March 28, 2024 / by 

 

Are DOJ and DOI Making A Competent Legal Effort On Gulf Moratorium?

Exactly one week ago, in a post entitled Judicial Ethics in the Gulf: Judge Feldman’s Conflicts and DOJ Malpractice, I related the patently obvious, and disqualifying, statutory ethical conflicts on the part of the Federal judge in the Eastern District of Louisiana, Martin Feldman, who made the curious and shocking decision to stay enforcement of the Obama Administration’s six month deepwater moratorium. As I pointed out, it legally was somewhat astounding the government did not raise Feldman’s conflict at any opportunity:

With this knowledge in the public sphere at least substantially by the night after Feldman’s decision, the government nevertheless did not even mention it as a ground in their attempt to stay Feldman’s ruling at the district court level when they filed their motion to stay at the district court level late the following day. That motion was in front of Feldman himself, so maybe you could rationalize the government not raising it at that point (although I would have posed the motion to stay to the chief judge for the district and included the conflict as grounds for relief were it me).

Having predictably received no relief in their lame request for stay from Feldman, the judge who had just hammered them (not surprising), the government put their tails between their legs and made preparations to seek a stay from the 5th Circuit. Surely the government would forcefully argue the glaringly obvious egregious appearance of both conflict and lack of impartiality once they were free of Feldman and in the Fifth Circuit, right? No, no they didn’t.

When the government filed their motion for stay in the 5th Circuit mid to late day Friday June 25, a full three days after getting hammered by oiled up Judge Feldman, and after Feldman’s most recent 2009 financial disclosure had even started being released to the general public (as evidenced by the literally damning piece on it Rachel Maddow did Friday night), the government STILL did not avail themselves of the glaringly obvious argument of conflict by Feldman. Nary a peep from the fine lawyers at the DOJ on one of the most stunningly obvious arguments of judicial bias in recent memory.

Another week later, and there STILL is no peep from the government on an issue that would be critical to reinstating their moratorium if they really wanted to. But while the government lawyers refuse to zealously litigate the position they claim to support, intervenors represented a by law school clinic professor and two lawyers for environmental groups have done the work the government should have done. On Friday June 2, Defendant-Intervenors filed a Motion to Disqualify Feldman in the district trial court and properly noticed the record at the 5th Circuit.

From the D-I Motion to Disqualify:

Pursuant to 28 U.S.C. § 455, Defendant-Intervenors Defenders of Wildlife, Sierra Club, Florida Wildlife Federation, Center for Biological Diversity, and Natural Resources Defense Council (collectively “Defenders”) respectfully move this Court to disqualify itself from proceedings in this case.

As detailed more fully in Defenders’ memorandum in support of this motion, the Court must recuse itself for two distinct and independent reasons. First, the Court’s financial holdings in various companies involved in oil and gas drilling raise in an objective mind a reasonable question concerning the Court’s impartiality in these proceedings, triggering the obligation under 28 U.S.C. § 455(a) for the court to disqualify itself. This obligation is not mitigated by the Court’s sale of some of this stock prior to the issuance of the preliminary injunction on June 22, 2010 since, prior to that time the Court must have formed substantive opinions about the case from both the briefs filed by the parties and the hearing on June 21. The Court owns and/or recently has owned an interest in several companies that comprise part of the network that supports the Gulf’s oil and gas industry. To rule that the moratorium would injure irreparably a network in which the Court was financially invested creates an impermissible appearance of partiality in the mind of a reasonable observer, which is enough to trigger the duty to recuse under § 455(a).

So, hats off to attorney Catherine Wannamaker and her clients the Center for Biological Diversity and Defenders of Wildlife, David Guest of Earthjustice for Florida Wildlife Federation and the Sierra Club and Professor Adam Babich of Tulane Law School’s Environmental Law Center also for the Sierra Club. These intrepid intervenors are doing the job the government lawyers should be doing, but curiously refuse to do.

