Drilling Moratorium Misguided

President Obama’s decision to suspend drilling in the Gulf of Mexico for six months in the interests of public safety may actually have the opposite effect, reports NPR’s John Ydstie.

Ken Arnold, one of the engineers called on by the department to help strengthen safety standards after the Deepwater Horizon rig exploded April 20, says the report he helped produce contains recommendations that will improve the safety of deep-water drilling in U.S. waters.

But, he says, more than half of the 15 professionals who reviewed the report think Obama’s six-month moratorium is misguided.

“We believe as a group that the moratorium as written and as being implemented today actually has the effect of decreasing safety,” Arnold said.

First of all, says Arnold — an oil and gas industry consultant with 45 years of experience — the act of shutting down wells and then restarting drilling introduces some safety risks; but, he acknowledges, they are marginal. A bigger problem, he says, will be set in motion by the migration of drill rigs out of the Gulf of Mexico.

“These rigs are expensive. If there not being used for six months, and maybe even for longer than six months, because there’s not promise they will be used in six months, then the rigs will start leaving the Gulf of Mexico and that’s already happening,” Arnold said.

The problem, Arnold says, is that the newest, most sophisticated rigs are in greatest demand around the world. They will go first, he says, leaving marginally less safe rigs in the Gulf. And, when the moratorium is lifted, the older rigs that have left will be the first to return.

More important, says Arnold, is that many of the drilling rigs will be gone for three to five years, the normal length of contracts. That means U.S. rig crews will disperse or move to other industries. When the rigs return, the new crews will have less operating experience. Of course, new crews can be trained, Arnold says.

“But it is marginally more risky to have a less experienced crew than to have a more experienced crew on the hour-by-hour, minute-by-minute decisions that have to be made on the rig itself,” he said.

Finally, says Arnold, the U.S. will have to import more oil because of decreasing production in the Gulf. That means transporting oil in tankers, which historically have accounted for far more oil spillage than well blowouts.

Brad Plumer noted the other day that

[T]he Gulf spill highlights our general ineptitude at properly assessing risk. As we now know, neither BP nor the government took adequate steps to make sure that a blowout didn’t end up fouling huge swaths of the ocean. Partly that’s because the agency responsible for oversight, the Minerals Management Service, has become a corrupt mess over the years, too cozy with the companies it’s supposed to supervise. But a deeper problem is that, as Cass Sunstein argues in his book Worst-Case Scenarios, humans seem to have an inherently difficult time preparing for low-probability catastrophes—we tend to vacillate between total panic and utter neglect, with little middle ground. One senior administration official recently told McClatchy that “the last time you saw a spill of this magnitude in the Gulf, it was off the coast of Mexico in 1979. When something doesn’t happen since 1979, you begin to take your eye off that thing.” A disaster doesn’t even have to be completely unprecedented to get ignored—it’s enough merely to seem unlikely.

As a result, it’s hard to convince people to pay the upfront costs of averting potential catastrophes, especially when the catastrophes seem remote and uncertain. Back in 2003, the Interior Department agreed with BP and other oil companies that installing a $500,000 acoustic shutoff switch on every offshore rig would be unreasonably expensive (even though such a switch would likely have prevented all that oil from spewing out). Of course, now that BP is staring at billions of dollars in clean-up costs and the prospect of bankruptcy, that $500,000 switch looks like a bargain, but back then, the incentives for short-term cost-cutting were persuasive.

And that’s all very much true.    But it’s worth noting that precautionary measures have pretty substantial risks as well.   Yes, in hindsight, spending a few million dollars and better switches was an obvious move.   But one presumes there are lots of other ways to spend millions of dollars to marginally decrease the likelihood of catastrophe.   It’s seldom obvious where to draw the line.

FILED UNDER: General,
James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. anjin-san says:

    Yes, in hindsight, spending a few million dollars and better switches was an obvious move.

    Actually, it not obvious in hindsight, its just obvious. Problem is, despite their mind-boggling profits, the oil companies don’t want anything shaving their margins, especially something as trivial as protecting the environment. Far easier to film a commercial about saving the Tule Elk.

  2. Hindsight is so, so easy. Mr. Plummer is I believe just assuming that all risks are knowable and can be properly assessed in advance. This just isn’t true.

    Does anyone really think that someone at BP knew and understood the risk and decided that a few million dollars saved here was better than bankrupting one of the largest companies in the world? Oh, and that’s where we are heading. Hard to see BP surviving this, but it does give Obama the chance to really turn the screws on our British allies quite a bit farther and perhaps damage the relationship permanently.

