Ignoring the Truth About Offshore Oil

Besides the funny papers, one of my favorite Sunday morning treats is skimming the Commentary section of the Richmond Times-Dispatch.

It is filled with plenty of amusing material, such as the usual local boosterism nonsense from the publisher, why we should ignore anything coming from the Congressional Budget Office and why we should beware Democrat Barack Obama cozying up to Communist China. It was Republican Richard M. Nixon who made the breakthrough to Beijing years ago, but I gather that little fact is too deep for the RTD’s editorial staff.

Imagine my smile when I saw a piece by Michael Thompson, head of a right-wing, libertarian outfit made up of lobbyists and think tankers grandly called the Thomas Jefferson Institute for Public Policy. Its annual reports feature TJ statues is various heroic and triumphant poses. It also owns the old Bacons Rebellion e-zine, which is too bad, because it used to be a pretty good publication.

Thompson bemoans the fact that Obama has restricted oil lease sales off the East Coast for about six years. He says that anytime we try to muscle up and create jobs, Bad Old Washington and untrustworthy Obama “make sure we fight these battles with one arm tied behind our back.” Thompson also assumes that the offshore area is particularly “Virginian” which presumably means that much of the revenue from any oil (still unfound) would go to Virginia and any oil spill disaster miles offshore would affect only Virginia.

The column is strange both in its content and its timing. We’re still not that far away from the worst environmental disaster in the U.S, namely, the BP/Deepwater Horizon, also known as the Macondo, blowout in the Gulf of Mexico.

Just as I was reading Thomson’s puff piece, in which he predictably buries Deepwater on the newspaper jump page, I was also reading “In Too Deep. BP and the Drilling Race That Took It Down.” This book by Bloomberg Press takes a hard look at the managerial culture at BP and the sloppy regulatory climate in the U.S. that led to Macondo.

The authors are Alison Fitzgerald and Stanley Reed, both Bloomberg reporters. I can vouch for Stanley. He and I worked at BusinessWeek in the late 1980s and 1990s. Reed knows oil and the Middle Eastern thoroughly. He worked in Cairo for years, speaks fluent Arabic and later, as BW’s London Bureau Chief, covered BP extensively along with the global oil industry.

In a nutshell, the authors note how BP under former chief executive John Browne went through a feverish effort to expand reserves and boost BP from its second tier status into a true behemoth. Simultaneously, Browne was chopping operational expenses left and right while all the while seeking new elephant oil fields that often were in dangerous and tricky deep water.

These conflicting goals, and Browne’s over attention on the upstream (exploration and acquisition) side of the business, were reasons why BP’s Bay City, Texas refinery, one of the largest in the U.S, blew up in 2005 with fatal results.

Macondo, of course, signalled any number of flaws, from bad technology at the ocean floor about a mile down to too much corporate cost cutting to too much attention paid to individual worker safety while forgetting factors that lead to a catastrophic system failure.

The federal Minerals Management Service which supposedly oversaw offshore drilling was in reality, a hot bed (literally) of cronyism. During the George W. Bush administration, the MMS saw its role as expediting oil production. Its workers accepted oil company bribes and regulators and oil officials were, literally, in bed with each other.

In his “Drill Baby Drill” screed, Thompson mentions none of these facts. He says that the oil industry has “come together to build a $1 billion spill response system that could be mobilized within 24 hours of an offshore spill.”

Really? Does he have details about this? Skimmers that were supposed to respond quickly to the BP spill failed miserably. A giant tanker fitted as a skimmer took weeks to get onsite and then didn’t work. Would Thompson have us believe that in the nine or so months since Deepwater Horizon was finally capped that the oil industry was come up with a wonderful new clean-up system? Even better, this gizmo could be moved miraculously from the Gulf, where it would likely be based, to the Mid-Atlantic coast within 24 hours?

This is the problem with views such as those of the “Thomas Jefferson” lobbying outfit and some newspapers. They put out a bunch of superficial views while ignoring key points — in effect, lying. It’s too bad that Thompson’s e-zine shares the same name as this blog.

Peter Galuszka

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14 responses to “Ignoring the Truth About Offshore Oil”

  1. The truth about oil is that it is a hard, dirty, dangerous business, like mining and farming, and quite a few other things.

