Drill Baby Drill! Spill Baby Spill!

...and let taxpayers pick up the tab for clean up.

President Obama increased his administration’s role in the cleanup of the vast oil spill in the Gulf of Mexico on Thursday, by positioning the Department of Defense to assist the giant oil company BP in dealing with the spill and by sending three top officials to Louisiana.

In Baton Rouge, Gov. Bobby Jindal declared a state of emergency Thursday afternoon, saying that the oil slick, which has been spreading perilously closer to shore, “threatens the state’s natural resources.”

...Government officials announced on Wednesday night that the oil spill was worse than they first thought: five times as much oil might be leaking from the well into the Gulf of Mexico as initial estimates suggested. Rear Adm. Mary E. Landry of the Coast Guard said, citing a scientist from the National Oceanic and Atmospheric Administration, that 5,000 barrels of oil appeared to be leaking each day, not 1,000. http://www.nytimes.com/2010/04/30/us/30gulf.html?hp

BP profit improvement

http://www.bloomberg.com/apps/news?pid=20601087&sid=atwi70O8sYzs&pos=4

You're link seems dead richard. I wonder if the government charges the company for the cleanup efforts?

ETA: Wait now it works, don't know why it wouldn't earlier, my bad.

#3 " I wonder if the government charges the company for the cleanup efforts?"

Soundbite sonthe radio implied the gov were going to try and charge BP for the clear-up costs. But given that this has now reached the coast, no amount of money can recover the damage it's going to do.

I watch all of the sob stories coming out of the Gulf and I think: "These fasco-cons are the ones who voted for Oilman W and Drill Baby Drill McCain in overwhelming numbers. Stop griping and asking Washington for help. Clean up your own mess."

The expanding Fascist underbelly of America in these States is bitching about losing tourist business to their posh beachside resorts and losing their fishing business. Hey you Florida Panhandlers: Tighten your belt and pull yourself up by your own bootstraps. Clean up your own mess instead of shamelessly depending on the Federal Government for a fix you moochers. You wanted offshore oil jobs for your state you got it. There should be plenty of jobs in the next decade cleaning up your mess. You poured tea into your harbors and now you got oil washing up on your shores. Ha ha ha.

As a book you Fasco-Cons are probably familiar with has it: "You reap what you sow."

This photo, taken this morning from a satellite, makes me feel like I just shit my pants.

Heartbreaking. With more oil to come, the loop current around Florida, hurricane season, and late summer reversal of currents toward Mexico, the oil will be everywhere. I wonder if dispersants make it easier for bacteria to break down the oil or just keeps it offshore and moving on so that damage not as noticeable / litigable. I suspect there would be less damage overall, and it would be easier to concentrate cleanup efforts without dispersants. (We need some more of geneg's pikes!)

To me, this whole fiasco is just proof of how deregulation of any kind is a BAD thing. If the government agency in charge of monitoring this stuff had actually done their job instead of looking the other way, this tragedy might have been avoided.

Up here in Alaska we know all about how well the oil companies take responsibility for cleaning up their messes. The Exxon Valdez spill was just recently decided (in the last two years). It only took about 20 years to settle the case. And it is fair to say that the final score was Exxon 50, Alaska 1. I have yet to meet an Alaskan who did not work for an oil company who thought the settlement was fair.

Hey, Florida, Louisiana, guess what!

You're screwed. Let's see how badly Bobby Jindal really wants the Feds to start cutting spending right about now.

> 8 If the government agency in charge of monitoring this stuff had actually done their job instead of looking the other way, this tragedy might have been avoided.

Yes, but...it's tough sometimes. People get hauled on the carpet, transferred to dead-end positions, and even fired for doing their jobs--Republicans as well as Democrats. When the winds change, old policies and all the people who were promoted during lax regimes remain--plus those political appointees who burrowed into the civil service during the twilight of the lax regime. Regulators need more protection from political interference, but what they usually get is another few inches of rule book.

It will be interesting to see whether red state political officials will request "Yankee dollars" for clean up and recovery (especially Jindal).

Oil spills are natural. It will clean itself up if we let Mother Nature take its course.

12>Umm, not from what I've seen of past spills.

Lunar, where are you? How is this the government's fault? Or is it OK but would be immoral for the government to take measures? Who's gonna suck it up here?

Well that is Louisiana's problem not BP's. Don't get me involved in their mess--the free market will sort it out.

I don't think there are many innocents here. We screamed when gasoline went to $4 per gallon. We demanded those wells be drilled in deep water because the shallow easy to drill stuff has been done and now the production there is declining. The deep water drilling is unexplored learn-as-we-go territory. By no means am I declaring BP and the regulators blameless. But to stand back and blame the whole mess on others while refusing to give up flying, driving, mass transiting, and putting our trash in plastic bags is a bit hypocritical and has a willful blindness to connect the dots tinge. Oil production, consumption, and transporting is not riskless nor is it ever liable to be.

Oil production, consumption, and transporting is not riskless nor is it ever liable to be.

Nor is any form of energy production. They differ largely in how dramatic the effects are. People react to discrete disasters much more powerfully than continuous degradations and risk. You can give tens of thousands of people lung disease and turn West Virginia into a lifeless gravel pile, and it will never compare to a few pictures of birds with oil on them in the public mind.

From my perspective, the biggest problem here seems to be that BP's damages are capped. Oil companies are not going to care enough if they know no spill could cost it real money.

From my perspective, the biggest problem here seems to be that BP's damages are capped. Oil companies are not going to care enough if they know no spill could cost it real money.

BP has lost billions in share value since the spill. That's real money.