But this is not the only instance of highly suspect lawyering by the DOJ and DOI attorneys handling the Hornbeck litigation on the six month moratorium. There is also the government’s failure to meaningfully address the critical case Feldman used to craft his contorted ruling. As I said a week ago:

Furthermore, the legal eagles at the DOJ and DOI failed to effectively address and contradict Judge Feldman’s reliance on the case of Motor Vehicle Manufacturers Association V. State Farm Insurance, 463 U. S. 29 (1983), which Feldman contorted and misapplied to wrongfully reach his result.

Here is Feldman’s opinion/order staying the Administration’s six month moratorium. Here is the decision in Motor Vehicle Manufacturers Association v. State Farm that Feldman used to contort the playing field in the direction he wanted. A reading of Feldman’s decision coupled with a close reading of State Farm reveals the clear distinction and contrast between the two situations and why the State Farm decision does not operate in the fashion Feldman claims.

State Farm is remarkably ill applied by Feldman. First off, and most obviously, State Farm reaffirms the proper standard of review, namely that any competent evidence in the agency record mandates upholding the agency determination (in this case the moratorium). Feldman, of course, did a complete end run of this standard. The government, in their respective motions for stay at the district and 5th Circuit, did at least make a halfhearted argument on Feldman violating the standard of review, although they completely fail to use his own linchpin State Farm case against him as would have been appropriate under the circumstances.

Beyond that though, and much more significantly, State Farm delves into a situation where the agency in question there (NHTSA) completely rescinded a rule deemed by the court to be in the interest of protecting the public, and did so without an arguable basis for completely removing the protection to the public. Put more plainly, the government agency in the State Farm situation was harming the public with no viable explanation for the action.

The Court in State Farm found such action – harming the public sector the agency was tasked with protecting instead of helping it – to be directly contrary to the mission and task of the that agency. That logic and framing certainly does NOT apply in the least to the Interior Department’s action in the instant case to impose a six month moratorium where it is crystal clear that the regulatory structure and practices of the oil and gas extraction industry are incapable of protecting the public and environmental welfare. Not to mention that the Department has asserted that their entire array of resources is being consumed entirely by the BP Macondo leak and it is an emergency scenario they are operating under.

In the instant case, Interior was acting exactly within their mission and task to protect the public in relation to mineral exploration and removal, and was not rescinding a rule to protect the public, it enacting a rule – a temporary delay – in order to immediately protect the environment and public, and determine how to better protect the public in the future. There is simply no way to read State Farm as being consistent with the way Feldman applied it to the instant case; in fact a proper scrutiny of State Farm demonstrates that it quite arguable actually supports the government’s agency decision on the moratorium.

But if you review the subsequent motions by the government by and through their attorneys at the DOJ and DOI linked above (and here and here for convenience), they barely address the State Farm decision Feldman used to leverage his entire decision. It is almost beyond belief that a competent lawyer truly zealously and appropriately fighting to restore the moratorium would fail to attack Feldman’s use and abuse of State Farm.

So, if the Obama Administration and Interior Department Secretary Ken Salazar truly believe in the propriety of their six month moratorium, and are dedicated to fighting through appeal for it, why are their lawyers not acting like it? Are they really not trying because they really don’t care, or are they just sloppy and incompetent? It is one or the other.

Oh, and the 5th Circuit is moving things right along. The 5th Circuit told the Hornbeck and related moratorium challengers to file briefs on the stay issue by Friday July 2. Hornbeck filed a brief, as did, quite astoundingly, Senator Mary Landrieu against the government and in favor of oil companies. The government must reply by July 6, if it wishes. The Court set a one-hour hearing for the afternoon of July 8, in New Orleans and said no delays will be granted.


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 contrary to normal standards of review for such issues, keep in mind the subject case of Hornbeck Offshore Services et. al v. Salazar had been assigned to Feldman for two weeks and, significantly, the adversarial hearing the opinion resulted from actually occurred the day prior, June 21, while Feldman obviously still held the stock even he considered an ethical issue.

