Free Markets, Free People
The cluelessness continues in the White House about the impact of the 6 month moratorium on drilling in the Gulf in waters over 500 feet. Taking the BP disaster as 100% certain without out such a moratorium, the administration has effectively stopped work on 33 deepwater exploration rigs in the Gulf . Energy Tomorrow gives a good round up of what the experts are saying about this policy:
•Adam Sieminski of Deutsche Bank predicted that U.S. oil production could fall by 160,000 barrels of oil per day by next year. (Financial Times)
•Bernstein Research said delays from the moratorium and rising costs stemming from new safety regulations are likely to raise the marginal cost of deepwater production by about 10 percent. (Financial Times)
•Paul Cheng of Barclays Capital warned that the higher costs could eliminate small independent companies who compete for drilling projects against the majors. (Financial Times) He also predicted an 11 percent drop in deepwater oil production. (Houston Chronicle)
•The Houston Chronicle reports that two large oil-services companies are relocating workers from the Gulf of Mexico to onshore North America drill sites and Brazil.
•The National Ocean Industries Association (NOIA) predicts that relocation is just part of the pain to be suffered by energy workers. Burt Adams, NOIA’s chairman, said in a statement, “the [president's] order will be felt by the families of tens of thousands of offshore workers who will be unemployed.”
The American Petroleum Institute (API) estimates that the moratorium will cost us 130,000 barrels of oil a day by 2011 and up to 500,000 a day by 2013. And it could put up to 46,200 jobs at risk short-term and as many as 120,000 over the long term.
So the blanket moratorium has some real down-side to it. And it is important that our leaders understand that and are sensitive to it, especially when we’re in the economic doldrums right how, the oil spill has all but devastated fishing in the area and the resort towns who normally thrive in the summer are feeling the impact of the spill. Risking that many jobs with a blanket moratorium is just not good policy.
So how sensitive to all of this is the White House? Louisiana governor Bobby Jindal found out recently:
Jindal said he had a conference call with President Barack Obama’s senior adviser, Valerie Jarrett, and appealed to her to shorten the six-month moratorium, arguing that a half-year pause would force oil companies to move drilling operations overseas for years and that the federal government could easily impose new safety standards and monitoring in a shorter time frame.
“She asked again why the rigs simply wouldn’t come back after six months,” Jindal said. “What worries me is I fear they think these rigs can just flip a switch on and off.”
Gross ignorance is all that can be called. These rigs cost about $500,000 a day for oil companies. You do the math. Those owning the rigs probably wouldn’t mind sitting around, doing nothing and getting paid 90 million for each rig. But the oil companies are going to move them, while they have them under contract, to foreign leases they own in order to seek oil.
Exploration rigs have always been at a premium (which is why their daily rate is so high), and they’re constantly working somewhere – as long as the price of oil supports such exploration. But since half a year is the apparent non-negotiable moratorium, those rigs are going to pull up stakes and move to foreign leases – leaving the oil untapped, and providing jobs elsewhere. We end up with higher unemployment and more dependent on foreign oil than ever.
And our leaders haven’t a clue.
The Associated Press quotes Adm. Thad Allen, the administration’s point man for the government response to the oil spill, as saying this weekend the oil spill may be with us “well into the fall.”
If so, the political news just continues to get worse for the Democrats.
Dogged by a poor economy, dreadful unemployment numbers, a simmering immigration situation and unpopular legislation, the Obama administration and Congressional Democrats are in political trouble. The last thing they needed heading into the fall mid-term elections was a disaster such as the oil spill in the Gulf of Mexico.
Of course no thinking person blames the cause of the disaster on the administration, although there is an argument to be made that lax Minerals Management Services (MMS) oversight might be a contributor. However, the blame rightfully belongs exclusively to British Petroleum. But mobilization in reaction to the disaster as well as the responsibility for federal waters belongs to the administration. As many have said, rightly or wrongly, the criticism George Bush received for Katrina had nothing to do with the hurricane per se, but with the perception of the federal government’s slow reaction to the disaster afterward.