But to be truthful, drilling in the Gulf is the least of many evils. There hasn't been a rig spill in the Gulf for 40 years. This one is not good, but in terms of oil spilled, it is pretty modest. There is an equivalent amount of oil spilled in Nigeria every couple months or so. Oil tankers, even when operated properly, spill oil, and substantially more over time than drilling rigs do.

So, the choices her are to (1) reduce consumption by a lot, (2) reduce Gulf and other drilling that is under control of U.S. firms, or (3) import oil from mostly third world countries via tankers. I can tell you that the most enviornmentally damaging solution is (3). Anyone want to take bets on (1) being a viable option?

17> I imagine the damages were capped otherwise nobody would drill in the gulf. Of course if the risks were too high for the major oil companies to drill without a cap maybe they were too high period.

18> i don't think that having loose environmental standards in this country is a good response to loose environmental standards in other countries.

19: The problem is that the only way to reduce environmental damage is probably (2) since we actually have much better environmental standards than other countries. Further, oil spills in the Gulf from tankers hauling oil from other countries put far more of the black stuff into the water than drilling in the Gulf does, so really, drilling our own oil probably causes less domestic environmental damage than importing it.

Politically, there is no chance that we will dramatically reduce consumption to a level where we don't need to either import oil or engage in offshore drilling (at a practical level, I don't think we can avoid having to do both). So it is not a question of "which option will cause no damage", but "which option will cause the least". From a practical perspective, that option is probably offshore drilling.

> 19 ...we actually have much better environmental standards than other countries...

Robert Kennedy Jr writes that Brazil and Norway require an acoustic or deadman's switch to remotely stop flow at the wellhead, and that oil companies voluntarily employ it in Great Britain's North Sea and elsewhere. "In 2000, the (US) Minerals Management Service, while weighing a comprehensive rulemaking for drilling safety, deemed the acoustic mechanism "essential" and proposed to mandate the mechanism on all gulf rigs." But incoming VP Dick Cheney got busy and "Bush's 2005 energy bill officially dropped the requirement for the acoustic switch off devices explaining that the industry's existing practices are "failsafe.""

Wish it weren't so...

http://www.huffingtonpost.com/robert-f-kennedy-jr/sex-lies-and-oil-spills_b_5641...

21: And were we importing any appreciable amount of oil from Brazil, or Norway, or Great Britain, then that would have a bearing on whether importing oil is more or less messy than drilling it here.

So I will clarify "we have much better environmental standards than most other countries, including several countries that we import substantial amounts of oil from, and the alternative sources that are available are generally at least as bad if not worse".

BP has lost billions in share value since the spill. That's real money.

Its shares lost money in proportion to its legal exposure, and because the share value includes estimates of how easily future offshore drilling projects will be to get approved. I would bet most of the damage was actually the latter. But anyway, it's crony capitalism, not free market economics, when a company is legally protected from the cost of its actions.

I imagine the damages were capped otherwise nobody would drill in the gulf.

The risk would be moderate--this is the first serious accident in decades--and it would be sold at a decent rate to an insurer. It would probably increase the cost of drilling, probably moving a few rigs over the cost/benefit line until the price of oil went up. And fisherman and such wouldn't see their livelihoods destroyed.

Obviously, that doesn't even touch farther externalities, or the environmental damage that has no obvious dollar value.

Isn't there a special tax on every barrel of oil sold in the US that goes into a fund to pay for cleanup costs? I believe they just raised that tax as well.

But that's basically spill-insurance. Why should BP have to pay the costs of cleanup when they're already "covered"? From what I know they're paying for it anyway, but I don't think they're obligated to.

I would like to see the risk assessment that told BP and the MMS that a single blowout prevention device would be adequate protection for a well of that capacity, and located where intervention is so difficult. Also, I would like to know what, if any, changes were made to these requirements after Cheney's secret meetings with oil company execs early in the Bush administration.

Chris Oynes, Associate Director of MMS has apparently decided to "retire" at the end of the month. His photo looks like the perfect stereotype of a "good ol' boy in the awl bid'ness".

Yeah, at least BP meant well, god love-um.

Not.

>26 oakes:

Risk assessment is a standardized methodology. We have any number of displaced nuclear engineers who are easily capable of identifying single points of failure, and providing probabilistic assessments of the likelihood of failures in complex systems. The probability of failures, and the likely costs if the failures do occur, can be weighed against the availability, effectiveness, and cost of prevention or mitigation measures.

Occasionally the assumptions that go into these assessments can become embarrassing. For example, in the 1970s, Ford had a bit of a problem with exploding fuel tanks in the Pinto. Mother Jones magazine obtained and published the cost-benefit analysis, revealing that Ford had calculated that paying any lawsuits resulting from potential fatalities would be cheaper than installing an $11 protective device over the protruding bolts in each Pinto.

So, that's what I would like to know about BP with respect to the current situation. How well did their assumptions match those made by other companies engaged in similar deep-water drilling operations? If they made incorrect assumptions, how do we need to change our current regulations to prevent this from ever occurring again?

And yeah, if purely political and/or greed factors were allowed to over-ride known risks, then I would like to see full prosecution of the responsible parties. If someone's top priority is greed and/or political power, then the only way you get their attention is by taking that away from them in a big way. Make an example, and others may not be tempted to be so loosey-goosey with their own risk assessments.

> 29

Riiiiiiiight. Critics of BP are the real problem.

Genius.

>31 oakes:

Thanks, that's an interesting link, and I always like to look at information on all sides of a story. One thing I find puzzling is, why did the author normalize all of the statistics to a baseline of 10,000 vehicle years? Seems like miles driven, or passenger miles, would provide a better baseline for vehicles that are actually in use.

