Gulf Oil Spill

[Haggis@wk]

DAVID WARREN:

“We learned a simple thing this week: that the BP clean-up effort in the Gulf of Mexico is hampered by the Jones Act. This is a piece of 1920s protectionist legislation, that requires all vessels working in U.S. waters to be American-built, and American-crewed. So while, for instance, the U.S. Coast Guard can accept such help as three kilometres of containment boom from Canada, they can’t accept, and therefore don’t ask for, the assistance of high-tech European vessels specifically designed for the task in hand. This is amusing, in a way: a memorable illustration of … the sort of stuff I keep going on about. Which is to say, the law of unintended consequences, which pertains with especial virulence to all acts of government regulation.”

[analog]

Why didn't Obama instead of trying to fake being all knowing & Presidential just say instead:

"I've never set foot on an oil rig. But my common sense tells me the last thing we need right now is a bunch of suits out there standing in the way of the workingmen.
Instead we need the most experienced kind of help we can muster to address this mess, and by experienced i mean real world industrial experienced not career bureaucrats and academics. This is no leisurely research grant.
I have asked CEO's of America's (pick a number) largest oil and exploration companies to each send three senior technical people to (pick a place perhaps a Louisiana or Mississippi shipyard) to man a Manhattan Project style ad-hoc recovery task team. I have asked specifically for T Boone Pickens, Matt Simmons(or pick your favorite oil experts) to get it rolling.

I have tasked the Speaker of the House personally to see that they have the resources they need.
I have tasked (head of EPA) personally to shred any bureaucratic red tape that gets in their way.
I have tasked (head of FEMA) to observe, keep his mouth shut and learn how to get things done.

Godspeed, Gentlemen." ?

Frankly i think the poor guy is short on common sense. At least he's getting lots of on-the-job training, i hope some of it takes.

a.

[Giant Communist Robot]

Frankly i think the poor guy is short on common sense

He's way too pompous to let common sense get in the way.

[Haggis@wk]

Want to see what national energy suicide looks like?

Wait until the moratorium on deepwater drilling goes into effect. The GoM market would effectively cease to exist for the drillers and services and equipment companies under a long-term ban on deepwater drilling. The overwhelming majority of activity in GoM today is in deepwater defined as >1,000 feet. The deepwater moratorium has an even stricter definition of shallow versus deepwater, defining deepwater as anything >500 feet. This will cut out half the rigs typically label now as shallow water.

First, existing deepwater programs will stop drilling at the next casing point and seal their wells for abandonment. The ban will not only impact exploration drilling but also development and even “work over” of existing producing wells.

These idle rigs will probably try to find jobs elsewhere (Brazil, West Africa, Australasia). Major services companies will relocate people and redeploy assets to US and Canada land programs, and int’l locations. Expect to see a freeze in announced hiring plans and huge layoffs in the GoM area.

An entire industry, the GoM oil industry, will die. Parts of Texas and almost all of Louisiana were the leading job creators in the U.S. No more. You think 9.6% unemployment is bad? Wait till those oil industries jobs start dying off. And since oil is the largest contributor in taxes to the U.S. Treasury, watch U.S. revenues drop like a stone.

The moratorium has been declared for six months in order to allow implementation of a presidential commission’s recommendations, but there is no statement that drilling will resume in six months. Since the commission is not due to submit its report for six months (which does not include implementing the recommendations), the default outcome is the ban will last well beyond six months. Best case is 12- 18 months from now we could see rigs returning to the GoM.

Realistically, four years is probably a better guess. And some of those deepwater rigs will not be coming back, ever. New, special government mandated GoM Insurance liabilities will keep a lot of rigs out of the GoM in perpetuity.

Anyone want to start a pool guessing what gas prices will be in Nov. 2012? I'm in for $7.00

[piqaboo]

Well, since it never really dropped from >$3 even after recovering from hurricanes, maintenance and other 'short term' causes of price hike,
I expect you are right, the price will climb and keep climbing. I dont think it would drop even if we re-open GoM drilling. We are buying from the same folks no matter where they pull the goop from.
I wish the bus could get me to work in under 90 min.

[dai bread]

Want to see what national energy suicide looks like?

Wait until the moratorium on deepwater drilling goes into effect. The GoM market would effectively cease to exist for the drillers and services and equipment companies under a long-term ban on deepwater drilling. The overwhelming majority of activity in GoM today is in deepwater defined as >1,000 feet. The deepwater moratorium has an even stricter definition of shallow versus deepwater, defining deepwater as anything >500 feet. This will cut out half the rigs typically label now as shallow water.

First, existing deepwater programs will stop drilling at the next casing point and seal their wells for abandonment. The ban will not only impact exploration drilling but also development and even “work over” of existing producing wells.

