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Opinion: BP oil disaster has huge repercussions

A conversation with Big Oil’s Cassandra, Matt Simmons

Oil pollution on Alabama coast
A beach goer walks on the beach where oil is seen in the water as it washes ashore from the Deepwater Horizon oil spill in the Gulf of Mexico on June 26, 2010 in Orange Beach, Alabama.(Joe Raedle/Getty Images)

ROCKPORT, Maine — The international repercussions from the BP oil disaster can only be guessed at today.

Will the oil stay in the Gulf of Mexico? Or will it circulate out into the Atlantic to be borne by the Gulf Stream to contaminate foreign shores? How much oil is yet to escape into the oceans? And how will it affect the world’s economy?

Bermuda, a self-governing British dependency, has already sent people to Washington to discuss the possible ramifications. Tourism, second only to insurance in Bermuda’s economy, stands to suffer if its pristine beaches are defiled.

Canada’s Prince Edward Island is enquiring whether its 300 licensed tuna fishermen will be affected if the tuna’s spawning grounds in the gulf are destroyed. The province is reportedly contacting BP for potential help.

And then there is BP itself, which may not be too big to fail if too many demands are put upon it. A bankrupt BP would send shocks through financial markets all over the world. Already pension funds in Europe and America are suffering the effects of the oil spill because BP, under pressure from the Obama administration, has cancelled its dividend.

One optimist when it comes to containing the oil in the Gulf of Mexico is former investment banker to the petroleum industry and energy expert Mathew Simmons. He said most of the oil is too heavy to be swept out of the gulf on looping currents. Therefore he thinks Bermuda has little to worry about.

But that is the only aspect of the BP disaster that Simmons is optimistic about. One of the industry’s world class pessimists, Simmons caused controversy with his book, “Twilight in the Desert,” which posits that Saudi Arabia’s oil reserves are about to dry up. As a result Simmons is now in the forefront of exploring new sources of energy.

I sat with him for an hour on his porch looking out over the Penobscot Bay the other day, and the picture he painted of the current disaster was enough to make my notebook curl up at the edges.

According to Simmons, BP has been lying to us all along, perpetuating one of the biggest cover-ups in history: “The Watergate of the environment.” From the very beginning BP presented the disaster as a rig fire, while all along “it was the Gulf of Mexico that was on fire, ” according to Simmons. The real problem, he fears, is not the damaged under-water well head, but a crack in the ocean floor some miles from the rig disaster which is gushing unchecked. Simmons believes we should seize all of BP’s assets in America, “just the way we did with Iran.”