Category Archives: oil exploration

Billions for Big Oil, Nothing for the Unemployed

04 Sunday Jul 2010

Posted by in budget, Congress, Deepwater Horizon, economy, Gulf Oil Spill, lobbyists, Obama administration, oil exploration, Politics, special interests, Unemployment

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We can’t afford to extend unemployment benefits, but:

“…an examination of the American tax code indicates that oil production is among the most heavily subsidized businesses, with tax breaks available at virtually every stage of the exploration and extraction process.”

Take, for instance, two of the major players in the Gulf oil spill—Transocean and BP:

“When the Deepwater Horizon drilling platform set off the worst oil spill at sea in American history, it was flying the flag of the Marshall Islands. Registering there allowed the rig’s owner to significantly reduce its American taxes.

The owner, Transocean, moved its corporate headquarters from Houston to the Cayman Islands in 1999 and then to Switzerland in 2008, maneuvers that also helped it avoid taxes.

At the same time, BP was reaping sizable tax benefits from leasing the rig. According to a letter sent in June to the Senate Finance Committee, the company used a tax break for the oil industry to write off 70 percent of the rent for Deepwater Horizon — a deduction of more than $225,000 a day since the lease began.”

Congress and the Obama administration are working (allegedly) on legislation that would cut $20 billion in oil industry tax breaks. The response from the oil companies? One wrong move and the economy gets it:

“Jack N. Gerard, president of the American Petroleum Institute, warns that any cut in subsidies will cost jobs. “These companies evaluate costs, risks and opportunities across the globe,” he said. “So if the U.S. makes changes in the tax code that discourage drilling in gulf waters, they will go elsewhere and take their jobs with them.”

What are the chances of Congress eliminating these subsidies? Slim and none:

“Efforts to curtail the tax breaks are likely to face fierce opposition in Congress; the oil and natural gas industry has spent $340 million on lobbyists since 2008, according to the nonpartisan Center for Responsive Politics, which monitors political spending.”

An example is Sen. Robert Menendez (D-NJ) who is co-sponsoring the legislation that would end the tax breaks, but:

“While the legislation would cut many incentives over the next decade, it would not touch the tax breaks for oil refineries, many of which have operations and employees in his home state, New Jersey.”

Peeling Back the Layers of the Deepwater Horizon Onion

10 Thursday Jun 2010

Posted by in BP, Deepwater Horizon, Energy, Environment, Gulf Oil Spill, Obama administration, oil exploration, Politics

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Being a long-time fan of Seinfeld, I kind of relate things and events to memorable episodes and lines from that show. As more light continues to be shed on the ongoing  Deepwater Horizon catastrophe in Gulf of Mexico, it brings to mind the episode where George leaves the running tape recorder inside the brief case after he exits the board room. The quote is, “this thing is like an onion, the more layers you peel back the more it stinks.”

A lengthy piece  in Rolling Stone by Tim Dickinson entitled, “The Spill, The Scandal, and the President” peels back several layers of this onion. And it stinks to high heaven. It’s the kind of investigative journalism we used to get from the Washington Post during the Watergate era but is rarely seen in major news sources any more. Here are a few excerpts, but please read the entire article:

“…the disaster in the Gulf was preceded by ample warnings – yet the [Obama] administration had ignored them. Instead of cracking down on MMS, as he had vowed to do even before taking office, Obama left in place many of the top officials who oversaw the agency’s culture of corruption. He permitted it to rubber-stamp dangerous drilling operations by BP – a firm with the worst safety record of any oil company – with virtually no environmental safeguards, using industry-friendly regulations drafted during the Bush years.

[…]

Most troubling of all, the government has allowed BP to continue deep-sea production at its Atlantis rig – one of the world’s largest oil platforms. Capable of drawing 200,000 barrels a day from the seafloor, Atlantis is located only 150 miles off the coast of Louisiana, in waters nearly 2,000 feet deeper than BP drilled at Deepwater Horizon.