    And since we can’t stop the leak, what happens to Cuba, Puerto Rico, the Bahamas, Haiti and the Dominican Republic, the Florida Keys and all the other small islands in the Caribbean? Or when it hits the gulf stream? At least scientists can learn a lot about currents in the Gulf of Mexico and the Atlantic Ocean watching the oil drift out for the next few years. Does anyone know what the expectation for the total amount of oil in this reservoir is?

  3. Steve Plunk says:

    This is not failure to properly assess risk as much as it’s political theater meant to prop up an impotent looking president.

    This spill is a rare occurrence and we need to understand that. These rigs endure hurricanes on a regular basis and are pretty darn safe. Accidents happen and this one proved to be particularly difficult to fix. All the safety measures in place at NASA still resulted in the loss of two space shuttles. Risk will never go to zero.

  4. anjin-san says:

    And since we can’t stop the leak, what happens to Cuba, Puerto Rico, the Bahamas, Haiti and the Dominican Republic, the Florida Keys and all the other small islands in the Caribbean?

    What happens? Exactly what the environmental movement has been warning us about for 40 years. You might not of heard the warnings over the chant of “drill baby, drill” from the right.

    I believe just assuming that all risks are knowable

    You might want to read the reporting on the long chain of bad decisions and poor practices on the part of BP. The reporting being done by such anti-business rags as the Wall St. Journal, The Economist and Business Week. Clearly, they minimized and ignored KNOWN risks.

  5. steve says:

    “. Hard to see BP surviving this, but it does give Obama the chance to really turn the screws on our British allies quite a bit farther and perhaps damage the relationship permanently.”

    Missed this meme. I presume we sent commandoes to the platform and blew it up so we could do this? What is the reason for getting rid of the Brits as allies?

    On topic- I think some sort of moratorium made sense to find out if other rigs are following the same routines and likely to risk blowing up another well. While this was an accident, it may have been an accident secondary to changes in equipment or procedure or personnel.

    Steve

  6. grampagravy says:

    I’m wondering how much longer the BP supporters will continue to refer to the present “catastrophe” in the Gulf as a “spill.” I wonder too how much longer the results of BP’s negligence and recklessness will continue to be referred to as an “accident.”
    On the bright side, one part of BP’s “spill” response plan has worked out perfectly. Not a single walrus has died in the Gulf of Mexico.

  7. […] explains why it will probably increase the risk profile of drilling in the […]

  8. john personna says:

    I thought the 60-minutes episode, the one where they talk about operators ignoring chunks of blowout valve seal in the well’s discharge, was pretty worrying. After that, I think it’s kind of silly to say “This spill is a rare occurrence and we need to understand that.”

    It’s rare for operators to ignore their well coming apart?

    I’m seeing more and more that supports my early suspicion of criminal negligence. I think if anything the political theater is in drawing out that conclusion.

  9. anjin-san says:

    I presume we sent commandoes to the platform and blew it up so we could do this?

    Exactly. The order went out shortly after Obama concluded his daily satan worship service in the White House basement. This was followed by his chairing of a meeting of the secret committee to end the American way of life.

  10. Pete says:

    Anjin-san, as usual you are making declarations based on either fantasy or ignorance :despite their mind-boggling profits, the oil companies don’t want anything shaving their margins,

    Do your homework:

    Oil companies aren’t as profitable as you think

    I sometimes get the impression that people think oil executives hold clandestine meetings where they unilaterally decide to set the price of oil and gas in order to maximize their profits. After maniacally laughing about how they are gouging the American public, they then go swimming in pools of gold ala Scrooge McDuck.

    But there’s a problem with that theory. Even though many oil companies are reporting record profits, many people forget just how expensive it is for energy companies to engage in the oil business.

    The average net profit margin for the S&P Energy sector, according to figures from Thomson Baseline, is 9.7%. The average for the S&P 500 is 8.5%. So yes, energy companies are more profitable than many others…but not by an inordinate amount.

    Google, for example, reported a net profit margin of 25% in its most recent quarter. Should we have an online advertising windfall profit tax?

  11. Zelsdorf Ragshaft III says:

    In my opinion, we will have all the time in the world to assess blame. Seems to me, what needs to be done post haste is fixing what is wrong. By that I mean doing what ever is humanly possible to collect the oil before in gets to land and stop the leak. I would run some large tube guided by robotics over the well head. That tube or pipe would lead to the surface.

  12. JKB says:

    Obama concluded his daily satan worship service in the White House basement.

    Now your just being silly. Everyone knows the services are held in the Oval office with the presidential seal covering the symbology at other times. It is all prepared for the revelation and Obama’s ascension.

    BTW, the anti-American Way of Life committee isn’t all that secret.

