Sunday, May 23, 2010

US Person on the Road Again

US Person will be on safari next week and during the month of June. So come back later this summer to check out the high impact blog at Persona Non Grata.

Jackal pup, Namibia

Friday, May 21, 2010

'Toontime: With a Side of Tar Balls

[credit: Clay Bennett, Chattanooga Free Press]

"Twenty-four miles of Plaquemines Parish is destroyed. Everything in it is dead," head of the parish in southern Louisiana, told US cable news station MSNBC Thursday.
Louisiana state officials are reported to be furious with BP's lackadaisical response to the disaster. The company seems satisfied to sit back and wait for the relief well to be drilled while disputing independent accounts about the actual size of the spill. Only two undisputed facts are important right now: 1)the spill is huge, and it is headed inland to contaminate fragile and productive wetlands because the company did not take immediate, effective action to contain the flow during the first days of the catastrophe; 2) the government is partly at fault for engendering an attitude within the industry that it is immune from regulation and public accountability.

Environmental groups like the World Wildlife Fund are calling for a new drilling moratorium until the Deepwater Horizon disaster has been studied by an independent commission.  Shell Oil is preparing to drill exploratory wells up to 140 miles from shore in the Arctic Ocean, known for its extreme weather conditions.  The same amount and variety of resources in the Gulf of Mexico to contain and clean up a major oil spill are not available in the Arctic.  There is considerable doubt even if conventional equipment were available, that it could be effective in the harsh conditions. The Minerals Management Service said in a 2009 paper, "field deployment of booms and skimmers in broken ice conditions in the Beaufort Sea highlighted the severe limitations of conventional equipment in even trace concentrations of broken ice." Detection of oil slicks under ice is also a technical challenge. Ground penetrating radar can be used to locate slicks of oil 1" thick or more in ideal conditions. It cannot detect oil slicks when the ice is thicker than 7", or 3" when the radar is used from the air. There is only one GPS unit in the Alaskan Arctic at present. Burning can an effective way to eliminate thick oil slicks on the surface, but a subsurface blowout like the Deepwater Horizon well will produce emulsified oil (oil-seawater mix) that is very difficult to burn. Chemical dispersants are toxic and spread an already toxic substance throughout the water. Clearly, given the present state of spill prevention and clean up technology, offshore drilling in the Arctic is not a reasonable course when the adverse impact of a major spill on wildlife and native peoples is considered.

Thursday, May 20, 2010

'Toontime': We Don't Need Regulation!

Update Day 30: The slow motion disaster [satellite photo], thanks to the befuddled dithering of the so-called oil experts, has reached the wetlands of Louisiana, and is entering the Loop Current. Louisiana officials want temporary sand berms erected around 80 miles of critical wetlands and coasts. The request should be granted immediately instead of "studied" to death by the Army Corps of Pencil Twirlers. The Secretary of Interior is rearranging bureaucrats, but he might as well be playing checkers.  It is the big one folks*, so stop staring at it like a deer in the headlights, if you want to save the state of Louisiana. The latest estimate from scientists examining undersea video and the surface extent of the slick is between 76,000 and 104,000 barrels of oil a day.

British Petroleum skipped the most effective test for the soundness of the well lining according to the New Orleans Times-Picayune.  The "cement bond log" which uses an acoustical device to test for voids and weak spots was never requested by BP despite the contractor Schlumberger being on board the platform and ready to perform the test. It is considered the gold standard for testing the soundness of well linings, but the government does not require it unless pressure tests indicate a problem.  The status of pressure tests on the well is unclear at this time.  A graphic with the linked article shows an annulus above the well bottom left unplugged with mud. Experts think this is the gap by which natural gas shot to the surface, exploded, and destroyed the Deepwater Horizon platform.  For more about BP's past alleged criminality read this article because you will not find the information in the corporate owned media (COM). BP, with the help of the government, is strictly controlling information and access to the site of the disaster.  Paging Benito!

*senior administration official to Politico“I don’t think any of the [worst case] predictions are crazy anymore,” the adviser continued. “That’s why you’ve seen that nobody is making predictions anymore. Nobody wants to be wrong anymore. They have to be demonstrating forceful leadership in throwing everything they have at the problem.”  US Person suggests they are not succeeding in the demonstration.

[credit: Jim Morin, Miami Herald]
{5.14.10}The Minerals Management Agency, reduced to party-time redundancy under the Regime regularly issued offshore drilling authorizations without first obtaining permits under the Endangered Species Act and the Marine Mammal Protection Act. The Center for Biological Diversity has notified the agency and the Department of Interior of its intent to sue for non-compliance with the two important environmental protection laws. The notice says the agency authorized over 300 drilling permits including the one for the Deepwater Horizon, three large lease sales, and over 100 seismic surveys without the reviews required when oil exploration could harm endangered species or marine mammals. The practice of ignoring the laws intended to protect ocean life has continued under Forty-four's administration. A federal appeals panel approved Shell's plans to drill exploratory wells in the Chukchi and Beaufort Seas on Thursday.

The retired chairman of an energy investment banking firm told the National Geographic magazine that the subsea gusher could spew oil into the Gulf for years. He said the company's engineers nor military engineers have any idea how to contain the well. Conventional attempts to plug it will be prone to failure because of the high pressures at 5,000 feet down. The size of the reservoir feeding the well is huge, and it could take years to deplete it. National Public Radio said that the outflow based on subsea videos of the broken riser (particle image velocimetry±20%) is now estimated to be 70,000 barrels a day, or one Exxon Valdez every four days. The Coast Guard is still operating under the assumption that a puny 210,000 gallons of crude a day is entering the water.