According to congressional documents, the platform lacks required engineering certification for as much as 90 percent of its subsea components – a flaw that internal BP documents reveal could lead to “catastrophic” errors. In a May 19th letter to [Interior Secretary Ken] Salazar, 26 congressmen called for the rig to be shut down immediately. “We are very concerned,” they wrote, “that the tragedy at Deepwater Horizon could foreshadow an accident at BP Atlantis.”

The administration’s response to the looming threat? According to an e-mail to a congressional aide from a staff member at MMS, the agency has had “zero contact” with Atlantis about its safety risks since the Deepwater rig went down.

[…]

The tale of the Deepwater Horizon disaster is, at its core, the tale of two blowout preventers: one mechanical, one regulatory. The regulatory blowout preventer failed long before BP ever started to drill – precisely because Salazar kept in place the crooked environmental guidelines the Bush administration implemented to favor the oil industry.

[…]

Nowhere was the absurdity of the policy more evident than in the application that BP submitted for its Deepwater Horizon well only two months after Obama took office. BP claims that a spill is “unlikely” and states that it anticipates “no adverse impacts” to endangered wildlife or fisheries. Should a spill occur, it says, “no significant adverse impacts are expected” for the region’s beaches, wetlands and coastal nesting birds. The company, noting that such elements are “not required” as part of the application, contains no scenario for a potential blowout, and no site-specific plan to respond to a spill.

Instead, it cites an Oil Spill Response Plan that it had prepared for the entire Gulf region. Among the sensitive species BP anticipates protecting in the semitropical Gulf? “Walruses” and other cold-water mammals, including sea otters and sea lions. The mistake appears to be the result of a sloppy cut-and-paste job from BP’s drilling plans for the Arctic.

Even worse: Among the “primary equipment providers” for “rapid deployment of spill response resources,” BP inexplicably provides the Web address of a Japanese home-shopping network. Such glaring errors expose the 582-page response “plan” as nothing more than a paperwork exercise. “It was clear that nobody read it,” says Ruch, who represents government scientists.

“This response plan is not worth the paper it is written on,” said Rick Steiner, a retired professor of marine science at the University of Alaska who helped lead the scientific response to the Valdez disaster. “Incredibly, this voluminous document never once discusses how to stop a deepwater blowout.”

The article goes on to expose the incompetence at every level of the government bureaucracy and the money-saving, corner-cutting practices of BP which put profits over people, like this about the Texas City explosion (emphasis added) :

“In 2005, 15 workers were killed and 170 injured after a tower filled with gasoline exploded at a BP refinery in Texas. Investigators found that the company had flouted its own safety procedures and illegally shut off a warning system before the blast.

An internal cost-benefit analysis conducted by BP – explicitly based on the children’s tale The Three Little Pigs – revealed that the oil giant had considered making buildings at the refinery blast-resistant to protect its workers (the pigs) from an explosion (the wolf). BP knew lives were on the line: “If the wolf blows down the house, the piggy is gobbled.” But the company determined it would be cheaper to simply pay off the families of dead pigs.”

Despicable. I need a shower.

“How Do You Write a Check for Something Like This?”

02 Wednesday Jun 2010

Posted by in BP, Deepwater Horizon, Environment, Gulf Oil Spill, oil exploration

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That question, asked by a BP contract worker who took reporters from the New York Daily News into areas BP wants to keep off-limits, and this accompanying photo of a decomposing dolphin on Queen Bess Island, put in a nutshell the unfolding environmental nightmare along the Gulf Coast.


How do you write a check for something like this?

“When we found this dolphin it was filled with oil. Oil was just pouring out of it. It was the saddest darn thing to look at,” said a BP contract worker who took the Daily News on a surreptitious tour of the wildlife disaster unfolding in Louisiana.

His motive: simple outrage.

“There is a lot of coverup for BP. They specifically informed us that they don’t want these pictures of the dead animals. They know the ocean will wipe away most of the evidence. It’s important to me that people know the truth about what’s going on here,” the contractor said.