These idle rigs will probably try to find jobs elsewhere (Brazil, West Africa, Australasia). Major services companies will relocate people and redeploy assets to US and Canada land programs, and int’l locations. Expect to see a freeze in announced hiring plans and huge layoffs in the GoM area.

An entire industry, the GoM oil industry, will die. Parts of Texas and almost all of Louisiana were the leading job creators in the U.S. No more. You think 9.6% unemployment is bad? Wait till those oil industries jobs start dying off. And since oil is the largest contributor in taxes to the U.S. Treasury, watch U.S. revenues drop like a stone.

The moratorium has been declared for six months in order to allow implementation of a presidential commission’s recommendations, but there is no statement that drilling will resume in six months. Since the commission is not due to submit its report for six months (which does not include implementing the recommendations), the default outcome is the ban will last well beyond six months. Best case is 12- 18 months from now we could see rigs returning to the GoM.

Realistically, four years is probably a better guess. And some of those deepwater rigs will not be coming back, ever. New, special government mandated GoM Insurance liabilities will keep a lot of rigs out of the GoM in perpetuity.

Anyone want to start a pool guessing what gas prices will be in Nov. 2012? I'm in for $7.00

Petrol prices here vary considerably, but $7 NZ per U.S. gallon is a fair average at present. ($1.80 approx per litre). It hasn't stopped us driving. Ask the Tenors about the waiting we had to do to cross Highway 1 at Cambridge.

There is considerable interest in prospecting some of our off-shore areas where hydrocarbons are thought to be, so I expect we'll see some of those GoM rigs here. I hope our Govt. enforcers have learned from the BP shambles and know what to look for and what questions to ask. They probably do. We have some very capable people in our Civil Service, but that doesn't mean they'll be used in oil matters.

[Haggis@wk]

Well, since it never really dropped from >$3 even after recovering from hurricanes, maintenance and other 'short term' causes of price hike,
I expect you are right, the price will climb and keep climbing. I dont think it would drop even if we re-open GoM drilling. We are buying from the same folks no matter where they pull the goop from.
I wish the bus could get me to work in under 90 min.

Piq, I think your prices are more affected by CA taxes than the market place. Gas here got close to the $2.00 rate, climbed to $2.55 and is back down to $2.37 yesterday.

The "six month" ban is predicted cut supplies of crude oil by 26 MIL BBLs by next Summer What'll that do to our gas prices?

Dai, you might be resolved to $7 a gal (mostly taxes, without taxes you'd be paying what we pay) but Americans aren't and there will be a price to pay at the ballot box. Because the only reason it will be $7, $8, or $10 is strictly political, the politicians prevent oil companies from production to keep a small but vocal minority of enviromental wackos happy. We saw in the Summer of 2008 how every politician was promising more domestic oil production when oil was $5 and then completely reverse themselves when the price dropped. If gas goes to $5+ and stay there you'll hear that famous "silent majority" Nixon spoke of.

2011 is going to be a very tough years for all Americans, Taxes are being raised to the higest levels in U.S. history, record unemployment will be with us still, a VAT is very possible (on top of current taxes) Obama's Deficit Reduction Commission is thinking of eliminating home mortgage tax deductions. If, on top of all that, gas goes $5+ you'll be looking at some awfully p****d Americans!

[piqaboo]

Between the price of gas rising, loss of corporate health insurance, and loss of mortgage tax write-off, the Tenors could go from net contributers to the state and federal coffers to negative contributers. Wouldnt that be a pisser!

[Haggis@wk]

Between the price of gas rising, loss of corporate health insurance, and loss of mortgage tax write-off, the Tenors could go from net contributers to the state and federal coffers to negative contributers. Wouldnt that be a pisser!

Piq, The commission doesn't make any recommendations until after the Nov election (I'm sure that was mere coincidence) and hopefully the Republicans will have made enough gains in the House and Senate to forestall the VAT and elimination of the mortgage deduction. Personally, I think the mortgage deduction is as much as a third rail as reform of SS was once upon a time and no Congressman, Republican nor Democrat wants to go there..

Selma was right when she said on another thread "The world is made up of two kinds of people: The group that agrees with Obama, and the misguided who need to be taken care of."

With all the hubris going on few people seem to realize that Obama has not been on the popular side of any issue since he's been in office. Like his co-rulers in Europe He's depended on fiat bureaucracy and a slavish congress to get his unpopular agendas passed. I don't think he's going to have that pair of aces much longer. He will still use the Administration to pass rules that would never get through Congress (i.e. EPA's coming rules on CO2) but hopefully a Republican Congress can rein in some of the more egregious rulings

[piqaboo]

Removing the mortgage credit would be do-able, if it were not retroactive to existing mortgages. Dropping it on a bunch of mortgage-holders who calculated it into their cashflow would just send the housing situation into another tail-spin.

