Offshore Disaster Presents Environmental, PR Challenges

Words of the Day

 “You can’t build a reputation on what you are going to do.” – Henry Ford

Gulf Coast Oil Spill Is Tarring BP’s Image

The Gulf Coast offshore drilling disaster – which could be the worst oil spill in history – is spewing thousands of barrels of oil a day into ocean off the coast of Louisiana and Mississippi, and in the process is tarring BP’s image with a thick coat of toxic ooze.

So far, the ruptured well is hemorrhaging 5,000 barrels of crude into the Gulf a day.  And it appears the Deepwater Horizon calamity is starting to crash into the shore of public opinion – and quickly eroding The London oil giant’s hard-earned reputation!

BP is facing a whale of a PR problem.  Not only will the clean-up of the accident cost hundreds of millions of dollars – and likely much more after potential lawsuits, settlements an fines – but the company’s reputation is sinking faster than a nuclear sub.

The April 20 accident has some experts claiming it could be worse that the 1989 Exxon Valdez disaster off Alaska.  That cost Exxon Mobil more than $4.3 billion including compensatory payments, cleanup costs, settlements and fines.  The damage to BP’s image— not to mention future prospects for drilling in the Gulf of Mexico — is likely to be far higher, according to industry analysts.

For Tony Hayward, who has led BP for the last three years, the accident threatens to overshadow all of the efforts he has made to burnish the tattered reputation of the company after a refinery explosion in Texas in 2005 and a pipeline leak in Alaska in 2006.

So far, the company’s failure to stop the seepage from the underwater well has frustrated government officials.

Hayward, who has blamed the rig’s owner and operator, Transocean, for the accident, said it was nevertheless BP’s responsibility to deal with the immediate problem. “We take it with the utmost seriousness,” he wrote. “Nothing else matters right now.”

Wall Street experts say that while the company is spending an estimated $6 million a day on fixing the mess, it is impossible to accurately estimate how much the incident will eventually cost.

The cost of an environmental cleanup will depend largely on how much oil reaches shore. The government could assess fines or other penalties. And lawyers have already filed a flurry of suits on behalf of commercial fisherman, shrimpers and injured oil workers against BP; Transocean; Cameron, the company that manufactured the blowout preventer; and other companies involved in the drilling process.

Regardless of the final assessment of blame, Wall Street analysts warned that everything BP does from now on will come under increased scrutiny by regulators and that potential partners in drilling ventures may well look elsewhere.

“In the last two years, it seemed BP had really cleaned up their act,” Fadel Gheit, a managing director and oil analyst at Oppenheimer & Company told the New York Times. “Now it looks like a house of cards that has totally collapsed.”

In recent years, BP rebranded itself as “Beyond Petroleum,” a company that was environmentally conscious and wanted to develop alternative energy sources like solar and wind power. Its logo of a blooming flower was intended to portray the company as one that was responsive to growing public concerns about climate change.

That image – worth billions of dollars – is certainly being sullied by the company’s inability to contain the massive oil spill.  Since the accident, BP’s stock market value has sunk by about $25 billion.  The biggest PR measurement, however, is not about past accomplishments, but about what BP does in the coming days, weeks and months. 

President Obama dispatched two cabinet heads to the region who, along with other federal, state and local officials criticized BP further for what they claimed was an inadequate response to the growing oil spill disaster. 

Ken Salazar, secretary of the interior, Janet Napolitano, secretary of homeland security,  and Louisiana Gov. Bobby Jindal urged BP to do more to stop a leaking undersea oil well 50 miles offshore as floating crude oil imperiled the fragile marshes of the Gulf coast.

Meanwhile the White House has stepped up its response to the worsening situation. President Obama ordered a freeze on new offshore drilling until a complete review of the oil rig accident and spill could be concluded – and new safeguards installed.

Calling the disaster “a spill of national significance” that could threaten coastline in several states, Ms. Napolitano announced the creation of a second command post in Mobile, Ala., in addition to the one in Louisiana, to manage potential coastal impact in Alabama, Mississippi and Florida.  Interior Secretary Salazar ordered an immediate review of the 30 offshore drilling rigs and 47 production platforms operating in the deepwater Gulf, and is sending teams to conduct on-site inspections.

PR and marketing experts and environmentalists say BP’s response so far has been superior to Exxon’s treatment of the Valdez crash.  BP devoted most of its website to the disaster and has held consistent, frequent news conferences.  It has hit some rough waters along the way – it initially downplayed the extent of the spill, and the oil giant along with the government have not done enough to communicate with communities in the path of the spill.

The best way BP can bring the green back to its image and restore its reputation is to attack the oil spill aggressively and head-on – and stop the oil leak ASAP.  Only then can they open the spigot of reputation repair.

For what could be the worst oil spill in history, the company, federal agencies, state and local officials must band together to save the Gulf now!  For the efforts of BP and all of those working on a solution, WordSmith awards a half-full, oil-tarnished Golden Mic.

Golden Mic

Each week, Wordsmith will bestow a Golden Mic Award to the person, group or company in the court of public opinion that best exemplifies the tenets of solid PR, marketing and advertising – and those who don’t.  Stay tuned … and step-up to the mic!

The WordSmith News Bureau is based at Deane Smith Media Innovations, a full-service PR, marketing and advertising agency.  Got PR?  Need marketing strategy? Ad consulting?  Message Wordsmithing?  Creative & online initiatives? Reach the WordSmith at wordsmith@deanesmithmedia.com