It is no joke Stephen; the Russians claim to have successfully buried five runaway wells using nuclear blasts of about 20-30 kilotons or the size of the Hiroshima and Nagasaki bombs. If Americans have run out of ideas, Russian engineers should be consulted about the use of a subsea nuclear device to seal the well. A nuclear denotation forty miles offshore and 5,000 below the surface may still cause fallout to reach shore. Certainly there will be massive destruction of sea life. The alternative is an entire sea and the surrounding coastline transformed into a toxic "national sacrifice" zone. As Ed Markey (D-MA) pointed out, "If you do not understand the scope of the problem the capacity to find the answer is severely compromised." He will hold hearings to determine the actual size of the spill.

Goldman's Virtual CDO

More: Today, Scott Brown (R-MA), the former male model who took Ted Kennedy's seat voted for cloture (ending debate) with Olympia Snow and Susan Collins (ME-R). So the 'reform' package moves to the House without the real changes wanted by Cantwell and Feingold. There are simply not enough progressive Democrats to make a difference in the Senate.  Progressives should now concentrate on passing the "Volker Rule" which bars banks from proprietary trading or playing the market with their own capital.   Positive development: Arlen Specter, the Repugnant turned faux Democrat, lost his Senate seat in the Democratic primary. Arlen's claim to fame will forever be the "magic bullet" theory he peddled to the Warren Commission.

Update: Two progressive senators, Russ Feingold (D-WI) and Maria Cantwell (D-WA) voted against the proposed package of legislation intended to rein in the irresponsible financial gambling by banks on Wall Street. Both senators voted with Repugnants to block the legislation because they believe it is not tough enough. Ms. Cantwell took the floor to say she wanted tighter rules on the trading of derivates. Her proposal would require derivates to be traded thorough an exchange and empower regulators to stop a deal if banks knowingly violated trading requirements. Ms. Cantwell also wants a vote on re-establishing the Glass-Stegall Act prohibition against co-mingling commercial and investment banking activity. Mr. Feingold also wants the Depression era reform law restored.

{5.10.10} US Person wrote some a while back {4.18.10} about Goldman creating a synthetic collateralized debt obligation (CDO) with the help of John Paulson who then shorted the security and made a bundle.  Goldman also made a bundle selling the long position mainly to European banks.  At the time the post was written, he did not do a good job explaining what a synthetic CDO really is.  The deal was complex enough without throwing another level of complexity on top of it.  A real CDO bundles real mortgages together into a security that can be traded like a bond.  There are real home owners provide the income stream upon which the security is built. That is until they stop paying.  A synthetic CDO has no actual mortgages involved.  It is a totally created security--a fiction if you will--based on computer models.  Sounds fantastic?  It is, but the big boys were trading the blue sky because there were not enough real mortgages to bundle and securitize.  John Mauldin explains the situation better than I can:

Let me see if I can simplify this. It [a synthetic index] exists only as a spreadsheet and performs in conjunction with the components it's modeled upon.  Numerous hedge funds did not think the rating agencies knew what they were talking about when it came to the mortgage ratings. They also believed we were in a housing bubble. So they went to a number of investment banks and asked them to construct synthetic (derivative) CDOs [based on BBB mortgage tranches] that they could short. And there were buyers on the other side who wanted the yield, who trusted the agencies, and who believed that housing could only go up. As to the Goldman deal, the buyers had to know there was someone short on the other side. By definition there was a short. The hedge funds that shorted the synthetic CDOs took real risk. [but Paulson had a hand in creating the synthetic and knew what components were being modeled] They had to pay the interest on the underlying tranches to the investors who were long. And if the housing market continued to rise, and the bubble did not burst, they could easily lose a lot, if not all, of their money....Let's be very clear. This was purely gambling. No money was invested in mortgages or any productive enterprise. This was one group betting against another, and a LOT of these deals were done all over New York and London.
Paulson & Co. had a hand in creating the synthetic and therefore knew what components were being modeled.  Perhaps not the same as dealing poker with a stacked deck because the banks could have checked the deck themselves. But as Mauldin points out, they wanted the yield. Who was underwriting this fanciful gambling between card sharks? Answer: US taxpayers. When the housing market did collapse, Goldman and other Wall Street firms "too big to fail" were hauled out of the mess they created with taxpayer funds doled out by the Treasury Department and the Federal Reserve. The underlying investments that failed served absolutely no useful public service.  Heads I win, tails you loose, and a textbook case of why we need derivative trading in a regulated market and the re-establishment of the Glass-Steagall Act prohibition against banks owning other financial institutions.

Wednesday, May 19, 2010

"La Plus Entente De Conservation Dans Le Monde"

Peut-être.  Certainement la entente couvre une grande region-- 72 millions de hectares de la forêt boréal canadienne.  Cette entente a annoncé hier par vingt-une membres de L'Association des produits forestiers du Canada et neuf organismes environnementaux.  La assurera la conservation de la vaste espèce boréale canadienne et la protection du caribou des bois [photo], une espèce menacée. Ce rapprochement d'adversaires traditionnels reflète un nouvel engagement a l'égard d'un objective commun: protéger de façon permanente de vastes entendues de forêt et mettre place des pratiques forestières durables.