[Haggis@wk]

The Economist goes after “VLADIMIR OBAMA:”

For several reasons. The vitriol has a xenophobic edge: witness the venomous references to “British Petroleum”, a name BP dropped in 1998 (just as well that it dispensed with the name Anglo-Iranian Oil Company even longer ago). Vilifying BP also gets in the way of identifying other culprits, one of which is the government. BP operates in one of the most regulated industries on earth with some of the most perverse rules, subsidies and incentives. Shoddy oversight clearly contributed to the spill, and an energy policy which reduced the demand for oil would do more to avert future environmental horrors than fierce retribution.

Mr Obama is not the socialist the right claims he is (see article). He went out of his way, meeting BP executives on June 16th, to insist that he has no interest in undermining the company’s financial stability. But his reaction is cementing business leaders’ impression that he is indifferent to their concerns. If he sees any impropriety in politicians ordering executives about, upstaging the courts and threatening confiscation, he has not said so. The collapse in BP’s share price suggests that he has convinced the markets that he is an American version of Vladimir Putin, willing to harry firms into doing his bidding.

Nobody should underestimate the scale of BP’s mistake, nor the damage that it has caused. But if the president does not stand up for due process, he will frighten investors across the board. The damage to America’s environment is bad enough. The president risks damaging its economy too.

Ouch. The Brits are not happy.

[jamiebk]

BP operates in one of the most regulated industries on earth with some of the most perverse rules, subsidies and incentives. Shoddy oversight clearly contributed to the spill, and an energy policy which reduced the demand for oil would do more to avert future environmental horrors than fierce retribution.

This statement is absurd. Corporate citizens should not have to be bullied into obeying the laws...this is like saying "Gee, I only wrecked my car because I was speeding and there weren't enough police officers patroling the highway to enforce the speed limit"

BP has a corporate responsibility to follow all regualtions...it does not appear that they did.

[dai bread]

BP operates in one of the most regulated industries on earth with some of the most perverse rules, subsidies and incentives. Shoddy oversight clearly contributed to the spill, and an energy policy which reduced the demand for oil would do more to avert future environmental horrors than fierce retribution.

This statement is absurd. Corporate citizens should not have to be bullied into obeying the laws...this is like saying "Gee, I only wrecked my car because I was speeding and there weren't enough police officers patroling the highway to enforce the speed limit"

BP has a corporate responsibility to follow all regualtions...it does not appear that they did.

Hear, hear!

[Haggis@wk]

Corporate citizens should not have to be bullied into obeying the laws

You don't have to ignore the misdeeds of BP in order to to criticize the appalling performance of our massive super-State. Big Government and Big Business have become so entwined that any disaster on the scale of the Gulf oil spill, or the subprime mortgage crisis before it, will have both public and private agencies to blame. Suggesting that government cannot be criticized until every one of its private-sector ‘partners’ has been bankrupted or nationalized or mugged into submission is a recipe for tyranny.

Understand that only one half of the government-business alliance can call press conferences at will, addressing a media prepared to extend it unlimited credit for their "good intentions" regardless of results. One of the reasons Big Government is so helpless in the face of an actual crisis is that it never learns anything, because it evades blame and consequence for its failures. The politicians who brought you the subprime crisis are richer and more powerful than ever before. The Gulf oil crisis will end the same way. You'll have less gas, higher prices and will thank the government for making your life just slightly more miserable rather than incredibly more miserable.

[jamiebk]

Suggesting that government cannot be criticized until every one of its private-sector ‘partners’ has been bankrupted or nationalized or mugged into submission is a recipe for tyranny.

Hello???? When did I suggest this? I only said that the statement that :

BP operates in one of the most regulated industries on earth with some of the most perverse rules, subsidies and incentives. Shoddy oversight clearly contributed to the spill,

....was absurd. Corporations should not need "police" to force them to obey regulations. They should obey the law whether they are being watched or not.

[dai bread]

Just to make you all really happy, especially Southerners, Australia's Melbourne "Age" newspaper reports that an oil well in the Timor Sea leaked for 75 days before it was capped. It was in 77 metres of water.

The "Age" does not say who was drilling the well, or who eventually plugged it. It was Australia's worst oil spill.