By using years rather than miles, the author includes every full-size GM pickup that hasn’t made its way to the scrap yard, or at the very least, all those with active registrations. I don’t know whether a higher percentage of GM pickups would be idled than other vehicles, but I do know plenty of people who use smaller, more fuel efficient vehicles for commuting, and save their large pickups for the weekend, or even for summer camping trips. Normalizing to vehicle years, rather than miles driven, gives the same statistical weight to those pickups driven only on weekends (or those used only in the summer to haul campers) as it gives to vehicles that commute a few hundred miles every week.

The National Highway Traffic Safety Administration reports fatalities per 100 million vehicle miles traveled. They also report fatalities per 100,000 population, fatalities per 100,000 registered vehicles - presumably the source for the GM data cited above - and fatalities per 100,000 registered drivers, but none of those figures correlate well to actual hazard levels on the road. The population baseline includes everyone from babies to grannies, including people who don’t even drive. Registered drivers is a bit better, but here again people who commute by bus, and those who drive only to church on Sunday, get the same weight as traveling salesmen. Using the baseline that puts your {generic “you”, not directed at anyone here} client’s situation in the best light, rather than the one that best represent the data, looks a lot like cherry picking. I wonder if the author might have been an expert witness for GM in the case he cites?

The Ford Pinto case is briefly mentioned at the end, but the author doesn’t provide a link to the new information he says is available. And in any case, the issue with the Pinto was not how many people specifically died, but rather, whether Ford had deliberately altered the data they used to assess the hazard of the Pinto design, especially after a number of fuel tank ruptures had occurred, which should have caused them to at least revisit their earlier assumptions.

I know this is a 1970's mentality, but where's the outrage? (a word I hate, but it fits in cases like this). As we hear more and more that this will subsidized by the taxpayers, where are the Americans that are boycotting BP? Where are the nut jobs who put their credit card in the slot, hit regular unleaded, then stand spraying gas all over BP's parking lot and say, "What? It's okay if BP does it!"

We've become a nation of weekend warriors. We get mad in one or two day increments but when all is said and done we hold up our hands and say, "What good does it do? It's not MY problem."

I, however, am going to do my part, as tiny as that is. I'm going to B oycott P olluters, starting right now. American consumers have been the least of BP's worries thus far. Let's hope that changes.

36>

The federal government is not a private corporation whose profits will be largely protected by taxpayers paying for the cleanup, so... no.

Re boycotting BP, one only hurts some franchisee who makes a few cents per gallon. (I thought boycott decision wasn't an issue for me, but BP logos are just now being painted on pumps at the gas station I frequent...) The challenge is to make sure BP fully pays the people whose livelihood it has hurt, cleans up--and to make sure preventive failsafes are in place in future.

BP may have fooled government for a while on the extent of the discharge, but I can't understand the government going along with use of dispersants. Not only are they toxic in their own right, but they've made oil more available for evacuation by currents and incorporation into the foodchain. From the perspective of fish etc., tar balls are far safer form than this homogenized soup. One can understand BP's motive: BP's more on the hook for oil-soaked beaches and birds than it is for destruction of the foodchain underwater. But why did EPA allow it??

38>

Good point, margd, the angle on punishing the franchisee. Still, it's not so much about outright punishing as it is standing up and letting such companies know that the consumer is really in charge--that in the end, buyers can decide what's most important.

Even the boycott BP sites onlline have suggested we all get together and not buy at BP... FOR THREE MONTHS. This disaster will affect the water and the shoreline and the environment and the animals for decades and we're gonna stand up and show em a thing or two... til late August? Brutal.

If the cap can't be lifted for damages, maybe the US should blacklist BP from future offshore drilling until feds and Gulf States (etc.?) are satisfied with cleanup and compensation. Great if Canada and Mexico would join US on this--wonder if there is some cooperation clause in the NAFTA environmental treaty? Sounds like Mexico might suffer from the spill this summer when current reverses and hurricanes commence... Canada is reviewing its rules as a result of Gulf spill--drilling was soon to commence in the Beaufort Sea and the Inuit are nothing if not a coastal people

It's remarkable how anger at oil companies is so commonly twinned with economic misunderstanding. Oil is a highly efficient world market. Transportation costs are low (less than 0.5% of consumer cost). Not buying from one supplier--even if the boycott were large and effective, which is a fantasy--would just mean a BP tanker went somewhere else and we got one from another company. Neither the product, nor the price nor the profit of the two companies would change one bit.

This sort of mis-thinking underlies every statement about how the US does or does not get X% of its oil from this or that country. Right now, for instance, the US does not import oil from Iran--without the slightest change in what we pay or what we get.

Obviously, BP is susceptible to political damage--we can withhold approvals, go after them legally and so forth. But a boycott is just silly.

>40 margd:

Those liability caps are interesting; they have them in the nuclear industry too. In both cases, the caps allow risky industries to get financing that would not be available without some ability to quantify the risk, but they also leave taxpayers on the hook for the truly huge disasters. It seems obvious at this point that the liability caps for offshore drilling are unrealistically low.

I wonder how much of the delay in getting this leak stopped has been due to BP’s desire to maintain the viability of an obviously productive well, without regard to environmental and safety considerations. The Wall Street Journal has been reporting on a disagreement that occurred between Transocean and BP a few hours before the well exploded. It has been alleged that BP was in a hurry to shut down this experimental well and move on to the next one.

BP has been a bad actor all around. OSHA fined BP $87 million (four times larger than any previous OSHA fine) for their failure to correct known safety problems that eventually led to an explosion at their refinery in Texas City, TX. (From the NY Times article linked above) BP also agreed to pay $50 million for failing to maintain safe startup conditions for processing units and the mechanical integrity of the refinery. That was the largest criminal fine ever assessed for violations of the Clean Air Act.