L'entente établit des engagements concrets pour les deux parties ainsi fait un plan pour l'action:
  • l'élaboration et l'application des meilleures pratiques d'aménagement forestier;
  • la formulation de propositions communes por des réseaux d'aires protégées et le rétablissement d'espèces en péril; 
  • une approche qui tient compte de tout cycle de vie pour la gestion du carbone;
  • suporter pour l'avenir économique des collectives forestières.
Les signataires doivent obtenir la coopération des gouvernements provinciaux, des Premières Nations et des collectivités locales pour exécuter l'entente.  Les participants reconnaissent que c'est aux gouvernements, y compris aux gouvernements autochtones que reviennent les décisions dans leurs territoires de compétence respectifs.

Ignoring the Lessons of History

Reporting at Counterpunch suggests that the Pentagon is resigned to the failure of the much touted offensive in Helmand Province earlier this year{"Afghanistan"}. Dubbed "Obama's surge" by the media, the offensive code named Moshtarak (Together), was intended to dislodge the Taliban and retake the province's infrastructure and population. Based upon General Stanley McCrystal's assurances of success, the President secured funding for a 30,000 man increase in force. The dislodging was achieved, but after the area was turned over to Afghanistan security forces the Taliban returned. Just three months later, villagers say the Taliban control the market town of Marjah at night. Shops are still closed and schools have not reopened. Central government workers have fled. The Taliban is replacing IEDs removed by US troops, and executing collaborationists. Local people also believe that the Taliban are stronger than ever in Kandahar, the latest target of western forces. Winning the hearts and minds of the Pashtun, a tribal people infamous for their xenophobia, will be next to impossible as US and NATO forces disrupt everyday life in their preparations for battle against the Taliban. The work of US assassinations teams has also raised the ire of the population. The quick turn around in the war General McChrystal envisioned has not appeared.

The conditions in southern Afghanistan are nothing new. Alexander faced them in the fourth century BC. After two years of fighting the region became the Greek province of Bactria, but the great Macedonian general did not succeed in subduing the tribes south of the Oxus. The Soviets had a similar experience during their ten year occupation beginning in December, 1979. McChrystal planned to form
an arc of control in the densely populated south (green shaded area) fixed on Marjah in the west and Kandahar in the east. Once Marjah was secure, he would expand the security footprint eastward to Kandahar, the city founded by Alexander in 330 BC. The maps shows this strategy is a familiar one following both the routes of Alexander (blue line) and the Soviet armies (red line). But the failure of the extraordinarily weak Kabaul government to hold Marjah once it was returned to it, puts the entire strategy in question. If western troops are redeployed to hold Marjah, they will be unavailable to takeover and hold Kandahar, the home base of the Taliban--a situation not anticipated by McChrystal's planning. Warnings from US ambassador Karl Eikenberry about government ineptitude and corruption were ignored[1]. One positive development in the war is the recapture of the Pakistani tribal areas on the northeast border that serve as safe havens for Taliban fighters. That gain is offset by the failure of the secure and hold strategy in the south. Once again the US seems to be stalemated in a far-off civil war, this one between the predominately Pashtun Taliban, and the Tajik, Uzbek and Hazara opponents in the central government.

The House will take up the $58.8b war supplemental spending bill this week.  American deaths in the war have passed 1000, as the rate accelerates dramatically in the face of a newly resurgent enemy.

[1] at a White House briefing last week the Ambassador refused to directly endorse Karzai as an "adequate strategic partner" saying only that he was the elected president of Afghanistan. The election is widely considered to have been tainted by vote fraud. Hamid Karsai's brother, Ahmed Wali, is the strong man of Khandahar. He is reputed to be deeply involved in the opium trade with contacts to both the Taliban and the CIA. President Karsai told an audience member during a recent Washington visit that he "could not fire his brother". Secretary Clinton, sharing the forum with him, was silent.


Tuesday, May 18, 2010

Transocean Hires More Flacks

Loop Current illustrationPart of the drilling company's response to mishandling  operations on the Deepwater Horizon is to hire more lobbyists.  The Hill reports that Transocean, Ltd. recently hired Capitol Hill Consulting Group, a lobbying firm that includes a former Democratic congressman and an advisor to former Majority Leader Tom Delay (R-TX). It also hired FD Public Affairs to manage the media. That firm's energy and environment business is run by a former aide to House Minority Leader John Boehner (R-OH). British Petroleum has hired the public relations firm of Brunswick Group.  Prior to the catastrophe, Transocean had a limited political profile in Washington. The "ridiculous spectacle" of American government dysfunction and cronyism continues as the oil spill is now positioned to enter the loop current of the Gulf of Mexico according to a NOAA marine ecologist. The current circles the Gulf in a counterclockwise fashion before flowing into the Gulf Stream through the Florida Straits. The current could carry the oil to the Florida Keys. NOAA is closing 19% of the Gulf of Mexico to fishing in response to the spreading slick.

Monday, May 17, 2010

Paying for Your Friends in Congress

When US Person sees another example of pay for play at work in Washington, DC he brings it to your attention hoping one day a supposedly free, democratic society with engender enough collective willpower to end legislation for dollars that passes as national government. Last Thursday when Senator Robert Menendez (D-NJ) tried to pass the the liability cap increase for big oil by unanimous consent, he failed. You would think with the largest oil spill in US history still spewing crude into the Gulf of Mexico on day 28, he would not face any objections to such common sense legislation. NOT! Senator Lisa Murkowski (R-AK) objected to unanimous consent claiming the issue needed more consideration. Of course Murkowski did not reveal her conflict of interest when blocking the measure. She has accepted $426,000 from the oil industry during her eight years in office. Seventy-five percent of oil industry contributions have gone to Repugnants.  In return for the largesse the industry gets numerous tax deductions, credits, exclusions, rates, exemptions and deferrals in the tax code.  As if that were not enough corporate welfare, a 1995 law gives companies operating in parts of the Gulf relief from payment of federal royalties worth as much as $80 billion.  If politicians in Washington seriously want to bring the nation's expanding deficits under control, they can start by ending the kid glove treatment of the oil industry. No pity here.

