You could be living in "Gasland"

http://www.gaslandthemovie.com/
http://www.npr.org/templates/story/story.php?storyId=127593937
http://www.npr.org/blogs/thetwo-way/2010/06/21/127988546/gasland-hbo-gas-drilling-film-exposes-drinking-water-worries

HBO is airing a documentary series this month, and one of the films is called "Gasland" by Josh Fox, about the problems associated with domestic natural gas extraction in American communities. The filmmaker was actually approached by a gas drilling company to lease his family's land for extraction for $100,000, and he first wanted to research the pros and cons before making a decision. What he discovered was so angering and shocking that he decided to drive across America to interview people living with the consequences of gas drilling for a documentary. Of course they were unaware of the impending BP disaster when the broadcast schedule was planned, but the content is now all too familiar. This is part of the true cost of our energy consumption habits.

The natural gas industry touts its product as cheap and "green", and yes its combustion is less polluting than petroleum and coal (but only 25% so). Plus it can be used in a variety of applications (from large scale electricity generation to vehicle fuel), extraction infrastructure is fairly compact, and we even have plenty of domestic reserves, so it sounds like a great energy source. But like ethanol, natural gas is dirtier than most of us know, and the companies tasked with its extraction have committed a litany of environmental and ethical violations. This controversy is not well publicized maybe because US natural gas reserves mostly exist in poorer, rural counties in the northeast, mountain states, and the southern Midwest. Much of the land is federally-owned, and those who live there don't have much of a political voice. The residents are generally less-educated and lower-income, so when a Halliburton-type drilling company approaches them with a fat check to buy the rights to drill on their land, they tend to sign. Companies give all sorts of guarantees that the drilling is safe and you won't even notice, and the rural residents are from the "my word is my bond" tradition, so they trust them without reading the dozens of pages of fine print. And if pollution problems are found and admitted to, the companies often pay off the victims into silence (or underpay for the true damage they inflict) and keep drilling the next day. But some short-changed victims were so mad that they broke their non-disclosure agreements to speak on camera. Even if landowners refuse to sign with drillers, they can still get screwed. If their neighbors agree to lease, their property value may sink because now they live next to an industrial site. By that stroke, drillers and your neighbors can collectively force you off your land by making your property virtually worthless if you resist.

Just as we are tapping new oil reserves with more sophisticated (and riskier) deep-sea drilling, we can now access deeper natural gas deposits using a technique called hydraulic fracture (nicknamed with a masculine moniker, "fracking"). Basically, the gas is trapped in dense rock (shale) over a mile underground and can't be cost-effectively harvested by a conventional well, so with the advent of horizontal drilling, we can bore into the shale and then pump in a high-pressure fluid mix. The mix of water, sand, and proprietary chemicals (that companies may or may not admit are included in the pumping fluid, and are currently not legally required to disclose) fractures the shale so the gas can percolate up to the wells. Through the work of the filmmaker and environmental activists, we now know that fracking fluid contains benzenes, sulfides, and other carcinogens banned by the EPA Clean Air, Water, and Safe Drinking Water Acts. 65 identified ingredients are known to be health hazards. It used to even contain diesel fuel, but Halliburton cut a deal with the EPA in 2005 to stop using it in exchange for a waiver to substitute benzene.

If you recall, 2005 was a big year for the industry with the passing of the Energy Policy Act. After VP Cheney's formed his energy task force and held secret meetings, industry lobbyists successfully convinced politicians to open up unprecedented tracts of federal land to energy exploration, and insert loopholes to exempt the oil and gas industries from many environmental rules. As you would expect, Halliburton is one of the biggest gas drillers, and the industry fracks a staggering 35,000 wells each year in the US. So far the EPA has shown interest and expertise in investigating and regulating fracking chemicals, but agency leaders have copped out, and pronounced that "the states should decide" how to regulate gas drilling. In response to calls for greater scrutiny, the industry has said that fracking is completely safe without providing much supporting evidence. They in turn threaten back that added regulation of drilling will only serve to increase the cost of natural gas to consumers. In response to criticism that "Gasland" paints a slanted picture with anecdotes only from angry anti-gas families, the filmmaker challenged an industry rep to provide him with just one example of a happy, healthy American community living alongside fracture drilling, and so far they haven't gotten back to him yet.

Fracking may sound good; we're tapping vast gas pockets that were previously inaccessible. But the fracking fluid has to go somewhere, and drilling sites are often near aquifers that supply well water to local residents (and in many drilling areas, there aren't big reservoirs or rivers, so people rely on wells to survive and farm/ranch). Some of the waste fluid returns to the surface and is collected in huge pits. If the company is conscientious, they will pump up the liquid and dispose of it safely. But often the drillers will just allow the fluid to evaporate, seep back into the soil, or even expedite evaporation by pumping the fuel through vaporizers. This is all legal apparently. But the poisons don't just disappear. They either accumulate in the water supply or become aerosols that get inhaled by living things nearby.

Fracking breaks up underground shale to release gas, but that gas isn't 100% collected by the wells either. It also seeps into the water supply, and there have been several documented accidents of tap water catching on fire and causing well or household explosions. Many residents were forced to buy bottled water or rely on rainwater cisterns instead. Poisons also contaminate the wildlife, making it harder for local farmers and ranchers to make a living, or even live healthily. The incidence of some cancers, asthma, and neurological disorders (all well-documented side effects of exposure to various fracking fluid base chemicals) is uncommonly high in communities near drilling areas. And as one interviewee in Wyoming said, viewers may think it's crazy but people like him really love what they do - 3rd or 4th generation ranchers who carry on the tradition of Western living that we usually relegate to nostalgia. Now they can't even water their herds enough to develop them for market. So in addition to the massive environmental and health effects of gas drilling, we may be losing a unique and precious feature of American history and culture also. Yes our supercharged economy needs energy to run, and gas is a precious resource. But potable water is also very precious, and although laws and subsidies make its price artificially low, humans are also fighting wars across the globe (either with guns or lawsuits) over water access. Ideally we should protect both our energy and water resources, and it makes no sense to destroy one while pursuing the other, unless you stand to make a lot of money in the process of course. 

Even if companies went beyond the porous rules and made sure their drilling waste didn't endanger local life (if that is even possible with fracking), how green and minimally-invasive is natural gas exploration anyway? Reserves are often in remote areas, so there has to be hundreds of diesel truckloads of equipment transported hundreds of miles to set up a well, and in many cases miles of new road to the site have to be paved beforehand. It's like clear-cutting in the Amazon, and may leave the land like a moonscape afterward. Fracking consumes 400-600 tanker truck loads worth of water, and only a fourth of that volume can be recovered and cleansed (if the company chooses to). If each well consumes 1-7M gallons of water per frack (and wells are sometimes fracked over 10 times), the industry creates trillions of gallons of contaminated water per year (the industry term for the waste is "produced water"). The drilling and refining processes also need to be powered by diesel generators, which collectively spew out tons of emissions. Combine that with gas leaks and chemical evaporation, and the air in microclimates near heavy drilling zones (even densely populated areas like Ft. Worth, which has 15,000 wells in its vicinity) is more unsafe than LA smog.