Subsequent to the Texas City explosion, an investigation by the Houston Chronicle found that BP had the most deaths among refineries in the US, with 22 fatalities between 1995 and 2005. Shell was next, with 11 fatalities, while Exxon Mobil had only 3. In 2005, Management & Excellence, a Madrid-based organization that rates companies on their ethics, compared BP to eight other large petroleum companies. It gave BP a 69 — the same score as Mexico's Pemex in the area of safety and health. Exxon Mobil scored 92.

The raw numbers tell only part of the story; to really understand the risk to employees, you need to compare to the size of the workforce. The Chronicle doesn’t provide that information, but the Centers for Disease Control report on Fatalities Among Oil and Gas Extraction Workers – United States, 2003-2006 gives an annual fatality rate of 30.5 per 100,000 workers (404 fatalities) during 2003-2006, approximately seven times the rate for all workers (4.0 per 100,000 workers).

And now this: Jefferson Parish Councilman Chris Roberts is claiming that BP shipped in 300-400 cleanup workers for Obama’s visit to Grand Isle, LA on May 28.

> 41 But a boycott is just silly.

One can know logically that avoiding BP gas stations doesn't hurt BP much, but I sure felt uncomfortable driving into one!

> 42 The Wall Street Journal has been reporting on a disagreement that occurred between Transocean and BP a few hours before the well exploded. It has been alleged that BP was in a hurry to shut down this experimental well and move on to the next one.

I read that there were BP "guests" on the rig, which made me wonder if the BP manager felt pressure to act -- to make something happen -- because there were VIPs present?

It won't happen, but theoretically, if a boycott against BP was 100% successful then their revenue would drop to zero and the taxpayer would have to pick up all the cleanup costs.

If you do purchase BP products, part of your money will end up paying for the cleanup.

Oil and gas wells are rarely owned by one company. They spread their risks. There are majority and minority ownerships. BP owns 65% of the leaking gushing well. Anadarko is the next biggest owner. Purchasing your oil and gas products from a rival company will still result in some revenues going to BP in many cases because BP might have interest in their wells.

The above does not mean BP should be let off the hook financially. It points out some of the flaws in boycotts. It makes some consumers feel good and gives them an area to channel their anger. Overall, it changes little in the macro-oil world.

All is not negative though. In the short to medium time frame there will be money that was destined to go into oil and gas development that will now flow into other non-oil energy projects.

if a boycott against BP was 100% successful

Worldwide? I guess. If the United States had a 100% successful boycott, it would still make no difference whatsoever.

I leave out BP stations. I have no idea how the corporate entities relate, whether there's franchising, etc. I suppose if you don't buy a SlimJim at one of them, they'll be down one SlimJim profit margin, I suppose.

> 46 All is not negative though. In the short to medium time frame there will be money that was destined to go into oil and gas development that will now flow into other non-oil energy projects.

Yes... It would be too much to hope, though, that as everyone runs to the other side of the boat, alternative energy projects will be well-designed and sited... and components of a PLAN.

(Great Lakes states are doing a little bit more preplanning, but Ontario is luring wind developers with generous Feed-Iin-Tariff (FIT) $$, relaxed environmental assessment requirements, and neutralized municipalities. Developers thus incentivized and freed from pesky oversight choose to locate on fish spawning shoals, when not within a few hundred meters of residences, and smack in the middle of continentally important migratory flyways. 700 wind turbines are proposed in Canadian waters of little Lake Erie alone! America can't be far behind...)

I think it makes sense for the major risks of energy production to be societal risks. Energy is critical to any modern society after all. Taxpayers helping to pay for a cleanup (which is actually paid for via a tax on oil producers anyway) seems no worse than taxpayers helping to fund research into solar power, for instance, which I also support.

I still haven't heard much detail about how the explosion happened.

The anti-boycotters forget the value of public relations. Most of the people who are boycotting are doing so not because of the accident itself, but because of BP's shoddy follow-up and their apparent lack of concern for anything except their own numbers.

And other companies watch that carefully like a trial balloon; they know what lines they can and cannot cross by watching what consumers react to. It's like punishing your children: sometimes you do it to show that child where lines get drawn--but often times you're doing it so that your other children get the message as well. A boycott may not be the biggest thing people can do, but it beats sitting on the sideline. Maybe public outcry would (help) lead to changes in policy, safety, etc.

In the end, BP may not lose a penny, but that doesn't mean a boycott has failed, necessarily. Having the wrong reaction to a mistake can be even more damaging than the mistake itself. Just ask Tiger Woods.

Apparently the top-kill didn't work.

Why did the big cap over it fail, again? That seems like the most sensible approach.

50: Because the oil comes out at high pressure into an environment that is extremely cold, resulting in an extremely high velocity buoyant discharge.

I'm just wondering what people think BP should be doing that they have not - every day the spill continues is large losses both direct (lost oil they could be pumping) and indirect (damages from the spill, PR fallout, etc.) They have every motivation to try anything they can to stop it, and they've thrown a bunch of attempts at it.

The real issue here is that we bear responsibility for this. We demand cheap gas for our cars and cheap oil to heat our homes but we have set as off-limits drilling in many areas that would be easier and safer and we scream about America's dependence upon foreign oil. Who decided BP should drill in deep water? We did, as a result of our many demands. Who is responsible for the spill? We are.

>51 StormRaven:

So, it floated up?

52- The top hat? It froze up with crystalline gas hydrates. There has been talk of heating another one or antifreezing it in some way.

52: The containment curtain they tried earlier actually did float up. The problem with the top kill is that the oil comes out at such high pressure, and the cold is so intense, that it can simply be cut apart by the stream. It appears that most of the mud they tried to pump in just got forced back out by the pressure. BP made no secret of the fact that there was a decent chance that the top kill could fail. The only reliable way to stop the flow is to drill a relief well and relive the pressure, but that's going to take some time (its been underway for a while). The other efforts are simply temporary measures to try to stop the flow until the relief well can be drilled.

