Jason Barton

Professional Information and Energy News

Archive for the ‘Gulf Oil Spill’ tag

Real People Show the Need to Internalize the Externalities

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If the devastation of the Gulf oil spill is too abstract, as it is for many of us, this story places faces and immediacy on the tragedy. The women discussed here have already lost their husbands and are now in danger of further losing their ability to make ends meet, as soon as the end of this month, this of all months. Yet executives and policy makers bicker over who’s responsible.

If BP and the other companies that operated the well were not fully prepared to pay the costs, then they should not have ventured after the benefits.

To put it unemotionally, the pain these women are experiencing is an externality. The job of government is not to distort the market, letting these firms profit at the expense of third parties, but to ensure that these companies are free to pursue their profits while ensuring that they must pay the costs, internal and external, direct and indirect, associated with their business.

Ah, it’s so simple, no?

  • DECEMBER 16, 2010, 12:08 P.M. ET

Widows Push Congress to Act on Gulf-Spill Measure

By DIONNE SEARCEY

Two widows of men killed in the Gulf of Mexico explosion that led to the largest offshore oil spill in U.S. history say they fear Congress is losing interest in passing a measure soon that would allow them to seek damages in court for the tragedy.

Under current law, families of anyone killed at sea—rather than on land—are banned from receiving damages for loss of care and comfort. Congress is considering a measure that would change the law for families of workers who died in the BP PLC explosion.

Read the entire article here.

Written by Jason

December 16th, 2010 at 11:54 pm

Energy Realities: The oil spill is my fault

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Well, this definitely isn’t getting any less interesting. Unfortunately, the energy situation in the U.S. is also not getting any clearer or easier to solve, even with pundits on all sides hurling dissatisfaction and vitriol at BP, Obama, Jimmy Carter, each other, seagulls, volunteers, parish presidents, and anyone else who happens to enter their field of vision.

This will not be easy. We will be using petroleum, coal, natural gas, and nuclear power for decades to come, and accidents like this will happen. Yes, there is much we can do to lessen our use and the related risks, and more we can do to mitigate the impact in the event they occur, but there is nothing, not a thing, to which anyone can point that will eliminate this risk, not even in the next 15 years. Maybe more.

We demand these resources. I demand them. And as long as we refuse to stop, we’re putting government or industry into the position of a parent, asking them to put out of reach the fix we know is there and that we very much want, even though we know it’s not good for us. Then we become petulant children when we get sick, and demand… What?

Some sort of methadone? There is no methadone, and every day we participate in and perpetuate a system, a habit, that has risks.

Once we face this reality, we can push past the questions for how we can end offshore oil drilling next week, and can put into proper, long term context the technologies for safer drilling, alternative fuels, vehicle fleets, and others that we’re now somehow hoping will materialize later this afternoon, after Keith Olbermann and Glen Beck, President Obama and Sarah Palin, Tony Hayward and Billy Nungesser have traded a few more punches.

When the topics of this oil spill or our energy use comes up in conversations with friends or colleagues, there’s often someone who insists technology is out there to clean up the spill or end our addiction to oil, but the powers that be either haven’t watched that particular show on the Discovery Channel, or those powers have some vested interest in letting these problems persist and keeping out competing solutions. Maybe I’m naive, but I just don’t see it.

I think part of the reason we insist on believing in these fairy tales, why we wait for our leaders–be they industry, government, or otherwise–to hand down our salvation is because it relieves us of any personal responsibility.

At the same time that I haven’t commuted to work or school since I was 17, riding my bike, walking, or taking the bus instead, I still put about 10,000 miles per year on my car and fly about that many miles as well.

The oil spill is my fault. I accept this reality and will continue to work towards greater independence from imported, nonrenewable sources of energy, focusing on all the healthy externalities derived from saving money on fuel and electricity, exercise and stress relief instead of frustration and smog in traffic, and all those silly pleasures so rarely discussed in the context of our current debacle.

The article below is one of dozens I’ve read in the last few weeks that criticizes Obama for his lack of a definitive response to the spill. Mr. Taranto, as usual, makes several excellent points. But like many on different sides of the debate, he foolishly uses the spill to decry a certain political ideology, as if any ideology has offered a concrete solution beyond the bland reality laid out in this post: It will take time; it will require sacrifice; it will require substantial investments from industry and government and citizenry to wean ourselves off fossil fuels and protect ourselves against the risks of dependence on nonrenewable, foreign sources for our energy.

Yes, we should formulate a comprehensive energy strategy, the one that has been promised by Republican and Democratic presidents for decades, that will work towards energy independence and bolster our economic and political security. And we should realize that this will require some sacrifices, sacrifices that will be better for us in the long run. And we will need to accept the reality that it will not eliminate the problems or drastically change our lives, our world, or our energy matrix, next week or even next year.

Maybe this is the leadership that government and industry have been providing. It’s not exciting. It doesn’t offer a quick solution. It’s just the reality. The oil spill is our fault.

