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Deepwater Drilling Moratorium Version 2.0 July 14, 2010

Posted by Jamie Friedland in Offshore Drilling, Politics.
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Last month, as most of you know, the Obama administration’s first deepwater drilling moratorium in response to the ongoing BP oil spill was overturned in a logically unsound and ostensibly political decision by U.S. District Judge Martin Feldman.

This week, Secretary of the Interior Ken Salazar announced a second moratorium on new deepwater drilling in the Gulf of Mexico through November 30th.  It is designed to address the “concerns” raised by Judge Feldman (download here).

I have said this before, but it must be repeated in any discussion of a deepwater drilling moratorium:

-Fact: We do not yet know what caused the blowout that sank the Deepwater Horizon rig.

-Fact: We do not have adequate prevention or containment methods for a deepwater blowout, so a massive oil spill is guaranteed if a blowout occurs.

-Fact: A massive oil spill is unacceptably destructive.

-Conclusion: Deepwater drilling must be halted AT LEAST until we know how to prevent and/or recover from deepwater blowouts.

This, in and of itself, ought to sufficiently justify a moratorium.  However, without addressing this issue, Judge Feldman somehow found the following items troubling enough to take the extreme measure of overturning the moratorium:

The original moratorium alluded to but did not explicitly describe the devastation caused by deepwater blowouts.  Judge Feldman did not think the moratorium followed logically from the 30-day safety report on which it was based.

The original moratorium covered oil rigs drilling in more than 500 feet of water.  Judge Feldman felt this depth-based cutoff was arbitrary (it’s not – in Feldman’s own words, it is “undisputed” that to drill beneath that depth, floating rigs are required to conduct the more dangerous, deepwater drilling).

The oil industry has also cited a bogus job-loss argument that I refuted in my original defense of such a drilling moratorium.  Yes, temporarily halting drilling does temporary reduce the number of drilling jobs available.  But when one considers the job loss beyond the oil industry as a result of oil spills (in nature-driven sectors such as fishing and tourism), it is clear that oil spills destroy far more jobs than a temporary halt in drilling.

This new moratorium addresses Judge Feldman’s stated concerns.

First, it essentially makes the case I have made above: it cites the oil industry’s inability to identify the cause of and thus prevent another blowout of this type.  It catalogues the utter inadequacy of every oil company’s cleanup and containment procedures in the event of a deepwater blowout.  It spells out what the rest of us already know.

Second, it removes the depth-based determination of which wells must halt their drilling.  Instead, this moratorium applies only to oil rigs “using subsea blowout preventers (BOPs) or surface BOPs on a floating facility” regardless of depth.

In regard to the scope of the moratorium, this different language appears mainly to address Feldman’s flimsy yet prohibitive criticisms of the original moratorium; it seems that the moratorium will still apply to the same 30 or so deepwater rigs currently in the Gulf.

It is true that BP was operating its rigs more recklessly than others in the oil industry.  Interestingly enough, one oil industry group (that usually spends its resources on important things like funding climate denial) has turned its guns inward on BP as the rest of the industry tries to distance itself from BP.  They released the graphic below detailing BP’s shortcomings:

BP was extra reckless with the Deepwater Horizon well, but deepwater drilling has intrinsic risks that cannot be fully negated. Click for larger.

But even the oil industry conceded during Congressional testimony that the risks of deepwater drilling cannot be avoided:

“When these things happen, we are not very well equipped to deal with them, and that’s why the emphasis is always on preventing these things from occurring.” -Exxon CEO Rex Tillerson

For the first time in my life, I agree with Rex; that, in one sentence, explains why the drilling moratorium is in place.

Some members of the presidential commission investigating the oil spill have concerns about the economic impacts of the moratorium and have changed their minds to oppose it.  However, until I hear a response to the three facts and conclusion laid out at the beginning of this post, I will support a moratorium.

Commission co-chairman Bob Graham compared the situation to Boeing’s treatment of its fleet when a defect was discovered in the cockpit glass of 1,200 planes. “They didn’t wait until all 1,200 had been examined to release the first one,” he said.  He feels that because there are only 36 or so rigs in question, we should simply be able to inspect each one, and allow them to continue drilling if and as soon as they pass inspection.