47- Another urge to do something quick is the constructed sand barriers- some of them tens of miles long. There are some what seems to be legitimate concerns that that might be even more harmful over the long term. I dunno, but they worry some biologists and ecologists.

StormRaven>

You're right, we do want it both ways, don't we? We want cheap oil yet we want safety. It's a lot like these immigration nuts of late--we want rules to be followed yet we need people who will willingly work 80 hour weeks at low-paying jobs with no benefits, etc, etc. The hypocrisy goes largely unnoticed.

And forgive my ignorance here, but where does insurance come in all of this? How can a company (any company) that makes billions and billions per quarter in any industry have a disaster that goes beyond their ability to pay? It's like if I were a multi-millionaire who decided not to get flood insurance on a beachfront property yet expected help from the government when damages were beyond what I expected to pay. StormRaven, you're a lawyer, aren't you? Why if a company is making billions of dollars do they not have to be insured to cover themselves if an accident could cost trillions?

Would a nuclear blast help or hurt?

56: Well, one question you have to answer is who would insure for a risk that could cost trillions? I don't know of any insurer who would be willing to run that risk unless they were paid a premium that would probably make buying insurance impractical. Most really large organizations self-insure for the most part. I don't know what BP's insurance options are coverage is, so saying anything more concrete would be pure speculation.

57: Well, irradiating the Gulf would make the oil spill seem less damaging.

57- There's a classified (I think) case of a nuclear explosion underground in an oil well. The Gas Buggy Project. Supposedly, it was done as a experiment to take the place of fracking. Again supposedly, it turn the formation into a sort of melted, fused glass and zero oil and gas was released. I think it has a possibility of working but I doubt permission would ever be given to try it.

ETA a link for gasbuggy
http://www.atomictourist.com/gasbug.htm

58>

But I hear all the time that there are rules that say if you do such n such, by law you need X amount of dollars in insurance coverage. My friend, for example, has a company that needs a minimum of a million dollars in insurance just to practice in the state of Connecticut. How are laws lined up so that his basically low-risk company needs that much coverage yet this company--one earning billions and billions (yet doing so in a high-risk industry), does not?

58- The explosion wouldn't take place on the floor of the Gulf. It would happen several thousand feet deeper in the formation area.

60: Sure, getting insurance makes sense in many cases. But when the price tag of coverage goes up so high that paying off a claim would wipe out the insurer then the usefulness of insurance is in the "not-so-much" category. Witness the part of the recent financial meltdown that was traceable to the fact that many banks went to the same insurer, and when they all had claims to turn in at once the insurer collapsed.

Also, note that a olow-risk company should be able to get coverage for a very reasonable rpice: the risk they will make a claim is low after all. A high risk company pays a much larger premium, if it can get coverage at all. Like I said, I don't know BP's coverage (they may, in fact, have insurance for all we know), but I would guess that they are large enough to self-insure, and it is quite possible that there would not have been insurance at any price for them anyway.

61: Suppose it didn't work. Now you have thousands of gallons of irradiated oil flowing into the Gulf. Imagine that nightmare.

62>

But again, I don't understand the law. Let's say I'm a millionaire and I decide that I don't want to buy car insurance, claiming that I'd rather pay for all accidents myself. The government doesn't say to me, "Well, as long as you'll pay for it yourself, that's fine then." (this in spite of the fact that I have money and can demonstrate my ability to pay.) Why is it any different for a company? Again, we're talking about a company that makes billions and billions just in PROFIT. If something is too big (or too expensive) to insure, why are they allowed to be in business?

Re insurance, as alluded to above, Congress imposed a $75 million cap for damages related to drilling. A cap might be necessary, but $75 million is coffee money for BP and not nearly enough to compensate fishers and others who have lost livelihoods.

As it stands now, the only way BP can be made to spend more if there is criminal wrongdoing. (Guess that's why Dept of Justice is sniffing around.) There is some talk of retroactively increasing the cap, but it doesn't seem to be going anywhere. BP says it will pay all "legitimate" claims. (ETA: But weren't they offering shoreowners $5K early on, if they promised not to ask for more? Shoreowners are directly affected, not the little people who serve the tourist industry, etc.)

Wish a commission would be appointed to review taxpayers' commitments to pay when private decisions result in catastrophe (derivatives, drilling...), and to identify regulatory needs to minimize our risk--a priori!

64: Some companies are required to have insurance at certain levels. Others are not. The law concerning things like that is varied enough that one would want to consult a specialist in industrial insurance law, which I am not. I'd be willing to hazard that to the extent that BPs potential damages are not capped, it would be nigh impossible for them to get insurance. Legislators know this. If they want companies like BP to do business, they have to deal with that reality. If they don't, then they can impose insurance requirements.

Remember that for every dollar in profit an oil company makes, it pays between three and four dollars in taxes. Some of those taxes are supposedly earmarked to funds designed to clean up problems.

I know that companies that build nuclear power plants were given a cap on their liability because Congress wanted nuclear power plants built but no company would do so if their liability in case of an accident were unlimited. So, I don't know why off-shore drillers got a liability cap, but I would guess that it's because the gov't wanted to encourage off-shore drilling.

66, 67>

I just wish companies (or individuals) without leverage got the same deal. If an insurance company refuses to cover me for something I want to do, that usually means I don't do it. Or, let's say I made 50 million dollars a year, yet I chose to do something beyond what was covered by my insurance. Would I then be given financial assistance? I doubt it.

It sounds cliche', but that argument that we're capitalists until a big company needs assistance (then we become socialists) is so so true. For companies it seems like a necessary evil, yet when individuals ask for the same protection people get mad as hell. I just don't get that contradiction.