JUNE 21, 2010

Keith Olbermann’s Wisdom

Obama, BP and the crisis of American liberalism.

By JAMES TARANTO

“What has defined us as a nation since our founding is the capacity to shape our destiny–our determination to fight for the America we want for our children. Even if we’re unsure exactly what that looks like. Even if we don’t yet know precisely how we’re going to get there. We know we’ll get there.”–President Barack Obama, June 15, 2010

Or, as Harry Truman might have put it: There is as yet no consensus on where the buck stops. And so I’ve established a national commission to understand the buck’s velocity and the degree of kinetic friction between the buck and the surface across which it is traveling. Even if we don’t know precisely where the buck is going to stop, we know it’ll get there.

On the Democratic left, Obama’s oil-spill speech last week has escalated what the mainstream media would call a civil war if it were being waged on the Republican right instead.

Read the entire article here.

The Coming Era of Extreme Energy?

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I am not an alarmist who believes we need an immediate, radical shift in our nation’s energy matrix. The compendium of tragedies in the article below presents another perspective containing several sound points, but also some impractical emotional appeals not based in fact nor reason.

Were it published in February, Klare’s article would raise few eyebrows. Now, because of a single terrible disaster, it sparks ample discussion, including an article by Daniel Gross today in Slate Magazine called “The Dangerous New Era of ‘Extreme Energy.'” In the second paragraph of that article, Gross claims that “When the land-based oil was exhausted, American prospectors went to sea. And when the shallow-water oil was exhausted, they went farther out.” Even if one didn’t immediately know that these claims were inaccurate, Gross graciously contradicts himself just a few sentences later to confirm that he’s simply engaging in yellow journalism: “Today, deep-water Gulf wells account for about one-quarter of the oil the United States sucks from the earth.” The other 75% come from the places Gross just said were exhausted.

I like Slate Magazine, but come on, Mr. Gross, we don’t need to lie to make the important points about changing our practices when it comes to our energy resources. Such dishonesty or carelessness only undermines your point.

When we see a car accident, even a massive one involving several vehicles and loss of multiple lives, do we say we should no longer drive? Do we argue that cars and roads need to be completely redesigned? No. We learn from the details, such as the dangers of drinking or texting while driving, the importance of seat belts, etc. The Deepwater Horizon rig may have been a bad idea from the start, or there may have been clear mistakes as the companies involved were trying to close the well, and these problems should be examined and learned from so they do not happen again. But there is little evidence to suggest that the problems that occurred should lead to the elimination of the thousands of rigs in shallower water that have been operating safely for decades.

Klare is correct to argue that government oversight of health and safety regulations in oil and gas drilling has been woefully inadequate. But as I pointed out in an earlier post, given the poor track record of these government bureaucracies, expanding their size or giving them more power may not be the best option. As citizens and consumers, as well as energy executives, politicians, and bureaucrats, paying greater attention to our sources of energy and their impacts is as fundamental to a safe energy matrix as energy is fundamental to our way of life, to all life.

If it’s true that sunlight is the best disinfectant, then the disaster in the Gulf should expose the many problems that led to the explosion, and even to the poorly planned implementation of the Deepwater Horizon rig in the first place. We should learn from these mistakes and move forward.

Yes, we need to pay greater attention to health and safety considerations as energy resources become more difficult to locate and extract. Let us be pragmatic in this pursuit, and not fall victim to alarmist calls for unrealistic or unnecessary measures. One market based solution is simply to make companies liable for most or all damages from accidents such as the one occurring now in the Gulf, rather than capping their liability and forcing taxpayers to cough up the rest.  Consider the current estimates that put clean up costs around $1 billion. BP recorded first quarter profits of just over $6 billion. They can afford to foot the bill, and if they try to pass the costs of their negligence on to the consumer, competition from other companies will inhibit this effort.

Most importantly, as readily available resources become more scarce, we need to examine our energy use more carefully. Increasing energy efficiency saves money while reducing our exposure to risk. Long term planning needs to include increased efficiency as well as development of technologies that can gradually enter our energy matrix in the coming decades as oil and gas become more scarce, more difficult to extract, and more expensive.

The next few decades could have us witnessing more problems like the one in the Gulf; but thoughtful, measured, gradual changes in our energy practices are possible, and necessary.

Michael T. Klare

Michael T. Klare

Author and Professor of Peace and World-Security Studies at Hampshire College

The Relentless Pursuit of Extreme Energy: A New Oil Rush Endangers the Gulf of Mexico and the Planet

Yes, the oil spewing up from the floor of the Gulf of Mexico in staggering quantities could prove one of the great ecological disasters of human history.  Think of it, though, as just the prelude to the Age of Tough Oil, a time of ever increasing reliance on problematic, hard-to-reach energy sources.  Make no mistake: we’re entering the danger zone.  And brace yourself, the fate of the planet could be at stake.