This administration is coming under the very same sort of criticism. And while the president finally seems to be getting the message on the public relations front about demonstrating more concern and urgency, he’s not getting good reviews from most observers for his handling of the government’s end of the disaster. Although he claims administration officials have been on the job since “day one” and fully in charge of the effort to cap the well and clean up the Gulf, few seem to believe the claim.
Now come the images of oil soaked pelicans and other wild life and the political damage continues to mount. Administration supporters ask, “what do you want him to do?” Critics say, “lead.” Thus far, however, little leadership has been evident.
Presidential historian Douglas Brinkley says, “there is a craving for a different kind of crisis leadership from President Obama largely because he’s so capable of it as we saw on the campaign trail in 2008,” he said. “When he lets go and talks from the heart, he’s one of the most effective political figures in modern times.”
But talking isn’t the type of leadership that is being craved by most. Action is the key. And to this point, action by the federal government is perceived to be far less than it should be and certainly less than many want and expect. Critics wonder, for example, why Louisiana governor Bobby Jindal’s effort to build barrier islands to protect the state’s wetlands remain wrapped in federal red tape after 50 days.
Some of his supporters are now urging the president to “go off,” get emotional and show some rage. Rage won’t contain the spill clear the Gulf. What is needed now is a comprehensive plan to cap, contain and clean up the leak and competent leadership to execute it.
If they don’t see that, the American people may take their “rage” out at the ballot box in November
The ABC News/Washington Post poll is nothing to write home about if you’re the President of the United States – they guy in charge of the federal government’s response to disaster. Americans are beginning to understand the scope of the catastrophe, they hold the proper company responsible and culpable, but, that said, they’re not at all happy with the federal government’s response. Interestingly, the present effort gets worse reviews than Katrina.
By more than a 2-to-1 margin, Americans support the pursuit of criminal charges in the nation’s worst oil spill , with increasing numbers calling it a major environmental disaster. Eight in 10 criticize the way BP’s handled it – and more people give the federal government’s response a negative rating than did the response to Hurricane Katrina.
A month and a half after the spill began, 69 percent in a new ABC News/Washington Post poll rate the federal response negatively. That compares with a 62 negative rating for the response to Katrina two weeks after the August 2005 hurricane.
The IBD/TIPP poll echoes the ABC poll:
The poll found that 30% rated Obama’s response as “unacceptable” and 22% rated it “poor.” Just 6% rated it “excellent” and 17% “good.” The rest gave him an average score.
Three-quarters of Republicans and one-third of Democrats disapprove of Obama on the issue. In an ominous sign for Democrats heading into midterm elections, just 18% of independents gave him favorable marks on the spill vs. 57% giving him failing grades.
The all important independent bloc gave him failing marks in an overwhelming majority (74% of independents viewed the federal effort negatively in the ABC poll).
“I don’t sit around talking to experts because this is a college seminar,” Obama continued. “We talk to these folks because they potentially have the best answers, so I know whose ass to kick.”
Given the polls, the size of the disaster and the poor federal response, most people, as the polls demonstrate, already know “whose ass to kick.”
Unfortunately, it doesn’t appear to be having much of an effect.
I think Charlie Rangel may have summed it up best:
“I don’t think the administration has the slightest clue. We’re bringing in experts now, in and outside of government, to see whether or not BP will do more.”
America continues to be held hostage by a lack of leadership.
If you’ve tried to imagine its size, there’s a site out there that will help you. And if that doesn’t put it in context enough for you, you can drop it on a map anywhere you’d like.
I dropped it on Washington DC.
Imagine something of that size in that area. Why there’d be a mobilizing of everything that could be mobilized trying to fight this thing and control it.
And of course there’s the “what will it do” question as in, once it gets into those loop currents around the keys, then what?
That particular test was run with dye within 20m of the surface. Don’t forget there’s a huge plume of oil well below the surface that is going to move as well.
Yes, some will disperse with time. Some will evaporate. But there’s still questions about that which is moving below the surface and how much of that will remain concentrated enough to have an effect. After all, the dye made it.
UPDATE: OK, my bad – the YouTube vid above is that of a model showing how the current flows and approximate time in days, for it to disperse. ScottH in comments brought it up and asked me to make it clear. Not sure how I ended up thinking it was real (oh, yeah, the dye reference). I sound like a global warmist. Anyway, this at least has some real data and some science behind it, however it is a model.