68: One thing that one has to remember is that not every large capitalist organization gets this sort of deal. Generally only the ones that are engaged in industries that are considered necessary are given such a dispensation.

Oil is incredibly politically sensitive. The public demands lots of it, and demands that it be relatively cheap. Politicians respond to these demands, because no one wants to be the guy in office when oil goes up to $4, $5, $6 or more per gallon in the U.S. Voters will vent their ire and turn out the incumbent and bring in a guy who can bring that price down. So oil companies get breaks. Not because they are big. But because they are oil companies, and we, the voting public, by our demands, insist that they get them.

69>

Good point. The thing I find funny is that people want both sides of the same coin: they're frantically against people getting free rides (to the point of forming groups, protesting, etc.) but they'll roll their eyes and say, "What are ya gonna do?" to something like this.

I know there are contradictions in life, but it's funny how some people will give opposing responses to (what is) basically the same issue.

"The numbers being batted around when it comes to how much the oil spill will ultimately cost BP and the local Gulf of Mexico economies are huge. $3 billion. $14 billion. One politician put it at over $100 billion."

"The range is so big because two important questions remain unanswered: When will the leak be sealed, and will most of the oil wash ashore? Until those are answered no one will know the price tag of the damages for sure."

"But there have been studies done looking at what's broadly at stake, and the number is quite large indeed."

"The four biggest industries in the Gulf of Mexico are oil, tourism, fishing and shipping, and they account for some $234 billion in economic activity each year, according to a 2007 study done by regional scholars and published by Texas A&M University Press."

"Two thirds of that amount is in the United States, with the other third in Mexico."

"If the Gulf of Mexico were a country, it would be the 29th largest economy in the world."

http://money.cnn.com/2010/05/30/news/economy/gulf_economy/index.htm

ETA: BP may not have killed the golden goose (yet), but it's sure choking the stuffing out of it!!

Re insurance: When you get to really big numbers, no single insurance company can handle the risk. For something like offshore drilling, BP probably has a self retention (deductible) in the tens of millions. Above that, they probably have several insurance carriers involved. Some programs are pro rata (each carrier picks up an agreed percentage of all losses from the self retention level up to some defined limit); others are layered (one company covers the first $10 million, another covers the next layer of so many million, and so on). For a layered program, the level of risk (probability of needing to pay claims) decreases with each level. Finally, they probably have an excess policy that starts at some very high number (say $100 million or so) and provides a band of coverage for catastrophic events above the limits of the other policies. Only a few insurance carriers have the capacity and the appetite for risk to play in that arena - one of them being AIG.

When a major loss (or group of losses, as in a bad hurricane season) hits those excess layers, insurance becomes much more expensive for everyone.

Supposedly a video of Russian engineers using an atomic bomb to plug a gas leak.

Neat post #73, the original was in english?

I posted some stuff on the Science section of LT after being frustrated with no progress on stopping the leak - I was especially disgusted with the dancing around the severity of the leak at the beginning since I had just bought stock in BP.

I am particularly worried about Dry
Tortugas National Park in the gulf and its reefs. The reefs there are some of the last pristine, healthy reefs left in the gulf from what I have read.

This is one of the worst disasters since the construction of the highway system.

Civilization is a death machine.

>75 inaudible: Civilization is a death machine.

Sure, can be. On the other hand, if you ever need, say, an appendectomy, or enjoy the occasional hot shower, nasty old civilization has its merits.

This is the partner we dance with, for better or worse. Might as well work on our steps. Being a wallflower isn't an option; it's an illusion.

...if you ever need, say, an appendectomy, or enjoy the occasional hot shower, nasty old civilization has its merits.

It's hard to believe people living in the future will look back at our era, the best of all possible worlds, and will find it barbaric.

>77 theoria:
best of all possible worlds etc.

Not remotely my suggestion. Reflexive irony, though, can be a deaf machine...

I'm sorry, you'll have to speak up. I'm wearing a towel.

> 73 Supposedly a video of Russian engineers using an atomic bomb to plug a gas leak.

So Lord help us, our options are to ask the Russians to bomb us--and if that doesn't work, maybe NASA can call in an asteroid... Waah!

What would Dick Cheney do?

We are as gods and might as well get good at it.

Sure hope the relief wells work. Interesting that Canada requires--and BP protested--the concurrent drilling of a second well in the Beaufort Sea. That way, a problem with primary well can be addressed immediately, not months later.

I wonder, though, why slant drilling isn't used for the primary well--inland to a point underwater in the Gulf of Mexico? Slant drilling from shore has been proposed in the Great Lakes as a way of getting around in-lake bans on drilling. (I think only GLs wells at the moment are gas wells in Ontario waters of Lake Erie.)

http://www.huffingtonpost.com/2010/06/01/oil-spill-response-if-rel_n_596142.html
http://www.nola.com/news/gulf-oil-spill/index.ssf/2010/05/challenges_involved_in...

I don't see what the big deal is. Improving the viscosity of sea life should make them faster.

Sorry - humor is the only way I can face the day.

Oil spills like this are not "natural" as someone posted above. Oil wouldn't be flowing out as this level and "mother nature" won't handle it well since recently shared research has shown the oceans are reaching their saturation level (or have surpassed it) for soaking up pollutants. I believe we're already past the tipping point to reverse the damage people have done. I think at this point, the best we can do is damage control - which we should do so future generations can have at least some semblance of quality of life.

Oil is going to continue to be a problem. Drilling more isn't the solution. If oil companies can take the cheap way out, do you think they'll bother trying to figure out a better alternative. The talk about continuing to drill while alternative energies are explored is total b.s. If anyone thinks a CEO of an oil company is going to devote any substantial funds to that type of research is delusional. That CEO is aware there's enough oil available to carry him to retirement and make it a problem for the next guy, or the guy after that to deal with.

