Showing posts with label interior. Show all posts
Showing posts with label interior. Show all posts

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.

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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?

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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.

Thursday, September 11, 2008

Living large at the Dept. of Interior

So you have federal employees tasked with collecting royalties from oil companies actually partying, accepting gifts, fornicating with, and doing drugs provided by those companies' representatives. And coincidentally or not, many feel that the government is getting shortchanged on resource royalties. Heh, who needs lobbyists when you can just bribe and dope up the tax collectors instead? This exact scandal happened not long ago (1990) at the same department, so obviously they haven't learned their lesson. Yet another consequence of toothless regulation and laissez-faire government.

http://www.presstelegram.com/ci_10437371?source=rss
Oil brokers sex scandal may affect drilling debate
By H. Joseph Herbert The Associated Press
Article Launched: 09/11/2008 10:05:03 AM PDT

WASHINGTON - A scandal involving sex, drugs and - uh, offshore oil drilling.

It's a strange mix, and it couldn't have come at a worse time for those in Congress pressing to expand oil and gas development off America's beaches while trying to stave off an election-year rush by Democrats to impose new taxes and royalties on the oil industry.

An Interior Department investigation describing a "culture of substance abuse and promiscuity" by workers at the agency that issues offshore drilling leases and collects royalties hit lawmakers Wednesday just as they prepared for votes next week on expanding offshore drilling.

"On the eve of Congress starting this big debate you've got a horror story of mismanagement and misconduct in programs that are going to be a key part of the discussion," Sen. Ron Wyden, D-Ore., said in an interview, adding that it can't help but influence the debate.

The two-year, $5.3 million investigation by Interior's inspector general found workers at the Minerals Management Service's royalty collection office in Denver partying, having sex, using drugs and accepting gifts and ski trips and golf outings from energy company representatives with whom they did government business. The investigations exposed "a culture of ethical failure" and an agency rife with conflicts of interest, Inspector General Earl E. Devaney said.

Between 2002 and 2006, 19 oil marketers - nearly a third of the Denver office staff
- received gifts and gratuities from oil and gas companies, including Chevron Corp., Shell, Hess Corp. and Denver-based Gary-Williams Energy Corp., the investigators found.

"Employees frequently consumed alcohol at industry functions, had used cocaine and marijuana, and had sexual relationships with oil and natural gas company representatives" who referred to some of the government workers as the "MMS Chicks."

The director of the royalty program had a consulting job on the side for a company that paid him $30,000 for marketing its services to various oil and gas companies, the report said. MMS Director Randall Luthi said in an interview the agency was taking the report "extremely seriously" and would weigh taking appropriate action in coming months.

Interior Secretary Dirk Kempthorne in a statement released Thursday vowed to take swift action, saying that he was "outraged by the immoral behavior, illegal activities and appalling misconduct of several former and long-serving career employees."

"We must and we will eliminate any remaining negative elements in the Minerals Management Service," Kempthorne said.

"This IG report has it all - sex, drugs and the Bush administration officials once again in cahoots with Big Oil," said Sen. Charles Schumer, D-N.Y., whose Joint Economic Committee released a report last year claiming the Minerals Management Service has failed to collect millions of dollars in oil royalties.

Republicans and Democrats promised further scrutiny of the Interior Department agency which last year handled $4.3 billion in royalty-in-kind payments from energy companies drilling on federal lands. Under the program oil companies give the government oil in lieu of cash and the MMS office in turn sells the oil on the open market. Sen. Jeff Bingaman, D-N.M., chairman of the Senate Energy and Natural Resources Committee, said the IG report "raises very serious questions" about the royalty collection process, something especially troublesome "given the potential for expanded domestic drilling." He said some basic reforms in the royalty-in-kind program should be included in drilling legislation.

Wyden said the program should be suspended to "clean house" at the federal agency and "bring back the process of rigorous audits and accountability."

House Democrats on Wednesday offered a broader drilling proposal than they had floated previously. It would lift all moratoria on drilling 100 miles from shore and allow energy development beyond 50 miles from the coast if a state agrees. Waters closer than 50 miles would continue to be protected.

The drilling measure is part of a broader energy package that also would roll back tax breaks for the largest oil companies and require them to pay additional royalties, with the money to be used to spur renewable energy programs and conservation.

House Majority Leader Steny Hoyer, D-Md., called it "a strong bill that will increase responsible drilling and invest in renewable energy" and said those criticizing it would "rather have a political issue."

But House Republican leader John Boehner, R-Ohio, accused the Democrats of "trying to pull a hoax on the American people." He said the plan would result "in little or no new American energy production" because states would share no royalties and have little financial incentives to allow drilling.

The Senate, meanwhile, is expected next week to take up several drilling proposals, including one that would open waters off the Atlantic from Virginia to Georgia and the eastern Gulf off Florida to drilling but keep the bans in place elsewhere. That plan also would allow for a 50-mile coastal buffer.

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Associated Press writer Dina Cappiello contributed to this report.

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On the Net:

Office of the Inspector General: www.doioig.gov