The latest siphoning effort is not a solution to the spill.  Even the industry friendly Secretary of the Interior, Ken Salazar [photo, NY Times] understands that (the company estimates the siphon operation is capturing about 1000 barrels a day).  Scientists abroad the research vessel Pelican have found huge ominous plumes of subsurface oil, an indication that the spill is simply enormous.  One plume was found to be 10 miles long 3 miles wide and 300 feet thick in parts.  The oil plumes will suck all the oxygen out of the sea water, killing all life in the vicinity.  The result will be 'dead zones' on the bottom that could persists for decades if not longer.

BP's potential criminal liability for the spill is becoming clearing as the calamity continues.  An electronics technician that escaped the doomed rig, said on 60 Minutes the blowout preventer was punctured in weeks before the blast but did nothing to fix it. During a test a crewman accidentally caused 15 ft of drill pipe to pierce a rubber gasket inside the BOP that is supposed to close tightly around the well head to seal it. The technician brought pieces of the gasket  found in the drilling mud to the control station, but was told it was "not a big deal".   He also said the company was concerned the drilling was behind scheduled and costing the company $1 million a day, so it ordered a faster pace which split the bottom of the well. Gas escaping up the well bore caused the fatal explosion abroad the Deepwater Horizon.

Chart of the Week: Buddy, Will You Buy My Home?

This chart shows the increasing inventory of distressed housing in the US. In April there were well over 300,000 foreclosures and the figure is expected to be more in 2010 than 2009. Several research firms say the number of underwater mortgages--the loan balance is more than the market price of the home--has exceeded 11 million.

Thursday, May 13, 2010

Offshore Oil Found in Falklands Islands

After US Person posted about an oil discovery by Desire Petroleum off the Falklands {"Falklands"} the company's test well results were disappointing. But another exploration company, Rockhopper, has found a commercially exploitable reservoir worth about 200 million barrels of oil. There has been no talk of a potential disaster among Falkland Islanders who see the oil business as a ticket to an economically secure future. They apparently are overlooking the impact of a Deepwater Horizon scenario on a fishing industry that generates £40m a year in license fees.

In the Gulf of Mexico, the disaster continues to expand unabated as BP fiddles with ways of plugging the wild well. If BP continues to fail to take effective immediate action, the oil spill will easily be double in size of the Exxon Valdez spill, assuming the relief well works. It will take another 75 days according to the company for one of two relief wells to be finished. The oil company behemoth, which takes in $93 billion a day in revenue, again demonstrated its warped priorities when it greeted rescued platform workers in their lifeboats with affidavits to sign saying they had "no personal knowledge" of what happened on board Deepwater Horizon. Federal officials are already finding that there were a series of defects in equipment and procedures that contributed to the blowout. The effects of the worst case scenario spill will be felt for decades according to a spokesman from the Scripps Oceanographic Institute. The Gulf Coast contains 40% of the United State's wetlands. The porous coast will act as a sponge as the gooey, toxic oil-seawater sludge is driven inland by wind, waves and storms. Hurricane season begins June 1st.

British Petroleum, as the offshore lessee, is ultimately responsible for what happened on Mississippi Canyon Block 252. No amount of public finger pointing can alter that fact. However, its civil liability is currently capped at $75m. The administration is asking Congress to increase the cap to $10b. However, if evidence mounts that BP's drilling contractor, Transocean, Inc. continued operations despite failed pressure testing of the well, a federal criminal prosecution of both companies is warranted. The deaths of federally protected migratory birds caused by the spill can also be criminally prosecuted without evidence of willful intent or negligence. There are no monetary caps on criminal fines and penalties.

Wednesday, May 12, 2010

Good Intention--Bad Decision

Tourism is a rational if imperfect response to the plight of endangered wildlife all over the world. Any human endeavor can be abused or mismanaged to the degree that the means no longer serve the desired end. Ecotourism that interferes with the preservation of a species should be questioned. India's National Tiger Conservation Authority announced plans to phase out tourism in its 37 tiger reserves. One estimate is that 500,000 visit India's tiger reserves every year. More lodges are built in tiger habitat to accommodate humans crowding in to see the last remaining tigers. Noisy traffic jams are taking place on bush trails. Undeniably these situations have a negative impact on tiger conservation.

It seems a simple solution to remove the people from the scene, and allow the tigers the precious little space that is left to them. However, tourism does not drive poaching which is a criminal enterprise financed by an international trade. The way to stop poaching is to eliminate the irrational demand for tiger parts. Tourism in protected areas deters poaching since the perpetrators obviously want to remain anonymous, and tourism also provides a source of funds to protect undeveloped land. Simply banning visitors from the reserves is not a solution to the problems of protecting the last remaining wild tigers. Regulating tourism in ways that are compatible with the needs of tigers is a solution. Insuring that some of the money generated by visitors goes into the hands of rangers, their families and the villagers nearby is also necessary.  Corruption drives bad conservation decisions. One fact is clear: when tourists stopped going to Zimbabwe to see the healthy wildlife, its survival was put in jeopardy. Poaching has increased dramatically, the parks are neglected shambles, and the wildlife decimated by hungry humans as well as ivory poachers.