I think those deposits are just too far out for slant-drilling from the shore. It would add hundreds of miles to the distance to drill and vertical wells are what, 10 to 20 miles deep?

ETA: I just looked up the distance to the mantle below the ocean floor and it's 3 to 6 miles, so any vertical wells in the seafloor would be less than that.

> 73 Supposedly a video of Russian engineers using an atomic bomb to plug a gas leak.

"BP plans to set up a separate organization to manage the response once the well is no longer leaking oil. That would allow some BP employees to focus exclusively on the situation in the Gulf rather than being sidetracked to run the daily operation of the company, Mr. Hayward said. The unit will be led by Robert Dudley, the former chief executive of BP’s Russian venture." (!)

http://www.nytimes.com/2010/06/05/us/politics/05obama.html?src=un&feedurl=ht...

A New York Times article clarifies James Cameron's opinion of the efforts to clean up the oil spill i.e. “thinking those morons don’t know what they’re doing”. His explanation:

"That was taken out of context in a way that sounded like I was slamming BP. In a roundabout way, I was explaining that while I started out the way everyone did on this, I’d revolved to the point where I respect the engineering work that’s been under way. "

Mr. Cameron's expertise comes from extensive experience with underwater technology at depths twice that of the leaking well head. A further NYT quote :

"Cameron said he hoped that the effort to assemble the specialists at the meeting, whom he said represented perhaps 70 percent of the world’s expertise on deep-water engineering and diving, could serve as a template for dealing with fast-breaking technological emergencies. "

In spite of this conciliation I am glad to see that someone else has the feeling that the proper level of preventative technical expertise was not in place as it should have been. The methane ice that gummed up the "hats" should have been anticipated and solutions in place to make it not a problem.

It is going to be tough for the governmental regulatory agency and BP to explain why two simultaneous wells were not drilled at the same time, one being a reserve to block off the other if an uncontrolled "blow out" like we had occurs. This is the policy in other areas. I don't think "too expensive" a precaution is going to fly very far.

::EDIT:: I just peeked in on a live feed for the well head leak and you can't see the new "hat" for all the oil gushing out around it. Is BP relying on the oil to push itself up those pipes a bit & are the pumps working at max?

It's nice to see Gulf state Republicans exhibiting their new-found environmental consciousness as tar turns up on their pristine beaches.

Does BP pay also the global economy for the oil and gas reserves that it is wasting?

deepwater...

oil + dispersants...

oxygen depletion + toxicity...

coral reefs, bluefin tuna, and other denizens, visitors, and dependents of the deep:

http://services.newsweek.com/id/238620/page/1

The good news - "Horrible as the spill may be, it's not going to turn the Gulf of Mexico into another Dead Sea."

I had not heard of the Ixtoc I well blowout in 1979. Interesting comparison.

http://www.msnbc.msn.com/id/37535767/ns/us_news-washington_post

"Undoubtedly, life will get a foothold," he said. "The question is how different it will be."

Fortune magazine weighs in on liability limits.

...BP isn't allowed to take advantage of it if the company -- or any of its contractors, Kende stresses -- acted with gross negligence or violated any federal safety law or regulation. In other words, if either BP or rig-owner Transocean Ltd. (RIG), or cement contractor Halliburton Energy Services (HAL, Fortune 500), or the blowout preventer manufacturer Cameron International (CAM, Fortune 500) violated some safety rule -- the limit vanishes. (If a subcontractor is the one responsible, BP might then be able to go after that company for contribution or indemnification.)...

76> I guess the question is whether showers and hospitals (and etcetera) are worth destroying the planet to have them.

So far, the answer seems to be: YES!

A new idea to plug the pipe from a wunderkind,engineering professor at 18, Alia Sabur here in the USA. She describes a smaller diameter pipe skewering several inflatable tires click
on video

The President is starting to up the rhetoric against BP.

My question is how much is the federal government to blame - regulators and Congress - for loose standards and loose monitoring.

Anybody know?

Comic skit on the BP spill,
kinda funny but a bit long for my apparent online attention deficient 
tastes.

The President address the nation on the spill tonight on the WhiteHouseYouTube channel.

Post your questions here on YouTube.

Post your questions here on YouTube.

He will answer them in order.

Actually -

"White House Press Secretary Robert Gibbs will answer questions directly from people like you."

Not you, but people like you.

>99 richardbsmith:

Press Secretary Robert Gibbs's eleven year-old son Danny has been briefing President Obama on the meaning and pronunciation of "n00b," "haz," and "lmao."

While Congress and the President are posing at various hearings and on YouTube, sounding a lot like a police chief in Cassablanca, it may very well be that the biggest problem is Congress and the regulators themselves failing their responsibility.

And I think that is a wide spread problem, not just in the Gulf of Mexico.

Coming home I listened to this NPR interview on OPA 90 with environmental law professor Zygmund Plater, who was chairman of Alaska's oil spill commission legal research task force after the Exxon Valdez wreck.

It's only 5 minutes, take time to listen.

If not, a summary here:

The Oil Pollution Act of 1990 was heavily lobbied, and therefore weakened.

Implementation over the last 20 years led to "complacency, collusion, and neglect" by regulators that diluted what effectiveness the law might have had.

Lack of vigilance had predictable results.

Recommend a civilian oversight council to make the regulators regulate, to ensure against "collusion, complacency, and neglect."

Dipolar system with industry and regulators leads to agency capture. The third entity, civilian oversight council, is needed to bring separation and to end collusion.

And I think term limits.