    But we don't allow spectacular failures like Challenger or Deepwater prevent us from learning from our mistakes and moving ahead.

    That doesn't mean we need any Pollyanna's painting over the problems, nor Chicken Little's making them biger than they are.

  2. http://www.oregonhill.net/2011/02/09/general-assembly-in-violation-of-virginia-constitution/

    the Virginia General Assembly Senate passed Senate Bill 1025. An identical bill (HB 2123) passed in the House of Delegates last month, and Governor Bob McDonnell is expected to sign the legislation into law.
    These bills, if signed into law, would tie the hands of Virginia officials, restricting their ability to use the effluent testing and water quality monitoring necessary to protect Virginia’s waterways and communities from the severe impacts of surface mining. The law would also repeal the State Water Control Board’s authority over an important category of pollution discharge permits, eroding the authority of this board of citizen experts.
    This violates Virginia’s Constitution. Section 1 of Article XI of the Virginia constitution is particularly relevant, and I quote it here (bolding added for emphasis):
    To the end that the people have clean air, pure water, and the use and enjoyment for recreation of adequate public lands, waters, and other natural resources, it shall be the policy of the Commonwealth to conserve, develop, and utilize its natural resources, its public lands, and its historical sites and buildings. Further, it shall be the Commonwealth’s policy to protect its atmosphere, lands, and waters from pollution, impairment, or destruction, for the benefit, enjoyment, and general welfare of the people of the Commonwealth.
    “Clean water and clean air have been assaulted from day one of this General Assembly session. Whether it’s loopholes in the permitting process for coal mines, or extending coal subsidies in Virginia, this General Assembly has done all they can to create a safety net for the coal industry,” said J.R. Tolbert, assistant director of the Virginia Chapter of the Sierra Club. “If we didn’t know any better, you’d think Virginia had become a corporate welfare state.”

  3. pgaluszka Avatar

    Scott Good points but they wouldn't affect offshore drilling.


  4. "To the end that the people have clean air, pure water, and the use and enjoyment for recreation of adequate public lands, waters, and other natural resources, it shall be the policy of the Commonwealth to conserve, develop, and utilize its natural resources, its public lands, and its historical sites and buildings. Further, it shall be the Commonwealth’s policy to protect its atmosphere, lands, and waters from pollution, impairment, or destruction, for the benefit, enjoyment, and general welfare of the people of the Commonwealth."


    Both of these sound like self conflicting sentencees. How could anyone be in violation of such gobbledegook, or even know what it says, let alone what it means.

    It sounds to me like:

    To the end that we have clean resources, lets develop them. And lets make it a policy to develop them for the general welfare in a way that conserves them beyond use.

    No wonder this state is in trouble.

  5. The statement basically says that the citizens WILL USE the resources but they will ALSO protect them – not harm them.

    In other words, use the finite resources in a way as to not harm the sustainability of renewable resources.

    That's a goal and so far we are less than perfect at implementation of the goal.

    To give an example.

    If we had been able to extract the oil from the gulf of mexico without a massive spill – the American Public would have remained fat, dumb and happy just as they were right before the Exxon Valdez or 3-mile island kerfuffles.

    Of course there are some folks who would see the advent of offshore oil in the Chesapeake and an ensuing massive spill as a way to save money by deciding that spending money on cleaning up the nutrients as a waste now that the oil was coating everything anyhow, eh?

  6. "The statement basically says that the citizens WILL USE the resources but they will ALSO protect them – not harm them."


    I agree that is probably the intent, but it would be hard to parse that from what was written.

    You said it a lot better and more clearly. Why is that so hard?

  7. I still maintain that it is impossible to use resources without doing some harm: get used to it. we need to come to some agreement as to how clean is clean and how much harm is harm.

    We could prevent wasting a lot of resources on lawsuits and useless "citizen participation" by setting reasonable expectations instaed of going for "zero pollution" which is the stated government policy in Pennsyvania.

  8. "If we had been able to extract the oil from the gulf of mexico without a massive spill – …."


    But we didn't. We probably never will. And every time there is a disaster, we will look back and find that one, still, small, voice of conscience that was saying "I told you so.", when we didn't listen.