[photos: Wildlife]

Tuesday, May 11, 2010

Allies Again?

Faced with the prospect of debilitating national debt that could have interest payments as high as 10% of GDP even Pentagon hawks admit the defense budget has to be cut. {defense spending} Defense Secretary Gates, a holdover from the Regime, gave a speech at the Eisenhower library announcing the need for drastic cuts in military spending.  One example he used to emphasize the need to cut military spending is more than 40 officers of flag rank are still stationed in Europe two decades after the end of the Cold War.[text]  Gates wants to save $10 to $15 billion from the current base budget of $547 billion.  The speech timing was appropriate as members of the the US Army's 18th Inf. Regiment marched in the traditional Moscow Red Square celebrations of victory in "The Great Patriotic War" known to the West as World War II.  The sixty-fifth anniversary was the first time ever western troops passed in review before the Tomb of Lenin.

The defense budget has more than doubled since 2001 to over $700 billion including war funding.  Obama's newly appointed National Commission on Fiscal Responsibility will consider ways to accomplish another task considered to be on the untouchable "third rail" in Washington.  The Congressional Research Service made a report on defense budget issues to the Commission that finds even if spending is not increased, the cost of everything military--from bullets to pensions--goes up.  Military pay and benefits rose 45% more than inflation over the past 10 years, while the cost of weapons systems grew $296 billion over estimates.  The United States possesses a battle fleet that is larger than the next 13 countries combined, 11 of which are allies and partners.  It has 20 times more advanced stealth fighter aircraft than China.  Clearly, this country needs to find the political will to mount a credible national defense without bankrupting itself in the process.  Eisenhower would have done it.

Monday, May 10, 2010

Thank You, BP

Thank you for putting us "beyond petroleum". Thank you for using good judgment and putting the health of our planet before profits or bonuses. Thank you for ignoring the equipment concerns of your own technologists. Thank you for the unbiased claims about the "highly unlikely" event we see before us today. Thank you for spending $16 billion lobbying the federal government and not on R&D to make better blow out preventers.  Pray to God that the living cost of the Deepwater Horizon catastrophe will be remembered by you until you no longer exist.

The well is now calculated to be gushing 25,000 barrels of oil a day into the Gulf of Mexico. A smaller version of the cofferdam will be tried to stem the flow. A large version did not work as it became clogged with gas hydrate crystals. If the gusher is can only stopped by a intercepting relief well which will take three months to drill that means a spill 10 times in volume of the Exxon Valdez.  The Timor sea relief well required five tries before it hit the 10 inch target.  It seems British Petroleum is rapidly running out of ideas of what to do next.  Maybe BP should give Alexander Moskalenko in Moscow a call.

Chart of the Week: The Growing Underclass

The economy may be improving according to some, but do not try convincing a growing number of long-term unemployed Americans.  It could never happen to you, right?  Do not be too sure. If you fall out of the workforce, it is getting harder to get back into the game the longer you are unemployed as employers are putting more emphasis on increasing worker productivity (below), and have their choice of workers with recent experience waiting to take up the few new positions available.

Saturday, May 08, 2010

Industry Knew of Mechanism Failures

The oil industry knew it was having blow preventer problems. US Person posted previously that a BP company spokesman briefly addressed the issue at an earnings conference in the second quarter of 2009. He assured his listeners that the problem was well in hand and would not affect future earnings.{5.03.10}However, an industry study of BOP problems was made and the results presented to a conference seven years ago. The study was coauthored by the then director of technology development for Transocean, Inc., the owner of the destroyed Deepwater Horizon offshore platform. Transocean is a major player in the offshore, operating around 140 rigs. The report candidly admits that because of the drilling boom promoted under the Regime, R&D related to safety equipment was either lagging behind or being developed contemporaneously with demand for improved equipment. Previously, equipment such as blowout preventers had not been operating in depths over a mile down where water pressures reach 2500 psi. So there was a lack of already proven systems for use in deepwater operations. The paper was intended to show that specific engineering performance specifications could be developed before the deployment of untested equipment was made. The authors pointed out, "The process described in this paper is contrary to how the offshore industry typically specifies its equipment. Historically, functionality has been the primary focus of bid specifications." For offshore operations in deep water one of the most expensive downtime events is having to pull the riser and subsurface BOP because of a malfunction. A typical "roundtrip" could cost a drilling contractor $1 million per event. According to the report, BOP failure was most often associated with hydraulic components in an electrical-hydralic system use to close rams that cut through the well's lining and seal it. The authors said such failures were "common" and cost all offshore drilling contractors substantial revenue. The goal of their project was to develope a subsea BOP that could operate for five years without the need to pull the system to the surface for unplanned maintenance.

BP's stumbling approach to capping the wild well on Mississippi Canyon block 252 demonstrates vividly the industry's profit first approach to operations.  The company did not have a pre-planned ecological disaster response for the event determined by the company to "high unlikely" in its planning documents submitted to the government agency responsible for mismanaging the OCS.  The cofferdam lowered over the wellhead 5,000 feet below the surface is not working.The extreme water pressures are causing gas hydrate crystals to form inside the steel box making it buoyant. Without a tight seal to the sea floor, the gushing crude-seawater mix cannot be pumped to the surface. Because the cofferdam technique has not been used at depths of one mile or more, BP was unable to anticipate the physical reaction preventing a seal. While the nation waits for a solution, the Gulf becomes even more contaminated at the rate of 210,000 gallons a day.