Most states are in very bad financial shape now, and thanks to the GOP blocking of the jobs bill, will get even less federal assistance in 2010. As consequence, they have had to trim down their environmental and regulatory workforce, and may be more open to allow gas drilling to reap royalties, taxes, and create jobs. As long as they don't live in drilling areas, what do those state legislators care? A major drilling expansion is planned in the Marcellus shale in upstate New York and Pennsylvania. But projected well sites are located in the upper Delaware River Basin and NYC watershed that collectively supply the drinking water to NYC, Philadelphia, and over 15M residents in between. NYC council members are trying to stop the expansion, and so far no wells have broken ground yet.

Undermining Obama's leadership

"Rep. Trent Franks (R-Ariz.), who was an oil and gas engineer before he started his career in politics, says President Obama is politicizing the BP escrow fund after having little to do with it being set up.

[T]he real story here is that BP had already made the decision to set aside $20 billion to compensate those harmed by this tragic disaster several days prior to the President’s speech. The true outrage is that this was never the President’s idea at all, and he should be ashamed for pretending it was for political purposes.

On Thursday, Rep. Anh "Joseph" Cao told me that he pressed BP on the fund idea a month ago, inspired by the example of Exxon after its 1989 spill off the coast of Alaska. And on Friday I talked with Ray McKinney, another engineer, who is running for Congress in Georgia against Rep. John Barrow (D-Ga.). McKinney stressed that there was no serious disagreement about the escrow issue, and said Democrats were concocting a political debate when all that mattered was making BP pay and investigating the disaster.

"I think what the government has done has been totally mis-focused," said McKinney. "What I hear when I turn on my radio, is a stupid statement some congressman made, and that's what everyone focuses on. There's a lot of finger pointing and a lot of blame, but everyone agrees we've got to finish the relief well and get to the bottom of why this disaster happened."

http://voices.washingtonpost.com/right-now/2010/06/do_republicans_deserve_credit.html

Basically, BP had already decided on the escrow fund (an action most prudent corporations would do), and Obama and BP announced it at the White House, both for their own PR purposes.

In the end, politics as usual but hardly a "Chicago-style shakedown".

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Thx, A. Gosh, so first they're mad about the "shakedown", and now they're mad that Obama was passing the account off as his idea? In this case, I don't think the public will say, "Shame on you, Obama!" for the escrow account, even if he is trying to take more credit for the idea than deserved. I don't think many Americans outside of the oil industry or irrationally anti-Obama circles will sympathize with BP on this one. As you said, the consensus is that BP + affiliates are 100% at fault and should pay for the damages 100%. So what's the difference, $20B now or later? Sure there may be some hokey claims filed here and there (as was the case after 9/11, and many of them were paid with little investigation!), but in general I think Americans want to see John Q. Fisherman or B&B owner given a lifeline so they don't plunge into financial ruin, for the short-term at least.

I think Obama entered the White House wanting to really be taken seriously as a legit statesman and C-in-C. So he and his people did all they could to distance themselves from the Obamania idol worship. "It's not about me, it's about we, and what we need to get done for America." But now, after all the ridiculous attacks and hits to his approval rating, I think he has to confront the issue and make it about him sometimes, because it is. I know he's not a complainer, cynic, or excuse-man, but he's got to fire back at these GOP idiots who are really only interested in his downfall, no matter the cost to the nation they profess to love. He's a polite guy and a consensus builder, but by now he should see that all but a handful of GOP lawmakers want to seriously work with him.

I wish he would say, "Some Republicans are fighting me every step of the way, uselessly criticizing every minute detail of my presidency instead of working hard for big picture solutions. Some people don't want change that may compromise their fortunate position in society, so they prefer to side with big banks and polluters like BP, instead of supporting me to rein in Wall Street excesses and compensate the victims of the spill. They fabricate controversies out of false claims or completely uncontroversial issues that have major public approval. They just want to confuse you about me, so my party and I lose big in elections. I'm not a miracle worker and I make mistakes, but I am not what they say I am. America, I want you to know that I took the hardest job in the world at one of the hardest times in our history because I know this great nation's potential, and we're not there, partly because of greed, egos, and corruption in politics. 'Yes we can' only works when we work together. I hope you will recognize that some of your elected leaders don't want that. They want to see me (and us) fail so badly, that they will sacrifice all our futures for their petty 'thwart and blame Obama' game. We don't have a moment to waste, and we've squandered too many opportunities. Terrorism, health care, climate change, energy, and financial reform aren't going away, even if I'm not in office. Much of the GOP have zero helpful ideas for these global problems and sometimes even deny their existence. So instead of falling for distractions like my citizenship status, please help me put pressure on the negative influences in Washington to either get them to finally do the people's work, or send them home in disgrace like they deserve."

It is about Obama, and I can't help but conclude that the utter disrespect for his office must be partially due to race. He's not a self-made joke like Nixon or Clinton. He hasn't done anything terrible yet, and is mostly "no drama Obama". Can you imagine our generals showing such public insubordination to even a buffoon like Bush? The military loved Bush, even though he was responsible for 5,000 of their brothers and sisters dead and many more wounded, with little improvement to our national security. I'm actually surprised that McChrystal got fired, because it makes the Obama admin. look a little thin skinned, but I'd rather have an overly sensitive civilian leadership than a military that answers to no one like Pakistan.

Gen. McChrystal running his mouth

http://news.yahoo.com/s/ap/20100622/ap_on_en_ot/us_mcchrystal_enemies
http://www.rollingstone.com/politics/news/17390/119236

Like the unprecedented shame of the current French World Cup soccer squad, I guess this is what happens when you let your ego convince you that you are bigger than the mission and the country. For a military commander, I understand that playing diplomat at black-tie events and sucking up to politicians (because they control your resources) can be annoying and not really in your job description. But disrespecting civilian leaders and foreign partners won't help your cause, and will probably undermine public support and military morale. Modern generals have to be worldly gentlemen and not tabacky-spitting, ass-kicking macho men. Well I suppose they have to be both at times, but I'd rather trust a commander who speaks sparingly and uses his brain (rather than the other head), than a prima donna crooning for the cameras. Unfortunately, the US military seems to have produced too many of the latter over our history (Patton, MacArthur, LeMay, Schwartzkopf), and too few of the humbler Bradley/Eisenhower types. Because when your ego and ambition are out of control, what's to stop you from putting your soldiers or innocent civilians in danger for your own career gains and power trips? It's really sad that we need to keep reminding our "civil servants" to put the country first.

