LOUISIANA MID-CONTINENT OIL AND GAS ASSOCIATION's estimate

 

Marketplace radio passed along to listeners the oil industry assertion that it was spending $300 million a month on the wages of workers on offshore drilling rigs that have been idled by President Obama's moratorium on new deep water drilling. The Washington Post reports that the ban has idled 33 deep-water drilling rigs.

If the average worker on a rig earns $100,000 a year, the industry's claim about lost wages would imply that it was employing 36,000 workers, or more than 1,000 on each idled rig. This seems implausibly high, and should cause reporters to question the industry's claim rather than just report it as being true. (The industry has an incentive to exaggerate the impact of the moratorium on workers since it helps to advance its agenda of ending the moratorium.)

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how many BP execs does it take to (properly) screw in a drill?

 

Marketplace radio passed along to listeners the oil industry assertion that it was spending $300 million a month on the wages of workers on offshore drilling rigs that have been idled by President Obama's moratorium on new deep water drilling. The Washington Post reports that the ban has idled 33 deep-water drilling rigs.

If the average worker on a rig earns $100,000 a year, the industry's claim about lost wages would imply that it was employing 36,000 workers, or more than 1,000 on each idled rig. This seems implausibly high, and should cause reporters to question the industry's claim rather than just report it as being true. (The industry has an incentive to exaggerate the impact of the moratorium on workers since it helps to advance its agenda of ending the moratorium.)

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Reporting on the negotiations between BP and White House.

 

Marketplace radio passed along to listeners the oil industry assertion that it was spending $300 million a month on the wages of workers on offshore drilling rigs that have been idled by President Obama's moratorium on new deep water drilling. The Washington Post reports that the ban has idled 33 deep-water drilling rigs.

If the average worker on a rig earns $100,000 a year, the industry's claim about lost wages would imply that it was employing 36,000 workers, or more than 1,000 on each idled rig. This seems implausibly high, and should cause reporters to question the industry's claim rather than just report it as being true. (The industry has an incentive to exaggerate the impact of the moratorium on workers since it helps to advance its agenda of ending the moratorium.)

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The Real Reason for High Gas Prices, Redux

Mar 21, 2012 door Andy Sharpless aan andy sharpless, energie, gas prices, Golf van mexico, offshore boren, olie, politiek

Olie tuig in de Golf van Mexico. © Oceana/Soledad Esnaola

Editor's note: dit bericht door Oceana CEO Andy Sharpless werd afgelopen mei oorspronkelijk gepost op Politico.com. We denken dat het kon niet meer relevant nu, vooral gezien het feit dat vele media nu vergelijkbare argumenten om de een die we te maken sinds vorig jaar - maken hebben dat de gasprijzen zijn niet aan offshore boren gebonden.

Waarom nemen we verschrikkelijke risico's om te boren naar olie in de Golf van Mexico en elders langs onze kusten?

De meeste mensen zouden zeggen dat we boren om onszelf te beschermen tegen grote schommelingen in benzineprijzen die worden veroorzaakt door grote omwentelingen in het Midden-Oosten.

Hun argument is dat de meer olie kunnen wij produceren in het binnenland, hoe lager de prijs we betalen aan de pomp. Het is niet dat zij als het gezicht van oliebronnen aan onze stranden. De belangrijkste reden dat zij pleiten voor meer offshore olie boren is ze denken dat het geld zal besparen — vooral omdat gasprijzen $4 per gallon onlangs benaderd. (Zie: een grafiek van U.S. gas prijzen hier.)

Dit idee is alleen niet intuïtief aantrekkelijk. Het is herhaaldelijk en ondubbelzinnig bevorderd door belangrijke regeringsambtenaren van zowel de democratische als Republikeinse partijen. Sen Mary Landrieu (D -La.) verdedigde wetgeving dat zou uitbreiden offshore olie boren, zeggende "dit wetsvoorstel zou doen meer tot lagere gasprijzen aan de pomp dan elk andere plan." Ondertussen, Sarah Palin bekritiseerd Voorzitter Barack Obama, zeggende: "zijn oorlog op binnenlandse olie- en gas exploratie en productie heeft veroorzaakt ons pijn aan de pomp."

