Thursday, May 13, 2010

More on the BP Gulf spill

http://www.newsweek.com/id/237651
http://www.newsweek.com/id/237619

Some interesting articles regarding the aftermath of the BP disaster. Incidents like the Gulf oil leak and the West Virginia mine deaths remind us of the question: how many lives and how much environmental damage are we willing to offer up on the altar of commerce and cheap energy? If we had a renewable energy economy, all of that harm could be avoided, unless a solar panel came loose in the Mojave and crushed a mouse. Unfortunately or not, very few Americans are directly affected by these industrial disasters, like the Middle East wars. So therefore it is a lot easier for the rest of us to ignore problems or even live in denial as long as the gasoline and electricity keep flowing. But although we don't see it, Alaskan fishing communities are still devastated two decades after the Valdez spill. Local ecosystems will probably never recover to pre-spill vitality, and fishing economies were decimated (suicides and domestic violence have risen significantly in those hard-hit communities too). Yet those victims have been swept under the rug, since oil is so vital to Alaska's economic survival (and provides hefty payouts and kickbacks to many in power), so Palin et al. up there are as pro-drilling as ever. Sacrifices for the "greater good", I suppose. I hope this sad narrative won't repeat in the Gulf, which is still struggling after Katrina, but I don't think their future is bright (in some cases, it has taken an entire year to finally plug a blown out well).

The recent NYC terror scare reminded us to be vigilant, and the government/law enforcement often state that we can't afford to be wrong even once - zero tolerance for terrorism. If only we could hold companies to the same standard regarding environmental harm (and we're not even talking about climate change yet, though the Kerry-Lieberman bill is sparking new discussion on the sausage making of energy reform: http://www.kqed.org/epArchive/R201005130900). We're petrified of Abdul the crazy Muslim bomber, even though the chances of being a victim of terrorism are at lottery levels. 9/11 was a major human and economic disaster (though smaller than the subprime bust), but after 9/11 the US has suffered much more from environmental disasters than terrorism (domestically at least). So what should we really fear? As a society, we've almost tuned out eco-disasters. Yes the Gulf spill is huge in magnitude and may well spur a (watered down) overhaul of drilling and environmental regulations. But there were at least 5 major North American energy disasters since 2000, and I doubt many of us could name them. It's one of those "oh well, what a shame" tragedies, like the problems in Africa - we're sympathetic when asked but otherwise it's barely on our radar. I hope we don't become like the Iraqis, where a daily car bomb isn't even news anymore. Are WV and the Gulf just the price we pay to keep the economy humming? We only get mad when gas exceeds $4/gallon or our block gets a blackout.

If we don't care about the millions of dead avian and sea life, what about the human costs? The Texas City refinery explosion that I previously mentioned killed 15 and injured 180, so imagine the ripple effects for that community. Toxic fumes displaced 43,000 other shelter-seekers. It could happen in the dozens of US communities near refineries. BP was fined tens of millions, but it was a slap on the wrist considering the magnitude of the crime. And it's no accident that the federal investigation was weak at best. The EPA lawyers were chomping at the bit for a home run case, but the Justice Department suppressed their efforts or watered down the case to the point of futility. BP's strategy to stunt the investigation after their Alaska pipeline leak was creative: they responded to the federal subpoena by spamming the EPA with 62M pages of documents, fully aware that the government only had 3 or 4 employees on the case. They got off nearly Scot free. Last year, BP spent almost $16M on Washington lobbying (a record for them), and like Goldman Sachs, they want a return on their investment. In the past, BP has made consultants out of major government players: Leon Panetta (current CIA director), George Mitchell (Obama's special envoy to the Middle East), Christine Todd Whitman (Bush's EPA chief), and Tom Daschle (former House majority leader and Dancing with the Stars contestant). What do you think they discussed - geology and pipelines?

The current Federal cap for environmental damages is a paltry $75M, and the Gulf disaster will cost an order of magnitude more. Obama vows to hold BP accountable for every penny, and their CEO Tony Hayward promised to "honor all legitimate claims", which sounds like the health insurance industry. But BP is the #4 oil company in the world, and so we face the "too big to fail" problem with them. BP is a major employer/taxpayer/campaign contributor, and is the #1 oil supplier for the US wars in the Middle East, doing $2.2B in business with the Pentagon last year. If we lean on BP too much, don't you think they're going to play that card?