If he had any honor, McChrystal should step down. Not just for these comments, but also for lack of progress in Afghanistan, and I don't think things will radically improve by next summer (winter makes large coordinated military operations nearly impossible over there, so they have 4 fewer months to work with). Remember the first surge operation in Marja that was touted as a great success? Now that some US forces have moved on to prepare for the Kandahar offensive, Marja has slipped back to partial Taliban control (and insurgents may have shot down a NATO chopper yesterday). We can't be everywhere at once, and the Afghan troops aren't up to task and probably never will be - at least enough to secure their nation to a level of our liking. Heck even the more advanced, institutional, and better funded Pakistani military can't control its Taliban.

http://www.washingtonpost.com/wp-dyn/content/article/2010/06/09/AR2010060906214.html

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"You're leading by example. That's what we do. Particularly when it's really, really hard, and it hurts inside" - Gen. McChrystal

To be fair to the general, McChrystal's big shot friends and foes involved in the Afghan war may also be egomaniacs and opportunists with their own agendas, so it's not like he's a tyrant and everyone else are victimized lambs. The degenerate, dysfunctional soap opera that was Hitler's inner circle and Nazi High Command during WWII seems to be the rule, not the exception, for wartime leadership bodies (look at Bush's war room with Cheney, Wolfowitz, Condi, Rummy, and Powell being like the only sane one). Some are jealous and resentful of McChrystal's rapid rise to fame (deserved or not), and that may be biasing their views. And I think we'd all agree that it is the biggest pain in the ass possible to wage war under the framework of a vague NATO coalition with a million different opinions, complaints, and special interests to please. NATO doesn't have great nation-building expertise, and Afghanistan is 100X more challenging than the Balkans. But hey, no one invited NATO to come.

If McChrystal's data and experience lead him to believe that Obama et al. are truly wrong on various war issues, he has the right to feel that way and express himself consistent with his military duties and obligations. But so far, McChrystal has "won" the debate and gotten almost all he asked for, so why would he need to bitch to the media? Though he got what he needed by playing dirty - initially Obama/Biden were hesitant to escalate the war, so McChrystal and the Pentagon sensed that and "leaked" a memo to the press, basically warning of doomsday unless he gets 40,000 more boots, which more or less forced Obama's hand for fear of looking weak on defense. After that, McChrystal doesn't have the right to get mad at his former commander, Ambassador Eikenberry, for doing the same and questioning the war strategy in a leaked cable. Well, it's now on McChrystal to prove he's right, but I wonder how many more people will die before he feels vindicated or just gives up. Maybe McChrystal is singing like a canary now as insurance in case his counterinsurgency-development strategy fails, so then he can say that others were fighting him all the way, preventing him from getting the job done. Maybe he'd be right, but maybe this move will make defeat more likely. Or maybe this hoopla is way overblown. I'm sure the Taliban doesn't care and doesn't read Rolling Stone. I wonder how our troops will react. They will probably side with their commander, but his example can't be good for military focus and professionalism. 

The RS article said that McChrystal was the son of a general, which probably helped him overcome his 298/855 ranking at West Point, despite being very sharp physically and mentally. He was top of his class in one area: over 100 hours of demerits for poor behavior. During the 2003 Iraq invasion, he was a Pentagon spokesman, not a field commander. Later his office was responsible for the lie/error claiming that Pat Tillman was killed by enemy fire, not by friendlies, and there were reports of detainee abuse at Camp Nama in Iraq in 2006, which was under his command. Yet strangely, it was like his poop didn't stink, and Washington and the media gave him a pass during his confirmation hearings for the top Afghan job. Maybe they were so desperate to have a white knight rescue us from the quagmire. But what probably helped his rise was his time leading JSOC in Iraq (basically black ops), and his people were responsible for killing the leader of Al Qaeda in Iraq, al-Zarqawi. He is known for modernizing Ranger training and using cyber-geeks to help hunt terrorists. But currently as head of ISAF, the troops resent McChrystal's strategies and new restrictions on using deadly force. It's a tough balancing act - using enough violence to scare and beat the Taliban, but restraining yourself so as to not incur more civilian casualties and the political blowback, which unfortunately puts NATO troops in more harm. It's a delicate approach that may not be viable in practice, and the soldiers seem frustrated and confused about it.

Economist compares Obama to Putin over BP

http://www.economist.com/node/16377269?story_id=16377269&source=features_box_main

I know The Economist philosophically supports the free market and neo-liberal capitalism, so I guess they wanted to come to poor BP's defense after the angry American mob grilled stonewalling Tony Hayward (Dickens would call him "Tiny Tony") in a public spectacle. How dare the descendants of colonist farmers show such disrespect to their mother empire! The Economist had the nerve to compare Obama to Putin over this matter. Obama's been called a lot of horrible things by a lot of stupid people since he hit the mainstream, but that's a new one. Obama is not harassing BP to "do his bidding" for his own lust for power and personal gain, as Putin does. He is prodding them to own up to their responsibilities, repair as much damage as can be repaired, and compensate all who have unjustly suffered for their mistakes. Because as we have seen from previous corporate disasters, companies will do all they can to delay and minimize payments (sometimes for decades). And are we surprised? That is what they exist to do - maximize production and profit, minimize loss.

Sure Obama is trying to score political points in the process and use the crisis to push his clean energy agenda (which may be offensive to some voters), but that isn't really hurting the country, unlike the previous administration giving energy companies the green light to regulate themselves. Yes his secretary Ken Salazar vowed to clean up the corrupt culture at DOI, and doesn't have much to show for it over 18 months, or at least not enough to have averted this disaster. So sure, BP is not 100% at fault. Westerners, and particularly Yanks, are addicted to abundant, cheap energy (we are now reminded of the true costs of "cheap energy"). Our leaders took industry money, gutted regulations, and got out of their way. But the bottom line is no one forced BP to tell Transocean to drill in an unsafe manner, low-ball the oil leak estimates, and half-ass the clean-up effort.