This is not an analogous situation.  The Boeing technicians knew what they were looking for; we don’t. Until you have diagnosed a problem, you cannot fix it.  An inconclusive doctor’s visit does not ipso facto cure an undiagnosed disease.

Until we know what happened, a drilling moratorium is the right move.  That’s why the European Union’s top energy minister has called for a similar moratorium on deepwater drilling as well – pending the results of an investigation of the Deepwater Horizon accident.

We cannot skimp on safety precautions just because the oil industry has a stranglehold on the Gulf economy.  Whatever economic losses may accompany a halt in drilling are still BP’s fault.  If BP is compensating fishermen who not work as a result of their recklessness, they should be compensating their own employees who cannot work because of their recklessness.

The oil industry is using its drilling jobs as leverage to threaten us into prematurely lifting our moratorium.  It is perverse to cave to their demands before we have even stopped this ongoing catastrophe.

Check out this post at Grist that gives some scale to the cleanup effort.

Deeply Flawed Ruling Overturns Deepwater Drilling Moratorium June 24, 2010

Posted by Jamie Friedland in Offshore Drilling, Politics.
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***UPDATE: Rachel Maddow has reported more information about Judge Feldman’s oil-related investments here.***

On Tuesday, Judge Martin Feldman granted a preliminary injunction brought by the oil industry against the Obama Administration’s 6-month moratorium on floating offshore drilling in the Gulf of Mexico.  That ruling lifts the drilling ban.

First of all, it is significant that Judge Feldman has reported extensive investments in the oil industry including both Halliburton and Transocean. Shockingly enough, his ruling does not read like it was penned by an impartial arbiter.  He uses phrases like “the government admits that the industry provides relatively high paying jobs” (p. 5-6).  Like that has anything to do with the safety of offshore drilling.

In describing the Deepwater Horizon disaster, Feldman even uses the exact same analogy trotted out by conservative pundits; “Are all airplanes a danger because one was?” (p. 19).  He also adds a few more analogies, including my personal favorite: “[Are] all tankers like Exxon Valdez?” (p. 19).  YES, FELDMAN, ALL THE SINGLE-HULLED TANKERS IN THE WORLD ARE JUST LIKE EXXON VALDEZ.  That’s why we’ve switched [embarrassingly slowly] to using double-hulled tankers!

Judge Martin Feldman. One of the 37 out of 64 active or senior judges in key Gulf Coast districts that have ties to the oil and gas industries.

Having read Feldman’s 22-page ruling, I am less than compelled by his arguments.

As I explained in my earlier defense of the moratorium, the logic for temporarily suspending deepwater drilling operations is very clear:

-Fact: We do not yet know what caused the blowout that sank the Deepwater Horizon rig.

-Fact: We do not have adequate prevention or containment methods for a deepwater blowout, so a massive oil spill is guaranteed if a blowout occurs.

-Fact: A massive oil spill is unacceptably destructive.

-Conclusion: Deepwater drilling must be halted AT LEAST until we know how to prevent and/or recover from deepwater blowouts.

Nobody has presented a counterargument to this logic.  This ruling does not contain one.  I don’t believe that one exists.

The oil industry and indeed Judge Feldman argue that the moratorium is a punitive action against innocent oil workers and that it would cause excessive job loss.  This is false.   Judge Feldman writes:

“Oil and gas production is quite simply elemental to Gulf communities” (p. 6).

As nice as that non sequitur would look on an oil billboard, all that says is that these communities need to diversify.

Employment has nothing to do with the justification for this moratorium. Even if it did, I have shown that blowouts such as this cause far more job loss in sustainable industries such as fishing and tourism than the moratorium would temporarily cost the drilling industry.

I find further faults in Judge Feldman’s ruling.

From a legal perspective, the Outer Continental Shelf Lands Act instructs the Secretary of the Interior to prescribe regulations,

“for the suspension or temporary prohibition of any operation or activity, including production…if there is a threat of serious, irreparable, or immediate harm or damage to life (including fish and other aquatic life), to property, to any mineral deposits (in areas leased or not leased), or to the marine, coastal, or human environment.” (p. 7-8).

This oil spill meets EVERY ONE of these conditions, ANY ONE of which justifies a moratorium.

Now, that same piece of legislation also preserves the right of any person “having a valid legal interest which is or may be adversely affected” by such regulations to sue to stop them (p. 8).  But those adversely affected workers do not make our oil rigs any safer or in any way reduce the threat that validates the moratorium.  If they have suffered financial burdens, make BP and friends compensate them.  Case closed.

The Administrative Procedure Act cautions that an agency action may only be overturned if it is “arbitrary” and “capricious”.  Lo and behold, Judge Feldman found this moratorium both arbitrary and capricious.

This moratorium is anything but arbitrary and whimsically impulsive.

Feldman contends that the government did not examine alternatives to the moratorium.  But until we know what caused the spill, there is no other effective preventative measure than not drilling (aside from blindly hoping it doesn’t happen again before we figure out what happened, but that’s not what I consider “effective”).

Feldman explains his ruling with the contention that the MMS report outlining the proposed drilling reforms “makes no effort to explicitly justify the moratorium: it does not discuss any irreparable harm that would warrant a suspension of operations” (p. 4).  Seriously Feldman?  Are you joking?  Have you read the news in the last two months?  You live in Louisiana for crying out loud.  Oh! I know, check the performance of your oil stocks.  Notice anything different?  Ya, something big happened.  It has consequences.

Feldman goes on to condescendingly demonstrate Secretary Salazar’s “pattern” of implying the catastrophic effects of deepwater drilling without explicitly stating them.

Instead of explaining the most convincingly implied point I have ever come across, I will take this moment to explicitly proclaim Judge Bubby Boy either decidedly dim or of integrity as oily and compromised as a deepwater blowout preventer.  Take your pick.

The points of contention continue.

Feldman repeatedly refers to the Administration’s “blanket” moratorium on offshore drilling.  If you’ve been following the oil spill, you may recall an earlier “mini-scandal” when the moratorium was announced: Secretary Salazar assembled a panel of experts to review the proposed safety reforms.  Those experts approved  – among many other reforms – a six-month moratorium on exploratory wells deeper than 1000 feet.  The final report proposed a six-month moratorium on exploratory wells deeper than 500 feet.  Everyone freaked out about DOI’s “blatant misrepresentation” of the experts’ recommendations (of which the moratorium was a small fraction).

Now, aside from sounding so far from impartial as to seem personally offended by these events, Judge Feldman wrote:

“[Eight of the experts] have publicly stated that they “do not agree with the six month blanket moratorium” on floating drilling.  They envisioned a more limited kind of moratorium, but a blanket moratorium was added after their final review, they complain, and was never agreed to by them.  A factor that might cause some apprehension about the probity of the process that led to the Report.” (p. 3)

First off all, that last sentence sounds like the script for a Fox News anchor.  My complaint here is for those experts that oppose the moratorium as well: just what kind of moratorium would you propose?  500 feet is the switchpoint between rigs that rest on the ocean floor and floating rigs.  That is, in Judge Feldman’s own words, “undisputed” (p. 18).

The oil industry (in this case, including Judge Feldman) isn’t angry that the Department of the Interior changed the moratorium depth by 500 feet.  They’re angry that it was implemented at all.  People talk about this “blanket moratorium” as if Obama tried to stop all offshore drilling.  In fact, he attempted to do nothing of the sort.

Feldman writes that he “is unable to divine or fathom a relationship between the findings and the immense scope of the moratorium” (p. 17).  Recurring oil spill delusion aside, “immense scope?”  Let’s look at what we’re talking about here.

The term “blanket” moratorium by itself is misleading.  The moratorium applied only to floating oil rigs drilling exploratory wells in depths deeper than 500 ft.  Existing production at those depths continued unaffected.  Shallower offshore drilling (the vast majority of offshore drilling) was unaffected.  The moratorium only applied to 33 oil rigs out of the ~4500 currently drilling in the Gulf!

How much more limited could the moratorium get? Should it only apply to deepwater wells owned by BP?  Only deepwater wells cemented by Halliburton? Only deepwater wells operated by Transocean rigs?  How about only those deepwater rigs that are about to explode and sink?

WE DON’T KNOW WHAT CAUSED THE BLOWOUT; how could we possibly refine the moratorium further? “Immense scale?”  This is the loosest-weave “blanket” moratorium in history.

Judge Feldman himself wrote that, “It is well settled that “preliminary injunction is an extraordinary that should not be granted unless the party seeking it has clearly carried the burden of persuasion” (p. 13).  That has not happened.  Yet Judge Feldman today rejected the government’s appeal to his Tuesday ruling. In doing so, he refused to delay his lifting of the drilling moratorium.    Why? For “the same reasons” given in his prior ruling. God bless America.

Full list of oil spill questions and answers here.

Why the Drilling Moratorium Makes Sense June 9, 2010

Posted by Jamie Friedland in Congress, Media, Offshore Drilling, Politics.
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-Fact: We do not yet know what caused the blowout that sank the Deepwater Horizon rig.

-Fact: We do not have adequate prevention or containment methods for a deepwater blowout, so a massive oil spill is guaranteed if a blowout occurs.

-Fact: A massive oil spill is unacceptably destructive.

-Conclusion: Deepwater drilling must be halted AT LEAST until we know how to prevent and/or recover from deepwater blowouts.

We have instituted a 6-month moratorium on deepwater drilling in this country.  Makes sense, right?  Well politics take no heed of logic, and this drilling moratorium has plenty of critics, many of whom live right on the Gulf Coast:

“…the administration’s deepwater moratorium is a major mistake. Simply put, it will cost us more jobs and economic devastation than the oil spill itself.” -Sen. David Vitter (R-LA).

No, David, it won’t (read on for proof).

Texas-based Anadarko Petroleum Corp., one of the world’s largest independent oil exploration and production companies, announced that it is closing 3 of its exploratory wells in the Gulf and moving the rigs to drill elsewhere.  Other companies are following suit.  And that is strengthening the moratorium critics.

You read that correctly: Oil companies are successfully creating political leverage against the moratorium on the oil industry.  And their political contributions are paying off.

Oil state politicians are attempting rhetorical acrobatics as they decry the oil spill and renounce the drilling moratorium in the same breath.  I would say they were walking a fine line if such a line existed, but one cannot rationally rail against and advocate for the same industry simultaneously.

That being said, here are their arguments:

“Shutting down the outer continental shelf, all that’s going to do is raise energy prices and cost American jobs,” Rep. Joe Barton* (R-TX).

*Barton is quite possibly the most scientifically challenged member of our legislature now that Ted “Internet = A Series of Tubes” Stevens has…“retired.”

The last thing we need is to enact public policies that will certainly destroy thousands of existing jobs while preventing the creation of thousands more.”  Gov. Bobby Jindal (R-LA).

In my opinion, the LAST thing we need would be to go through this ordeal again.  Or potentially even at a second site concurrently before we cap this first one.  But that’s a risk Bobby is willing to take.

Some even argue that we need the drilling jobs now more than ever because the fishing industry is dead.  To them, I would say that the enemy of your enemy may be your friend, but the problem of your problem is not your solution.

Now, the first argument, oil prices/energy security, is just false.  As I’ve previously explained in more detail, U.S. offshore oil reserves are so insignificant compared to world oil production that we cannot affect supply-side prices (which are determined on the global market) by more than a few cents if even that.

An energy consultant estimated that the moratorium could reduce domestic oil production by 80,000 barrels per day in 2011.  That may sound like a lot on its own, but not when compared to the 19,498,000 barrels of oil we consume everyday.  Bear in mind, this moratorium applies to deepwater drilling only.  We are talking about up to 33 deepwater rigs leaving from among the approximately 4,500 total rigs currently in the Gulf.  This argument does not hold any oily water.

So what about the second argument – jobs?  Conservatives are gleefully pushing this point on account of our sluggish economy, but they are doing so in a decidedly dishonest manner.

It takes a remarkable amount of self-imposed tunnel vision to view such a massive catastrophe through the single lens of employment.  But if you’re going to do it, you have to include the whole picture.  This moratorium was not imposed out of arbitrary spite.

Yes, offshore drilling creates jobs.  You know else does?  Fishing and tourism.  Offshore drilling has at least temporarily destroyed these sustainable industries in the Gulf region.