Voormalig President George W. Bush, die had ervaring in de particuliere sector olie industrie, zei dat het kon "nemen druk op benzineprijzen na verloop van tijd door het bedrag van Amerikaanse makelij olie en benzine uit te breiden." En Rep. Doc Hastings (R -Wash.), voorzitter van het huis natuurlijkehulpbronnen Comite, dringt erop aan, "gasprijzen zijn sluiten op $4 per gallon … vanwege het de facto moratorium op boringen vergunningen."

Experts, zoals Steve Doocy van Fox, eens met het argument, zeggen dat de oplossing voor stijgende gasprijzen is het "gewoon een gat in de grond porren."

Nog tijdens de afgelopen twee jaar, het bedrag van olie gepompt in de VS is al op, niet neer — zoals men zou kunnen van al deze opmerkingen afleiden. Dus is dit sterk verklaarde argument te verhogen huishoudelijke olie boren verkeerd.

De feiten te onderzoeken. De Energy Information Administration gegevens Toon de prijs aan de pomp komt nauw overeen met de internationale prijs van olie, niet het percentage olie afkomstig van invoer. (Een grafiek vergelijken de US benzineprijzen en het percentage van olie die wij importeren kan hier worden gevonden.)
Nu, kijkt naar de prijs van ongelode benzine aan de pomp in vergelijking met de internationale prijs van ruwe olie (zie: een grafiek vergelijken US benzineprijzen en internationale ruwe olieprijzen hier.)

Waarin denk je heeft een betere baan uit te leggen van de wijzigingen in de prijs van benzine aan de pomp? Uw gezond verstand lezing van de grafieken is correct. De prijs van benzine aan de pomp is statistisch niet gecorreleerd met het aandeel van de U.S. consumptie van geïmporteerde olie, maar het is sterk gecorreleerd met de internationale prijs van geïmporteerde ruwe.

Dit schijnbaar contra-intuïtief resultaat komt overeen met hoe de markten van de wereld olie eigenlijk werken. Stel jezelf de vraag: wanneer BP of een andere grote olie-bedrijf vindt olie in de Golf van Mexico, doet het verkopen ons tegen een korting omdat we waren aardig genoeg om hen boren in Amerika te laten?

Nee, dat niet het geval. Het verkoopt het over de hele wereld de prijs in de internationale oliemarkt bepaald. Als een internationale grondstoffen, olie is geprijsd op een internationale basis — volgens de globale vraag en aanbod. Mondiale vraag is de reden waarom die de prijs is omhoog nu. De economieën van de wereld bent herstellende van de malaise van de afgelopen jaren en de zich ontwikkelende economieën, zoals China, zijn toenemende hun vraag.

Ondertussen, offshore boren is gewoon te riskant voor onze stranden en visserij. Wil je bewijs? Olie bedrijf aandeelhouders aandringen op een recht hun aansprakelijkheid in het geval van een ramp te beperken.

Ik denk niet dat deze risico's zijn de moeite waard. U misschien niet eens. Maar als u weet, nog: iedereen die je moeten we offshore olie boren vertelt te verlagen onze prijs aan de pomp niet de zorg over de feiten.

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What BP Owes Americans

Posted Wed, Mar 7, 2012 by jsavitz to bp, gulf of mexico oil spill, oil spills, what bp owes americans

This blog was originally posted on the Huffington Post.

There has been a lot of news lately about whether BP will settle all of the legal claims against it stemming from the Deepwater Horizon catastrophe two years ago, or whether the company will end up in court. As is typical of most things surrounding the oil spill issue, much of the information that has come out in recent weeks has done little more than muddy the waters.

First of all, despite a settlement announced late last Friday, most of the legal claims against BP have not been settled. The recent $7.8 billion settlement only represents the private injury claims brought by local residents, fishermen, tourism companies, and the like whose businesses and livelihoods were devastated by the oil spill. That's important, but it's not even close to half of the story. The remaining claims -- what BP owes the American people -- could amount to many times that amount.

BP has yet to settle with the Federal Government, which represents "we the people," and it hasn't settled with the affected states. The Feds have already brought one suit seeking civil penalties and natural resource damages from BP, and could bring more in the future. Estimates of the total amount that BP owes us just for those federal claims have varied from $20 to $60 billion.

These numbers might seem large, but the truth is they don't come close to the total amount that BP could -- and should -- be required to pay. Our nation's environmental laws allow the Justice Department to seek damages and penalties against BP that could be as high as $90 billion. But recent discussions in the press of a possible future settlement between BP and the Federal Government have focused on much lower amounts in the $20-25 billion range. Compared to what BP could be asked to pay -- and what we have the right to demand -- that's not a deal the American people should be happy about.