[graphic: Orlando Sentinel]

Obama In Bed with Fed

US Person cannot be held responsible for the two-bit tampering with good ideas that passes for legislating in Congress. He urged his readers to support auditing the Federal Reserve. If you read his posts on the issue {"audit fed"}, you know he had in mind a periodic, if not an annual, examination of the books by Congress. What we got after the lobbying was done, is a one time audit by GAO for the period of the financial crisis beginning in December 2007. Senator Sanders caved on the audit's scope apparently in order to get any audit passed in the face of the administration/banking lobby's opposition to oversight of the mysterious temple of finance. They were particularly afraid that the inner sanctum of the Open Market Committee where interest rate policies are made would be violated by the public's profane glare. Voodoo economics indeed! At least there is an audit provision in the Senate's finance reform package to be sent to reconciliation with the House proposals.

{5.5.10}Obama has turned out to be mostly a virtual reformer. The latest deviation from his rhetoric: the administration is attempting to stop the Federal Reserve audit proposal{"audit fed"}, a bill which has over 300 co-sponsors in the House. A version of auditing the Fed proposal passed the Senate by 95-1. So how is it Forty-four, who pledged to bring more transparency* to government, is objecting to bringing much needed transparency to the operations of America's most powerful chartered bank? Because secrecy allows an administration to favor certain banks over others, as the Fed did during the 2008 financial crisis. It provided $2 trillion dollars to selected financial institutions at virtually no interest. The Federal Reserve has repeatedly rejected legislators' requests to name loan terms or recipients of the public money, and is fighting two FOIA suits in federal courts that ordered it to divulge the information. Former Chairman Greenspan also used the bank's secrecy cloak to keep policy dissent within the Open Market Committee away from public notice. A Federal Reserve bank president expressed his concern about rampant real estate speculation in Florida being influenced by "our very accommodative [interest rate] policy". Jack Guynn's March 2004 remarks were not released by the Fed until now. Independent socialist Bernie Sanders (I-VT) is shepherding the audit amendment through the Senate Banking Committee chaired by Senator Chris Dodd (D-CT). Senator Sanders has picked up new supporters, but the amendment will probably have to scale the 60 vote filibuster to reach the Senate floor. Do you want the grip of the plutocrats broken, and control of America returned to the people's elected representatives? Call your Senators and ask them to support auditing the Federal Reserve. After all, it's your money.

*page 3, The Blueprint for Change, Barack Obama's Plan for America, Obama For America Campaign Committee

Friday, May 07, 2010

They Made Love Not War--

At least some of the time. The great mystery of human paleontology has been answered by genetics. A study published in Science concludes that the ancestors of modern humans interbred successfully with Neanderthal. That makes Neanderthal entitled to the coveted title of Homo spaiens. The scientists who participated in the study estimate than non-Africans (Europeans and Asians) have 1-4% Neanderthal genes. They also estimate that modern humans and Neanderthal humans became separate between 270,000 and 400,000 years ago.  The divergence in genomes between modern humans and Neanderthal was about 12.7% compared to about 30% for chimpanzees.  (Yes, we share 98% of the same genes with Pan, but the sequencing is different.) There could be other plausible explanations of the data besides hybridization and these are ably discussed here. Personally, US Person likes the idea of two human ancestors getting it on in their dark caves, trying to keep warm in Ice Age Europe. I always thought I had some Neanderthal in me.


Reimpose Moratorium on Offshore Drilling

An inexperienced President facing political pressure to secure the nation's future energy supplies gives the nod to an industry who's environmental record is checkered with accidents.  The industry rewards his misplaced confidence by causing an unmitigated ecological disaster of biblical proportions. Forty-four took more campaign money from BP than John McCain did. When boosterism replaces good government, this what you get. Claiming offshore drilling is safe and environmentally benign is to be dangerously ignorant of the facts or is simply a industry sales pitch.  The offshore drilling moratorium* was imposed for good reasons. Americans became concerned that their beaches, fishing spots and seafood would be covered in smelly, sticky ooze from coast to coast.  Since April 22nd when the drilling platform Deepwater Horizon collapsed in flames, it has leaked an estimated 3 million barrels of crude oil into the sea.  The calamity in the Gulf of Mexico will have adverse effects lasting generations, just as the Exxon Valdez spill still affects the lives of Alaskans twenty years later.  Until the government comes up with a way to make offshore drilling safe, and it's inevitable environmental impacts minimized, it should not allow new drilling on the OCS.

Hope is with BP as it positions the cofferdam [photo] to capture most of the oil gushing out of the damaged well. If it works, the Gulf coast may be spared another huge disaster. If it does not work, the relief well being drilled is the last desperate option.  No one wants to contemplate the Russian suggestion to use a subsurface nuclear detonation to bury the runaway well. In the face of the Deepwater Horizon calamity that is slowing turning the northern Gulf of Mexico into a smelly, scum ridden, toxic lake, perhaps Congress will be motivated to spend the $54 billion it plans to give to another subsidized polluter, the nuclear power industry, on building a green energy economy.  You may not be able to drive a 11mpg SUV anymore, but your children will thank you.

*On January 28, 1969, Union Oil's Platform A experienced an uncontrolledblowout in southern California's Dos Cuadras field that lasted for approximately eight days. The spill of approximately 80,000 to 100,000 barrels of crude oil affected over forty miles of coastline. Several environmental laws were passed at the federal and state levels following the blowout, including the National Environmental Policy Act (NEPA) and the California Environmental Quality Act (CEQA). Future OCS and state tideland leasing would require a formalized environmental review process.