[lliam]

Future historians will not ask if President Barack Obama was anti-British – they will wonder exactly how anti-British.
We are accustomed to US leaders who are rather fond of the Brits.
Baby-boomers like Clinton and Bush were listening to Exile On Main Street and Abbey Road as they ducked the draft for the Vietnam War.
An earlier generation of American Presidents like John F Kennedy and George Bush Senior fought alongside the British in the Second World War. Obama is very different.
Reading his book, Dreams From My Father, you are struck repeatedly by his deep antipathy towards the British. Their arrogance in colonial Africa. The cruelty towards the Mau Mau in Kenya. The racism of the British, who called Obama’s Kenyan grandfather “boy”, even when he was an old man.
A lot of this is understandable in a man of his heritage.
But it’s ironic Obama seems to bear such a grudge about the Empire while apparently willing to forgive and forget 500 years of slavery in America. If he wants to see what institutionalised racism looks like, then US history is not a bad place to start.
Almost his first act upon entering the Oval office was to remove a bust of Winston Churchill given to the American people in the aftermath of 9/11.
It was a petty and ungracious little act. But Obama’s anti-British prejudice runs deep and now it has finally been allowed to run amok.
Obama’s reaction to the BP oil spill has been hysterical. Despite his loony repetition of the name, the company has not actually been called British Petroleum for 12 years, since merging with American oil company Amoco. BP is about as British as a Big Mac. It is an Anglo-American company.
So why rabbit on about “British Petroleum”? Because Obama – increasingly unpopular in his own country – bizarrely wants to put an entire nation in the dock for the failings of one multinational.
But the average Brit has as much responsibility for the BP oil spill as the ordinary American has for the Union Carbide gas explosion in Bhopal, India, that has blighted a generation. Which is none at all.
Brits sympathise with Americans who are suffering from this environmental catastrophe. Most of us hope people who suffer get every dollar of compensation they deserve.
But it is nothing to do with us, buddy.
The majority of BP’s employees are American. A large chunk of the company is US-owned.
And comparing the oil spill with 9/11, as Obama has done, is plain barmy.
Those attacks were a deliberate and coldly calculated mass murder of more than 3,000 people.
Does Obama really think BP wanted the oil spill?
Obama was once very popular in Britain. I do not think it is overstating the case to say there was real love for him here. But he has never been keen on the British. And he never will be.
Now the affection the British people felt for Obama is fading fast. I suspect it has less to do with his “British Petroleum” rants and more to do with his total lack of gratitude.
Who fought alongside American troops in Iraq and Afghanistan? Who sees their young soldiers coming home in coffins and wheelchairs even as Obama rants about “British Petroleum” on the White House lawn?
The British. And there remains a special bond between this country and the USA that will endure long after Obama has gone.
But it is deeply offensive that the sacrifice of troops in America’s wars means nothing to this fanatically anti-British President.
And I can’t think of a better reason to bring our troops home.

[jamiebk]

I really don't think the American's hold the Brits responsible for the oil spill and ensuing catastrophy (economic and environmental). BP is totally responsible. Factually, BP is the largest UK domestic corporation, but a corporation is an entity unto itself...it's actions are not those of the Brits as a whole any more than any corporation represents it's country of domicle. Unfortunately, the spill will have a significant long term ecological and financial effect on US. Because of BP, the UK economy and many pensionsers will suffer as well. Your anger should be placed at the feet of those causing this mess...that would be BP itself.

[Shapley]

Mr. Obama's anti-British leanings have been commented upon here before. From his removal of the bust of Churchill to the innapropriate gifts given to British dignitaries, his disdain for the British is clearly evident to those willing to look. Some are willing to dismiss some of his tactless comments and protocol violations as mere 'gaffes', but they do seem to form a pattern that does not bode well for British-U.S. relations at the highest level.

I believe that most of the U.S. citizens will always feel a certian kinship to the British, in spite of the mis-steps of Mr. Obama. I like to think that the thick-skinned Brits will get past them without lasting damage, as well.

The main issue is the inability of Mr. Obama to put aside his personal disdain for the good of international relations. That is a duty that goes with the office, one he appears incapable of accepting. The British are and have been our allies on many issues. As Illiam notes, sometimes to the detriment of Britain's own best interests. That 'special relationship' is threatened by the perception of Mr. Obama's personal feelings towards that nation.

[jamiebk]

Mr. Obama's anti-British leanings have been commented upon here before. From his removal of the bust of Churchill to the innapropriate gifts given to British dignitaries, his disdain for the British is clearly evident to those willing to look. Some are willing to dismiss some of his tactless comments and protocol violations as mere 'gaffes', but they do seem to form a pattern that does not bode well for British-U.S. relations at the highest level.

I believe that most of the U.S. citizens will always feel a certian kinship to the British, in spite of the mis-steps of Mr. Obama. I like to think that the thick-skinned Brits will get past them without lasting damage, as well.

The main issue is the inability of Mr. Obama to put aside his personal disdain for the good of international relations. That is a duty that goes with the office, one he appears incapable of accepting. The British are and have been our allies on many issues. As Illiam notes, sometimes to the detriment of Britain's own best interests. That 'special relationship' is threatened by the perception of Mr. Obama's personal feelings towards that nation.

Yeah...OK, but it's not an "oil spill" issue