A year ago today, the oil industry was shaken by a blowout on the Deepwater Horizon rig, 1500 metres deep in the Gulf of Mexico. The explosion killed 11 people and spilled 200 million gallons of oil. BP’s bill – over US$8 billion to date – is expected to reach US$32 billion after all damage claims have been made.
BP wasn’t solely responsible for the spill. BP’s contractors were also held to task, including Transocean, the rig owner; Halliburton, who did the cement job; and Cameron International, who built the blowout preventer. The incident highlighted the complexity – and vulnerability – of today’s oil and gas contracting arrangements.
Almost unnoticed by the world, Iran has moved towards the adoption of a basic income grant to distribute money from its oil industry directly to its citizens. This could be a good example of how distorting fossil fuel subsidies used in many developing countries could be repealed without adversely impacting upon the poor. Furthermore, the outcomes of this policy could have a wider impact on the way rents from natural resources are used - allowing households to choose how to spend profits from resource extraction.
The world is facing an energy crisis with major global and local implications. Energy issues need to be addressed holistically, based on integrated models and approaches and involving multiple stakeholders. IIED's work on energy currently focuses on two key areas: governance of large-scale energy sector development (oil, gas, biofuels); and models for delivery of sustainable decentralised energy services.