A strength of the Clean Water Act is that citizens can sue if government doesn't enforce--a useful feature for any environmental legislation! http://www.epa.gov/earth1r6/6en/w/cwa505.htm

I'm wondering if BP and other oil companies in the Gulf may have much to fear from the Endangered Species Act. Brown pelicans were listed nationwide as endangered in 1970 (DDT) and delisted in 2009. Lots of politics, but once in the process, the US Fish and Wildlife Service must monitor brown pelicans for five years after delisting. If, say, the Louisiana population is decimated, there may be some automatic tripwires already in place that could threaten oil drilling as currently practised. (We'll know that's the case if we see oil executives rushing to support pelican cleanup and recovery!)

>103 richardbsmith:

And yet if John McCain were POTUS, what? I suspect he would be leading the chorus of "Accidents happen, let's move on and continue to Drill Baby Drill."

Obama, regardless of his human failings, seems sane at least. I and millions of others appreciate that.

You?

Unfortunately it looks like the only to of have handled the spill is to go back in time and scrutinize the laws, notice the oil companies are out of compliance on preparedness and bring them into compliance.

The folks most effected seem to be frustrated with the mobilization efforts of the clean up. I like the fact that some of the people of the area are taking their own initiative - those who are using barges to cordon off a bay for example. Great idea hope it works, sucks that the fed. guv. could not give a yea or nay until they already had the idea deployed.

> 73 Supposedly a video of Russian engineers using an atomic bomb to plug a gas leak.

Apparently, an anonymous commenter on a thread for petroleum engineers, etc., thinks that "All the actions and few tidbits of information all lead to one inescapable conclusion. The well pipes below the sea floor are broken and leaking." Describing himself as one of "those who are outside the real inside loop, yet still fairly knowledgeable", he lays out a truly horrific scenario on how the gusher could get much worse--as if it isn't bad enough already.

http://motherjones.com/blue-marble/2010/06/worst-already-true-BP-well-now-unstop...

margd,

My assumption is that it will be worse than the worst we can imagine. We have underestimated this from the first day - because we believed that our government would require that the very best precautions were used.

They fooled us.

BP and the government have underestimated because they want that public appearance that things are better.

I can see why BP wants that, but although I think his news conference language suggested things were better than they are, I don't really see why Obama wants it. He doesn't really control the situation, so why take ownership over it rhetorically?

Tim,

I should not make statements about another's motivation. And I certainly do not have any information about estimating the oil flow. So take my comment as a frustrated rant.

It seems that the government was slow to make real estimates about the amount coming out, at a time when many private experts with less information were questioning the accuracy of official estimates.

I think the President has a polling problem, with mid terms approaching fast. If the projections are worse, the I suspect the polling problem is worse.

http://www.spiegel.de/international/world/0,1518,700759,00.html

Relief well option.

"Leifer is a member of a team of experts deployed by US President Barack Obama to estimate the volume of oil currently flowing in the Gulf of Mexico. Just last week, the scientists almost doubled their estimate and now say that between 25,000 and 30,000 barrels of oil a day is gushing out of the well into the Gulf of Mexico. On Tuesday, they once again upped their estimate -- to between 35,000 and 60,000 barrels per day."

>106 margd:

Info on the relief well from the BP site here and high resolution graphic here would seem to support the idea that the well pipe must be bypassed in order to stop the spill. The failed blowout preventer is on the seabed at a depth of 5000 feet, and they are drilling the relief wells to approximately 18,000 feet.

Someone has posted Well Blowout Basics for the Beginner. I have no idea whether the information is credible, but he does include links to a number of other sources.

Is there perhaps some way we can use this corporate disaster to solve the BP disaster?

http://news.blogs.cnn.com/2010/06/18/15-million-pounds-of-spaghettios-recalled/?...

The matter has been brought up to date for the English.

http://www.milkandcookies.com/link/207082/detail/

Robert

Trump rescinds Obama policy protecting oceans
Timothy Cama - 06/20/18

...President Trump is repealing a controversial executive order drafted by former President Obama that was meant to protect the Great Lakes and the oceans bordering the United States.

In his own executive order signed late Tuesday, Trump put a new emphasis on industries that use the oceans, particularly oil and natural gas drilling, while also mentioning environmental stewardship.

“Ocean industries employ millions of Americans and support a strong national economy,” the new order states, mentioning energy production, the military, freight transportation and other industries.

“This order maintains and enhances these and other benefits to the Nation through improved public access to marine data and information, efficient interagency coordination on ocean-related matters, and engagement with marine industries, the science and technology community, and other ocean stakeholders,” it states.

The order encourages more drilling and other industrial uses of the oceans and Great Lakes...

http://thehill.com/policy/energy-environment/393213-trump-rescinds-obamas-policy...

__________________________________________________

Still, sounds like Great Lakes shipping may be favored over environmental concerns such as spills, winter navigation, levels mamagement, ballast transport of invasive species, dredging, infrastructure (Soo Rapids?), harbor air pollution, etc...

Stabenow sends President reminder of Great Lakes drilling ban after Executive Order signed
Andrew Minegar | June 20th 2018

...U.S. Senator Debbie Stabenow (D-Michigan) sent a letter to the President on Wednesday to remind him that there is a permanent federal ban on gas and oil drilling in the Great Lakes. (https://www.gpo.gov/fdsys/pkg/USCODE-2010-title42/html/USCODE-2010-title42-chap149-front.htm)

“The economic and environmental significance of the Great Lakes cannot be overstated,” Stabenow wrote. “Our Great Lakes are the largest surface freshwater system on Earth, supply drinking water to over 40 million people, and sustain a $6 trillion economy and over 50 million jobs. Given the existing ban on drilling and the importance of the Great Lakes, I call on you to reverse course and oppose any efforts to open our waters to oil and gas drilling as a result of your recent Executive Order.”...

http://wwmt.com/news/state/stabenow-sends-president-reminder-of-great-lakes-dril...