BP Still Fuels Pentagon For Billions and Iraq Oil

BP in bed with the perpetual war machine, benefiting far past its $2bn annual contract with the Pentagon.

The continuing catastrophic ‘oil spill’ in the Gulf of Mexico, rightfully, demonizes BP in the court of public opinion. Today, Jeremy Scahill wrote at The Nation, that the oil giant continue to enjoy it contracts with the militant Pentagon:

Contrast the Congressional response to ACORN’s federal contracts with its response to BP, which does billions of dollars in business with the federal government, specifically the Pentagon. BP holds more than $2 billion in annual U.S. defense contracts and continues to be the premiere provider of fuel to the world’s largest consumer of oil and gas: the Pentagon. BP is responsible for the worst environmental crime in US history. It is responsible for the deaths of 11 oil rig workers. Attorney General Eric Holder said he is conducting both criminal and civil probes into BP’s actions in the U.S. Gulf.

And yet, there is no real, bi-partisan Congressional march to de-fund BP. The White House is reportedly considering the possibility of debarment of BP, but as of last week no formal inquiry had begun. Last week, The Wall Street Journal reported, “Cutting BP off from future government contracts, though, would be an unprecedented and highly complicated move, lawyers say. BP supplies the military with nearly 12% of its fuel needs, making it the Pentagon’s largest fuel supplier, with Royal Dutch Shell coming in a close second, according to the Defense Logistics Agency. ‘It is not hard to block a debarment if an argument exists that it would harm the government, especially on national security grounds,’ said Robert Burton, a Washington lawyer who worked as the Bush administration’s top procurement official.”

Almost a year ago, BP—in a consortium with the state-owned China National Petroleum Corporation (CNPC)—secured the contract with the U.S.-puppeteered Baghdad government to exclusively drill in Rumaila, the largest oil field in Iraq. The 20-year contract was signed in November, Al Jazeera (AJ) reported:

Rumaila, with 17 billion barrels in estimated crude reserves, is the workhorse of Iraq’s oil industry, producing almost half of its total output of 2.5 million barrels a day.

[BP and CNPC] expect to increase Rumaila’s output to 2.85 million barrels a day.

Tony Hayward, BP’s chief executive, said the company would invest $15bn in the field.

“It is a very significant undertaking,” he said.

The contract stipulates that BP and CNPC must spend $300m over the first 33 months and increase production by 10 per cent initially.

The Iraqi government agreed to pay $2 per barrel to the consortium, but the field is only operable with high collaboration with the U.S. military. “The Rumaila field is estimated to hold 3.3 trillion cubic feet of oil reserves, but also lies in Diyala province, which has seen some of Iraq’s worst violence in recent years,” AJ reported, last June.

Royal Dutch Shell, the second-largest fuel supplier to The Pentagon, is in a consortium that won the Majnoon oil field, with an estimated 12.8 billion barrels. It doesn’t perform nearly as well as Rumailia—only 46,000 bpd, compared to the estimated million-plus at Rumaila, United Press International recently reported—requiring more time, drilling and expected dissent from the Iraqi people.

All of this as the Deepwater Horizon rig explosion could gush more than 100k barrels—or 4m gallons—per day (bpd), Jacqui Goddard reported at the London Times, today:

The news—revealed by one of the members of President Obama’s Flow Rate Technical Group, a panel that previously estimated that the flow was in the region of 12,000 to 25,000 barrels a day—counter to BP’s claims that it is now capturing “the majority” of the oil and channeling it into a tanker.

Dr Ira Leifer , a researcher in the Marine Science Institute at the University of California who is a member of the technical group, said that the oil company’s operation to cut the leaking pipe and cap it with a new containment device last week may have increased the surge of oil not by 20 per cent, as BP and the White House had warned may happen, but several times over.

“How much larger I don’t know, but let’s just quote BP,” he said, referring to the 100,000 barrel rate that BP executives indicated weeks ago would be their “worst case scenario.

“In the data I’ve seen, there’s nothing inconsistent with BP’s worst case scenario,” he added in comments to McClatchy newspapers, stating that the previous 12,000 to 25,000 barrels a day estimate had simply been the “lower bound” estimate.

BP claims to be capturing 15,000 bpd—Dan Froomkin reported at The Huffington Post, yesterday—and anyone watching the live streaming can tell a large percentage is still exploding into the Gulf:

But judging from the new video, it seems clear that the daily flow is probably more in the neighborhood of 50,000 to 100,000 barrels—or 2 million to 4 million gallons.

That’s about one Exxon Valdez every two and a half to five days. And we’re on day 50.

It’s about time to cease calling it the “BP Gulf oil spill“. When someone opens a pop can that was shaken up beforehand, the overflowing contents of the can are not intentional, but we call that an explosion. The rig exploded and the oil is gushing at full force, not spilling.

Even if “spill” was appropriate in the beginning, the extent of this catastrophe past the ‘Oops!’ phase when resistance began against blowing up Deepwater Horizon. Now the concept isn’t even a part of the narrative. It’s completely rational to conclude that it wasn’t blown up—and there’s no sight of that in the near future—because BP wants to preserve the site for future drilling.