The backlash in the face of the Deepwater Horizon spill is already clear to see.
BP has shed a third of its market value amid fears it could be frozen out of future US government contracts.
Nordic bank Nordea yesterday said it had sold its £8.2m stake in BP and accused it of a lack of transparency over its handling of the spill - something BP immediately denied.
More broadly, long- term oil futures prices are trending upwards on speculation about a looming regulatory crackdown that could affect the entire industry.
The UK government has also now been spurred into action, with Energy Secretary Chris Huhne today announcing a doubling of inspections of North Sea drilling rigs.
BP (down 3.05p to 430.3p) has been making some progress in its battle against the spill.
On Sunday it retrieved around 11,000 barrels of oil through a new containment cap fitted over its ruptured wellhead. The company, which has now spent $1.25bn (£870m) on America's worst-ever environmental disaster, is hoping to ramp up the amount captured to around 20,000 barrels a day.
However, success is far from assured, and BP's containment efforts could quickly be dislodged as the Gulf's hurricane season gets under way.
The experience of Mexico's Pemex augurs ill.
The state-controlled operator's quest to cap its sub-sea gusher took ten months in total, even though it was operating in far shallower waters. Massive slicks ultimately reached almost 170 miles of US beaches.
The question is will the lessons from this Gulf disaster linger longer than those from the Mexican spill three decades ago?
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