To help add some clarity to these numbers, here are a few of the key components that will be decided either through a trial, or by an agreement between BP and the Justice Department:

Clean Water Act Violations -- Under the Clean Water Act, the government can fine the company anywhere from $1,100 to $4,300 per barrel of oil spilled. The high end amount is reserved for cases of "gross negligence" or "willful misconduct" -- something that was a clear part of the disaster if you consider the findings of the President's Commission on the Oil Spill and the other investigative reports, and something that the Justice Department has already alleged in its ongoing case against BP. In the wake of the America's largest environmental disaster, resulting from a long series of operator errors, the government should have no qualms about pursuing the maximum possible fine. If it is used in this case, BP is on the hook for more than $17 billion in fines.

Other Civil Fines -- There are many laws under which civil fines can be assessed against BP. These include fines for safety and operational violations under the Outer Continental Shelf Lands Act and Occupational Safety and Health Act, and fines for harming important animal species under the Endangered Species Act and the Marine Mammal Protection Act, among others. These civil penalties may each amount to a small multimillion dollar fine to the company. While these fines are relatively small, they are symbolically important, emphasizing BP's responsibility for the carelessness that led to loss of human lives in the initial explosion and losses to the natural environment in the months that followed.

Criminal Penalties -- All of the laws discussed above, as well as the Migratory Bird Treaty Act, also provide for criminal penalties in situations of particularly egregious conduct. Again, these fines are fairly small -- just a few million dollars -- but there's a legal route that allows the punishment to fit the crime. The Alternative Fines Act allows the criminal fines against BP to be dramatically increased, up to double the amount BP gained -- or, more importantly, the amount that others lost -- as a result of its actions. That's double the losses to the fishery industry, and double the losses to tourism and the economy. Some estimates put that figure alone in the $20 to $40 billion range.

Natural Resource Damages -- Under the Oil Pollution Act, BP is required to pay us back the amount necessary to restore the natural resources -- our resources -- that it destroyed. While the studies that are underway to assess these costs are top secret, one way to estimate the magnitude of the costs is to compare the Deepwater Horizon disaster with previous spills like the Exxon Valdez Oil Spill.

Doing so and adjusting for inflation suggests that these damages could be in the $30 billion range. It's important to remember that even the most thorough studies won't uncover all of the environmental havoc wreaked by the BP spill soon, or possibly ever -- so even if the government demands the maximum amount supported by the studies we have, it's already going to be an underestimate of the true costs to the Gulf environment and our natural heritage. That's why it's doubly important that the Federal Government doesn't compromise on this part of the case against BP.

Adding up the high-end figures in these three categories suggests that BP may still be on the hook for as much as $90 billion depending on the amount of natural resource damages and other losses that can be demonstrated. Our Justice Department must make sure that the public is fully compensated and that other companies are put on notice of the substantial fines they will face if they spill oil in our waters. Given the extreme carelessness of BP and the vast scope of the resulting damage done, a low-end settlement would send the wrong message to BP and the other companies that are drilling in our oceans, telling them that they may not have to pay for future damages they cause.

The reasons why BP is pushing so hard for a settlement could not be more clear. Besides the high price a lawsuit could exact on the company's checkbooks, airing the mistakes, mishaps and bad management that would likely come out in the trial can't be good for stock prices. But the Federal Government should settle for no less than what the law allows. No amount of money will ever truly fix the mess that BP made, and Americans deserve to be fully compensated.

Jackie Savitz is Senior Director of Pollution Campaigns and Senior Scientist at Oceana.

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Oil Spill: Why the BP Settlement Is Just the Beginning of the End

 

Lawyers representing the oil giant BP on one side, and more than 100,000 Gulf Coast residents on the other, were set to show up at the court of U.S. District Judge Carl Barbier on Monday morning. There they would have begun contesting one of the biggest class-action lawsuits in American history, fighting over the responsibility BP still had towards the individuals and businesses affected by the 2010 Deepwater Horizon oil spill. Preparations for the trial produced an astounding 72 million pages of documents and included the depositions of more than 300 witnesses. As lawsuits go, this was going to the Super Bowl wrapped up in the World Series—only with much, much more money at stake.

