Drilling and pumping oil in offshore rigs is a dangerous and expensive business. In the aftermath of an oil platform fire this week in the North Sea near Scotland that left 160 dead or missing and presumed dead, the hazards - and the safety performance of oil companies - are in for very close scrutiny.
In addition, the tragedy could have an impact on pocketbooks of people in many parts of the world, not because it will affect the price of oil but because of insurance costs.Insurance officials said the platform fire could cost $1 billion in claims. Salvage and the cost of replacing the platform, cleaning up pollution, redrilling, plus loss of life, are all covered by insurance.
Lloyds of London said the expected $1 billion would be the biggest insurance settlement on record in the North Sea. The previous largest insurance cost was $172 million in 1980, when an oil rig capsized and killed 123 workers near Norway.
How the latest tragedy will affect insurance around the world is unclear, but it will have some impact. The risk had been spread among companies in many different countries.
Nobody will be put out of business, but when insurance companies lose money, the cost of buying insurance tends to rise for everybody.
The oil companies pay attention to safety; they have to, in a business so inherently risky. Yet perhaps they don't pay enough.
A British member of Parliament said inspection and maintenance of rigs has been reduced in recent years and not enough money is spent on safety training.
An oil analyst in London said the disaster would force oil companies in the North Sea to start spending a lot more money on safety.
In terms of money and in terms of lives, safety is a good business investment. The North Sea companies - and their workers - unfortunately are learning that lesson the hard way.