The political winds certainly seem to be shifting a bit as I watch pundit after pundit begin, every so softly for some, to come to the same conclusion Maureen Dowd has about President Obama.
The oil won’t stop flowing, but the magic has.
The other day, Dowd referred to Obama as “President Spock” and moaned about his inability to relate. He’s not an emmoter-in-chief as Bill Clinton was, she complained. Instead he maintains an aloof distance and instead of tackling the problems that come with the presidency head-on, seems more inclined to treat them as annoyances or distractions.
All this brought on by an oil spill that Barack Obama had nothing to do with, but which is now starting to define his presidency. Said Dowd in the previous editorial:
Once more, he has willfully and inexplicably resisted fulfilling a signal part of his job: being a prism in moments of fear and pride, reflecting what Americans feel so they know he gets it.
Again, to those of us who watched his progression to the Presidency while warning about his wafer thin resume, this doesn’t come as a particular surprise. Call it “I told you so” if you wish, but many critics found his lack of leadership credentials to be the most important reason not to elect the man.
And now, the Dowds, Carvilles and Matthews of the world are discovering this problem.
Certainly, he didn’t cause the leak. George Bush didn’t cause Katrina. But he’s responsible for the federal response, a precedent set by Katrina and the Democrats who demonized and pilloried Bush. Obama is the guy on the spot to make a difference when a disaster strikes. He is the person who must mobilize the federal forces necessary, remove the red-tape and get things headed in the direction they need to be headed.
Where is that? He’s visited the area twice. He seems to have no idea of what further measures might be possible or necessary. He’s delegated everything to others and doesn’t seem that interested in taking an active hand. In fact, it appears he’s only made an effor to look like he’s interested because people are beginning to talk.
Where is the leadership? Where’s Obama taking an active role, for instance, in federalizing some National Guard troops, training them up on beach and marsh clean up and getting them where they need to be? Is every possible boom available on site and either deployed or ready to go? Why isn’t he in using the influence of his office to remove the red tape wound tightly about the Corps of Engineers and helping the governor of LA get his barrier islands constructed?
Why isn’t he talking to Saudi Arabia about how they used supertankers used to clean up the horrendous spill caused by Saddam Hussein over here? How many supertankers are available. Why aren’t we chartering them, and moving them in the spill area?
Instead we see the deployment of the Attorney General to explore criminal indictments against BP, a commission to study the problem and this:
One little hole a mile down on the ocean floor, so deep it seems like hell spewing up its sulfurous smoke, has turned the thrilling saga of “The One” into the gurgling horror of “The Abyss.” (Thank goodness James Cameron, the director of “The Abyss,” came to Washington Tuesday to help the administration figure out how to cap the BP well. What’s next? Sending down the Transformers and Megan Fox?)
Seriously – James Cameron is somehow more of an authority on submersibles than, say, the thousands upon thousands of experts within the oil industry (not just BP) who work with them daily in the environment in question? Is it any wonder to see people like Dowd beginning to lose confidence in Obama’s ability to lead?
Barack Obama isn’t responsible for the leak, and he’s made it clear, and rightfully so, who is. But he is responsible for protecting this country from all enemies and problems – even evil oil slicks that threaten our coastlines and way of life in those areas.
And he’s failing – miserably. Dowd continues to pretend this is something that Obama can change and quickly if he’ll only step up.
This president has made it clear that he’s not comfortable outside whatever domain he’s defined. But unless he wants his story to be marred by a pattern of passivity, detachment, acquiescence and compromise, he’d better seize control of the story line of his White House years. Woe-is-me is not an attractive narrative.
His problem isn’t a story line that he’s deliberately, for whatever reason, allowing to unfold. It is the fact that he hasn’t the experience, the fortitude or the leadership to do what is necessary to address the ever growing problem.
43 days and Obama remains on his balcony, detached, annoyed and clueless. That’s not how anyone wants to see their President.
As he did many times in the Illinois Senate, he is again voting “present”.