[L photo: Vets rehydrate a gannet that was covered in oil.  The spill has reached the Chandeleur Islands, the nation's second oldest wildlife refuge, off the coast of Louisiana.  UK First Post]

Thursday, May 06, 2010

Yes, Muffin, It's a Dirty Business

Everyone seems to like the phrase "visible from space" because it reminds us of what our technology has been able to accomplish.  It is used so often, the phrase is becoming trite. This sight too, is visible from space, but it is not a pretty one.  The gas flares of Nigeria burn brighter than the city lights of the capital, Lagos.  The profligate waste of a valuable natural resource makes it difficult for nearby Nigerians to breath, and contributes significantly to global warming.  Medical studies in Nigeria's oil rich delta region show that gas burning contributes to a high infant mortality rate and an adult life expectancy of 43 years. Officially flaring is illegal since 1984. The corrupt central government has set three separate deadlines for stopping the practice.  The latest one is December 31 this year.  But the waste continues unabated for a stark economic reason:  It is cheaper to flare off the gas, than build the infrastructure needed to process it and bring the product to market.

Nigeria is by no means alone in the amount of flaring of natural gas, but only the Russian Federation flares more.  According to the first global satellite survey of the practice commissioned by NOAA, Nigeria has actually reduced the amount of flaring over the past twelve years.  The dispute over the amount of flaring is whether the ongoing civil unrest in the delta that has halved oil production is responsible for the reduction in the amount of gas burned.  The flares are color coded in this composite image   1992 is blue, 2000 is green and 2006 is red.  World wide flaring has remained stable, but a huge amount of natural gas is simply wasted every year.  An estimated 170bcm was flared in 2006 or 27% of the total US natural gas consumption for that year. That amount of wasted gas would have had a market value of about $40 billion in the US.  The burning creates 400 million tons of CO₂ or more than the total emissions of France.  Flaring, while a cheap way to dispose of natural gas, is not 100% efficient. Unknown amounts of methane--a more potent greenhouse gas than CO₂--escapes into the atmosphere.  An independent oil and gas expert told the Independent newspaper the flares are "a continuing economic, political and environmental disaster".

Nigeria officials blame the major oil companies operating in the Niger Delta for the waste, while oil companies blame the government for failing to create  infrastructure and domestic demand.   Furthermore the companies say they are forced to operate as junior partners in joint ventures with the government.  Nigeria has some of the world's sweetest crude that attracted companies in the 1950s to develop its oil fields. But Nigeria has always had more gas than oil. Slapping fines on the oil companies is largely meaningless to an industry that supplies 80% of the nation's income.  Flaring of associated gas cannot be eliminated entirely, but it can be reduced, especially continuous flaring that wastes the most gas.  In 2002 the World Bank and Norway started a global initiative to reduce flaring.  The partnership now has 12 country members and 10 industry participants.  Despite their good intentions the major hurdles of lack of regulation, lack of markets, and lack of infrastructure remain.  A Nigerian environmental activist told the Independent that the oil companies are not serious about ending the waste; "They will never stop gas flaring until the oil wells run dry."


More BP Denial

Update:  News reports coming from the scene say BP has succeeded in stopping the smallest of the crude oil leaks fouling the Gulf of Mexico after the leased drilling rig Deepwater Horizon suffered a catastrophic explosion and fire last month.  However, the oil slick continues to spread at an estimated rate of 200,000 gallons a day.  The company admitted the spill could get much larger if a worse case scenario actually occurred.  During a private meeting with Congress members Tuesday, BP said the ruptured well could spill as much as 60,000 barrels a day.  Fortunately for the coast, the weather is expected to be calm for the next several days, keeping the floating slick away from beaches, estuaries and wetlands.  Another burn of floating oil is scheduled to be ignited according to AP.  Concerns for wildlife in the area to be affected by the burn were dismissed by the joint incident information center.  However, dead endangered sea turtles have already washed ashore in Mississippi [AP photo].  Several species of sea turtles are at the peak of their nesting season.

Environmental concerns were never foremost in the minds of BP or the federal agency responsible for managing the OCS when plans for drilling on the Mississippi Canyon block 252 were formulated.  The Department of Interior's Minerals Management Service exempted BP from detailed NEPA requirements after three assessments said a massive oil spill was unlikely.  The MMS, which made the news during the Regime for wild parties conducted by its employees, gave British Petroleum a "categorical exclusion".  In the Gulf of Mexico where there are hundreds of platforms operating, the agency routinely grants 250 to 400 waivers a year.  Environmentalists say the agency is little more than a rubber stamp for self-serving drilling plans.  BP lobbied the White House Council on Environmental Quality to provide categorial exemptions more often.  BP spent $16 billion lobbying in Washington in 2009, triple what it spent two years before. After the Deepwater Horizon disaster, BP may find the going tougher: an acoustic trigger on a blowout preventer costs $500,000.  Before the oil patch boys led by Vice-President 'Darth' Cheney got to the agency, the MMS proposed in 2000 to mandate the mechanism for all OCS rigs.  By 2003 the proposed requirement was dropped.