But now it might never happen. That’s the upshot of news that broke late Friday evening: BP and the lawyers representing Gulf Coast individuals and businesses affected by the spill reached a $7.8 billion settlement that should eliminate the threat of litigation. The money will be paid out of the $20 billion compensation fund—run for the past year and a half by the lawyer Kenneth Feinberg—and it should resolve most private claims of economic loss, property damage and injury from the spill. “This settlement will provide a full measure of compensation to hundreds of thousands,” Stephen J. Herman and James P. Roy, the plaintiffs’ co-liaison counsel, said in a statement. “It does the greatest amount of good for the greatest number of people.”

But while the settlement might head off some of the massive litigation BP is still facing over the oil spill, the company’s legal woes are likely far from over.

MORE: Understanding the Psychic Toll of the Spill

That’s because Gulf Coast residents will still need to decide whether the settlement is right for them. Many individuals have been waiting nearly two years to get their claims settled by the Feinberg fund, which was set up in the months following the oil spill. Feinberg—a lawyer who had run a similar compensation fund for the government after the 9/11 attacks—had broad latitude to decide on settlements for anyone impacted by the spill: fishermen who lost a season, hotel owners along the Gulf Coast, waitresses in restaurants that went under during the spill. The fund—which has doled out about $6 billion so far to more than 200,000 businesses and individuals—had the benefit of avoiding litigation and lawyer’s fees, but many Gulf Coast residents were unhappy with the amount of money they were eligible to receive, as well as the fact that they had to forswear any further lawsuits against BP if they participated in the fund. The sheer number of people the fund had to serve also meant that many residents are still waiting for their checks.

Under the terms of the settlement, plaintiffs who haven’t received compensation yet can take money from the settlement or opt out and apply to a BP-run entity. And if neither option appeals, they can still sue—which means we may not have seen the end of litigation over the oil spill.

And that’s just private individuals. BP is still facing suits from the federal government and from affected states, and it’s not clear how Friday’s settlement will impact those ongoing cases. The $20 billion Feinberg had been given to hand out as compensation was also meant to cover environmental damages and the costs to state and local governments—and it’s not clear if those damages have yet been recovered.

MORE: Chevron’s Never-Ending, Record-Breaking Lawsuit

In a statement, the U.S. Justice Department said:

The United States will continue to work closely with all five Gulf states to ensure that any resolution of the federal law enforcement and damage claims, including natural resources damages, arising out of this unprecedented environmental disaster is just, fair and restores the Gulf for the benefit of the people of the Gulf states.

The remaining government claims could add billions more to BP’s bill, depending on how fines under the Clean Water Act and other environmental rules are calculated. (BP has said that it has already spent more than $22 billion on the spill.) A settlement might be possible there, but the Justice Department has said there is a strong case to be made for BP’s liability for the accident aboard the Deepwater Horizon that led to the blowout and oil spill. “We are prepared to go to trial, we were ready to go to trial yesterday,” Holder said during Congressional testimony on Feb. 28.

BP is also embroiled in ongoing litigation with its Deepwater Horizon partners Transocean—which actually ran the rig—and Halliburton, which was involved in a faulty cementing job that likely helped lead to the blowout. So the legal saga here is far from over, which is good news for the lawyers—and the journalists as well, as any lawsuits that actually go to court could bring new evidence to light over the events on the Deepwater Horizon and in the months that followed.

But ordinary Gulf Coast residents might be wise to get out of the litigation game as soon as possible. Studies done on the victims of the Exxon Valdez spill—many of whom were involved in lawsuits against the company that ran for years—found that being involved in ongoing litigation was a major source of stress and mental anguish. Lawsuits keep traumatic events fresh in the minds of plaintiffs, forcing them to relive some of the darkest days of their lives—all while absorbing legal body blows from a company that has endless amounts of money to spend on lawyers, as I wrote in 2010:

Like southern Louisiana, Alaskan towns were full of fishermen whose way of life was threatened. Residents saw coastal waters fouled by millions of barrels of oil, and they raged against an incompetent response from government and industry. Previously close-knit communities were divided — those who took well-paying cleanup jobs with Exxon were decried as “spillionaires” profiting from the catastrophe. And the wounds did not heal with time: a recent study found that stress levels among Alaskans involved in the oil-spill litigation were as high in 2009 as they were in 1991. “There are still significant levels of depression and posttraumatic stress,” says J. Steven Picou, a sociologist at the University of South Alabama. “It was a constantly renewing disaster.”