    Like the engineer who warned on the SRM O-rings in the cold. In retrospect, it was common sense.

    In aerospace, and some other industries, safety margins, double checking everything, built n redundancy, repairability, maintainability, serviceabilitly, reliability, extensability, testability; all those things, are almost a religion, built into the culture from the ground up.

    In spite of that, there are still stupid errors, like landing on mars in meters per second instead of feet per second.

    Those kinds of things you learn from, put them in the checklist and procedure manual for next time. Say a few prayers, and move on.

    And there is room for the precaustionary principle: always take in a reef before dark, because it is a boatload harder to do in the middle of the night.

    There is also such a thing as too much: the more crap you force people to do the more likely they are to miss something important. Like the pilot who landed his plane on the belly because he was distracted by people screaming onthe radio at the same time the alarm was going off.

    A similar corollary is having too many amateur experts. the hardest thing a manager does is let his experts do their job.

    But when it comes to using resources, well, I'm sorry, you can't make bacon without murdering a pig. That doesn't mean we are free to make pigs extinct, and it also doesn't mean we need a national program to increase the number of wild, "natural" pigs.

    Some people will never be satisfied until we have a massive infrastructure in place, able to provide the best avaialable technology within 24 hours, any place on the plane there is an oil spill.

    Never mind if providing all that infrastructure wastes more resources than all the oil spillage it prevents. We can see this in the wind turbine fracases that are brewing.

    We can make some sensible decisions, but not the way we are going about it. We first need to make, and agree to, the rules on how we make the decisions.

    When EPA lowered the value of a statistical human life, they were immediately sued by special interest groups who perceived this as meaning their special projects would get less money. It was a bush administration conspiracy to gut environmental protection, etc.

    Whatever those rules are, they can be modified over time, as experience and data is developed, same as for O-rings. But in the meantime we can at least argue for fair apllication, so that no one has to bear an undue burden.

    If we do decide to have more wild pigs, they will probably affect farmers more than apartment dwellers, and we need to consider that in the wild pig policy.

  9. Greetings from the Carribean. The offshore drilling issue will follow the pattern of gas prices at the pump. Gas has been rising lately. In less developed countries, energy inflation is very real. Meanwhile, the demand for more energy just grows and grows. I predict that extremely high gas prices (at the pump) will occur in the immediate run up to the next presidential election. Obama will be challenged to explain why even exploratory drilling has not occurred. Now, if the turmoil which has hit Tunesia and Egypt spreads to Saudi Arabia – watch out! Obama may rue the day when he changed his mind from calling deep water offshore drilling "safe" to banning it. And no … It won't matter how much oil there is off the coast of Virginia because nobody will know. All they will know isnthatjgas costs $6 a gallon, the recovery is in jeopardy and Obama put a moratorium on drilling.

    Bye, bye Barack. Maybe call Jimmy Carter and see If he's available for Mah Jong starting in 2013.

  10. Gooze Views Avatar
    Gooze Views

    Hey Groveton!

    I was wondering where you were? The Caribbean! How come you get to have all the fun?

    How can you swim when you wear that paper grocery bag over your head?


  11. Anonymous Avatar

    Let us know if you run into EMR in BWI.

  12. Ignoring the truth about obtaining offsore oil may not be as important as covering up the truth about how we use it.

    Ed Glaeser has a guest post if Freakonomics in which he repeats the claim that urban dwellers use 40% less energy than suburban dwellers.

    A number of reades commented onthe reasosn that this must be false.

    1) half the worlds population live in urban areas but urban areas use 80% of the energy.

    2) the description of urban areas rightfully must include their suburbs, and probably the entire area necissary for its environmental support.

    3) The statistic only includes personal consumption and not community energy, such as street and lobby lighting, elevators and escalators, advertising, lobby and hallway heating.

    4) does not include the cost of trucking virtually everything in and out.

  13. Bwi or bvi? I am in the BVI. Little Dix Bay. If EMR is here, I'll buy him a local drink called the pain killer. Paper bag holding up well.

  14. British West Indies, otherwise know as British Virgin Islands to the geographically illiterate.

    I think he has a place there.

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