Even more distressing is the fact that it has now been revealed from Judge Feldman’s 2009 financial disclosure, literally just filed and only released this week after demand resulting from his questionable ruling, that Feldman is very heavily invested in Blackrock Financial products. Blackrock is, of course, the single biggest shareholder in BP. As the New York Times put it:

No single institution has more money riding on BP than BlackRock, the money management firm that is BP’s largest shareholder.

Well that certainly sounds like reason to pause, eh? There are two sources of guidance for federal judges such as Feldman in instances like this, the statutory guidance of 28 USC 455 and the Code of Conduct for United States Judges contained within the Guide to Judiciary Policy of the US Courts. Both sets of provisions yield the same guidance, so I will focus on the statutory provision as it is more specific and would appear to take precedence; 28 USC 455 provides inter alia:

(a) Any justice, judge, or magistrate judge of the United States shall disqualify himself in any proceeding in which his impartiality might reasonably be questioned.
(b) He shall also disqualify himself in the following circumstances:

(1) Where he has a personal bias or prejudice concerning a party, or personal knowledge of disputed evidentiary facts concerning the proceeding;
(2) Where in private practice he served as lawyer in the matter in controversy, or a lawyer with whom he previously practiced law served during such association as a lawyer concerning the matter, or the judge or such lawyer has been a material witness concerning it;
(3) Where he has served in governmental employment and in such capacity participated as counsel, adviser or material witness concerning the proceeding or expressed an opinion concerning the merits of the particular case in controversy;
(4) He knows that he, individually or as a fiduciary, or his spouse or minor child residing in his household, has a financial interest in the subject matter in controversy or in a party to the proceeding, or any other interest that could be substantially affected by the outcome of the proceeding;
(5) He or his spouse, or a person within the third degree of relationship to either of them, or the spouse of such a person:

(i) Is a party to the proceeding, or an officer, director, or trustee of a party;
(ii) Is acting as a lawyer in the proceeding;
(iii) Is known by the judge to have an interest that could be substantially affected by the outcome of the proceeding;
(iv) Is to the judge’s knowledge likely to be a material witness in the proceeding.
(c) A judge should inform himself about his personal and fiduciary financial interests, and make a reasonable effort to inform himself about the personal financial interests of his spouse and minor children residing in his household.
(d) For the purposes of this section the following words or phrases shall have the meaning indicated:
(1) “proceeding” includes pretrial, trial, appellate review, or other stages of litigation;
(2) the degree of relationship is calculated according to the civil law system;
(3) “fiduciary” includes such relationships as executor, administrator, trustee, and guardian;
(4) “financial interest” means ownership of a legal or equitable interest, however small, or a relationship as director, adviser, or other active participant in the affairs of a party, except that:
(i) Ownership in a mutual or common investment fund that holds securities is not a “financial interest” in such securities unless the judge participates in the management of the fund;
(ii) An office in an educational, religious, charitable, fraternal, or civic organization is not a “financial interest” in securities held by the organization;
(iii) The proprietary interest of a policyholder in a mutual insurance company, of a depositor in a mutual savings association, or a similar proprietary interest, is a “financial interest” in the organization only if the outcome of the proceeding could substantially affect the value of the interest;
(iv) Ownership of government securities is a “financial interest” in the issuer only if the outcome of the proceeding could substantially affect the value of the securities.
(Emphasis added).

A comparison of the strictures of 28 USC 455, especially those I have highlighted, with the conduct of Judge Martin Feldman cannot lead to any conclusion other than Judge Feldman has acted in violation of his ethical obligations. The standard under 28 USC 455 is recusal if there is even a question regarding the appearance of impartiality. Common practice in Federal courts dictates that, even where there are underlying facts that may mitigate a judge’s duty to recuse, there is an affirmative duty imposed on the judge to disclose and explain on the record.

The evidence to date is that Judge Feldman neither recused nor disclosed and, in fact, was surreptitiously scurrying around selling interests after two weeks of having the case, and a day after presiding over the crucial hearing in the matter, in some kind of attempt to cleanse himself prior to the formality of making his decision public.

Even if Feldman did not learn about his stock holding in Exxon until the last minute, which appears to be his claim, the proper course would have been to recuse or delay until full disclosure could be made and waiver by the parties obtained if they were so willing. Instead, Feldman rushed to secretly sell his stock and then slammed out his decision favoring oil interests over the judgment of the responsible administration agency and the health of the environment for the Gulf of Mexico and the planet earth. This is an atrocious and unsavory set of facts on the part of Judge Martin Feldman and goes far beyond the “appearance of impropriety or conflict”. It is hard to see how a reviewing court, in this case the 5th Circuit, could let this stand.

Which brings us to the second part of the title caption, the conduct of the government lawyers, notably the ever present DOJ. As I intimated in my initial post last Tuesday immediately after Judge Feldman’s opinion was released to the public, the public protestations to the contrary, you have to wonder whether the Obama Administration’s heart is really in defending their six month moratorium. First off, the Perry Masons at the DOJ appear to have violated one of the prime directives of trial lawyers, know your judge. If the DOJ researched Judge Feldman and knew his personal holdings in Gulf oil stocks and dependent interests, they sure did not evidence it or act accordingly. If they did not so research and know and understand Feldman’s conflicts and prejudices, they are incompetent. Either way, there is a serious cloud of questions over the government’s lawyering effort in Hornbeck Offshore Services et. al v. Salazar.

The cloud of questions was already present as of a couple of hours after Feldman issued his ruling. In addition to the aforementioned failure to know and address their judge by the DOJ, there was the issue of how the responsible lawyers for the government permitted briefing to be submitted in Interior Secretary Ken Salazar’s name misrepresenting the nature of the concurrence of the panel of seven experts that Feldman used to excoriate the government. As I explained in the earlier post linked above, that should not have been used as the basis Feldman creatively and manipulatively used it for; nevertheless it was flat out bad, if not incompetent, lawyering by the DOJ to not clean that up before arguing as their centerpiece in defending against Plaintiff Hornbeck et. al’s attack.

But from almost the second Fedman’s decision was issued, the issue of his conflicts was percolating as described above, and getting stronger and more egregious by the day. With this knowledge in the public sphere at least substantially by the night after Feldman’s decision, the government nevertheless did not even mention it as a ground in their attempt to stay Feldman’s ruling at the district court level when they filed their motion to stay at the district court level late the following day. That motion was in front of Feldman himself, so maybe you could rationalize the government not raising it at that point (although I would have posed the motion to stay to the chief judge for the district and included the conflict as grounds for relief were it me).

Having predictably received no relief in their lame request for stay from Feldman, the judge who had just hammered them (not surprising), the government put their tails between their legs and made preparations to seek a stay from the 5th Circuit. Surely the government would forcefully argue the glaringly obvious egregious appearance of both conflict and lack of impartiality once they were free of Feldman and in the Fifth Circuit, right? No, no they didn’t.

When the government filed their motion for stay in the 5th Circuit mid to late day Friday June 25, a full three days after getting hammered by oiled up Judge Feldman, and after Feldman’s most recent 2009 financial disclosure had even started being released to the general public (as evidenced by the literally damning piece on it Rachel Maddow did Friday night), the government STILL did not avail themselves of the glaringly obvious argument of conflict by Feldman. Nary a peep from the fine lawyers at the DOJ on one of the most stunningly obvious arguments of judicial bias in recent memory. Furthermore, the legal eagles at the DOJ and DOI failed to effectively address and contradict Judge Feldman’s reliance on the case of Motor Vehicle Manufacturers Association V. State Farm Insurance, 463 U. S. 29 (1983), which Feldman contorted and misapplied to wrongfully reach his result (I will likely come back to the absurdity and contorted error in Judge Feldman’s decision in this regard at a later date).

