The Oily History of Offshore Operations: From Venezuela to the Gulf

Commentary by Nikolas Kozloff, special to mongabay.com
May 01, 2010



Though undoubtedly shocking and disconcerting, the recent BP oil spill in the Gulf of Mexico is hardly the first incident of its kind in the region. Indeed, as I watched the footage of the ominous oil spill approaching the ecologically sensitive coast of Louisiana, I was struck with a profound sense of déjà vu. Long ago, while researching my dissertation on the environmental history of the petroleum industry in Venezuela, I combed through archives and libraries in the U.S., Britain and South America to uncover the oil companies’ sordid past. Starting in the 1920s, American and British subsidiaries of Standard Oil of New Jersey, Gulf and Royal Dutch Shell turned environmentally pristine Lake Maracaibo, which empties out into the Gulf of Venezuela and the Caribbean, into toxic sludge.

Oil Leak from Damaged Well in Gulf of Mexico
NASA image caption: In the top image, the Mississippi Delta is at image center, and the oil slick is a silvery swirl to the right. The oil slick may be particularly obvious because it is occurring in the sunglint area, where the mirror-like reflection of the Sun off the water gives the Gulf of Mexico a washed-out look. Click to enlarge image (2 MB, JPEG)


Travel to Lake Maracaibo today and you can still see the relics of the pioneering petroleum past: hundreds of offshore oil derricks dot the horizon as far as the eye can see. During the 1920s oil was a messy business and blow-outs, fires and fantastic gushers were a common occurrence. Just as in Louisiana today, the oil industry in Lake Maracaibo put delicate lakeshore mangroves in danger as well as tropical wildlife. The water used by local residents for domestic uses came from the lake itself, and reportedly there was little risk of getting sick from the water as it was clean, such that one could even see the head of a coin or a needle in the water. With the arrival of the oil companies however, the water became dirty.

In an effort to get control over the burgeoning oil industry, including marine operations, derricks, platforms, tugboats and other infrastructure, the authorities obliged the companies to adopt a system of safety lighting within the lake. The legal moves came none too soon: tankers, each carrying between 15,000 and 25,000 barrels of oil, could make up to ten round trips per month between Lake Maracaibo and refineries on Curacao and Aruba. Even after government officials sought to make lake transport safer, serious accidents occurred. In 1931, for example, an oil schooner was lost in the entrance of Lake Maracaibo.

Offshore oil operations meanwhile were vulnerable to fire, as boiler stations with boardwalks connected the oil wells. Each well was in turn flanked by other kinds of oil infrastructure, including platforms holding pumps, mud tanks, pipe racks, manifolds, flow stations and separator or transformer tanks. Obviously, such oil infrastructure posed an enormous environmental threat. In 1927, an oil well blew out with such force that the drilling tower was ripped from its supports. Reportedly, at least 20,000 barrels of oil were spread out over the lake as a result of the blow-out.

Over time, a kind of system of environmental racism emerged on the oil fields. While the corporate elite lived in comfortable and hygienic lakeshore housing, Venezuelans, Caribbean blacks, Chinese and other foreigners resided in unsafe villages built on stilts within the lakeshore itself. One such traditional village, Lagunillas, became a disaster waiting to happen.

Writing in the late 1920s, one U.S. diplomat remarked “the waters are covered with oil which is carried up to shore by the waves and blackens all vegetation which it touches. Along the shore are rows of palm trees whose leaves are so covered in oil that they droop to the ground. Oil is spattered everywhere on the vegetation and houses. It is carried into the offices and dwellings on the shoes or the clothes of those who enter.”




Deepwater Horizon (BP) spill off the coast of Louisiana. Courtesy of Google Earth

Soon enough, the entire town paid the price for oil company negligence when a huge fire ignited Lagunillas. Reportedly, the conflagration was started by a spark from one of the open hearth fires that ignited oil spilled by a leaky drill near Lagunillas. The 1928 fire destroyed more than 80 percent of the town. One local paper in Maracaibo declared that the Lagunillas fire was of such magnitude that it had no historical precedent within the wider region. Needless to say, oil company offices weren’t damaged by the accident as they were located at a secure distance from the water.

When oil company managers denied any responsibility for the accident, local residents became embittered. An acclaimed contemporary Venezuelan novelist remarked that the oil industry victimized “inferior races.” Industrial science, he argued, was firmly in the hands of Anglo-Saxons who cared little if such inferior races died in furthering technological progress.

Though Venezuela eventually became one of the world’s primary oil exporters as a result of exploration in Lake Maracaibo, the environment continued to take a beating. A refinery owned by Royal Dutch Shell located on the island of Aruba, which processed Maracaibo crude, was strategically important as it supplied products not only to Britain but also to France. In an effort to cut off oil supplies to the allies, Hitler sent German U-boats into the Caribbean during World War II. In February 1942, the Nazis torpedoed and sank a tanker, sending the boat’s oily contents into tropical waters.