  13. Commandos to blow up the platform? What the hell is wrong with you guys? Seriously. Or perhaps you’ve forgotten Rahm Emmanuel’s immortal aphorism regarding crises and Obama’s speech calling for cap and trade as a “remedy” for this problem in what has been widely regarded by almost everyone as one of the most abysmal presidential speeches everywhere. IT is hard to make Jimmy Carter’s “malaise” speech seem reasonable, but The One has done it.

    anjin-san, WRT “drill, baby, drill”, well, bullshit. Had we been drilling in ANWR it might not have been necessary to be driling 8,000 feet below the bottom of the gulf which is already 5,000 feet below the surface. Drilling in ANWR or in a few hundred feet of water is radically different than drilling in five thousand feet of water.

    Environmentalists have been telling us that the sky is falling for a long, long time, and almost without exception they have been spectacularly wrong. But I can see how you would find common cause.

    Also, did any of those reports get written before the accident? No? I didn’t think so. Like I said, hindsight is easy, so, so easy.

    And while I’m ranting, I’ll note again that if you want to see leadership, look at Bobby Jindal who is busy trying to address the problem rather than Barack Obama who is too busy trying to affix blame.

  14. grampagravy says:

    Pete,
    As soon as google starts treating the Gulf of Mexico and our southern shores like their toilet, it will be time to hammer on them too.

  15. JKB says:

    Over at Oil Drum they laid out the losses from the suspension of drilling new wells. Note: the moratorium didn’t shut down the shallow water drilling or deep wells already in production. All the rigs shut down were inspected right after the Deep Horizon disaster and only a few minor deficiencies were found.

    In any case, no one can sustain $250-500/day loss for an idled rig. Especially when there are holes to be drilled elsewhere. That’s $8,250,000 to $16,500,000 per day in costs for the 33 idled rigs.

    Amusing fact is the $100 million Obama squeezed out of BP to pay for wages lost due to his presidential action won’t cover a single day’s wages for the idled workers. Somehow, I’m thinking Obama got taken.

  16. JKB says:

    I would run some large tube guided by robotics over the well head. That tube or pipe would lead to the surface.

    That is what they’ve done. Although, it turns out that working with high pressure oil and gas at extreme ocean depths, it was harder than it might seem. Plus you have to pump down heated methanol to keep the gas from forming hydrates.

  17. grampagravy says:

    “Environmentalists have been telling us that the sky is falling for a long, long time, and almost without exception they have been spectacularly wrong”…..so far.
    Sleeping on railroad tracks is safe too….until

  18. john personna says:

    zelsdorf:

    In my opinion, we will have all the time in the world to assess blame.

    First of all, I don’t think the 60-minutes film crew was blocking cleanup. Second, I kind of sense that you really mean we should forget about it forever, or at least until nobody cares.

    If the cause was criminal negligence, you should not be helping to hide it. Unless that is you believe in private profit with socialized losses.

  19. G.A.Phillips says:

    um ah um ah um who sent them out there that deep, when they wanted to drill closer and who approved the site and buggered the response???????????????????????

    Plug baby plug clean baby clean…….

    STOP THE LEAK CLEAN UP THE MESS!!!!!!!

  20. anjin-san says:

    Drilling in ANWR or in a few hundred feet of water is radically different than drilling in five thousand feet of water.

    Do you have even an iota of proof that the explosion was caused by the depth of the gulf? All signs point to negligence on the part of BP as the cause.

    Also, did any of those reports get written before the accident? No? I didn’t think so. Like I said, hindsight is easy, so, so easy.

    Charles I know you are not stupid. All evidence points to what were at very best poor practices by BP, and what looks more and more like criminal negligence the more we learn. If you don’t get your breaks fixed when they have been squeaking for a while, and they fail, and you run someone over, it is not an “accident”. BP knew there were serious problems with the well. They were firmly focused on turning the well into a revenue produce ASAP, all other considerations (such as safety) were either put on the back burner or outright ignored.

    They were johnny on the spot when it came to getting their workers who barely escaped with their lives to sign away their rights under pressure from company lawyers. They did not skimp there.

  21. Dave Schuler says:

    Does the accident/mishap/crime/whatever it is on the Deepwater Horizon render a similar incident on another rig more likely (hard for me to imagine), no more likely, or less likely (my guess)? If either of the last two, lifting the moratorium should be considered very seriously. If it’s the last, the moratorium is a purely political act with only deleterious results in the non-political sphere.

  22. anjin-san says:

    Environmentalists have been telling us that the sky is falling for a long, long time, and almost without exception they have been spectacularly wrong

    Really? And you know this how… because Sarah Palin Tweeted it?

    Of the more than 800 species of birds in the United States, 67 are federally listed as endangered or threatened, the report said. Another 184 are “species of conservation concern” because they have small distribution, are facing high threats or have a declining population.