Since hopping out in front of the cameras, thinking the top kill had worked and claiming that the administration has been in charge of the effort from “day one,” things have gone down hill for President Obama. As it turns out the top kill effort was unsuccessful. And, as the Washington Post tells us today, now the effort is to distance the administration from the oil company is supposedly was directing to do its bidding:
Struggling to convey command of the worsening Gulf of Mexico oil spill, the Obama administration is taking steps to distance itself from BP and is dispatching Attorney General Eric H. Holder Jr. to the Gulf Coast to meet with federal and state prosecutors. The Holder trip could signal that the environmental calamity might become the subject of a criminal investigation.
Holder has said Justice Department lawyers are examining whether there was any “malfeasance” related to the leaking oil well, and investigators, who have already been on the coast for a month, have sent letters to BP instructing the company to preserve internal records related to the spill. But federal officials indicated that Holder’s trip, which will include a news conference in New Orleans on Tuesday afternoon, will focus on enforcement of environmental laws and holding BP accountable.
The opening of a criminal investigation or civil action against BP, if either were to happen, would create the unusual situation of the federal government weighing charges against a company that it is simultaneously depending on for the most critical elements of the response to the record oil spill.
Usually, if there is a possibility of a criminal investigation and charges in a situation like this, they are kept in abeyance until there’s some resolution to the problem. But in this case, desparate for something which will cast the administration in a favorable light, it appears this is the chosen method. Holder’s news conference will be a welcome distraction from the constant “but what are you doing to stop the leak” questions the administration gets.
That’s the act of symbolic separation.
Step two is to physically separate the administration from the
bad guys BP.
The relationship between the federal government and the oil company has been an awkward collaboration all along — “We have them by the neck,” Interior Secretary Ken Salazar said of BP in congressional testimony last week — but it reached a turning point Monday when the administration said it no longer wants to share a podium with BP at the daily briefing in Louisiana. Instead, the national incident commander, Coast Guard Adm. Thad W. Allen, will give a solo briefing wherever he happens to be.
It is a “we’re still in command, but it is an arm’s length, hold-your-nose, we’re forced to work with these people, command.” The perfect setup for something this administration is actually quite good at – demonization.
As for the spill itself, the next step is in contention. Apparently Carl Browner, the head of the EPA has become an expert in fluid dynamics and underwater blowout prevention:
The administration and BP have disagreed over whether the company’s next maneuver would cause a temporary increase in the flow of oil into the gulf. In the coming days, BP plans to saw off the top of the leaking riser pipe where it emerges from the blowout preventer that sits on the well. BP will then lower a containment dome, or cap, onto the riser in an attempt to capture the leaking oil. White House official Carol M. Browner said Sunday that after the pipe is cut, about 20 percent more oil would probably escape before the new cap is in place. BP officials said that they think that is unlikely and that there might be no significant change in the flow.
I’m not sure where she gets the idea that cutting the riser will allow a 20% increase in the flow. They’re cutting it, not removing it. It will still be there with the same diameter it’s always had, it’ll just be shorter so they can deal with it better.
The salient point, of course, is like it or not, the administration is stuck with BP, both in the plugging of the leak and in the clean up effort. And frankly, they wouldn’t have it any other way – this is the company that will be blamed for every failing of the administration. Note I said failing of the administration – it has a role and a duty in this disaster. What it is going to do, or at least attempt to do with this distancing, is to lay all blame on BP from this point on.
Holder’s trip to the Gulf is only the opening salvo.
Well it looks like I was a little premature, and I should have known better than to believe an LA Times story.
Live and learn.
The bottom line is that everyone, to include the President and a whole host of politicians (and me) thought the deep water oil leak had been plugged.
In the most serious setback yet in the effort to stem the flow of oil gushing from a well a mile beneath the Gulf of Mexico, BP engineers said Saturday that the “top kill” technique had failed and, after consultation with government officials, they had decided to move on to another strategy.
Doug Suttles, BP’s chief operating officer for exploration and production, said at a news conference that the engineers would try once again to solve the problem with a containment valve and that it could take four to seven days for the device to be in place.
“After three full days of attempting top kill, we now believe it is time to move on to the next of our options,” Mr. Suttles said.