I understand that the Economist would want to remind us that BP's mistakes should not be an indictment of business as a whole. Have they been living under a rock for the past few years? Look how "big business" has performed in our lifetimes (and especially since Obama took office), and maybe they do deserve a blanket indictment. I'm not talking about the mom-and-pop restauranteurs, veterinarians, or freelance architects of the world that just want to make a living and provide great customer service. I'm talking about the big corporations who spend millions courting politicians, even to the point that the biggest oil money recipient in Congress, GOP Rep. Barton from TX, went so far as to open the BP hearings by apologizing to Hayward for his government's angry rhetoric and "shakedown". The companies that give their inept, short-sighted executives huge compensation, globalize their businesses to tap slave-wage labor markets and nonexistent regulatory environments, layoff thousands to appease Wall Street, and in many cases, commit fraud and break the law.

http://news.yahoo.com/s/ynews/20100617/ts_ynews/ynews_ts2660_2

Plus it seems that the bigger or more prominent the corporation, the worse their infractions. Toyota and GM are the biggest auto makers on the planet, and Toyota's quality control practices were hailed and replicated the world over. One problem, in their manic quest to rapidly overtake GM, they forgot their own teachings, and initially denied everything rather than fess up to their responsibility for putting some drivers in mortal peril. GM once ruled their industry, and millions depend on them for their livelihoods. But last year they were reduced to taking government handouts, even though tiny Hyundai posted record sales (so you can't just blame the recession). Fortune magazine gave Enron the title of "most innovative company" for 6 straight years (even Kobe Bryant couldn't win 6 straight titles), and we know how that turned out. Goldman Sachs is one of the best-performing and shrewdest firms on Wall Street, and now they are under investigation for multiple infractions. The world's biggest pharma, Pfizer, had to pay the biggest government fine in history (at the time), for improper drug marketing. Massey Energy, one of the biggest coal miners, permitted lax and negligent safety standards, which claimed the lives of dozens of its workers. And now BP, the world's 4th biggest oil company, has presided over the worst environmental disaster in the New World, stealing the dishonor from the world's biggest oil company, Exxon, after the Valdez spill. The list goes on and on.

One can argue that the sheer scale of these mega-companies makes it more likely that there will be some sort of problems under their umbrella, vs. smaller outfits at least. But their oversight/safety/compliance infrastructure should grow with the rest of the business. A 200 pound person can't survive with a child's kidneys. These businesses I mentioned may be too big to fail (apart from Enron), but maybe they're too big for their own good too. As Hayward said, he was "out of the loop" regarding the Deepwater Horizons drilling project. Many of the big banks caught in the subprime crisis claimed that they had no idea they were even dealing in those securities. When a company's leader has no idea what his or her company is doing, maybe that company needs to rethink the way it does business. I know one CEO can't micro-manage a billion-dollar organization, but the chain of command and communication should at least include the execs. Otherwise you just have a chaotic, out of control, short-term-profits-driven entity that is under tremendous pressure from shareholders, employees, and investors to cut corners and cheat to make more money.

In the Olliver Stone film "Nixon", the president confronts an anti-war protester. Both want the Vietnam War to end, but Nixon explains that it's not so simple because of the complex military establishment. The protester said it sounded like a beast that can't be controlled. I hope that is not what big business has become, but many warning signs point to it. I know that big corporate disasters and fraud are still relatively rare (the ones we find out about at least), and many companies follow the rules and behave ethically. But just because disasters like BP and Enron were possible in our free market society should be enough cause for alarm for us to rethink our entire economic system. I'm not saying a command economy would be any better (see North Korea), but when the status quo is failing, we have to contemplate alternatives. Unlike The Economist, I feel that it's better in this case to over-react to a potential problem rather than pretend none exists and the system is working fine.

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You've omitted the primary reason they make the comparison.  This should be a republic, a nation of laws and not men.  Instead of pursuing the law, Obama is calling BP into his office to strong-arm them into extra-legal requirements: for the good of the nation, or for his own political good, depending on your spin.  But good or bad, it's outside the law, and that's why the Economist comments that the "collapse in BP’s share price suggests that he has convinced the markets that he is an American version of Vladimir Putin, willing to harry firms into doing his bidding."

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No, the collapse in BP's share price is due to their spill and poor damage control thereafter, both of which Obama had nothing to do with. BP's stock price actually went up on June 16 when Obama met with BP execs to "strong-arm" them into agreeing to open the $20B escrow account (from $30 to almost $33). And the next day the share price held pretty steady at $32, so maybe investors were just happy that some sort of positive agreement was reached. So the data don't support the Economist's claim.

We are a nation that respects the rule of law, but we have no laws to date to handle an environmental disaster of this magnitude. If the $20B account is extra-legal, then BP doesn't have to agree to it. Deals are cut all the time in Washington, and sometimes what's good for the politician/party is also good for the country. Obama doesn't strike me as the shake-down kind of leader. BP would only agree to the $20B account if the alternative was worse (criminal action maybe?). Maybe Obama threatened to revoke BP's drilling leases on Federal land or confiscate assets. Both actions are completely LEGAL and acceptable for a president to do considering BP's horrible safety record in the last 10 years and their duplicity in their promises to improve (see the long ProPublica article below if you're curious).

I find it amusing how some people in the media/politics are getting so outraged about Obama "kicking around" BP (ostensibly for petty political gain, and not because it's the justified thing to do), yet they don't seem to exhibit a similar level of anger over the worst environmental disaster in American history that is affecting at least 5 states and millions of people/jobs for decades. And the critics seem to forget that Obama was pretty calm and rational during the first month of the spill, almost to a fault, and didn't take it to BP when he could have.

http://online.wsj.com/public/quotes/main.html?type=djn&symbol=BP
http://www.propublica.org/feature/years-of-internal-bp-probes-warned-that-neglect-could-lead-to-accidents
http://www.npr.org/templates/story/story.php?storyId=127561853

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Regarding the share-price question, I look at http://www.google.com/finance?q=NYSE%3ABP and see the stock closing at 31.40 on the 15th, 31.85 on the 16th, and 31.71 on the 17th, so effectively no change.  More interesting is that on the 16th, a CDS on BP's debt jumped 400 basis points, from 600 to over 1,000.  http://www.zerohedge.com/article/bp-cds-curve-goes-nuts-1-year-passes-1000-bps-no-offers-market  Basically, the cost of insuring against BP defaulting (bankruptcy) increased almost as much on June 16th as it did over the previous two months.  The market thought the chance of BP ceasing to exist was a lot higher on the 16th than on the 15th.

I agree that the spill is absolutely outrageous.  But the problem isn't just BP, and focusing just on BP isn't going to fix it or prevent it happening again.

Why weren't there laws in place?  This isn't the first time there's been a big spill in the US, nor the first time that BP's created problems - they had 760 pre-spill OSHA violations, something like 97% of oil-industry violations (http://www.businessinsider.com/bp-has-been-fined-by-osha-760-times-has-an-awful-track-record-for-safety-2010-6).  Why weren't they more closely regulated?  I'm sure you've seen that BP's Gulf Spill Response Plan was so unbelievably shoddy that it listed walruses as a local species (http://www.americanscientist.org/science/pub/bps-gulf-spill-response-plan-lists-walrus-as-local-species): what regulator signed off on that?