    Hawaiian birds, particularly, are in crisis, the report said. More than one-third of all U.S. bird species are in Hawaii. However, 71 species have gone extinct since the islands were colonized about 300 A.D., and 10 more species have not been seen in the past 40 years, contributing to fears they, too, have died out.

    Eastern & Western Bluebirds in the US are in serious trouble. Perhaps the conservative idea of paradise on Earth is a world with no bluebirds and oil platforms everywhere.

    Maybe we should start talking about bee colony collapse disorder. Guess what skippy? If enough bees die, people start starving. Perhaps even here in the good ol’ USA.

  23. G.A.Phillips says:

    ***Maybe we should start talking about bee colony collapse disorder. Guess what skippy? If enough bees die, people start starving. Perhaps even here in the good ol’ USA.***

    So then maybe the mighty US government should stop the leak and clean up the mess?

    I mean it’s only been two months…..

    Maybe they all those brilliant and just democrats could hold a herring on how to do that instead of a bloody witch hunt?

    Maybe they could take their yachts down there and help?

    Maybe they could get the census workers down there, how much money did the spend on that crap?

    They could look for some of them birds while they are working.

    Maybe they could remove the white house fox news black out and watch Huckabee and frigging learn something.

    Maybe they could see if some other countries would send some ships to help? hmmm now there is an idea.

    Or better yet maybe Obama could take like a trillion dollars worth of gold bricks and drop it in that frigging hole?

  24. john personna says:

    Dave, I think drillers would be more careful now, but I also don’t think a few months for investigation will really hurt. Patience is a virtue.

    The weird thing is the asymmetry of this argument. No one wants a drilling ban, notice that? The worst that can happen is a delay. But if people want to press back against anything, however reasonable, they can. They can make “delay” the devil.

  25. steve says:

    “Drilling in ANWR or in a few hundred feet of water is radically different than drilling in five thousand feet of water.”

    One of today’s posts on The Oil Drum is from someone who has been running drilling operations for many years. He claims that there are differences between a couple of hundred feet and 5,000, but not man apply to this incident, ie, it could have happened in shallow water with the same catastrophic results and the inability to stop it. The moratorium should end as soon as they why this event happened and if the same problems are likely to occur, or are occurring elsewhere.

    Steve

  26. anjin-san says:

    G.A.

    You really should get to a meeting.

  27. anjin-san says:

    But there’s a problem with that theory. Even though many oil companies are reporting record profits, many people forget just how expensive it is for energy companies to engage in the oil business.

    Ummmm. Pete. Profit is the positive gain that remains AFTER operating expenses and other costs are met. Who was your business professor, Sarah Palin?

    Let’s look at some numbers from Fortune about just who is profitable in America in 2009

    1 Exxon Mobil 45,220.0
    2 Chevron 23,931.0
    3 Microsoft 35 17,681.0

    Yes, those poor oil companies with their tight margins and high operating costs. Its a wonder they can even keep the doors open. Micosoft, even with better margins, is not even within shouting distance of Exxon.

    You appear to be stupid even by right wing standards.

    http://money.cnn.com/magazines/fortune/fortune500/2009/performers/companies/profits/

  28. Davebo says:

    President Obama’s decision to suspend drilling in the Gulf of Mexico for six months in the interests of public safety may actually have the opposite effect,

    An entire post and series of comments based on an fallacy.

    Great job James. I can give you the names and phone numbers of over 300 persons currently working on offshore rigs in the gulf of Mexico.

    Do you need 400 names? Or is accuracy no longer important?

    For the first time I’ve left a valid email address. But feel free to delete this comment since reality seems to be a bit troublesome for you.

    I know, it sucks being a thoughtful Republican these days.

  29. G.A.Phillips says:

    ok ok once again for the slow learners, how much profit is generated buy taxing oil and things produced by oil?

    An incompetent fool tells excuses and lies while the gulf of Mexico dies.

    PLUG THE HOLE CLEAN UP THE MESS!!!!!!!!

  30. Pete says:

    anjin-san, do you know the difference between profit and profit margin? It seems not. Go back to school and listen this time to your Econ 101 prof.

    Next take a look at this chart: http://www.petrostrategies.org/Links/Worlds_Largest_Oil_and_Gas_Companies_Sites.htm

    Exxon is certainly a disgustingly large company. And if its revenues are large, is that a crime?

  31. anjin-san says:

    anjin-san, do you know the difference between profit and profit margin? It seems not

    Ummm. Yea. You made the rather nonsensical argument that oil companies are not as profitable as people think because their margins are tighter than say, a software company. No were in that brilliant little thought did you address revenue.