Apparently the pressure of the escaping oil and gas was just too powerful to overcome and the disaster in the Gulf continues. BP’s next option is apparently a variation on the containment dome option they tried previously.
The new strategy is to smoothly cut the riser that the oil is leaking from and then place a cap. Pipes attached to the cap would then take the oil to a storage boat waiting at the surface.An effort at a containment dome was tried earlier this month, but failed when gases escaping from the oil, froze and blocked the pipe. Mr. Suttles said, however, that BP had learned from that experience and now believed that this cap, which is custom fitted to the riser, will be more successful.
Let’s hope they’ve figured out a way to prevent the causes of the failure the last time they tried to use a dome.
Option 2 is to attach another blowout preventer to the non-functioning one already at the wellhead.
If that doesn’t work, we’re most likely looking at a relief well (which will definitely stop the leak) sometime in August.
If that’s true it is fair to say that Obama and his daughter will be having a few more bathroom conversations and that “plug the hole” failed.
In all seriousness though, this presents a big problem for the administration. Thinking they were past the leak and faced only with the clean up (a daunting problem, but not as visible as the leak), most of the building criticism of the way the President and his administration had handled the leak was subsiding. And, the President made an late PR effort by visiting the LA coast to blunt further criticism before heading to Chicago for the Memorial Day weekend.
All for naught now. Per the NY Times:
The latest failure will undoubtedly put more pressure — both politically and from the public — on the Obama administration to take some sort of action, perhaps taking control of the repair effort completely from BP — and increase the public outcry.
And what do we get from the Prez?
“It is as enraging as it is heartbreaking,” Mr. Obama said in a statement, “and we will not relent until this leak is contained, until the waters and shores are cleaned up, and until the people unjustly victimized by this manmade disaster are made whole.”
Manmade disaster? Wait I thought that’s what we were calling terrorism now. It’s all so confusing. As for the statement from Mr. Cool, Calm and Collected – a little over-dramatic maybe? All a part of keeping their boot foot on the neck of BP one supposes. In the meantime, the rest of us hope and pray that the “next option” BP tries succeeds. And we also have to hope that the government won’t “push BP out of the way and take over” or we’ll be out of options.
In this podcast, Bruce, Michael, and Dale discuss unemployment, Greece, and the BP offshore drilling leak.
The direct link to the podcast can be found here.
The intro and outro music is Vena Cava by 50 Foot Wave, and is available for free download here.
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I’ve been watching this oil spill story develop over the weeks since the April 20th explosion and sinking of the BP oil platform in the Gulf of Mexico.
As an outspoken proponent of drilling for oil – both on-shore and off shore – I’ve watched happen what I had been convinced couldn’t happen. A deep water platform, with cutting edge technology, blew up and sank. A deep water well with the latest in blow-out prevention devices failed to function properly and stem the flow of oil from the well. An industry that had no contingency plan or equipment available to quickly cap such a leak. And the result has been an environmental problem that the industry all but claimed couldn’t happen.
All that’s extremely disappointing and causes me great concern. However, it doesn’t change the fact that oil is still critically important to our energy needs now and in the future, must be a part of any comprehensive energy strategy and must still be sought and recovered. Period. End of statement.
That said, the oil industry must seriously address what I’m sure most thought was unimaginable a few short weeks ago. Obviously blow-out prevention technology isn’t fail safe. Perhaps redundant systems are needed, or some easier method of manually addressing the failure of “automatic” systems, especially in deep water wells. This particular well is at around 5000 ft. meaning divers couldn’t be deployed. Robotic submersibles were unable to close the valves on the blow-out prevention device. While that’s bad, what perhaps bothered me more was the fact that there was no industry backup plan in case such a situation presented itself. They’re now fabricating a cap to put on the well and no one knows if that will work.
So this particular catastrophe’s continuance is on BP and the oil industry in general. It seems they may have believed their own press a little too much and were caught flat footed when the worst case scenario unfolded. Since BP is on the hook for paying for the clean up of this mess, not to mention losing a billion plus oil rig, I’m sure the lesson will be learned.
