Chevron oil spill hints at risks of Brazil's 'moonshot' deep water drilling

Brazilian politicians may push all of the blame for last week's oil spill onto Chevron, says blogger James Bosworth, to deflect public attention from risks of Brazil's nationalized deep water project.

Silvia Izquierdo/AP
Greenpeace activists protest using simulated oil to protest an oil spill in an offshore field operated by Chevron Corp, outside Chevron's offices in Rio de Janeiro, Brazil, on Friday. The Brazilian Federal Police on Thursday began investigating an oil spill in an offshore field operated by Chevron Corp., a leak that an environmental group alleges is far bigger than the company has stated.

Brazil is going to do everything it can to blame Chevron for the offshore oil spill this month.

Certainly Chevron deserves some, if not most or all, of the blame. The company has already indicated that their pressure miscalculation led to the leak. Brazilian politicians and police are investigating the incident to see whether other errors were made, as they should. There are also complaints that Chevron did not share information in a timely manner. For more info, see BBC, AJE, NYT, Reuters, and CNN.

But whether it turns out that Chevron should receive some, most, or all of the blame, it's clear that Brazil's politicians are going to try to push all of the blame on the US oil company. Why? Brazil does not want to discuss the possibility that a similar spill could happen to them during their "moonshot" effort to drill to the pre-salt oil. If they can fully blame Chevron, then they don't have to acknowledge that it could also happen to Petrobras. They need this spill to be portrayed as a malevolent accident by a foreign oil company, not something that can happen to any effort to drill off shore.

Deep water drilling always has risks and Brazil's pre-salt deposits are an attempt to get oil that nobody has ever reached. No matter how many safety precautions are put in place, there is a risk of something going horrifically wrong. That doesn't mean all offshore drilling is wrong. However, it does mean greater precautions should be taken, more debate should be had, and some offshore drilling should be blocked when the risks are too high.

Without having that debate, Brazil has made the pre-salt oil part of their future narrative. Most politicians from the major parties don't want to debate the risk vs. the reward because doing so raises the potential that the public decides drilling is not worth the risk. For Brazil's politicians, their biggest fear isn't this particular oil spill as much as the potential that the Brazilian public begins to turn against offshore drilling in general.

But what if there is a big oil spill in the next few years, one far bigger than Chevron's spill this month? Brazilian public opinion on the pre-salt issue could shift dramatically following any spill in the coming years. It would be an unexpected and unlikely event, but it would have a large impact on the economic environment and political narrative in the country. In terms of potential low probability, high impact events to consider in South America, the oil spill this month should give everyone a scenario to think about.

UPDATE: After I wrote this post, Chevron accepted full responsibility for the oil spill.

--- James Bosworth is a freelance writer and consultant who runs Bloggings by Boz.

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