    Are you denying that Exxon/Mobile and Chevron are the two most profitable companies in America? Here, look again:

    Top companies: Most profitable

    PROFITS
    RETURN ON REVENUES
    RETURN ON SHAREHOLDERS’ EQUITY
    Rank Company 500 Rank 2008 $
    (millions)
    1 Exxon Mobil 1 45,220.0
    2 Chevron 3 23,931.0
    3 Microsoft 35 17,681.0

    Everyone would like fatter margins, But you said

    Oil companies aren’t as profitable as you think

    Yes, they are. You referred to Google as some sort of monster of profitability. They do have fat margins, but they are not even one of the top 50 most profitable companies in America. It is pretty clear that you are the one who does not know the difference between profit and margin.

    Keep digging. I won’t give you anything really hard like what newspapers do you read.

  32. anjin-san says:

    BTW, the chart you linked to has nothing to do with profitability, it shows oil and natural gas reserves.

  33. anjin-san says:

    http://online.wsj.com/article/SB10001424052748704289504575313010283981200.html?mod=WSJ_hpp_MIDDLETopStories

    Interesting article on BP’s preference for cheaper, riskier well design from that noted pro-Obama, anti-business rag, the Wall St. Journal.

  34. Duracomm says:

    Oil companies have big profits numbers in dollars because they sell a lot of product.

    When you look at profit as a percent of sales, which allow a comparison with other industries, oil companies profits are just not that big.

    Oil Industry Ranks #60 By Profit Margin

    Between 2003 and 2007, Exxon paid $64.7 billion in U.S. taxes, exceeding its after-tax U.S. earnings by more than $19 billion.

    Exxon’s profit margin stood at 10% for 2007, which is hardly out of line with the oil and gas industry average of 8.3%, or the 8.9% for U.S. manufacturing (excluding the sputtering auto makers).

    If that’s what constitutes windfall profits, most of corporate America would qualify.

    Take aerospace or machinery — both 8.2% in 2007. Chemicals had an average margin of 12.7%. Computers: 13.7%. Electronics and appliances: 14.5%. Pharmaceuticals (18.4%) and beverages and tobacco (19.1%) round out the Census Bureau’s industry rankings.

    The latter two double the returns of Big Oil, though of course government has already became a tacit shareholder in Big Tobacco through the various legal settlements that guarantee a revenue stream for years to come.

  35. anjin-san says:

    Guy, guys. VOLUME IS A DRIVER OF PROFITABILITY. If you have sufficient volume, you can compensate for narrower margins.

    Is Exxon/Mobile the most profitable company in America? That is a yes/no question. Margins are not even particularly relevant.

    Sort of stands to reason that if it is indeed the most profitable company, than saying “oil companies are not as profitable as people think they are” is gibberish.

    If Pete’s original comment had been “the oil industry has tighter margins than many other sectors” it would be a bit different, but that is not what he said. And it would not change the fact that oil companies, are indeed, fabulously profitable in spite of high operating costs.

  36. Duracomm says:

    Brad Plumer said,

    Back in 2003, the Interior Department agreed with BP and other oil companies that installing a $500,000 acoustic shutoff switch on every offshore rig would be unreasonably expensive (even though such a switch would likely have prevented all that oil from spewing out).

    The bold empahsis is mine and I’m not sure that is true.

    The articles I’ve read said the bop had a deadman switch logic that was supposed to cause it to shut in when it lost communication from the horizon. That did not happen

    Rovs were supposed to be able to shut in the bop by activating that on the seafloor. That did not work.

    Maybe the bop was damaged in the initial blowout and in that case an acoustic switch would not have closed the bop either.

    One last point:

    Increasing complexity adds failure points.

    Adding acoustic switches may reduce chance of failure in some cases.

    Acoustic switches may also increase the chance of bop failure in all cases by adding another failure point that is present all of the time.

  37. Eric Florack says:

    Actually, it not obvious in hindsight, its just obvious. Problem is, despite their mind-boggling profits, the oil companies don’t want anything shaving their margins,

    Perhaps because that’s because their margins are so incredibly narrow in the first place. Did you forget? Oil companies may not be as profitable as they think they are, but they most certainly are not as profitable as you think they are.

    At every juncture in this little escapade this administration is done precisely the wrong thing. As an example the oil sucking barges being held up by the coast guard the other day. One and two mistakes along the way I can certainly countenance as being big government and its issues. But this administration has had a batting average of 1000. Every time they’ve stuck their hand in something particularly as regards energy in this case it is been precisely the wrong thing to do. One cannot help but wonder with that kind of record if this isn’t intentional.

    Never wasted good crisis, after all. If one wanted to create a sentiment against oil companies, how would one go about it? What of that list varies from what the Obama administration has done?