The ideal situation would have been that lawmakers in DC identified these problems and put laws into place to handle this situation.  That's a failure of leadership.  Big companies have been profit-driven since Adam Smith: why are we surprised by this?  Look at Standard Oil, or the big railroads of the past.  The job of government is to put the rules into place to set the proper incentives for those companies.  Instead, we have no laws to handle this situation.

The second-best situation would be to start putting those laws into place now.  Fix the regulatory scheme.  Reform tort law: why does the Oil Pollution Act limit the legal damages from an oil spill at a hilariously-low $75M (http://www.lawsuitfinanceblog.com/2010/06/bp_disaster_highlights_that_to.html)? 

Even better, turn this energy and fury into a change in American energy policy.  That would be real leadership: refocus popular anger from the short-term immediate cause to real long-term change.  The simple reality is that America's use of oil contributes to this.  The amount of oil spilled in the Gulf gets spilled *every year* in Nigeria (http://www.boingboing.net/2010/06/14/more-oil-spilled-in.html).  We only get upset when it's in our backyard.

Instead, we've got Obama publicly shaking down BP.  That's certainly easier: westerns work better when one guy has a white hat and the other has a black hat.  But it's not leadership, it's public theater.  And it ensures that this will happen again.

To be clear, I do think BP should go under as a result of this.  Given their current cash position, I don't think that's impossible.  They have a big line of credit from JPM right now ($50B) which could keep them afloat, but with CDS spreads widening and the various debt problems in Europe, I wouldn't be surprised to see JPM pull that.  They have something like 13B in cash and another 10B in yearly profit, but if the estimates of daily oil spill increases, or they don't fix it, their liabilities could be much higher.  Then we might get to see whether BP is too big to fail (it's like the too legit to quit of the 21st century!).

I'd just like to see the blame and fixes extend beyond just blowing up BP :)

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Thanks for the links and your comments!

I don't think this crisis is about putting BP in front of a firing squad like that inmate in Utah. I think it is about them owning up to their responsibilities for the damage they caused to the US and its people. We allow them to do business in our country with certain expectations, and when they fail to meet their obligations, some punishment is in order. BP and its execs have acted pretty callously and unapologetically for the first 1.5 months of the crisis, and now the best they can give us are alligator tears before going to a sailing regatta. The people and Washington don't appreciate that. Yes, maybe we're using BP to score political points and serve as a warning to other would-be violators, but as you said, destroying BP won't help us avoid another disaster, and won't bring the Gulf back. But let's remember that there's a good chance BP will be just fine in a decade, since much of their business is outside of the US, and they can write off all their fines and penalties. Everyone predicted the death of Exxon after Valdez.

FDR also made public spectacles and called out big industry and the banks whose business practices led to the Depression. From the NYT: Mr. Obama wanted to transcend partisanship. Instead, however, he finds himself very much in the position Franklin Roosevelt described in a famous 1936 speech, struggling with “the old enemies of peace — business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering.” And that’s not necessarily a bad thing. Roosevelt turned corporate opposition into a badge of honor: “I welcome their hatred,” he declared.

As you said, during last week's BP-Obama meeting, the closing price was pretty much unchanged, so their stock didn't "collapse" in response to the $20B settlement that Vlad Obama forced upon them. But as I said, during the day of the 16th, the stock went up, not down. So if the meeting was so disastrous for business confidence, the share price didn't reflect that. Regarding the jump in basis points, that's how third-party bankers evaluate BP's prospects. Their debt status is near junk like Greece, but it may be irrational and inaccurate. It's just a guess, and has little to do with BP's actual financial viability and obligations to the US government. As we saw during the credit crisis, debt rating agencies were way off target and contributed to the collapse. BP and Greek debt are still much safer investments than a lot of stuff out there.

No one ever said the problem was all BP. In multiple emails I said it was also on the oil-thirsty public and our high-consuming way of life (not to mention our out-of-sight-out-of-mind political mentality), and also the lax regulators and politicians who took oil money and let the companies police themselves. But in this case, the spill is 100% the fault of BP and Transocean. Obama didn't blow up the rig. Problems with the cleanup and repair effort are on the industry and government both. But for the spill, I don't think BP can come out and blame the government for not regulating them better. Because that is an admission of their own incompetence (even though they assured everyone that they had deep water drilling down to a near-foolproof science), and contradicts the oil industry's efforts to ease regulations and expand drilling over the last decade. "It's not our fault, the government should have watched us more carefully!" Well they're not allowed to pull that excuse when they're the ones who told the government and public that everything was fine and to leave them alone.

As you probably know, pro-oil legislators wrote a loophole in the offshore drilling permits process. Regulators have only 2 weeks to review and sign off on drilling proposals before companies are allowed to start their projects. Everyone damn well knows that the MMS is understaffed, undertrained, underpaid, and the ones that do make decisions are often pro-oil former industry lackeys looking to buddy up to companies to earn a cushy return to the private sector. There is no way they can read thousand-page reports with complex data in 2 weeks. So essentially, it's like they don't even need to get an approval. This is the fault of industry lobbyists and corrupt public "servants". Energy extraction should be as scrutinized as financial accounting and food/drug safety (and we're still not perfect in those areas).

I completely agree with the need to have newer, better, stricter laws on the books. But we're just 2 months after the rig explosion. It's going to take Congress some time (universal health care took over a decade after all). We're still collecting the data, and the GOP are being assholes every step of the way, pulling the "government stifling business and taking away our rights" card every chance they can. But we can't have it both ways - either we want to roll out strong, effective, rational regulation of businesses in the national interest, or we just accept the status quo with the conservative ideology of deregulation and short-term profit-taking. If we have to temporarily trample on the rights of the "poor, defenseless corporation" when real flesh-and-blood people are getting screwed, then that's a sacrifice I'm willing to accept.

I don't think Obama will rest now that he has "shaken down" BP; that was never the end goal. Of course he used this occasion and his prime time address to stress the need for energy alternatives, and he will continue his push for a greener economy like he promised years ago on the campaign trail (of course the energy industry will fight him tooth and nail). He was under fire for not getting madder about the situation, so he responded. Maybe he went too far with the $20B, but the Dem Congressional leaders were also involved, and we'll let the historians decide in the future There were some concerns that BP would drag its feet to "honor all legitimate claims", so he cut through the red tape and made sure the victims got some help before the next ice age. He works for the people, not BP. The money is part of the process, but not the objective. Give Obama some credit, I think he knows that we have to change the way we do and regulate business so that we're less dependent on risky energy exploration and have more peace of mind that strict safety measures will avoid catastrophes. As you said about Nigeria, it is also sad that our dependence on imported oil conveniently allows us to ignore all the environmental and social harm energy extraction causes in the Third World. Well once we have more energy flexibility at home, we can be more selective with our sources of imports, and hopefully boycott the companies and nations that commit gross violations.