The faster Gulf Coast residents can move on with their lives, the better—and if the settlement can help speed that process along, it’s a win. I’m reminded of something I heard Feinberg tell a group of angry fishermen at the Louisiana village of Port Sulphur just a few months into the spill. “The people of Louisiana are pretty resilient,” he said. “Get a check, and move on as best as you can.” It may not seem fair—but it’s still good advice.

MORE: How a San Francisco Spill Took a Toll on Fish

Bryan Walsh is a senior writer at TIME. Find him on Twitter at @bryanrwalsh. You can also continue the discussion on TIME’s Facebook page and on Twitter at @TIME.

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Ohio: Gas-drilling Injection Well Led to Quakes

  A brine injection well owned by Northstar Disposal Services LLC in Youngstown, Ohio.

(COLUMBUS, Ohio) — A dozen earthquakes in northeastern Ohio were almost certainly induced by injection of gas-drilling wastewater into the earth, state regulators said Friday as they announced a series of tough new rules for drillers.

Among the new regulations: Well operators must submit more comprehensive geological data when requesting a drill site, and the chemical makeup of all drilling wastewater must be tracked electronically.

MORE: It’s Not the Fracking That Might Be the Problem. It’s Everything Else

The state Department of Natural Resources announced the tough new brine injection regulations because of the report’s findings on the well in Youngstown, which it said were based on “a number of coincidental circumstances.”

For one, investigators said, the well began operations just three months ahead of the first quake.

They also noted that the seismic activity was clustered around the well bore, and reported that a fault has since been identified in the Precambrian basement rock where water was being injected.

VIDEO: The Fuss Over Fracking: The Dilemma of a New Gas Boom

“Geologists believe it is very difficult for all conditions to be met to induce seismic events,” the report states. “In fact, all the evidence indicates that properly located … injection wells will not cause earthquakes.”

Northeastern Ohio and large parts of adjacent states sit atop the Utica and Marcellus Shale geological formations, which contain vast reserves of natural gas that energy companies are rushing to drill using a process known as hydraulic fracturing.

That process involves freeing the gas by injecting huge amounts of chemical-laced water, termed brine, into the earth, but that water needs to be disposed of when companies are done with it. Municipal water treatment plants aren’t designed to remove some of the contaminants found in the wastewater, including radioactive elements. Deep injection is considered one of the safest methods for disposing of the wastewater.

Past earthquakes have been linked to energy exploration and production, including from injections of enormous amounts of drilling wastewater or injections of water for geothermal power, experts said.

They point to recent earthquakes in the magnitude 3 and 4 range — not big enough to cause much damage, but big enough to be felt — in Arkansas, Texas, California, England, Germany and Switzerland. And in the 1960s, two Denver quakes in the 5.0 range were traced to deep injection of wastewater.

The improper placement of the Youngstown well stemmed in part from inadequate geological data being available to regulators, the Ohio report states. New rules would require a complete roll of geophysical logs to be submitted to the state.

MORE: Sizing Up the Quakes That Come from Hydraulic Fracturing

“These logs were not available to inform regulators of the possible issues in geologic formations prior to well operation,” the document says.

Requiring well operators to submit more comprehensive geologic data is just one of the added regulations the department will either impose immediately or pursue through legislative or rule changes.

Among other changes:

— Future injection into Precambrian rock will be banned, and existing wells penetrating the formation will be plugged.

— State-of-the-art pressure and volume monitoring will be required, including automatic shut-off systems.

— Electronic tracking systems will be required that identify the makeup of all drilling wastewater fluids entering the state.

As the technology is developed and installed, the new regulations could have an immediate impact on neighboring Pennsylvania, which is among states that ship their wastewater to Ohio for disposal. Pennsylvania, the top gas-producing state in the region, doesn’t practice deep injection of wastewater because its geology precludes it.

MORE: Could Shale Gas Power the World?

“Ohio has developed a new set of regulatory standards that positions the state as a national leader in safe and environmentally responsible brine disposal,” Natural Resources Director James Zehringer said in a prepared statement.

“Ohioans demand smart environmental safeguards that protect our environment and promote public health. These new standards accomplish that goal,” he said.

Carlo LoParo, a spokesman for the natural resources department, said ramping up the electronic monitoring of incoming wastewater could take some time. The technology, similar to an electronic pass used on a toll road, is not yet widely available, he said.

The U.S. Environmental Protection Agency gave Ohio regulatory authority over its deep well injection program in 1983, deeming that its state regulations met or exceeded federal standards. The new regulations would be added to those existing rules.

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