Feldman was required by both statutory and ethical considerations to recuse himself; at a absolute base minimum to disclose his appearances of conflict on the record; but he did neither. Any competent standard of lawyering would mandate the government to raise the issue if they are going to competently fight Feldman’s ruling; but they have not, and they have engaged in other consistently questionable lawyering on this case as well.

The public ought to be asking what in the world is going on here. On all fronts.


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 if it is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law”. And the general standard in appellate courts on administrative reviews on abuse of discretions claims is that ANY relevant evidence in the record below that could support the decision is sufficient and it must be upheld.

Shockingly, Judge Feldman then goes on, in pages 18-20 to delineate, in fine detail, just such a “rational connection” that more than constitutes a sufficient basis for the agency decision in this matter:

Of course, the present state of the Administrative Record includes more than the Report, the Notice to Lessees, and the Memorandum of Moratorium. It includes a great deal of information consulted by the agency in making its decision. The defendants have submitted affidavits and some documents that purport to explain the agency’s decision-making process. The Shallow Water Energy Security Coalition Presentation attempts at some clarification of the decision to define “deepwater” as depths greater than 500 feet. It is undisputed that at depths of over 500 feet, floating rigs must be used, and the Executive Summary to the Report refers to a moratorium on drilling using “floating rigs.” Other documents submitted summarize some of the tests and studies performed. For example, one study showed that at 3000psi, the shear rams on three of the six tested rigs failed to shear their samples; in the follow up study, various ram models were tested on 214 pipe samples and 7.5% were unsuccessful at shearing the pipe below 3000psi. How these studies support a finding that shear equipment does not work consistently at 500 feet is incomprehensible. If some drilling equipment parts are flawed, is it rational to say all are? Are all airplanes a danger because one was? All oil tankers like Exxon Valdez? All trains? All mines? That sort of thinking seems heavy-handed, and rather overbearing.

The Court recognizes that the compliance of the thirty-three affected rigs with current government regulations may be irrelevant if the regulations are insufficient or if MMS, the government’s own agent, itself is suspected of being corrupt or incompetent. Nonetheless, the Secretary’s determination that a six-month moratorium on issuance of new permits and on drilling by the thirty-three rigs is necessary does not seem to be fact-specific and refuses to take into measure the safety records of those others in the Gulf. There is no evidence presented indicating that the Secretary balanced the concern for environmental safety with the policy of making leases available for development. There is no suggestion that the Secretary considered any alternatives: for example, an individualized suspension of activities on target rigs until they reached compliance with the new federal regulations said to be recommended for immediate implementation. Indeed, the regulations themselves seem to contemplate an individualized determination by authorizing the suspension of “all or any part of a lease or unit area.” 30 C.F.R. §250.168. Similarly, OCSLA permits suspension of “any operation or activity . . . pursuant to any lease or permit.” 28 U.S.C. §1334(a)(1). The Court cannot substitute its judgment for that of the agency, but the agency must “cogently explain why it has exercised its discretion in a given manner.” State Farm, 463 U.S. at 48. It has not done so.

So, in short, Feldman correctly sets the standards he must follow in his review, and then blows by and around every one of them. Feldman in one breath, and out of one side of his mouth says “the Court cannot substitute its judgment for that of the agency” and then in the next breath, and talking out the other side of his mouth does just that. Feldman may not agree with the basis for the administrative action here, he may not like it, but it is simply unfathomable that he can say there is no supporting evidence whatsoever such that there is no “rational connection” of the agency decision to the facts. It is simply absurd.

So, and I really do not like asking or suggesting these kind of questions, ever, but here it has to be done. What else could have been behind this bunk decision? Well, for one, Judge Feldman’s disclosures indicate he is invested in and tied to Transocean and Ocean Energy concerns, among others, which certainly ought to raise a red flag. The other question I have is whether or not the government’s attorneys or staff gave some informal clue to the court that they would not be upset in the least if the court were to rule against them. There are lots of ways to accomplish this and, yes, it does occasionally occur. I have no idea or evidence that is the case here; but this is simply an inexplicable decision to the best of my experience. Something funny happened on the way to the forum, that is for sure.