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I thought it was pretty clear, as per a speech given by Obama, that he WAS using this as a stepping stone to a new improved energy policy focusing on clean and sustainable energy, is that not the case?

And if i had to address point 1, why weren't laws in place?  I would say that it is because businesses own government on this kind of thing.  Kind of addresses the difficulty of point 2, make some now.  

I think t's point of washington deal making is what makes or breaks the Putin reference.  The understanding is that when Putin makes a deal behind closed doors, it was an offer you couldn't refuse.  I don't think we believe that is the case with Obama.  It may ACTUALLY be the case, which would make him Putinesque for sure, but i don't think that is public perception at this point.

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Thanks M, that was my point exactly regarding the difference with Obama and Putin. Plus BP has an army of litigators who are much better than government lawyers, so if Obama played hardball with them and overplayed his hand, they would find a way to roast him for it.

For all we know, the $20B fund may be a LUCKY BREAK for BP. As J said, they made over $10B in profit last year, and their cushy royalties agreements with the government mean that they shortchange the American people millions each year too. Maybe they won some government concessions and guarantees that they wouldn't revoke their licenses or whatnot. History has shown us that oil companies often escape full punishment, and I wouldn't be surprised if their allies in government helped them this time too. 

Thanks for your comments, G. I'm proud of Obama for doing this much so far and not being scared to be publicly anti-business (at least corrupt business). Actually my "approval rating" for him is the highest it's been since his inauguration. He didn't want this crisis; it's distracting the government and people from all his other policy initiatives. But he's doing what he can to fight for the victims and use the crisis to show us how we have fallen so far during the Bush years. We need more regulation (as if the recession wasn't proof enough), and cleaner ways of getting energy - plus we need to use energy more sparingly, which I wish he would stress more, instead of riding around in a big motorcade of Chevy Suburbans. And I hope he would use the BP crisis to show how horribly the GOP is behaving and how they are truly bad for America. As if health care wasn't bad enough, the GOP are just acting outrageously regarding BP and the financial reform bill. He's got to nail them to the cross for this, and even dare to call them unpatriotic (they called the Dems that during the War on Terror anyway).

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To add to this, I think no one (at least no one I've read) suggests that BP shouldn't be fully liable for all costs that result from the spill. As long as the escrow account is only used to pay all the legitimate damage claims that result from the spill (and, if it turns out to be less expensive than $20 bil, the rest is returned to BP), then the escrow account, on a net-net basis, doesn't really change BP's ultimate cash position.

What it mostly does is in the name of efficiency. First, it saves a lot of litigation and time costs on both sides. If BP doesn't set up the escrow account, then the government would have to sue (assuming BP initially refuses to pay), or keep sending individual bills to BP. Likewise for private parties. It is therefore in both parties interest to set up some means of expediting claims (if you assume BP actually is interested in a good-faith effort to pay legitimate claims and not on releasing packs of lawyers to try to get out of every damage payment).

I think ultimately the escrow fund is a pretty minor achievement by Obama (not that he's in a position to do much anyway). For it to be a Putin-esque style shakedown, it would require Obama forcing them to hand over private shares/monies to the government without compensation. Instead, he asked them to set aside some money on a contingency basis to meet all legitimate outstanding damage claims against them, to be refunded to them in the event that the fund is not exhausted. Any competent corporate bod/executive does this anyway for expected litigation costs, they just don't publicly make deals with the president to do it.

Basically, Obama gets some face for making BP do "something". BP does what it was going to do anyway (set up a contingency fund) and gets some positive press for "owning" the disaster. I think that's probably why the stock price was largely unaffected: the agreement doesn't really mean much one way or another for BP's ultimate fate. Maybe it spooked some bond investors by the size of the fund, but that has to be because BP is revealing to the market information about how much it thinks the damages may be, not because the government "shook them down".

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I think your reply is very well stated and sums up my feelings to a great extent.

One thing to note about the CDS market is that volumes are *way* down (like 90%) from the highs in 2007 so you do have a point about the pricing perhaps not being as aggressive as it could be (though I should mention that CDS prices are based on mathematical models and it might be a bit haphazard to characterize them as nothing more than a guess)...

PS:   I think you're right about blame for the disaster but I have a feeling of dismay to think that only now (2 months later?) the media is talking about how the redundant control mechanism was compromised (i.e. there was only one of two working safety mechanisms) and that no one seems to be asking why the safety systems aren't passive control mechanisms (like the kind in a nuclear reactor) rather than active control mechanisms.

PPS:  I think the administration can't be blamed for the clean-up; once a disaster has occurred there isn't much that can be done (especially when the technical challenge is the thing requiring management).  The government can definitely change the shape of the incentives which are in place and the regulations which give rise to the systems which are utilized in practice... but come on - Bush was the oil man, not Obama!

Alter's "The Promise" on Obama's first year

If you don't want to shell out bucks for Alter's new book on Obama's first year in office, here's an interview where he summarizes his reporting:

http://www.kqed.org/epArchive/R201006161000

I've been harsh on Obama because he entered office with impossibly high expectations and hype (some of it his doing). But Alter reminds us of how hard it was to be president in 2009, and how Obama kept the ship afloat and made some progress on big issues despite massive GOP hatred and obstructionism.

It's admirable how Obama is the type of politician who doesn't care as much about getting credit and gratitude. The stimulus package and TARP were big examples, where the GOP/media gave him hell, and the public never really embraced the positives. The stimulus, despite being infused with some pork and waste (inevitable if Congress is involved) was designed for speed - get passed and get the money out quickly. Sure the economy is experiencing stimulus-withdrawal now, but we avoided a prolonged depression (economists debate how much the stimulus funding actually affected our massive economic machine). It was a real help for medical research, desperately needed infrastructure spending, and assistance for the poor (an increase in the IRS earned income credit and extended unemployment insurance). TARP was started by Bush and Paulson anyway, the big banks survived, people didn't lose their deposits, and Wall Street mostly paid back TARP loans (+ interest), so it didn't really hurt America except for giving arrogant bankers the confidence that the taxpayer will be behind them next time. Both bills cost Obama political capital, and it's hard to get credit and persuade the public that his decisions averted worse outcomes. We'll see how he fares with financial regulation overhaul, despite it being pretty watered down already.