{5.4.10}BP continues to deny that it did not take adequate measures to prevent a blowout of its deep water well on the Mississippi Canyon block.  A spokesperson for the company said an acoustic switch on the blowout preventer that could activate the BOP from the surface, or subsurface cut off valves, "were not appropriate for a discovery well". Whether the well was classifiable as a discovery well or a production well is really immaterial.  What is important is the Deepwater Horizon was operating in an environmentally sensitive region at great depth where unknown gas pressures could pose a hazard of a well blowout, and the well at the time of the explosion was producing an 8,000 barrel a day flow of crude. A Transocean employee who escaped the flames also said the well was drilling down to 22,000 feet, in excess of the federally permitted 20,000 feet. Facts now emerging show the well services firm Halliburton was hired to cement the well bore in place to prevent subsurface gas pressures from escaping up the bore.  Cementing or capping is typically a difficult process, often prone to accidents. Over the pass 14 years, 18 of 30 blowouts have been linked to cementing by the Minerals Management Service. A Wall Street energy analyst told the Wall Street Journal that faulty cementing was the likely cause of gas reaching the surface, and a lawsuit filed by Transocean employees alleges the contractor Halliburton was negligent in it's cementing operation. Halliburton was also implicated in the blowout that spilled tens of thousands of barrels of crude oil into the Timor Sea for ten weeks before the well was shut down. The investigation into the Timor Sea incident is still proceeding. Cameron International Corp. built the blowout preventer used on the well that did not stop the gas explosion from occurring. BP said drilling a relief well will begin in two weeks. In the meantime the company will attempt to lower a 98 ton steel dome over the largest leak to contain it. The operation has never been tried at over a mile down.


Monday, May 03, 2010

Migratory Birds at Risk in Gulf

The Deepwater Horizon catastrophe will impact not only sea and wading birds native to the Gulf coast, but also migratory songbirds passing through Gulf coastal areas on their way north during late April and early May. The smoke created by efforts to burn off some of the oil will make their long journey even more difficult as they arrive near the US weak and undernourished.  Environmental News Service reports that the following bird sanctuaries are at immediate risk of damage from the spilled oil:

  • Gulf Coast Least Tern colony--one of the world's largest colony of the threatened least tern nest on a man-made white sand beach in Biloxi;
  • Pascagoula River Coastal Preserve--the marshes at the mouth of the river provide habitat for yellow and black rails, snowy plovers;
  • Gulf Islands National Seashore--thousands of wintering shorebirds live here including the brown pelican, Louisiana's state bird, and the endangered piping plover;
  • Breton National Wildlife Refuge--includes the Chandeleur Islands, home of the largest tern colony in North America, also oystercatchers, piping plover and frigatebirds inhabit the refuge;
  • Dauphin Island--stopover for gulls, terns, herons and rails;
  • Fort Morgan Historical Park--another important resting place for migrant birds;
  • Bon Secour National Wildlife Refuge--thousands of Gulf migrants rest and feed here;
  • Baptiste Collete Bird Islands-- artificial barrier islands that are home to terns, brown pelicans, and skimmers;
  • Elgin Air Force Base--the base has significant coastal habitat used by shore and wading birds as well as an inland population of red-cockaded woodpeckers;
  • Delta National Wildlife Refuge{4.15.10}--thousands of wading birds such as snowy egrets, herons, and white ibis live here, and migrating shorebirds use the mudflats during migration.
Even though Forty-four has announced a halt to new drilling pending an investigation, Shell Oil has already announced plans to drill in the Arctic an area equally as fragile as the Gulf Coast. There is even less demonstrated facility to clean up a major oil spill in the Arctic according to a former director of the US Fish and Wildlife Service, now an executive with Defenders of Wildlife. Mr. Jamie Clark called for a reinstatement of the drilling moratorium on the OCS and legislation from Congress mandating a shift to greener energy sources.  California governor Arnold Schwarzenegger has announced an about face on his decision to allow a limited expansion of oil drilling off Santa Barbara, citing the Deepwater Horizon disaster.

British Petroleum, the energy company that advertised itself as "Beyond Petroleum" has offered no explanation so far of why such a deep water well was not equipped with an acoustically controllable blow out preventer (BOP) and redundant systems. A 1999 Minerals Management Service report says that many blow out preventers used by oil companies do not work properly. According to the report, during a two year period in the late nineties, there were 117 failures of blow out preventers offshore. Between 1992 and 2006 there were 39 actual well blowouts. Blowout preventers can weigh up to 500,000 lbs, and be up to 50 feet in length. According to one newspaper account, the crew that escaped the platform said the blowout preventer (BOP) was activated before abandoning the rig. Investigators may find that the crew lost control of the oil and gas pressures in the well bore leading to an onboard explosion and fire. The rig itself contained over 700,000 gallons of fuel oil to run operations. The intense heat of the ensuing fire caused the drilling platform to collapse. Without support, the well riser fell to the sea bottom were it ruptured in several places, spewing oil into the Gulf. Transocean, the owner of the drilling rig leased by BP manages 142 offshore rigs. It experienced problems with BOPs in 2009. Steven Newman of Transocean addressed the problem during an earnings conference as "...a handful of BOP problems; nothing that I would characterize as systemic or quarter specific. We did a deep dive on each one of those incidents. We've identified the root causes. We are going back to address them in our management systems so they don't happen again....All of the BOP incidents that occurred in Q2 have been resolved, and we'll continue to keep our eye closely on the performance of our subsea equipment."

Twenty dead sea turtles including endangered Kemp's ridley have already washed up ashore in Mississippi.  Ingestion of oil coated fish is suspected to be the cause of death.

[photo: brown pelicans, Breton NWS, USF&WS]