An Oily Past to an Oily Present

You’d think that with the cessation of wartime hostilities, environmental protection would have improved in the Gulf and Caribbean. Yet despite public relations hype, the Brits and Americans continued their sorry track record with the expansion of complicated offshore oil operations in the wider Caribbean.

While the recent BP oil spill in the Gulf was huge and certainly dramatic, it was hardly the first instance of oil company malfeasance. In 1998 for example, a leaky pipeline belonging to BP gave rise to a spill of about 155,000 gallons of crude oil. The pipeline was connected to an oil platform lying about 100 miles southeast of New Orleans, and reportedly the spill reached the southeastern tip of Louisiana.

BP, which merged with Amoco and Arco, continued to play fast and loose with the environment when, in 2002, the company allowed a pipeline to rupture. The spill sent about 90,000 gallons of oil into the Southeast Louisiana coastal area. Then, BP encountered further problems when one of its oil platforms was damaged during Hurricane Katrina and started to leak off the coast of Louisiana. The incident, remarked Oil Daily at the time, cast doubt on BP’s safety record “in the wake of pipeline corrosion problems and oil spills in Alaska.”

In Texas, many have grown to resent BP’s lackluster regard for safety and the environment. In 2005, an explosion at a BP refinery in south Houston killed 15 people and injured a whopping 170 --- the worst U.S. industrial accident since 1990. And as recently as early April of this year, an 18,000 gallon spill of crude oil damaged the Delta National Wildlife Refuge. The pipeline belonged to Cypress Pipe Line Company, a joint venture between BP and Chevron. Located at the mouth of the Mississippi River, the Delta National Wildlife Refuge serves as the wintering ground for hundreds of thousands of snow geese, coots and ducks.

BP’s environmental malfeasance is compounded by other, more long-range problems in the Gulf. Indeed, the export of Venezuelan crude to the U.S. has hardly been risk-free from an environmental perspective. Take, for example, the case of the British tanker Alvenus, which ran aground 11 miles off the coast of Louisiana in July, 1984. When the ship’s hull cracked around one of its tanks, 1.4 million gallons of heavy Venezuelan crude was released into the water. An 85-mile long oil slick then polluted beaches around Galveston.

Venezuela’s Hugo Chávez has railed against the Global North, arguing that affluent nations should scrap the capitalist model in favor of socialism in order to save the environment. Yet Venezuelan state oil company PDVSA has hardly been free of environmental problems. In fact, PDVSA, which was born from nationalization of foreign oil companies in the 1970s, inherited many of the same technical and logistical difficulties which had plagued the petroleum industry from the outset.

Recently, a U.S. District Court fined PDVSA subsidiary Citgo $13 million for spilling 53,000 barrels of oil in two Louisiana rivers back in 2006. Citgo pleaded guilty in a Lake Charles district court for “negligently failing to maintain storm water tanks and failing to maintain adequate storm water storage capacity” at a local petroleum refinery. The $13 million fine was the largest ever handed down for a criminal misdemeanor violation of the federal Clean Water Act.

In light of PDVSA’s not so sterling ecological record, it is rather perverse that Chávez has taken on the role of environmental crusader. Yet, it is unrealistic to expect that Venezuela, which is enmeshed in the oil industry, can move the region away from fossil fuels. It was the British and the Americans, who first pioneered offshore oil technology in Lake Maracaibo some one hundred years ago, who must now pave the way for cleaner technologies in an effort to save the Gulf of Mexico. Failure to act now could give rise to more oil spills of the same magnitude that we saw this week.


Nikolas Kozloff is the author of No Rain in the Amazon: How South America’s Climate Change Affects the Entire Planet (Palgrave, 2010). Visit his website, nikolaskozloff.com

For more information on the environmental history of oil in Venezuela, see Kozloff’s doctoral 2002 dissertation from Oxford University, “Maracaibo Black Gold: Venezuelan Oil and Environment in the Era of Juan Vicente Gómez, 1908-1935,” and Nikolas Kozloff, “From Lakeshore Village to Oil Boom Town: Lagunillas under Venezuelan Dictator Juan Vicente Gomez, 1908 – 1935,” in Christian Brannstrom (ed.), Latin American Environmental History.









CITATION:
Commentary by Nikolas Kozloff, special to mongabay.com (May 01, 2010).

The Oily History of Offshore Operations: From Venezuela to the Gulf.

http://news.mongabay.com/2010/0501-gulf_oil_kozloff.html