Category Archives: BP

>Modern Corporate Patriotism

>Under the new Republican mantra of “privatize gains, socialize losses,” yesterday Alaska Senator Lisa Murkowski defeated a bill that would cap BP’s liability at $10 billion, an increase from $75 million. That means us taxpayers have to pay for the rest of the cleanup if BP opts not to.

How’s that for a Big Oil bailout? Let them make as big of a mess as they want, and we taxpayers will pay for the cleanup. Easy peasy.

The reason, she claims is that

It would be impossible or perhaps close to impossible for any energy company that is smaller than the supermajors, smaller than the national oil companies, to operate in the O.C.S.

which is patently dishonest because, for one thing, drilling on the Outer Continental Shelf is already prohibitively expensive, and thus only something the “supermajors” can tackle. And too:

Sen. Robert Menendez, D-New Jersey, said Murkowski’s argument didn’t hold up. “The risk is what has to be calulated here. If you drill, you need to be able to pay for the damages,” Menendez said.

Interestingly, there is a similar law over on the nuclear energy side called the Price–Anderson Nuclear Industries Indemnity Act. In the event of an accident at a nuke plant, the federal government pays all liability claims above $10 billion. So much for that free hand of the market stuff!

The American taxpayer needed to come to the rescue of the nuclear power industry because, as Wikipedia notes,

At the time of the Act’s passing, it was considered necessary as an incentive for the private production of nuclear power — this was because investors were unwilling to accept the then-unquantified risks of nuclear energy without some limitation on their liability.

Ah yes, just another way the “free hand of the market” isn’t really all that “free” but instead gives a generous government assist to the oil and nuclear industry–an assist I daresay the solar and wind power industries never see.

So don’t talk to me about how “competitive” green energy could never be, not when the game is rigged.

Anyway, all of this is preamble to what’s really outrageous about the whole “privatize gains, socialize losses” tactic at play here. Because where the BP oil spill is concerned, none of these players are American companies. They are all headquartered overseas, and therefore pay few U.S. corporate taxes.

Transocean Ltd.? They’re based out of Zug, Switzerland. They moved there two years ago–from the Cayman Islands. Formerly based out of corproate-friendly Delaware, they haven’t called America home since 1999.

Halliburton? Once based in Houston, they now call Dubai home. This despite raking in billions in U.S. government contracts.

BP, as we all know, stands for “British Patroleum.” They are based out of the United Kingdom.

So there you go. American taxpayers will be paying for this oil spill in a lot of ways: loss of jobs in affected industries such as tourism and fishing. There’s the damage to the ecosystem. There will be health costs associated with the toxic mess. And while Lisa Murkowski blocks raising BP’s liability, meaning Joe and Jane taxpayer will pay for more of the cleanup, we’ve got three two major players who have dodged paying their full share of corporate taxes by moving to overseas tax havens. Talk about “starving the beast”!

Even worse, as I frequently remind my readers, all of this talk about us “needing” to drill offshore for our “energy security” is just a load of bull. We don’t have a nationalized oil industry in this country. Oil is traded on the world market. That oil pulled out of the deep sea bed is as likely to end up in South America, China, or the EU as it is American SUVs.

So how about this. Since American taxpayers are paying to clean up this mess anyway, why don’t we make sure we’re the ones reaping the rewards of offshore drilling? How about nationalizing the oil companies, or at the very least creating a nationalized oil company. If you’re going to drill in U.S. waters, then that’s who’s going to have to do it. Hell, we’re paying for it anyway.

Sound too socialist for you? Maybe. But the alternative isn’t looking much better.

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Filed under BP, corporations, Gulf oil spill, Halliburton, oil industry

>Stupid, Greedy, Stupid, Greedy, Stupid

>[UPDATE]:

Oh my God it’s worse. It’s already worse.

————————————–

This shit is making me nuts.

BP America Chairman and President Lamar McKay:

McKay compared efforts to try to trigger the blowout preventer to stop the flow of oil from the sea floor to performing “open heart surgery at 5,000 feet in the dark with robot-controlled submarines.”

Yeah, no shit, Sherlock! We got that! That’s why environmentalists wanted things like acoustic triggers, blowout preventers, yada yada. Which you in your brilliance lobbied against because you said an incident would be “unlikely.”