“The things I’ve seen: They just aren’t right. All the life out here is just full of oil. I’m going to show you what BP never showed the President.”…The grasses by the shore were littered with tarred marine life, some dead and others struggling under a thick coating of crude.”When you see some of the things I’ve seen, it would make you sick,” the contractor said. “No living creature should endure that kind of suffering.”

[…]

“Those pelicans are supposed to have white heads. The black is from the oil. Most of them won’t survive,” the contractor said.

“They keep trying to clean themselves. They try and they try, but they can’t do it.”

The contractor has been attempting to save birds and turtles.

“I saw a pelican under water with only its wing sticking out,” he said. “I grabbed it and lifted it out of the water. It was just covered in oil. It was struggling so hard to survive. We did what we could for it.

How do you write a check for something like this?

“He said he recently found five turtles drowning in oil. “Three turtles were dead. Two were dying and not dead yet. They will be,” he said. As the boat headed back amid the choppy waves, a pod of dolphins showed up to swim with the vessel and guide it to land…”They know they are in trouble. We are all in trouble,” the contractor said.

How does BP write a check for something like this? They can’t.

I Read the News Today, Oh Boy

19 Wednesday May 2010

Posted by in Afghanistan, BP, Clinton, Congress, Deepwater Horizon, Energy, Environment, Gulf Oil Spill, Obama administration, oil exploration, Politics

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I read the news today:

Arlen Specter switched parties because he couldn’t win the Republican primary, now he loses the Democratic primary to Joe Sestak. This just in Arlen, it’s not about party this year, the key word is “incumbent.” You’re 80 years old, you’ve been in the Senate for 30 years. Your time is up.

Mitch McConnell’s hand-picked candidate to succeed Jim Bunning got smoked by Tea Party favorite Rand Paul in the Republican senatorial primary in Kentucky. Once again, connections to the party establishment, regardless of which party, is the kiss of death this election season.

The latest example of why the anti-incumbent mood exists. Eight-term Congressman Mark Souder announced his resignation after an affair with one of his staffers was exposed.

I defer to the experts on the Gulf oil spill, but this smells like a cover-up to me:

“The Obama administration is actively trying to dismiss media reports that vast plumes of oil lurk beneath the surface of the Gulf of Mexico, unmeasured and uncharted.

But the National Oceanic and Atmospheric Administration, whose job it is to assess and track the damage being caused by the BP oil spill that began four weeks ago, is only monitoring what’s visible — the slick on the Gulf’s surface — and currently does not have a single research vessel taking measurements below.”

As does this:

“BP, the company in charge of the rig that exploded last month in the Gulf of Mexico, hasn’t publicly divulged the results of tests on the extent of workers’ exposure to evaporating oil or from the burning of crude over the gulf, even though researchers say that data is crucial in determining whether the conditions are safe.

Moreover, the company isn’t monitoring the extent of the spill and only reluctantly released videos of the spill site that could give scientists a clue to the amount of the oil in gulf.”

Also on the spill:

“Homeland Security Secretary Janet Napolitano acknowledged Monday that the federal government doesn’t have the resources or expertise to deal with an oil spill 5,000 feet below the sea, and must largely depend on oil companies to deal with an incident of such magnitude.”

So if the government agencies don’t have the “resources or expertise” to deal with the consequences of offshore drilling, why do they permit it to take place and just trust that the oil companies will be to “deal with an incident of such magnitude?” Sounds to me like expecting the arsonist to help put out the fire.

And finally, a grim milestone in Afghanistan.

“On Tuesday, the toll of American dead in Afghanistan passed 1,000, after a suicide bomb in Kabul killed at least five United States service members. Having taken nearly seven years to reach the first 500 dead, the war killed the second 500 in fewer than two.”

This following General McChrystal’s assessment that “nobody is winning” in Afghanistan and Secretary of State Clinton’s pledge to Hamid Karzai of “a long-term U.S. commitment” there.

Oh boy.