BP made over a $17B profit in 2007. Apart from the recession, they have done really well in the last 5 years. If we are serious about avoiding environmental disasters, ensuring safety at facilities, and holding energy companies accountable, we have to hit them where it hurts. Revoke their license to do business. Like the Pfizer Bextra email I sent out before, the FDA has the right idea by blocking medical companies convicted of fraud from doing business with Medicare (unfortunately they let Pfizer off the hook that time because they were "too big"). For energy companies convicted of skirting safety regulations and guilty of causing environmental/human disasters, we should revoke their permits and confiscate their assets. That will keep them on the wagon, or weed out the reckless companies that shouldn't be in business anyway. But of course it's not just the companies' fault. They do what makes business sense. They don't necessarily want to club baby seals, but if the benefits of skirting regulations to improve output outweigh potential government penalties from rare accidents, of course they will keep being reckless.

We people are to blame for our addiction to cheap energy. We should boycott polluters like we did to apartheid South Africa, but then where will we get our power? If we get tough with Big Oil, they will rebut with, "Sure we can reform our operations and become safer/cleaner, but it could cost American jobs and we're going to pass on those costs to the consumer". Then we shut up. The feds are to blame as well, with the Department of Interior is one of the most corrupt parts of our government. Finally the regulators are under fire after the recent coal and oil disasters, and some may have accepted bribes. Obama was right to separate the regulatory and royalty-collecting arms of the DOI due to the obvious conflicts of interest (obvious to anyone outside of Washington it seems). And even so, the US people are getting really shortchanged on energy royalties like we were a Third World shit hole. Oil companies build their offshore platforms just beyond the state waters limit to avoid taxes, yet their wells suck up oil from adjacent rock that the state owns (like "I drank your milkshake!" - Daniel Day Lewis). In Mexico, their constitution states that natural resources belong to the PEOPLE. Not so here. Of course the Mexican people get shortchanged from corruption as well, but they are more progressive than us on this front at least.

---------

Did we find out that BP is at fault for this particular leak?  Or that it was through skirting of regulations that this occured?  In theory there is a moderately low risk way to drill in the ocean, and i assume the regulations that exist are to hold you to that moderately low risk method.  I read, more so in the end, about how BP skirts regulations in favor of good business, but was that the case here?  I am asking as i have no clue, not as a rhetorical point.  And i believe that BP has most certainly, at least in other isntances, chosen money over "the right thing" but what about in this specific case?

---------

Well BP blames the rig owner they leased from (since the "fail safe" blowout preventer valve didn't close, in fact 4 of them failed), and the rig owner blames Halliburton for a leaky well head. And Halliburton blames BP because they were just carrying out BP's work order that BP designed. So the merry-go-round of BS continues.

I am not an expert, but drilling a mile underwater in a hurricane area is NOT low risk (industry/conservative propaganda: http://www.aei.org/article/101949). The BP rig was on one of the deepest oil wells on earth (see ABC article below, and actually BP is currently drilling THE deepest well off Texas: 4,000 ft water + 35,5000 ft rock, so cross your fingers). And because of the depth, the rig has to float instead of having fixed moorings, which exposes you to ocean drift. The long drilling pipe means that the oil needs to be pressurized more to reach the surface, which can heat up the oil to 250 F (also increasing the risk of blowout). And of course anything in salt water corrodes, and the deeper you go, the harder it is to monitor, maintain, and service your stuff (as we now see). But I guess they thought it was worth it because the Tiber reserve in the Gulf that BP owns 62% of is estimated to be as lucrative as AK's North Slope (4-6B barrels of gas/oil). But for these expensive, deep projects to pay off, the price of crude must stay above $70/barrel.

http://abcnews.go.com/US/wireStory?id=8476359
http://en.wikipedia.org/wiki/Offshore_drilling

American Enterprise Institute: The two main reasons oil and other fossil fuels became environmentally incorrect in the 1970s--air pollution and risk of oil spills--are largely obsolete. Improvements in drilling technology have greatly reduced the risk of the kind of offshore spill that occurred off Santa Barbara in 1969... To fear oil spills from offshore rigs today is analogous to fearing air travel now because of prop plane crashes in the 1950s.

No comments: