Oil Shill Mary Landrieu Claims Ignorance of ConocoPhillips

The Senate Energy and Natural Resources Committee has voted to have its own commission investigate the BP disaster. The Committee finds that necessary, according to Mary Landrieu, because Obama hasn’t appointed a representative from the oil industry to his own commission.

The Senate Energy and Natural Resources Committee voted Wednesday to create a congressional bipartisan commission to investigate the spill, with Sen. Mary Landrieu, D-La., and others saying a separate panel is needed because the White House commission has four environmental advocates — three members and the executive staff director — but no oil industry representation.

“Maybe the commission that the Congress sets up, in a more balanced fashion, with both very strong environmental views and very strong industry views, could actually come up with something that really might work for the dilemma and the challenge that this nation faces, which briefly is this: We use 20 million barrels of oil a day,” Landrieu said. “That was true the day before the Deepwater Horizon blew up. It is true today. And we need to get that oil from somewhere.”

Aside from the problem of the oil industry investigating the oil industry, there’s another problem with Landrieu’s complaint.

Bill Reilly, the Republican Co-Chair and one of the people Landrieu’s calling an “environmental advocate”? He serves on ConocoPhillips’ board. ConocoPhillips is a much smaller player in deepwater drilling than, say, BP. But it’s still the sixth largest driller.

But I guess that kind of obvious conflict isn’t enough to reassure Landrieu.

Judicial Ethics in the Gulf: Judge Feldman’s Conflicts and DOJ Malpractice

Last week Federal district court judge Matin Feldman of the Eastern District of Louisiana (EDLA), in what has become a controversial decision, overturned the six month moratorium on deepwater oil drilling imposed by the Department of the Interior. It was a legally curious decision to start with as it, on its face, appeared to be contrary to the well established standard of review.

Almost immediately from the time Judge Feldman’s decision hit the public conscience, information on Feldman’s undisclosed (at least on the case record at issue) financial ties to the oil and gas exploration industry started coming out of the woodwork. From Saturday’s Washington Post:

The federal judge who presided over a challenge to the Obama administration’s six-month moratorium on deepwater oil drilling simultaneously owned stock in an oil company affected by the ban, according to a financial disclosure statement released Friday.

U.S. District Judge Martin L.C. Feldman sold the stock in Exxon Mobil 14 days after the case was filed in New Orleans by a group of oil service firms — and less than five hours before he struck down the moratorium.

Feldman said in a statement elaborating on the disclosure that he was unaware of his holdings in Exxon Mobil and a smaller oil company until 9:45 p.m. Monday, the day before he issued his ruling.

“Because he remembered that Exxon, who was not a party litigant in the moratorium case, nevertheless had one of the 33 rigs in the Gulf, the judge instructed his broker to sell Exxon and XTO [Energy Inc.] as soon as the market opened the next morning,” according to a statement released by his chambers and reported by Bloomberg News.

Even before this latest disclosure, Feldman was criticized by environmental groups and others for not recusing himself from the case. The groups pointed to his 2008 disclosure form, which showed that he had invested in companies involved in offshore oil and gas exploration.

So Judge Feldman not only held numerous oil and gas interest stocks, but was trading them up to and including the morning of his fateful decision, and doing so out of an admitted realization that he had an appearance of ethical conflict. Feldman owned and was trading Exxon stock, a company whose Gulf of Mexico rigs were losing money at the rate of a half million dollars a day due to the moratorium, during the entire time he was assigned the case. Yet, failing to disclose his appearance of conflict on the record or recuse, Feldman nevertheless proceeded to issue a questionable decision clearly benefitting the oil and exploration industry he is so invested in.

Lest there be any confusion that perhaps Judge Feldman somehow put himself in the clear by suddenly selling off his holdings in Exxon on the morning of June 22 just hours before issuing his surprising opinion Read more

We Can’t Even Get Japan to Stop Whaling…

And now we’re going to have to try to get them to give up Maguro sushi.

Fearing that the oil spill in the Gulf of Mexico will deal a severe blow to the bluefin tuna, an environmental group is demanding that the government declare the fish an endangered species, setting off extensive new protections under federal law.

[snip]

Both the Bush and Obama administrations tried to win greater international protection for the bluefin, but their efforts were derailed by opposition from countries like Japan, where a single large bluefin can sell in the sashimi market for hundreds of thousands of dollars. (The tuna fish sold in cans comes from more abundant types of tuna, not from bluefin.)

The bluefin uses the Gulf of Mexico as a prime spawning ground, and the gulf is such a critical habitat for the animal that fishing for it there was banned in the 1980s. But after spawning in the spring and summer, many tuna spend the rest of the year roaming the Atlantic, where they are hunted by a global fishing fleet.

The environmental advocacy group, the Center for Biological Diversity, in Tucson, filed the request under the Endangered Species Act in late May. If the petition is granted, a process that could take years, the endangered listing would require that federal agencies conduct exhaustive analysis before taking any action, like granting drilling permits, that would pose additional risk to the fish.

Frankly, I think a campaign to put bluefin tuna on the endangered species list would be beneficial for a number of reasons. If a bunch of elites have to give up their Maguro sushi, it’ll highlight both the problem with overfishing generally and the concrete way in which our oil-addicted lifestyle endangers the little perks of life we love (and don’t get me wrong–I love Maguro sushi too).

Which will it be? Give up your SUV, or give up your favorite sushi?

In the meantime, there are two things you can do to help.

The Center for Biological Diversity, which is leading this effort, has been one of the best environmental groups responding to the BP Disaster. You might help them in any way you can.

And check your seafood choices for sustainability before you eat it. The Monterey Bay Aquarium has a great online tool (with pocket tools available) that provides recommendations for seafood choices based both on sustainability and health hazards, like mercury. In addition to bluefin, it also recommends you avoid Hamachi.

(Maguro image by pittaya under Creative Commons 2.0)

Obama Drilling Moratorium Overturned In Curious Court Decision

The breaking news this hour is the decision of Judge Martin L. C. Feldman of the Eastern District of Louisiana to grant a preliminary injunction to the moving plaintiff oil and gas interests and against the Obama Administration’s six month moratorium on deepwater drilling for oil in the Gulf of Mexico.

The court’s decision is here. The key ruling is:

On the record now before the Court, the defendants have failed to cogently reflect the decision to issue a blanket, generic, indeed punitive, moratorium with the facts developed during the thirty-day review. The plaintiffs have established a likelihood of successfully showing that the Administration acted arbitrarily and capriciously in issuing the moratorium.
…..
Accordingly, the plaintiffs’ motion for preliminary injunction is GRANTED. An Order consistent with this opinion will be entered.

The 22 page decision is quite thorough in detailing the applicable law and standards of review. The Judge Feldman proceeds to blatantly disregard and violate the very standards and law he has laid out. It is really quite remarkable. Here, from his own decision (p. 11-12), is the scope he is supposed to be operating under:

The APA cautions that an agency action may only be set aside if it is “arbitrary, capricious, an abuse of discretion, or not otherwise not in accordance with law.” 5 U.S.C. §706(2)(A); see Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 416 (1971). The reviewing court must decide whether the agency acted within the scope of its authority, “whether the decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment.” Overton Park, 401 U.S. at 415-16; see Motor Vehicle Manf. Ass’n of the U.S. v. State Farm Mutual Auto. Ins. Co., 463 U.S. 29, 42-43 (1983). While this Court’s review must be “searching and careful, the ultimate standard of review is a narrow one.” Overton Park, 401 U.S. at 416; see Delta Found., Inc. v. United States, 303 F.3d 551, 563 (5th Cir. 2002). The Court is prohibited from substituting its judgment for that of the agency. Overton Park, 401 U.S. at 416. “Nevertheless, the agency must examine the relevant data and articulate a satisfactory explanation for its action including a ‘rational connection between the facts found and the choice made.’” State Farm, 463 U.S. at 43 (quoting Burlington Truck Lines v. United States, 371 U.S. 156, 168 (1962)).

The key language is that an agency decision such as entered in this case can be set aside ONLY Read more

Negotiation 101: How to Get Corporations to Do What You Want

I just got back from driving across the rust belt – Syracuse, Buffalo, Cleveland, Toledo, MI – and am catching up on all the interesting conversations you’ve been having this week while I was celebrating my mom’s birthday (thanks, once again, to bmaz for watching the liquor cabinet while I was gone). So for the moment I want to make one quick comment.

The WSJ has a story describing how BP heroically pushed back against two of the Administration’s most onerous demands: that it pay for the costs of the moratorium on new drilling, and it pay to restore the Gulf to its natural state, rather than the state it was in when the Deepwater Horizon disaster struck.

BP PLC, despite being put under pressure by the U.S. government to pay for the oil-spill aftermath, has succeeded in pushing back on two White House proposals it considered unreasonable, even as it made big concessions, said officials familiar with the matter. BP last week agreed to hand over $20 billion – to cover spill victims such as fishermen and hotel workers who lost wages, and to pay for the cleanup costs – a move some politicians dubbed a “shake down” by the White House. Others have portrayed it as a capitulation by an oil giant responsible for one of the worst environmental disasters in history. A more accurate picture falls somewhere between.

The fund is a big financial hit to BP. But behind the scenes, according to people on both sides of the negotiations, the company achieved victories that appear to have softened the blow.

BP successfully argued it shouldn’t be liable for most of the broader economic distress caused by the president’s six-month moratorium on deep-water drilling in the Gulf of Mexico. And it fended off demands to pay for restoration of the Gulf coast beyond its prespill conditions.

Now, I know WSJ’s job is to make corporations look good, so I’m unsurprised by this spin. And I’m skeptical the $20 billion will get in the hands of those who need it in a timely fashion.

But it seems to me that the real story is that – for the first time I can think of – the Obama Administration has actually taken a tough approach to negotiation. Normally, of course, Obama starts by ceding on key issues (such as drug reimportation, oil drilling, and real financial reform) and from that incredibly weakened position, further damaging his policy position. Perhaps this time is different because the Administration is under a much greater public opinion threat. Perhaps this time is different because BP is a corporation (though so are the drug companies) not the opposing political party.

But this time is different.

I actually agree with the WSJ that Obama was unlikely to get BP to pay for the moratorium on drilling. But that may have not been the point. It established the window of possibility far beyond what it had been, and made the $20 billion escrow account look reasonable by comparison. And voila! BP at least said they agreed to cough up $20 billion.

It’s called negotiation!

Whoever came up with this novel idea really ought to get a bigger policy portfolio.

Touchdown Jesus Struck Down by Act of God (or Maybe Al Gore)

This is perhaps a post that klynn and Leen (and BoxTurtle, too?) will appreciate more than the rest of you. Because they, like me, have undoubtedly almost crashed their car because they were laughing so hard as they drove by Touchdown Jesus, which is a mighty gaudy distraction just east of 75 north of Cincinnati.

Or should I say was?

Because last night an Act of God–in the form of a lightning strike–destroyed Touchdown Jesus. (Thanks to cbf for alerting me of the target of this particular Act of God; for video, go here.)

Though I tend to think it was not so much an Act of God as an Act of (fat) Al Gore–or rather, climate change. After all, climate change is likely the more direct cause of the really crazy weather we’re having this year. And this Act of God occurred just one week after tornadoes took part of the roof off Michigan’s Cabelas (which, for you arugula-eating Coasters, is a temple to hunting culture much cherished in flyover country), which is MI’s biggest tourist site and, like Touchdown Jesus, is also a testament to the hubris of Americans.

I think climate change is trying to tell us something.

(Touchdown Jesus photo by Morhange under Creative Commons Attribution ShareAlike 3.0)

BP’s Well Failure Due to Effort to Save $10 Million?

Henry Waxman just put up a letter and a whole bunch of backup documents in preparation for a hearing with Tony Hayward Thursday. In it, he lists 5 shortcuts BP used in the days before the well explosion, all of them with real risks. But BP chose them to save money and time.

Well Design. On April 19, one day before the blowout, BP installed the final section of steel tubing in the well. BP had a choice of two primary options: it could lower a full string of “casing” from the top of the wellhead to the bottom of the well, or it could hang a “liner” from the lower end of the casing already in the well and install a “tieback” on top of the liner. The liner-tieback option would have taken extra time and was more expensive, but it would have been safer because it provided more barriers to the flow of gas up the annular space surrounding these steel tubes. A BP plan review prepared in mid-April recommended against the full string of casing because it would create “an open annulus to the wellhead” and make the seal assembly at the wellhead the “only barrier” to gas flow if the cement job failed. Despite this and other warnings, BP chose the more risky casing option, apparently because the liner option would have cost $7 to $10 million more and taken longer.

Centralizers. When the final string of casing was installed, one key challenge was making sure the casing ran down the center of the well bore. As the American Petroleum Institute’s recommended practices explain, if the casing is not centered, “it is difficult, if not impossible, to displace mud effectively from the narrow side of the annulus,” resulting in a failed cement job. Halliburton, the contractor hired by BP to cement the well, warned BP that the well could have a “SEVERE gas flow problem” if BP lowered the final string of casing with only six centralizers instead of the 21 recommended by Halliburton. BP rejected Halliburton’s advice to use additional centralizers. In an e-mail on April 16, a BP official involved in the decision explained: ” it will take 10 hours to install them . .. . I do not like this.” Later that day, another official recognized the risks of proceeding with insufficient centralizers but commented: “who cares, it’s done, end of story, will probably be fine.”

Cement Bond Log. BP’s mid-April plan review predicted cement failure, stating “Cement simulations indicate it is unlikely to be a successful cement job due to formation breakdown.” Despite this warning and Halliburton’s prediction of severe gas flow problems, BP did not run a 9- to 12-hour procedure called a cement bond log to assess the integrity of the cement seal. BP had a crew from Schlumberger on the rig on the morning of April 20 for the purpose of running a cement bond log, but they departed after BP told them their services were not needed. An independent expert consulted by the Committee called this decision “horribly negligent.”

Mud Circulation. In exploratory operations like the Macondo well, wells are generally filled with weighted mud during the drilling process. The American Petroleum Institute (API) recommends that oil companies fully circulate the drilling mud in the well from the bottom to the top before commencing the cementing process. Circulating the mud in the Macondo well could have taken as long as 12 hours, but it would have allowed workers on the rig to test the mud for gas influxes, to safely remove any pockets of gas, and to eliminate debris and condition the mud so as to prevent contamination of the cement. BP decided to forego this safety step and conduct only a partial circulation of the drilling mud before the cement job.

Lockdown Sleeve. Because BP elected to use just a single string of casing, the Macondo well had just two barriers to gas flow up the annular space around the final string of casing: the cement at the bottom of the well and the seal at the wellhead on the sea floor. The decision to use insufficient centralizers created a significant risk that the cement job would channel and fail, while the decision not to run a cement bond log denied BP the opportunity to assess the status of the cement job. These decisions would appear to make it crucial to ensure the integrity of the seal assembly that was the remaining barrier against an influx of hydrocarbons. Yet, BP did not deploy the casing hanger lockdown sleeve that would have prevented the seal from being blown out from below.

BP willfully ignored numerous warnings in an attempt to save $10 million here and there, and several days of time. And as a result, precisely what they were warned against happened, causing tens of billions of monetary damage and permanent environmental damage to the Gulf.

BP Well Bore/Casing Integrity Issues and Senator Nelson’s Statements

One week ago, on the morning of June 7, I wrote about questions on the substantive physical integrity of the BP Macondo well casing and bore, and statements by Florida’s Senator Bill Nelson on the same, as well as potential resulting seepage from the sea floor surrounding the well head. To say the least it raised a few eyebrows.

I have again attached the FDL video from the appearance Nelson made on the Andrea Mitchell MSNBC show where he became the first official to materially discuss the game changing issue of sea floor seepage from a structurally compromised well below the surface. Since Nelson first made the statements and raised the questions, I have spoken to his office several times.

Here is a quote given directly to Emptywheel/Firedoglake by Senator Nelson:

Why do scientists and others suspect the well casing is breached beneath the seafloor? Well, for one, in one of my briefings I learned that a lot of mud used in the so-called “top kill” attempt didn’t come back up after it was pumped down there.

Clearly, from Senator Nelson’s quote, he has received multiple briefings in addition to the information in the public domain, and he is hearing other private disturbing reports. Quite frankly, this should be of no shock in light of that which is, and was, already in the public domain. In this post, mindful of the fact there is likely a wealth we in the public do not yet know, I would like to delve into the public evidence Senator Nelson was relying on and why this is an issue that should, and must, remain squarely in the forefront of public and media conscience.

First off, it is clear Senator Nelson’s measured statements to Andrea Mitchell were not an off the cuff or uninformed gaffe by Nelson. Quite the contrary, he and his staff had been probing the issue of the integrity of the well bore long prior to the MSNBC appearance. On June 2, Sen. Nelson directed the following correspondence to BP:

June 2, 2010

Mr. Lamar McKay
Chairman and president, BP America, Inc.
501 Westlake Park Boulevard
Houston, Texas 77079

Dear Mr. McKay:

I understand the priority of your company right now is capping the Deepwater Horizon well. But new information about the accident has come to light in two recently published accounts that raise serious questions I hope you can promptly Read more

Time to Check In on Our Relations with the Anglo-Iranian Oil Company

Apparently, the Brits are calling Americans–including President Obama–xenophobic for referring to the company shitting up our Gulf  as “British Petroleum.” So for this installment of my now-regular reflection on how, fifty-some years ago, we overthrew a democratically-elected government for that company shitting up our Gulf, I’m going to call it the Anglo-Iranian Oil Company.

You see, the “special relationship” between us and the AIOC is suffering a bit of a strain right now. (h/t this very good Yves post)

Tensions escalated sharply on Wednesday when the U.S. Interior Secretary, Ken Salazar, said he would demand that BP pay the lost wages of oil workers in the Gulf region idled because of the administration’s order to halt new deepwater drilling for six months. That demand could add hundreds of millions of dollars to BP’s obligations.

Mr. Hayward immediately canceled an employee town hall meeting and a trip to review clean-up on the Louisiana coast, and gathered his visibly shaken executives at the crisis center in Houston. At a top management call between Houston and London to review its “Sub-sea and Surface” agenda, the top item on “Surface” issues suddenly became “Washington politics.”

“This demand is chilling,” said one executive in the meeting. “The administration keeps pushing the boundaries on what we are responsible for.”

Tony Hawyward is apparently aghast that the Obama Administration might consider nationalizing BP’s AIOC’s profits to actually pay for shitting up our Gulf.

Mr. Salazar’s comments, and reports that the U.S. Justice Department was looking into BP’s plan to pay a dividend, touched off a rout of BP’s shares.

[snip]

As the oil giant’s stock fell, Mr. Hayward holed up in a makeshift office at BP’s crisis center here and worked his cell phone relentlessly. Among those he called: leaders of the U.K. government, which had until Thursday stayed largely on the sidelines as tensions mounted between BP and the Obama administration.

Which is leading the British MOTUs to grow impatient with David Cameron’s government for not more aggressively defending BP AIOC against the American demand that BP AIOC actually pay for shitting up our Gulf.

The U.K. government has come under mounting pressure from business associations and some U.K. lawmakers, angry at the increasingly aggressive rhetoric coming out of Washington.

I’m actually really, really fascinated by this development. Ultimately, the biggest threat BP AIOC has over us is bankruptcy, thereby shielding its assets from US seizure (ironically, such a bankruptcy might look a lot like the GM restructuring). Short of that, though, the British MOTUs appear to want to escalate this into a foreign policy issue. And ultimately, they’re demanding that the needs of BP AIOC take precedence over the well-being of Americans in the Gulf.

It’s a familiar demand, since it’s the same one AIOC made those fifty-some years ago. Only back then, AIOC made the demand of brown people, not Americans (though I’m guessing brown Americans may well suffer disproportionately from this BP mess).

I guess maybe we believed a company with “Anglo” in its name–that, plus the “special relationship” that binds us Anglos–would ensure that Americans were never asked to pay the same price those Iranians were.

Abadan refinery picture from wikimedia.

Oil Flow Rate More Than Double What BP and Government Have Said

This will not be a shock for anybody paying attention to the ever changing figures from BP on what they are capturing from the containment cap versus what is blindingly obvious from watching the spillcam live video feed, but BP and the US government have yet again been dishonest about the nature and size of the oil gusher leaking into the Gulf of Mexico water.

From Reuters:

The new estimates are considerably higher than the prior “best estimate” of 12,000-19,000 bpd issued on May 27 by the so-called Flow Rate Technical Group.

The flow of crude from the ruptured well could have been as low as 20,000 barrels (840,000 gallons/3.18 million liters) per day and as high as 40,000 bpd, with an average flow rate of 25,000-30,000 bpd, according to the findings announced by U.S. Geological Survey Director Marcia McNutt.

The thing to keep in mind here is that even these new higher figures are before the riser was cut off the Blow Out Preventer (BOP) on June 3. The estimate from BP and the government has been that the cut increased the flow 10%-20% from the baseline before the cut. All of which would indicate the current flow could easily be 48,000 barrels per day (bpd).

Not to mention, of course, there has not once been an estimate by either BP or the US government which was anything but a serious underestimate; so the safe bet is the real flow rate from the Macondo well is even higher yet, especially considering the visual evidence lends the conclusion the cutting of the riser increased the flow noticeably more than 20%. You have to wonder if the public will ever get a straight answer out of BP and the Obama Administration.

[Graphic – BP: Broken Promises. Logo design by Foye 2010 submitted as part of the Art For Change BP Logo Redesign Contest and used with permission]

image_print