  38. john personna says:

    So what could Obama have done that would have mattered more than a hill of beans, Eric?

    Ordered some Dutch simmers that would be out there plowing around? Would we even notice the difference? Let Jindal pile some sand? Seriously, that would have fixed the gulf?

    The key error here is letting the well blow. After that, it’s window dressing.

  39. G.A.Phillips says:

    ***So what could Obama have done that would have mattered more than a hill of beans, Eric?***Stop the leak? clean up the mess?

    nuke it cover? it with rock? Crap that’s above my pay grade by If I was in control of the United States I sure would not be waiting for BP to get it sealed for two months, and he could be doing a trillion times more to clean it up!

    Plug the dang leak clean the dang mess.

  40. john personna says:

    I understand the frustration G.A., but other than the random “nuke it” we don’t have much.

    That’s why I don’t buy this “waiting” thing.

  41. Duracomm says:

    john personna said,

    Ordered some Dutch simmers that would be out there plowing around? Would we even notice the difference?

    The dutch skimmers would apparently make a significant difference in oil recovery. Cleanup in 3 months if the Dutch skimmers were deployed instead of 9 months using just US equipment.

    And recovering oil on the open water is infinitely easier than cleaning it from the marshes, beaches, and wetlands.

    Additionally collecting the oil on open water accelerates the clean up because the oil is removed before it can impact land.

    Morning Bell: How the White House is Making Oil Recovery Harder

    According to one Dutch newspaper, European firms could complete the oil spill clean up by themselves in just four months, and three months if they work with the United States, which is much faster than the estimated nine months it would take the Obama administration to go it alone.

    The major stumbling block is a protectionist piece of legislation called the Jones Act which requires that all goods transported by water between U.S. ports be carried in U.S.-flag ships, constructed in the United States, owned by U.S. citizens, and crewed by U.S. citizens.

    But in an emergency this law can be temporarily waived as DHS Secretary Michael Chertoff did after Katrina.

    The failure to waive the Jones act and get the dutch skimmers working is incomprehensible.

    Worse it is likely causing substantial additional environmental damage to the gulf coast region.

  42. john personna says:

    Duracomm, you know that:

    “Foreign-flag vessels have already been deployed for skimming work in the Gulf, with equipment already in use from EU nations.” From that liberal rag “dredging today”:

    http://www.dredgingtoday.com/2010/06/20/usa-jones-act-not-hindering-oil-cleanup/

    Did you also know that:

    There are 447 active skimming vessels off the coasts of Louisiana, Mississippi, Alabama and Florida, a Coast Guard spokesman said Friday. About 150 of those are skimming the Louisiana coast. The number of skimmers assigned to Louisiana could change daily based on demand, the spokesman said.

    http://www.nola.com/news/gulf-oil-spill/index.ssf/2010/06/oil_spill_containment_efforts_1.html

    Basically, you guys say “no don’t look at the 447 ships cleaning the gulf!” Pretend it is all about … how many missing ships exactly?

  43. john personna says:

    BTW, how do you skim the gulf in 3 months, when (1) so much of the oil is deep in the water column, and (2) the well is still flowing?

  44. john personna says:

    BTW, I’m not opposed to inviting the Dutch, or anyone else. I’m just saying keep this in perspective. To say we aren’t doing anything without them is pretty silly. 447 ships worth of silly.

  45. Duracomm says:

    john personna,

    The nola link you provided said nothing about the dutch skimmers being deployed. Have they been deployed?

    Those ships were estimated to potentially cut spill cleanup from 9 months to 3 months.

    You make due with what you have available and if shrimp boats are all that is available you will use them. However, it is obvious that purpose built skimmer vehicles are going to be able to remove more oil than shrimp boats with makeshift booms attached.

    The total number of ships is only part of the equation, the capability of those ships is what is important.

    This quote is from your dredging today link

    “Worse, they are taking advantage of this disastrous situation to undermine American workers for the benefit of foreign companies and foreign workers.”

    Sound like the folks in that article are trying to protect their jobs from foreign competition.

    I don’t personally blame them for that stance but obviously keeping highly qualified foreign boats and crews (like the dutch skimmers) away is going to slow the spill cleanup.

    You also ignore incidents like this from my linked article. Incidents that show how government is hindering response to the spill.

    Five weeks ago Escambia County officials requested permission from the Mobile Unified Command Center to use a sand skimmer, a device pulled behind a tractor that removes oil and tar from the top three feet of sand, to help clean up Pensacola’s beaches.

    County officials still haven’t heard anything back.

    Santa Rosa Island Authority Buck Lee told The Daily Caller why: “Escambia County sends a request to the Mobile, Ala., Unified Command Center. Then, it’s reviewed by BP, the federal government, the U.S. Army Corps of Engineers and the Coast Guard. If they don’t like it, they don’t tell us anything.”