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 address.

Specifically, a recent Wall Street Journal account indicates that BP altered the design of the Deepwater Horizon well even up to five or six days before the rig exploded. And one of these design decisions, according to drilling experts cited in the Journal, could have left the well more vulnerable to the blowout that occurred April 20.

Also, a Washington Post report cites sources including a BP official saying that sometime during or after the recent abortive top kill operation, new damage was discovered inside the underground well. Some of the drilling mud that was forced into the well was moving sidewise into rock formations, sources told the newspaper.

If the sourced information is accurate and mud leaked out the side of the well casing, oil and gas likely are leaking beneath the seafloor as well, according to Professor Ian R. MacDonald, an oceanography expert at Florida State University who advised my staff.

Both of the published accounts, then, raise serious questions. Please address these accounts and provide my staff with any and all information and documents regarding the following:

· The discovery of breaks or leaks in the well casing beneath the seafloor;
· Records of any monitoring BP is undertaking of the Deepwater Horizon wellbore for structural integrity;
· Records of any monitoring of the seafloor surrounding the Deepwater Horizon well, including any geological or geophysical information showing changes in the formations within the proximity of the Deepwater Horizon well;
· Records reflecting whether any oil, natural gas, or residual drilling mud might be migrating to the seafloor beyond the boundaries of the casing, including any analysis of how this might impact the drilling of two relief wells or other methods to mitigate the flow of oil;
· All documents related to BP’s casing strategies for wells in the Macondo prospect.

Thank you in advance for your prompt response.

Sincerely,

Bill Nelson

The first of the two articles Nelson relies on in his June 2 correspondence to BP is from the Washington Post on May 31, 2010. After noting that drilling experts were afraid the failed “Top Kill” attempt by BP, which involved shooting drilling mud down through the heavily damaged blow out preventer (BOP) and into the well “might have done further damage to the well”, the Post article stated:

Sources at two companies involved with the well said that BP also discovered new damage inside the well below the seafloor and that, as a result, some of the drilling mud that was successfully forced into the well was going off to the side into rock formations.

“We discovered things that were broken in the sub-surface,” said a BP official who spoke on the condition of anonymity. He said that mud was making it “out to the side, into the formation.” The official said he could not describe what was damaged in the well.

Therein lies the issue at the heart of the issue regarding the lack of well integrity; with the Post citing multiple (if some unnamed) sources confirming the well casing was completely breached to such an extent that, when the Top Kill attempt was made, they lost drilling mud out through the breached casing, well walls and into the surrounding rock formation. Now the other thing I find absolutely fascinating about this Washington Post article in the discussion of Dr. Steven Chu and the Department of Energy (DOE) tucked in toward the end:

“At the end of the day, the government tells BP what to do, and at the end of the day, we will hold BP accountable for all of this,” she said.

She also sought to portray the administration as in charge and engaged. She said an administration “brain trust” led by Energy Secretary Steven Chu urged BP to stop adding pressure to the well through the top-kill maneuver because “things could happen that would make the situation worse.”

But she stopped short on CBS of saying that Chu ordered an end to the top-kill maneuver.

Well, Carol Browner may have “stopped short” of saying that Dr. Chu and the DOE were the ones who ordered the premature termination of the ill fated Top Kill attempt by BP, but it is pretty clear that is exactly what happened.

A decent question is by what mechanism did Chu and DOE come to be so in the middle and calling the shots on the Top Kill operation? Not that DOE has no interest, but MMS/Department of Interior are the lessors, and generally the well operation authority, for the government for this area of the Gulf; why is DOE micro-managing well operations? A copy of the actual BP lease for the Macondo Well at Mississippi Canyon 252 is here. And who else from DOE beside Steven Chu was tasked to this “brain trust” and calling shots for the BP Macondo catastrophe reclamation effort? What information and evidence regarding the compromised and blown state of the Macondo Well are they still withholding from the public? Oh, and another thing, under the terms of the lease, BP was, and is, supposed to be providing weekly reports, well logs and other information to MMS. Where is all that information, and why is none of it, apparently, available to the public?