Halting deepwater drilling for 6 months may cost 40,000 jobs around the Gulf.  Louisiana will be hardest hit, so let’s take a look there:

The moratorium could cost Louisiana 20,000 jobs if all the deepwater rigs currently off its shores leave.  Ok, but many jobs did deepwater drilling cost the fishing and tourism industries?  There are 13,000 commercially licensed fishermen in Louisiana, not including deck hands and crew.  None of them can work.  Louisiana’s nine coastal parishes supported nearly 15,000 tourism-related jobs.  Do you know anyone planning any trips to coastal Louisiana right now?  I sure don’t.  So that’s well over 28,000 jobs within just Louisiana that are likely gone for at least immediate future because of this oil spill (as promised above, this proves Sen. Vitter is wrong,).

Tourism in the Gulf region is responsible for more $100 billion annually, or roughly 46% of the Gulf economy.  Even more is generated through fishing, both recreational and commercial; the Gulf of Mexico accounts for more than 50% of U.S. recreational fishing and 40% of the seafood harvested in the contiguous U.S. (including 85% of our shrimp and 60% of our oysters – but most of the seafood we eat is imported).

Unlike temporary, one-time oil revenues, the billions generated by fishing and tourism can be relied upon to sustainably support families along the Gulf year after year after year.  But not if the beaches are covered in oil, and not if the fisheries are poisoned or destroyed altogether.  Thanks to offshore drilling, all the jobs that generated all that money are threatened.

The oil industry is fond of touting the one-time benefits of its extractive drilling while completely ignoring the recurring, sustainable benefits of the industries jeopardized by drilling.  In 2007, President Bush decided to reopen Alaska’s Bristol Bay to offshore drilling (it was protected in the aftermath of the Exxon Valdez spill).  Industry spokespeople and their congressional allies explained that opening the bay offered compelling arguments both financially and for energy security.

I have previously explained how offshore drilling helps only oil companies, not America, and does not improve our energy security.  So let’s look at the financial argument: opening the Bay offered an estimated $8 billion in oil – over the next 20 to 40 years.  Meanwhile, sustainable fishing in that area brings in $2.2 billion ANNUALLY.  In just 4 years, fishing in Bristol Bay generates more money than decades of drilling there would.  And as BP is vividly demonstrating, that fishing is threatened by offshore drilling.  (Obama restored protection to Bristol Bay as part of his offshore drilling plan in April.)

Why would we trade sustainable revenue for one-time drilling that threatens that sustainable future?  Because it enriches oil companies that spend millions on lobbying.

By now you have probably heard some of the metaphors conservatives are using to [mis]characterize the moratorium:

Halting air travel because of one plane crash. –Sen. Vitter (R-LA).

Halting car production because of a 100-car pile up. –Lee Hunt, President of the International Association of Drilling Contractors.

You get the idea.

I’ll respond to ridiculous analogies with a ridiculous hypothetical: During World War II, the U.S. economy was as close to full employment as is likely possible.  We set historic lows for unemployment (~1% in 1944) that we will probably never reach again.  Was ending WWII wrong?  It caused unemployment to rise.  It cost millions of people their jobs as soldiers and workers in war-related industries.  Should we start World War III now?  It would solve our persistent unemployment problem (in more ways than one).  This argument makes sense if all you care about is employment.

Even ignoring the environmental devastation, the jobs argument for offshore drilling is not compelling if you consider even the broader jobs situation.  In some situations, there are other valid considerations beyond local job loss in one sector.  This is one them.

Besides, if we pass a climate bill, we’re going to need a lot of people to help build wind turbines and install solar panels.  Many of those wind turbines will likely go offshore…job training programs would be an appropriate component of either a Gulf recovery package or the climate bill.

In lieu of that, I hear there’s a big clean-up project ramping up in that area.

My research for this post was disheartening.  If you want to know what subtle media bias looks like, read this poor excuse for journalism courtesy of Fox News’ more reputable cousin, the Wall Street Journal.  This article presents startlingly narrow, one-sided coverage of the topic at hand, but most readers will never even know it.  Rupert Murdoch’s media outlets do an unfortunately effective job of dressing up spin to look like news.

To be clear, I do not object to anyone’s right to make this argument.  Or even to present only half of it as they have done.  But to allow such slanted coverage to be considered “fair and balanced” and to parade under the guise of objective journalism is nothing short of intolerable.

Full list of oil spill questions/answers here.