  46. Duracomm says:

    john personna said,

    BTW, how do you skim the gulf in 3 months, when (1) so much of the oil is deep in the water column, and (2) the well is still flowing?

    Simple, use the ratios from the preliminary cleanup estimate.

    Whatever the total spill volumes end up being the cleanup will take three times as long without the dutch skimmers as it would if they were allowed to work on the spill.

    Not saying that the dutch skimmers are going to solve the problem just saying that the failure to get them working in the gulf is a symptom of a cleanup effort that is not working the way it should in some areas.

  47. steve says:

    “Those ships were estimated to potentially cut spill cleanup from 9 months to 3 months.”

    They took the total amount of oil being spilled and divided it by maximum processing ability by the ships. The problem is that the oil does not sit in one place. It is very widely spread. That is why you find that estimate in only one newspaper, a Dutch one at that. In reality, they will add a very small percentage of cleanup. The Coast Guard which made the initial call, as would be the case with any president, thought the size of the ships and the potential for damage did not justify the small increase in processing ability.

    Also, the initial estimates were for a much, much smaller leak. These estimates came from BP. They may have been lying, but the drilling engineers and oil guys at The Oil DRum think it possible the leak really was smaller at first.

    Steve

  48. anjin-san says:

    but they most certainly are not as profitable as you think they are.

    Are you guys maxing out your limited brainpower trying to fathom the wisdom of Sarah Palin’s tweets?

    From the noted anti-business publication, Fortune, here are 2009’s most profitable companies in the world – seems that there are few bucks to be made in oil after all.

    Top companies: Most profitable

    PROFITS
    RETURN ON REVENUES
    RETURN ON ASSETS
    Rank Company Global 500
    Rank 2008 Profits
    ($ millions) Profits % change from 2007
    1 Exxon Mobil 2 45,220.0 11.4
    2 Gazprom 22 29,864.1 16.1
    3 Royal Dutch Shell 1 26,277.0 -16.1
    4 Chevron 5 23,931.0 28.1
    5 BP 4 21,157.0 1.5
    6 Petrobras 34 18,879.0 43.7

    http://money.cnn.com/magazines/fortune/global500/2009/performers/companies/profits/

    I dunno bit, every once and a while I comment that you are not stupid, but it is starting to look like I am wrong about that. Oil companies are mind-numbingly profitable in spite of the tight margins. So please drop this line of BS lest you be branded forever as a congenital idiot.

  49. Pete says:

    I’m not sure what planet you are from, but they don’t teach Econ 101. You are stuck on stupid and it is not worth any average IQ person to continue to try to enlighten you. Why don’t you go try to reverse the corriolis effect and explain it to us?

  50. Duracomm says:

    anjin-san your original post was

    Actually, it not obvious in hindsight, its just obvious.

    Problem is, despite their mind-boggling profits, the oil companies don’t want anything shaving their margins,

    especially something as trivial as protecting the environment. Far easier to film a commercial about saving the Tule Elk. be something that an honest discussion would discuss.

    Bold emphasis is mine.

    You apparently think margins are important, you brought them up in your first post. It would be reasonable to assume an honest discussion would include topics (margins) that you raised in your first post.

  51. anjin-san says:

    Of course margins are important, and any business person want to see their increase, be they already fat or slim. My industry is suffering from commiditization and narrowing margins, so it is a problem I understand pretty well.

    That being said, oil companies are, despite much blather from the right about how “they are not as profitable as you think they are”, wildly profitable. I believe Exxon/Mobile had the most profitable quarter in the history of American business not all that long ago. I am not crying any tears for them & I do not see cutting corners on safety and following best practices as an acceptable means of increasing ones margins.

    It’s worth noting that you are calling me out on discussing margins, but you don’t seem to be bothered by obvious nonsense about “oil companies not being that profitable”.

  52. anjin-san says:

    Pete,

    Sounds to me like you are unable to prove your point, so you are going to just declare yourself the winner and move on. You and bithead should start hanging out.

    Tell you what, name 5 American companies that had a higher net profit in 2009 than Exxon/Mobile and we will change your name to Adam Smith.

    Am I “stuck on stupid”? Well, I could drop names of some of the people I work with on my projects, and you or some of the other folks in here would recognize them. I have been consulting for one of the most successful acts in the history of the recording industry for 15 years not. I am relatively certain that I am not associating with these folks because of a gross deficiency of intellect.

