Deepwater Horizon
Torrey Canyon, (UK, 1967 ExxonValdez (US, 1989) Erika (France, 1999): all names tattooed on the collective memories of both the oil industry and the general public. Interestingly they are shipping-related disasters which caused exceptional levels of pollution – and helped change cultures and attitudes.
While Piper Alpha is recalled for the explosion and loss of life, the environmental impact was relatively minor. The Deepwater Horizon is a tragic combination of both – an on-rig explosion and a seabed leak which, for the sensitive wetland environment along the Gulf coast, could present an environmental disaster of immense proportions. A combination of favourable weather and industry-wide crisis management may prevent the latter, but this remains uncertain.
BP finds itself in the firing line and, under US law, liable for the costs. It already estimates a $350m spend since the tragedy happened. This is tough, since the responsible operator for the rig was Transocean. I can hear contracts and insurance policies being reviewed and it also brings into sharp relief both the organisational and environmental risks of deep water exploration.
Will the Deepwater Horizon affair change US attitudes? How close to the shore does the public really want oil and gas exploration – and are they willing not to drive such gas-guzzling cars and/or invest in Public transport? The US government and public has to decide.
Lubes economy to improve
Meanwhile the lubricants industry should be benefitting from the sharp economic improvement. US Manufacturing continued to grow in April, with the rate of growth accelerating as the PMI registered 60.4 percent - up from 43.2 in May 2009. If the PMI for April is annualized, it corresponds to a 6.2 percent increase in real GDP.
Based on the OATS GDP related model this would suggest a strong recovery in the US lubricants business in the coming 12 months. Positive results and news from Caterpillar, historically a good barometer for the lubricants industry, show expected global sales growth of 10-25%.
ACEA 2008 impact
In Europe, ACEA 2008 is beginning to really impact product ranges as the deadline for the implementation arrives at the end of 2010. Expect to see lots of product launches in the coming months.
New Lubricants Resource Centre
Finally, you will notice a change in the layout of the OATS Bulletin. This is thanks to the launch of our new Lubricants Resource Centre which will bring you regular news, information and useful links throughout the month. If you have any news or comments then, as always, contact us at bulletin@oats.co.uk.
Sebastian Crawshaw, Chairman OATS