It may never be possible to pin down the precise cause of the massive explosion that destroyed the Deepwater Horizon drilling rig on April 20th, killing 11 of its 126 workers.  Possible culprits include a faulty cement plug in the undersea oil bore and a disabled cutoff device known as a blow-out preventer.  Inadequate governmental oversight of safety procedures undoubtedly also contributed to the disaster, which may have been set off by a combination of defective equipment and human error.  But whether or not the immediate trigger of the explosion is ever fully determined, there can be no mistaking the underlying cause: a government-backed corporate drive to exploit oil and natural gas reserves in extreme environments under increasingly hazardous operating conditions.

Read the entire article here.

Curbs on Oil Drilling Lurk as a Long-Term Wild Card

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It’s all about perception. Clearly, this oil spill does not contain the volume to disrupt oil supplies. As is pointed out by this article, the question is how this will change regulations and energy use in the long term.

Is this the sort of disaster that will force a dramatic shift in our energy usage? I don’t think so. It will likely force stricter regulation, however, which may cause a slight upward shift in production costs over the next several years. Given the tendency of Congress to want to work with petroleum companies, rather than against them, as well as the tenuous condition of our economy, the regulations will probably not be sufficiently strict to strangle oil companies the way some may fear.

* JUNE 3, 2010

Oil Traders Take Long View on Spill

By BRIAN BASKIN

They may not be lifting oil prices now, but tough restrictions on offshore drilling in the wake of the oil spill in the Gulf of Mexico may lead to higher prices down the line.

July crude futures have fallen more than $10 a barrel over the past month as traders’ concerns about global demand have overshadowed the political fallout from BP PLC’s failed efforts to contain the spill from its underwater well. Last Thursday, the White House announced a six-month moratorium on all offshore drilling and canceled exploration lease sales in the Gulf and off the Virginia coast.

Read the entire article here.

Written by Jason

June 3rd, 2010 at 1:21 pm

What’s the Role of Media in Energy and other Complex Issues?

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Discussions like this have particularly importance in the last several weeks with all of us watching the response, or lack of, to the oil spill in the Gulf. It’s frustrating to see the various ideas, some with far too much complexity, 5000 feet below the sea’s surface, for us to assess critically, and others, like Obama’s elaborate directive to “plug the damn hole,” expressing our own grossly inadequate comprehension of the task at hand.

In the Enron case discussed below, the ramifications transcend energy and cross paths with the current discussions of Wall Street oversight and the government’s role in the financial industry. It’s easy for some to say that there should be increased regulation, but then when we learn that those responsible for watching financial industries, and the MMS, supposed to oversee off shore drilling, were surfing porn and doing drugs at their desks while their charges ran so terribly afoul, can we really trust that increased government intervention will help to solve the problems?

These are just two examples of countless discussions happening within industry and government, and played out in the media and the blogosphere, that are so important to our daily lives, our economies, our comforts, and yet often beyond the grasp of intelligent people who have not investigated the intricacies of our electricity grid, our transportation fuels, and the sources and end uses of these and other forms of power.

How can the media decide between the demand for accessbile, interesting stories, without dumbing down technical information or pandering to sensationalism?

Clearly there are different kinds of outlets that fall in different places along this continuum, but I’d very much like to hear what you think about the media’s role in this and other complex issues.

Enron Made Suckers of the Media

May 28, 2010

Ken Silverstein, EnergyBiz Insider
Editor-in-Chief

Inveterate writer Walter Lippman said in 1925 that the “American press is the bible of democracy, the book in which a people determines its conduct.” He not only spoke of the ideals of the Founding Fathers but he lived them as well by providing “trustworthy” information to the American people.

While that sense of altruism is pervasive at many news organizations, it is often clouded by limited resources, tight deadlines and yes — a lack of interest in complicated subjects. Simply put, stories that require an understanding of economics are too complex for many journalists who instead flaunt stories with more allure. Charismatic leadership is more titillating than seemingly mundane corporate policies.

[…]

The extent of Enron’s complexity was unknown to all but those in its inner circle and its internal auditors. Still, the journalists covering Enron did fail. They helped provide the tools that Enron used to wheel and deal. As such, media organizations fell into the trap of believing in Enron’s invincibility, or that it could leverage its knowledge of markets and use that to profitably sell any commodity.

[…]

Why was the press not more skeptical earlier on? For sure, corporate accounting and finance are difficult subjects and not really the domains of the typical reporter. After all, Enron was able to dupe folks paid to know better, such as government regulators.

[…]

As more and more evidence has come out and given credence to reports of marketplace manipulation, journalists began receiving an increasing number of calls from people who explained how such exploitation occurred. And the volume of mail that each receives from those hurt financially by the deception has left an indelible impression. “In a democracy with a Free Press, it will eventually all come out,” one analyst says, although the damage in the interim can be ruinous.

The press, unfortunately, is often behind the curve. It’s a problem partly of its own making as many organizations are more intent on focusing on the sensational instead of matters of real substance.

Read the entire article here.