He ignores the political theater and polls almost to a fault, but at least he's trying to do the right thing knowing full well that it's going to cost his re-election chances. Everyone told him to hold off on heath care, but he felt that America needed it in 2009, and there would never be a better time when it could get passed. That hurt him too, but he doesn't need a few insignificant political victories to soothe his ego. He'd rather put his pen to paper so that millions of more Americans can get coverage.

From what we knew of candidate Obama, the M.O. was that he was a gifted communicator but weak on executive experience. At least from Alter's view, it's strange that Obama's first year was marred by poor communication but kept afloat by seasoned, savvy leadership. He is deliberate, analytical, defers to the experts, and his slower pace of decision making (vs. Bush at least) is seen as either a strength or weakness. But his stubborn aversion to sound bites shows respect for his audience, but is also hurting his ability to get messages across. America needs to hear his vision in one sentence and as few syllables as possible. If he wants to gain support, he's got to find a way to boil down Afghanistan, health care, and energy to a bumper sticker. Because his opponents definitely have plenty of anti-Obama bites that stick in the public memory.

One area where his leadership and office were challenged was Afghanistan. Apparently the Pentagon establishment (and Hillary) really ambushed Obama on the troop increase issue, and painted him into a corner. Biden was so upset how they treated the president that he was looking to get people fired. But that also shows weak resolve if a chief executive is pressured into doing what the mob wants. But he believes that Afghanistan is critical for US security, and will withdraw troops next year if conditions show improvement.

Massive mineral deposits found in Afghanistan

Oh, so that's why the war is "worth fighting for": http://www.nytimes.com/2010/06/14/world/asia/14minerals.html?no_interstitial

Afghanistan is flush with iron, copper, gold, and rare expensive metals used in electronics. Soviet geologists first discovered some of the deposits during their failed occupation. Some Afghans retained their survey maps, which caught the attention of a USGS development team after our invasion. We conducted our own aerial surveys in 2006-7 which confirmed the mineral riches, but didn't act on the data until a Pentagon business development unit (that formerly worked in Iraq) got hold of it in 2009.

There are quite a few challenges, mind you, before Afghanistan becomes the "Saudi Arabia" of metals though. Some of the richest deposits are found in the hostile border regions near Pakistan, where even the NATO forces won't venture into. The deposits require heavy equipment and well trained workers to extract, and may be situated in tough mountainous terrain. Currently Afghanistan lacks even a km of railroad, and has no mining infrastructure (or really any modern infrastructure), so it would take decades of development and billions of foreign investment before they are ready. Yet as we have seen in Nigeria and other unstable oil nations, static industrial targets are easy pickings for insurgents and thieves. If they can attack NATO and UN compounds at will, they can easily disrupt mining production with sabotage or mere threats to workers. We know that we won't really pacify Afghanistan no matter how many surges we send. So if the price is right to justify mining there despite the risks, our security presence will probably need to be permanent, like our bases in the Gulf states. 

Another confounding factor is minerals-thirsty China. Although Afghanistan is "our project", the Chinese have already made their presence known by bribing and winning the rights to mine copper in some areas. So it's almost assured that the US and China will raise tensions competing for influence. And lastly, the culture of corruption in Afghanistan would probably just intensify with a new high-value economic sector. The US is among the top 20 least corrupt nations, and look how our MMS and mine safety regulators perform.

"The corruption that is already rampant in the Karzai government could also be amplified by the new [mineral] wealth, particularly if a handful of well-connected oligarchs, some with personal ties to the president, gain control of the resources. Just last year, Afghanistan’s minister of mines was accused by American officials of accepting a $30 million bribe to award China the rights to develop its copper mine. The minister has since been replaced." -NYT

Also a very good Frontline doc summarizing our challenges in Afghanistan: http://www.pbs.org/wgbh/pages/frontline/obamaswar/

We're paying and pressuring the Pakistani government to help us defeat the Afghan Taliban, which is essentially the Afghan wing of the ISI. Yet an even greater regional security concern is the viability of the fragile pro-US regime in Islamabad, with its nuclear arsenal, rivalry with India, and threats from internal Islamist groups. So winning in Afghanistan means weakening our allies in Pakistan, and supporting Pakistan means condoning the Afghan Taliban. How are we supposed to resolve that paradox?

Please don't let Meg Whitman win

I really, really don't want Meg Whitman to be our next governor (call it anti-CEOism bigotry). How can she blast the "tax and spend" CA liberals in Sacramento, and promise austerity and fiscal discipline, when she's broken campaign spending records in her epic battle to overcome the mighty... Steve... Poizner? She's spent $81M so far, and will at least double that in her fight vs. Jerry Brown. Most of that has been on incessant TV ads, which surveys have shown actually turn off CA voters to her. So she's spent $71M of her private fortune to produce ads which actually hurt her, yet she vows to lay off 40,000 state workers as governor, in order to "trim the fat". The average full time CA state employee made $68k in 2008. So if Whitman cares so much about CA, why doesn't she stop her stupid Spamming and extend 1,000 jobs for a year? Better use of the money to me. Republicans hate government, yet they want to lead it. Well, they use the office not to help the people, but to hook their buddies up. Dems do this too, but less outrageously. Well, at least Whitman isn't a Bible-thumping ideologue, and I doubt she'd get caught in a sex scandal because she makes Hillary Clinton look like a perfect 10. 

During this anti-incumbent/anti-government movement, she does play the outsider with business savvy pretty well. But so did Arnold and Dubya.

http://www.huffingtonpost.com/2010/06/04/meg-whitman-spending-meg-_n_601328.html

Israel after the bloody flotilla raid

"[If I had been born a Palestinian, I would have joined] one of those terrorist organizations."
- Former Israeli general and prime minister Ehud Barak, 1986

http://www.newsweek.com/2010/06/05/lost-tribe.html

This is one of the most candid, reasoned assessments of Israel's security paradox from a former Israeli major who is now at the Kennedy School. And he doesn't blame anything on the Palestinians, even when justifiable arguments exist. He maturely realizes that Israel is ultimately in control of, and responsible for, its actions and destiny, and any attempt to blame others for "forcing their hand" into bloody mistakes is an insult to their homeland, people, and values. As previous emails have touched on, there is no logic in using violence to defend oneself, when those acts of violence ultimately compromise future security (and one's social/moral values). If you are truly committed to ridding the world of terrorists, WMDs, and murderous fanatics, you cannot use that cause as pretext for becoming the very thing you're fighting against.

