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“Syriana” and the BP Pipeline Controversy August 14, 2006

Posted by Michael Hoexter in News and Events.
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This week I finally got around to renting “Syriana” on DVD. “Syriana”, multiply nominated for the Oscars last year, is the latest movie by Stephen Gaghan, the writer/director of “Traffic” which was also recognized with numerous awards. George Clooney stars, as do Matt Damon, Christopher Plummer and numerous fine actors; Steven Soderbergh and Clooney were among the producers.

I had wanted to see Syriana because among other things, it is supposed to give us a very detailed view of the interplay of oil and politics in Washington and the Middle East. I also had thought that the movie would be exposing the “bad guys” at work, those who are keeping us beholden to a retrograde energy policy.

First a summary of the plot (no spoilers here really): George Clooney is a CIA operative near the end of his career involved in operations in the Mideast, including in Iran. He is a dutiful officer but is an outsider in the agency. Concurrently, oil executives are attempting a merger of two major oil companies with the help of a law firm with multiple connections in the energy industry. In still a third plot, an American energy analyst in Geneva is involved in the royal succession plans in a oil producing country. And finally, two Pakistani oil workers are followed as they struggle to make ends meet in the same oil producing country. The plots intermingle to some degree though there is no neat bow tied around them.

In terms of my review of the picture, I think it was an excellent film, though I think that we needed a little more backstory in among other subplots the lawyer’s involvement with the merger. The lawyer remained a little bit of a cipher even though there were attempts at an exposition of that plotline.

I was surprised by among other things, how complex the picture that emerges of the forces and people involved in the energy business. More so than “Traffic”, in “Syriana” Gaghan as much as possible is trying to portray (dramatically of course) the workings of oil without judgment. So a stereotyped exposé with “good” and “evil” forces it was largely not. Most characters are different shades of grey though we tend to sympathize with some characters more than others.

In one of the DVD extras, called “Make a Change, Make a Difference”, the call is for reduced consumption of oil but there are no fingers pointed at the corporations. In fact they are even cited for providing what we demand. The dominant metaphor then at least in the political take home message is that of an oil addiction which we or our representatives will countenance any and all corruption to supply the substance to which we are addicted.

It just so happens that this week that BP has come under fire for failure to maintain one of the pipelines that brings oil from Alaska to the lower 48 states.
Just to summarize the controversy, it appears that there is significant corrosion in one of the pipelines that BP maintains. An ombudsman for pipeline workers has said that BP failed to act on his warnings two years ago that a technical procedure (called “pigging”) was not being done with the proper frequency. He says that BP officials viewed him as a problem rather than listening to his warnings. BP denies neglect but is willing to learn from the experience. Congressional hearings have been scheduled in BP’s practices.

Well can we apply the take home message of Syriana to BP? Is BP simply responding to the multiple stakeholders in its business in the best way it can? Are we simply oil addicts complaining that our dealer is late with the next fix?

Well, if you have been reading my blog, you might suspect that I have a vested interest in making light of BP’s troubles: in my last posting I was holding up BP as an example of a greener oil company. And I am not alone in noting that among the major oil companies, BP is one of the “greener” ones.

Then the story of the BP pipeline is a sobering wake-up if we are about to declare a new era of clean energy has begun. BP still makes a vast majority of its money from selling petroleum. Maybe investments that might have gone into upgrading and maintaining “old” assets like oilfields have been diverted into more forward-looking projects. If that is not the case with BP, it might very well be the case in the future when diversified energy companies (traditional oil among them) are attempting to transition to a cleaner energy portfolio. Others will say that the substantial profits that oil companies are currently accruing should be plowed into making the transition work. But shareholders and oil company analysts will most likely complain and punish oil companies that risk current profits for future unknowns.

I think then that it is reasonable that oversight bodies and whistleblowers do their jobs to insure that oil companies perform better and do not harm the environment when there is a choice in the matter. But the overwhelming reality, as pointed out by “Syriana” is that we are asking these companies to deliver energy to us cheaply and also reward their shareholders. Even the most enlightened of these companies will be forced into some compromises in one area or another to minimally satisfy all parties.

New clean technology companies, new laws and new technological breakthroughs will speed a greening of the energy delivery companies and force a better deal to be struck in these areas of compromise. But oil and a petroleum fueled economy remains a dirty business…but it is also, at least for the moment, our business too.

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