Let me repeat: you are drilling the world’s deepest oil well, which requires some very specialized technology, yet from a safety and risk standpoint you acted as if this was just any ol’ offshore well. And you claim that you didn’t put “blowout preventers” on these wells because an accident like what we’re seeing “seemed inconceivable”.

I repeat: You are doing something that has never been done before and yet in your brilliance an accident was “inconceivable.”

You think we’re stupid, don’t you?

For starters, you assholes at BP know you had a history of problems on your offshore rigs:

BP faces fresh questions over the cause of the Gulf of Mexico oil spill after it emerged that problems with the type of equipment that led to the disaster were first reported a decade ago.

In June 2000, the oil giant issued a “notice of default” to Transocean, the operator of the rig that blew up last month. The dispute was over problems with a blowout preventer, a set of iron slabs that should close out-of-control wells. It failed on the Gulf of Mexico rig, triggering the explosion and oil spill.

Transocean acknowledged at the time that the preventer did “not work exactly right”. The rig in question, the Discover Enterprise, was unable to operate for extended periods while the problem was fixed.

The preventer was made by Hydril, now owned by GE’s oil and gas arm, and Cameron International, a Houston company. Cameron also made the preventer on the Deepwater Horizon, the rig that exploded. Its preventer was fitted at about the same time BP was complaining of problems with its sister vessel.

Oh this is peachy. So excuse me if I don’t take Mr. McKay’s PR bullshit seriously.

And I have a very special fuck you to Interior Secretary Ken Salazar:

He expressed confidence that the oil industry “can operate safely.”

Salazar said, “There are 30,000 wells that have been drilled out in the Gulf of Mexico, and so this is a very, very rare event.”

Okay, let me take a deep breath and try to explain this stuff slowly and carefully to you. I’ve said this before a thousand, gazillion, bazillion times but I will say it again: there is a reason these deep water oil reserves are untapped. They are really, really, hard to get to. And expensive. And hard. And did I mention expensive?

So when BP execs tell you that blowouts were “inconceivable” let me point out that they are talking out of their ass. Look, not all offshore oil wells are the same, got it? This was the deepest oil well in the world. That’s a whole ‘nother ball of wax than what you’re dealing with everywhere else. And the very last thing in the world I want to hear right now is Administration officials repeating oil industry talking points. So I have a steaming cup of STFU with Ken Salazar’s name on it.

Look, the oil wells close to land are done, tapped, finished, over. We are going further and further out into the deep water, which presents new technological challenges. We are, quite literally, in uncharted waters here, people.

Here, lookie, Wired did a wonderful piece on this waaaay back in 2007. Read it and stand in awe at what it takes to pull oil out of the deep, dark, cold water. BP knows this, it’s their business to know this. Hell, even folks who work for Chevron call deep water oil drilling “a total crap shoot.”

Meanwhile, assholes like Bill Kristol, who say we just need to drill closer to land, don’t have a fucking clue. We’ve been there and done that and that oil is gone. Got it? The easy oil is gone. We are going after the hard stuff. The expensive stuff. The difficult-to-extract stuff. That means that extra precautions need to be taken. Extra safeguards. Belt-and-suspenders stuff. Acoustic shut-off valves and whatnot. Hell, I don’t know. I just know that when you are walking on the Moon you don’t pretend it’s an afternoon in Central Park. You do, you know, extra shit to be extra careful.

Because these deep water oil wells are not like any other well. So when you say, “Oh gosh there are tons and tons of offshore oil rigs and they haven’t blown,” well let me point out the very fucking obvious to you: This is what the oil industry refers to as “The Last Frontier.” This isn’t business as usual. This is special circumstances.

Got that?

Special fucking circumstances. And when you are operating in special circumstances as if it’s the same ol’ same ol’ to maximize your profts and keep Big Government off your back then you, in my opinion, are a greedy fucking asshole. And if there is any justice in the world then Corporate Person BP will be given the death penalty for this crime it has inflicted on the American people.

That is all.

18 Comments

Filed under BP, Gulf oil spill, Ken Salazar, oil industry, rants

>Failure To Anticipate

>Damn, I’m so sick of this shit:

BP suggested in a 2009 exploration plan and environmental impact analysis for the well that an accident leading to a giant crude oil spill — and serious damage to beaches, fish and mammals — was unlikely, or virtually impossible.

Where have we heard this before?