That brings me to the reaction by government to the growing disaster. It appears some lessons are never learned. Slow to realize the size, scope and impact of the disaster don’t even begin to describe its reaction. Certainly the Coast Guard has been on the problem almost from the beginning. But, acknowledging the Katrina comparisons being made, that was the case then as well. That doesn’t excuse the administration’s apparent lackadaisical response. It doesn’t explain why a 1994 plan for such a disaster wasn’t implemented quickly as it was designed to be (it involves fire booms to burn off the oil – and the oil, light, sweet crude is very amenable to burning). Had that been done, some experts believe the spill could have been contained soon after the accident.
It doesn’t explain why the EPA has taken almost 2 weeks to get involved or why the EPA’s Ocean Survey Vessel “Bold” has yet to be deployed in support of the effort when it was in Miami, FL the 19th through the 23rd of April (OSV Bold has been deployed in the past to monitor and assist in other oil spills).
The White House is now in full spin mode and the modus operandi is the usual – blame others. Stipulated – BP is to blame for the leak. BP should pay for the damage it caused – all of it. BP is the cause of the problem and they acknowledge it. Got it.
Now – what has government, which we’re told is always the answer, done to protect our shores and waters from the disaster? Well, it is appearing that so far the effort hasn’t been particularly well run, successful or timely.
Just as interesting is how little the press is howling about it.
Bottom line, this disaster points to inadequacies on both sides of the problem. The oil industry needs to get its act together on this problem. And government has been no better now than it has in the past. I hold out some hope that the industry will learn from this disaster and do what is necessary to prevent it again. Given its history, I hold little hope that government will improve its performance. That said, it should be clear that it is up to industry to clean up its act since government seems inadequate to the job of cleaning up any mess industry makes (government will hold hearings, of course, and spout off about needing more regulation). What shouldn’t end up being an option though is the abandonment of off-shore drilling.
UPDATE: Nice – the usual blame targets again emerge. Huge surprise.
A massive oil spill in the Gulf of Mexico has prompted a large coordinated response from the owner of the rig, BP, and the U.S. government. President Obama addressed the issue in a short speech yesterday where he said:
Earlier today, DHS Secretary Napolitano announced that this incident is of national significance and the Department of Interior has announced that they will be sending SWAT teams to the Gulf to inspect all platforms and rigs. And I have ordered the Secretaries of Interior and Homeland Security as well as Administrator Lisa Jackson of the Environmental Protection Agency to visit the site on Friday to ensure that BP and the entire U.S. government is doing everything possible, not just to respond to this incident, but also to determine its cause.
I was immediately puzzled when I first heard this yesterday. Why on Earth would the DOI have SWAT (“S”pecial “W”eapons “A”nd “T”actics) Teams? What exactly would they need them for, and why would they be dispatched to “inspect” oil rigs in the middle of the Gulf? I was not alone in my puzzlement:
In an odd turn, Obama announced he’d be sending SWAT teams out to all oil rigs and platforms in the Gulf to inspect them, as pointed out by RealClearPolitics. We’re not sure what a Special Weapons And Tactics team is going to do on an oil rig but we’re pretty sure it’ll make good fodder for Tom Clancy’s next book.
I have to believe that Obama was being colorful in his language instead of literal. I checked the DOI website and could find no announcement about “SWAT teams” or any mention of such teams whatsoever. So, it must be the case that the man whose speeches cause tingles to run down the legs of newscasters, oceans to recede, and Nobel Prizes to fall from the sky simply misspoke.
One interesting thing to note is that DHS Secretary Janet Napolitano’s declaration of the oil spill as an incident of “national significance” brings the whole mess within her Department’s purview. That of course allows all sorts of resources not otherwise available (i.e. money) to be employed in the cleanup, but it also raises the question as to what exactly the limits of the DHS are. Apparently they are quite willing to spend gobs of money and effort (and possible deploy SWAT teams!) to tackle an invasion of viscous minerals upon our southern shores, but are completely uninterested in doing anything about an invasion of vicious criminals upon our southern border, other than to challenge the right of individual States to defend themselves. Perhaps Arizona should spill a bunch of oil along the border and see what happens.