We recently discussed how the Israeli public as a whole has soured on the peace process, and would rather maintain the status quo of apartheid. During the first Lebanon war in 1982, Israeli-backed Christian militias slaughtered hundreds of Palestinian refugees. A crowd the size of 10% of Israeli's population gathered in Tel Aviv to protest Israel's indirect responsibility for the atrocity. A generation later during the 2008-9 Gaza war, only a few dozen Israelis protested similar killings of Palestinian civilians - this time directly by Israeli hands (and not accidental in some cases). Possibly in the 1980's, criticism of Israel's government/military was not automatically equated with anti-Semitism and betrayal of heritage, as it may be today thanks to provocateurs like Alan Dershowitz. Despite much past suffering, those Israelis who took to the streets in 1982 understood that true patriotism is not blind support, but rather diligent scrutiny to ensure that their country met the social and moral obligations of a righteous nation. But current Israelis mostly criticized the Lebanon/Gaza wars and the recent bloody aid flotilla raid because they were not resounding victories like the Six Day War. They were upset that their government wet the bed, not that they killed innocents in unnecessary conflicts.

The number of Palestinians killed over five years of the first Intifada equals the number killed in the Gaza war in just 22 days. The intensity of violence is increasing, yet the number of internal Israeli investigations of Palestinian civilian deaths has decreased. The Israeli public generally accepts this because their quality of life has improved, yet more Palestinians are starving and dying. Israeli deaths are way down after the erection of the security walls and Hamas/Hizbullah's ceasefire of rocket attacks. And all the while, their government has become more right wing, and provocative settlement and enforcement activity in the West Bank show no signs of abating. I suppose the government and public believe that such measures are necessary to counter the growing threats of terror groups and a near-nuclear Iran, but international condemnation of their draconian methods makes it harder to build consensus for punitive action on Iran and supporters of anti-Israel terrorism. Though all that has nothing to do with millions of unarmed Palestinians living in squalor and oppression. I'm not saying it's an easy fix, but why can't they make a better effort to decouple the humanitarian consequences from their security strategy?

Israel was created after WWII as a homeland and safe haven for Jews. Yet since then, more Jews have died in Israel than the rest of the world combined. Sadly, more Jews would be alive and thriving today had Israel never been created. So has Zionism been a failure? I am sure that Israelis would counter that finally having a homeland was worth the sacrifice, and look at all they have accomplished (with massive Western aid and diplomatic support). But is ethnocentric pride clouding rational judgment? A successful Jew would still be free to succeed in most other corners of the industrialized world. Though a Jew is less safe in his homeland than in nations that were formerly affiliated with Nazi Germany, or even in the Islamic Republic of Iran. Jews aren't dying in the Holy Land because their neighbors wish to exterminate them for who they are. They're dying because they refuse to give up or even fairly share land that others want, or used to legally reside in. So really it makes no sense for politicians and the media to conflate anti-Semitism with territorial power and politics.

This should be obvious but I'll state it anyway: I think Jews should have a safe, independent homeland that reflects some of their ancestral territory. I also wish the same for every other landless minority group, but not at the price of endless conflict, regional instability, and displacing others (especially those who never even remotely contributed to the suffering of that minority group). Israel is here to stay, that is the reality. But military strength and propaganda are not enough to guarantee its future. Success and survival depend on sharing and cooperating with neighbors, not subjugating and murdering them. South Africa, Nicaragua, Northern Ireland, and maybe even Sudan have all shown signs of progress towards peace and reconciliation from ostensibly intractable, complex, and delicate situations. It's their choice.

Now if only Helen Thomas could have articulated something like that instead of, "They should go back where they came from".

Oscar Grant murder trial: setting up for another Rodney King?

http://www.kqed.org/epArchive/R201006040900
http://www.youtube.com/watch?v=bmJukcFzEX4
http://cbs5.com/local/BART.shooting.trial.2.1681755.html

You probably remember the shooting of Oscar Grant on New Year's Eve by BART policeman Johannes Mehserle that was caught on a number of cell phone cameras. The cop is accused of murder, but the trial was moved from Alameda to LA County due to possible protests, a biased jury pool, and possible harm/tampering of the courtroom participants. Mehserle is defended by Attorney Michael Rains, who has defended the police often in his career, and has also represented Barry Bonds.

The jury selection process has begun, with about 250 LA residents (about 1/4 of them being black) filling out a paper questionnaire to tease out prejudice regarding race, crime, and law enforcement. Although both sides have agreed on the list of questions, there may not be much live questioning. The judge plans to select the jury in a matter of two days or so and then jump into opening statements, when jury selection for similar high-profile murder cases has taken weeks. The assigned judge, Superior Court Judge Robert Perry, has a reputation for expediency and keeping to a tight schedule. So that is raising some eyebrows. But each side is permitted to excuse one judge-selected juror for any reason other than possible bias.

In addition, the matter of admissible evidence is puzzling. The California evidence code states that "character evidence" is inadmissible for a trial of this nature. Some of you on this email list have JDs, so please chime in with more explanations and corrections if I misrepresent anything. Basically, the victim's past conduct during similar events as the night in question can't be used to explain his behavior/intent. Grant has had 3 felony convictions, and had resisted arrest during a prior altercation when he was being similarly cuffed on the ground, and was then tased. The judge felt that it would be a denial of Mehserle's Constitutional rights to bar this evidence that may cast doubt on his guilt, so he decided to supersede CA law, which is unusual.

On the other hand, Mehserle's questionable background will most likely be inadmissible. Apparently he has used a taser properly on duty before, which would cast some doubt on the accidental firearm discharge defense. Mehserle is also under investigation for physical contact with a black suspect, but since that litigation is pending, it is also inadmissible. It's also strange that if Mehserle was innocent, why would he refuse to participate in the BART police internal investigation and resign a week after the incident? Mehserle was mostly silent after the event, and during his first questioning by internal affairs, he never mentioned any taser. His "I thought I was using my taser" defense only emerged two days after the event, possibly after being coached by attorneys. And there are points such as a taser weighs about half as much as a loaded sidearm, and also has bright yellow markings on it that pistols lack. Plus there are the bystander cell phone videos, which seem to show Mehserle looking at his holster before reaching for his gun, suggesting cognizant use of deadly force.

Regarding the cell phone video footage, the judge's ruling is troubling. In general, jurors can evaluate impartial video evidence themselves and decide the facts based on their perceptions. But for the Mehserle trial, the judge granted the defense's request to have a video analysis expert testify on the video. They argue that the poor quality of the footage requires a video expert to "decipher" the events in question. So in this case, the expert opinion will be telling the jury what he thinks is going on in the video. Will the jury trust their own instincts, or defer to the views of an expert called by the defense?

So if Mehserle is acquitted or charged with a lesser manslaughter conviction, there will be probably be a lot of anger and some violence from the black and minority communities in the Bay Area (though the trial seems to be of very little interest to LA residents). Of course the trial hasn't even begun yet, and who knows what Mehserle will say on the stand, but already a couple judge rulings seem to be favoring the defendant.