How about the failure to anticipate 9/11. The failure to anticipate post-war problems in Iraq. The failure to anticipate the Space Shuttle Columbia disaster.

Nobody anticipated the failure of the northeast electric grid in August 2003. Nobody anticipated that deregulating the energy market in California would make consumers vulnerable to greedy Enron energy traders manipulating the energy supply for fun and profit.

Nobody could have anticipated the breach of levees protecting New Orleans. Or the collapse of a major interstate bridge in Minneapolis. Certainly nobody anticipated big shitpile blowing up in everyone’s faces.

Locally, TVA failed to anticipate the breach of a leaky coal ash pond, spilling 1 billion gallons of toxic sludge onto East Tennessee.

And on … and on …

Once upon a time we were able to anticipate things. We were able to set up systems that prepared for the worst, and mostly things ran pretty well. Now we stand slack-jawed in amazement as one major fail after another rains down all around us.

What the hell is going on?

I think it’s two-fold. I think part of it is that we’ve been blessed over the past 50 years to live in a country where we did worry about infrastructure and regulatory measures. Things worked pretty smoothly, for the most part. Sure there have been problems, but mostly they were few and far between so we become comfortable–maybe even complacent. We started unraveling the oversight which had shielded us from the worst disasters, and we stopped paying attention to infrastructure. Predictably, things have started falling apart.

But there’s a larger issue at play. We live in a far more complex world than ever before. And with greater technological complexity comes a need to change how we calculate risk, how we “anticipate.”

Grist’s Peter Meyer touched on this after the Kingston Coal Ash disaster and that post is worth revisiting here. It’s an excellent post which doesn’t lend itself to pulling out easy excerpts. So I urge everyone to read it.

In a nutshell, Meyer explains that things like Environmental Impact Statements are too often wrong because they

are still based on what economists call “expected utility theory” (EUT). Based on past experience and recorded data, we project the probability of different events and use those odds in combination with the “utility” or value associated with each alternative event to arrive at an expected value for a course of action.

But in the case of the Kingston coal ash disaster,

The expected value calculation appears to have assigned a zero probability to a spill as massive as the one that occurred. That’s as if you carried an umbrella in the rain even though you might melt if you got wet, and assigned a zero probability to the possibility of high winds or hail. That’s not rational.

Assigning that zero likelihood also meant that there was no serious effort to calculate the cost of such a massive failure.

What this helps to see is that the expected value calculation—and all our NEPA-mandated Environmental Impact Statements for federal projects —depend on key assumptions that are unlikely to be true even if we make conscious allowance for normal accidents we tend to ignore.

Getting back to the B.P. oil spill, it seems we have the exact same scenario:

The plan for the Deepwater Horizon well, filed with the federal Minerals Management Service, said repeatedly that it was “unlikely that an accidental surface or subsurface oil spill would occur from the proposed activities.”

The company conceded a spill would impact beaches, wildlife refuges and wilderness areas, but argued that “due to the distance to shore (48 miles) and the response capabilities that would be implemented, no significant adverse impacts are expected.”

Robert Wiygul, an Ocean Springs, Mississippi-based environmental lawyer and board member for the Gulf Restoration Network, said he doesn’t see anything in the document suggesting BP addressed the kind of technology needed to control a spill at that depth of water.

Just like with the TVA coal ash spill, it seems the BP plan assigned a zero probability to a spill, meaning that there was no serious effort to calculate the cost of a massive failure.

In other words: a failure to anticipate. Going into this project planners already determined that there would be no well failure, because no wells had ever failed at that depth. That’s not just unrational, it’s not factual: just as with the TVA coal ash pond, which had been leaking for years before finally bursting, this Deepwater Horizon rig had a nine-year history of spills and accidents. Still, it appears a plan for drilling the world’s deepest offshore oil well was written–and approved–with the assumption there would be no spill.

And I daresay every Environmental Impact Assessment for an offshore oil plan has that same flaw.

Planners, regulators and policy analysts need to take a look at this. There is a deep flaw in how we calculate risk. Our world is riskier but we seem to be living in a happy ignorance. Relax, don’t worry, nothing could ever go wrong!

This is a dangerous attitude. We cannot afford to live in happy ignorance any longer. The old adage “anything that can go wrong, will go wrong,” should be the rule when calculating environmental risks in sensitive areas.

7 Comments

Filed under BP, environment, oil