The Wall Street Journal article Nelson cited only reinforces the the above facts, issues and questions, but also gives a view of how rickety the BP casing work was on its Macondo well, why there was an almost immediate blowout and why it is a given there is little, if any, integrity of the well bore:

By April 14, when BP filed the first of three permits that would later be amended, the London-based oil company had already faced many problems with the well, including losing costly drilling fluid and fighting back natural gas that tried to force its way into the well. The problems had caused BP to use eight pieces of steel pipe to seal the well, rather than the planned six pieces. The permit filed on April 14 dealt with the eighth and final section, which hadn’t yet been installed in the well.

BP had hoped to get a 9 7/8-inch pipe—big enough to handle a lot of oil and gas—into the reservoir. But for the final section, the largest pipe they could fit was a 7-inch pipe. The company had to decide whether to use a single piece of pipe that reached all the way from the sea floor down to the oil reservoir, or use two pipes, one inside the other.

The two-pipe method was the safer option, according to many industry experts, because it would have provided an extra layer of protection against gas traveling up the outside of the well to the surface. Gene Beck, a longtime industry engineer and a professor at Texas A&M University, said the two-pipe method is “more or less the gold standard,” especially for high-pressure wells such as the one BP was drilling.

But the one-pipe option was easier and faster, likely taking a week less time than the two-pipe method. BP was spending about $1 million per day to operate the Deepwater Horizon.
……
At 9:54 a.m. on April 15 BP filed another permit informing the MMS of a correction. Rather than using a 7-inch-wide pipe the whole way, it planned to run a tapered pipe that was wider at the top than at the bottom. This was approved by the MMS seven minutes later.

Then, at 2:35 p.m., BP filed another revision. This one informed the MMS that it had “inadvertently” omitted mention of a section of pipe already in the well. Four and one-half minutes later, MMS approved this permit also.

Last year, the MMS floated a proposal to require all companies to “document and analyze” all major changes. BP responded during a comment period that the proposed safety rules were unnecessary.

Less than five days and a whole lot more warning signs later, the Macondo well had blown, the Deepwater Horizon rig had exploded and was on fire and the biggest environmental disaster in American history was well underway. And now, 55 days later, and a series of ever more destructive and futile attempts to stanch the flow of hydrocarbon from the mouth of the Macondo, we stand with a well head leaking more than ever into the waters of the Gulf of Mexico and its fragile ecosystem. Not to mention serious concerns as to whether the oil and gas pollutants are also seeping up from the immediately surrounding sea floor.

To return to the original issue of this post, it appears quite clear Florida’s Senator Bill Nelson was on very solid ground with his statements about the compromised state of the Macondo well casing and well bore walls, there is a record of everyone from BP officials to government officials to drilling professionals to outside experts agreeing on the substantial loss of well integrity. The only part of the well that appears to still have any known integrity is the cement collar immediately below the well head, and there is little reason to believe even that will necessarily remain intact under the circumstances.

The only question at this point whether or not there has been seepage or leakage detected from the sea floor surrounding the Macondo well head as suggested by Senator Nelson and Professor MacDonald and, if so, to what extent. Senator Nelson and the public are entitled to answers from BP, and for that matter from the Obama Administration and its officials, to the material and germane questions raised in Nelson’s June 2 letter to BP, and they are entitled to them immediately. Lastly, the Obama Administration, the DOE and its head Steven Chu, and BP should all explain exactly what role each played in the ill fated Top Kill and Junk Shot operations, and why the DOE, and through what agents, was so centrally involved in the Top Kill/Junk Shot and what damage they caused to the Macondo well structure in the process.


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.

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Originally Posted @ https://www.emptywheel.net/environment/page/7/