    You can indulge in semantic arguments about net profit v. profit margins till the cows come home, and it will not change the fact that oil companies are profitable to a degree that staggers the imagination. No crime in making a profit, I never said there was. But if you cut corners on safety, ignore established industry best practices and the advice of your engineers because you can’t wait to generate some ROI, and then people die and the environment suffers grievous harm? There may well be a crime or two in there.

  53. Pete says:

    Anjin-san, let me try this one more time. Exxon’s revenues are huge. If they are profitable, their profits are huge. But their profit margin (approx. 9%) is not out of line with other mainstream businesses. If they were gouging their customers, their profit margin would reflect it. I’m not arguing anything about their safety or their spending for safety, I just tried to point out that their level of profits is not an indication of anything sinister. It is in line with their level of revenues.

    Tell you what, name 5 American companies that had a higher net profit in 2009 than Exxon/Mobile and we will change your name to Adam Smith.

    It doesn’t matter that Exxon’s net profit was bigger than any other company. The net profit is a byproduct of its revenues (sales). Why is that bad. Their sales are huge and with an ordinary PROFIT MARGIN, their profits are huge. Is that evil?

  54. G.A.Phillips says:

    ****Tell you what, name 5 American companies that had a higher net profit in 2009 than Exxon/Mobile and we will change your name to Adam Smith.****

    um Fannie May? ah Freddie Mack ? um Goldman Sachs? er GE, ah um er General Motors?

    But If I win I want my name changed to Will Smith cause I’m planing on running for Congress as a Democrat:)

  55. john personna says:

    Again, I wouldn’t mind the Dutch ships being there, right now. At the same time I see this “issue” as a crazy attempt by irrational conservatives to deflect from the real problem.

    The well blow-out is the story. That was the one key thing that if changed, would have changed the whole story. Unfortunately things are so bad that adding a few more skimmers or few more berms aren’t going to fix it.

    There are 447 ships skimming the gulf. They are having a hard time skimming because much of the oil is beneath the surface:

    http://www.alexkearns.com/2010/06/today-in-gulf.html

    … but if really are an idiot looking for any way to blame Obama and liberals for BP’s spill, I guess you will.

  56. G.A.Phillips says:

    http://video.foxnews.com/v/4238785/unusual-gulf-cleanup-proposal

    Man unleash all of these men, companies, and their inventions and tested products! I wish I could link this whole show to the Obama White House, Maybe instead of going to ball games, hanging out with idiot rock stars or sucking at golf he could be talking to those CEOS.

    Heck one of them turns the the frigging oil into fish food!

  57. john personna says:

    I’m glad you have come over to the dark side, GA! Welcome. You’ll find it a happy place here, where we believe government can solve all our problems, and “pick winners” day in and day out.

    I don’t think Obama should play golf again until 80% of the economy is under his control! Right GA?

  58. anjin-san says:

    Why is that bad. Their sales are huge and with an ordinary PROFIT MARGIN, their profits are huge. Is that evil?

    Please show where I EVER said profits are “evil” or even mildly bad. Where did I say they were gouging their customers?

    I work for a global corporation. I love profits. And never claimed there was anything wrong with them. Why are you trying to put words in my mouth?

    I just tried to point out that their level of profits is not an indication of anything sinister. It is in line with their level of revenues.

    Not really. You said “they are not as profitable as people think they are”. Well, they are exactly as profitable as I think they are. Fine and dandy. The only thing sinister is the pattern of minimizing or ignoring safety concerns, and pressuring employees who barely escaped with their lives as a result of this negligence to sign waivers that will probably have an adverse effect on collecting compensation that they may be entitled to.

  59. G.A.Phillips says:

    ***I don’t think Obama should play golf again until 80% of the economy is under his control! Right GA?***

    What I think is he should resign before he gets impeached.

    But what I want for him is to do is try to live up to at least a small portion of the crap he says, I am fully aware that he hates and would never even think of using the free market to try to fix some of this catastrophe. That’s why many keep begging him to at least consider it.

    I never said he can’t party and have a good time while the gulf of Mexico and several states lively hoods and ways of life are being destroyed by something other then his policies, I’m only saying he could do much much more then he is and much much quicker.

    I think that is absolute crap that the U.S. government has not taken over the effort to stop that leak and stopped it by now.

    And your delusional if you think that we could not be doing a heck of a lot more to clean up that mess.

    I’ll give him the first week or two to blame BP for lack of information, o.k.

    BUT It’s been two months!!!

  60. john personna says:

    You do understand that the solid libertarian position, especially a year ago, would have been that we can trust corporations because with their liability on the line, with their profits on the line, they would be the ones with the highest incentives to prevent leaks. They also would be the ones with most incentive to clean up the mess, because they are on the hook for damages.

    Suddenly, what, “warm weather libertarians” are for the government cleaning it up, and limiting company liability?