I don't recall an environmental disaster that has occupied the nation's attention to the extent of BP's (NYSE: BP ) Gulf oil spill. After being exposed as wildly unprepared for this type of catastrophe, our country's largest oil companies are forming a rapid-response force to deal with future spills, should they occur. Better late than never, I suppose.
Specifically, ExxonMobil (NYSE: XOM ) , Chevron (NYSE: CVX ) , and ConocoPhillips (NYSE: COP ) , along with Royal Dutch Shell (NYSE: RDS-A ) , are establishing a joint venture to deal with future deepwater spills in the Gulf. Unlike BP's latest cap, which followed several other ineffective efforts to contain the spill, the new system will be ready to spring into action quickly.
The venture, to which the companies have attached the moniker Marine Well Containment Co., will be funded by company contributions totaling $1 billion. However, its cost could expand considerably. The system is expected to be able to function at up to 10,000 feet beneath the sea's surface and to capture up to 100,000 barrels of oil per day. It also should be capable of being fully deployed within 24 hours.
According to Sara Ortwein, an ExxonMobil Development vice president, about 40 engineers have been working on it virtually nonstop for the past month. It will include sealing caps (a la BP), oil-collection ships, and subsurface containment equipment.
BP is not included among the initial participants. According to Exxon CEO Rex Tillerson, the group is merely trying to avoid distracting the British company as it continues to contend with its spill. A conversation that I had with an individual from Chevron indicated that any company that wishes to participate will be encouraged to do so. Indeed, I wouldn't be surprised to eventually see some of the major offshore drillers -- such as Diamond Offshore (NYSE: DO ) or Transocean (NYSE: RIG ) -- be added.
The system likely will be intended to prevent the Gulf from being damaged by gushing oil, along with keeping the powers that be in Washington somewhat mollified in the event of a spill. Michael Bromwich, the new director of the Bureau of Ocean Energy Management, Regulation, and Enforcement -- the erstwhile Minerals Management Service -- says the government is pleased by the companies' initiative.
Tillerson says that, while the companies will build the system, "we're never going to use it." Let's hope so. In the meantime, I applaud the company's commitment to getting it right going forward.
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