The Demise of BP?
Posted by Robert Rapier on June 5, 2010 - 9:25am
It was about six weeks ago that the man I work for walked into my office and asked what was happening in the world of energy. “This oil leak in the Gulf of Mexico”, I told him, “is going to be a monumental disaster.” He hadn’t heard about it yet, but my views on it at the time were 1). They weren’t going to have an easy time getting the leak stopped; 2). It would drastically shift the debate on offshore drilling.
I published an essay on the spill shortly after it happened in which I predicted that this would be a death blow for deepwater drilling in the U.S. Only time will tell on that one, but it has clearly changed the debate drastically. No longer can drilling proponents point to decades of safe operation. No more can they reassure people that something like this can’t happen. And in that case, what are the chances that new areas off the coasts of Virginia, Florida, or California are going to be opened up to drilling? Slim to none.
The latest news per the Wall Street Journal is that “the Obama administration announced a six-month moratorium on all offshore drilling and canceled exploration lease sales in the Gulf of Mexico and off the Virginia coast.” (That moratorium is on deepwater projects; a temporary ban on shallow-water projects has expired. Update 06/03/09: The moratorium has been extended to include all new drilling in the Gulf of Mexico according to a Minerals Management Service, e-mail obtained by the AP).
And frankly, as someone who has argued that the U.S. needs to invest in more offshore drilling lest we face oil shortages and increasing dependence on other countries for our energy, I can’t make that argument in light of this sort of disaster. We may need drilling, but we also need our coastlines. If the choice is to deal with oil shortages or risk a disaster off the coast of Florida, I am going to vote to live with shortages.
I know that when the shortages occur, we will probably try to drill anywhere and everywhere out of desperation. I believe I understand what the consequences of shortages may look like – hence my support for expanded drilling. But this disaster has convinced me that we have exceeded the depths at which we can safely drill and extract oil. There will always be human error, and there will always be companies willing to take shortcuts. When the consequences are potentially severe, you have to play it safe.
But that’s a digression from the title of this article. When the BP disaster in Texas City occurred in 2005 – killing 15 people and doing a great deal of damage – it was a serious blow to the company’s image. They had carefully crafted the image of a company – now rebranded Beyond Petroleum from British Petroleum – that was moving away from oil. They deeply cared about the environment and were moving the company in a new, greener direction.
Then the explosion happened and the world was focused on BP the oil company. While it wasn’t a death blow for the company, their carefully crafted image vanished in the eyes of many people. For many, they were simply an oil company trying to convince people they were something beyond that.
With the latest disaster – which many have already categorized as the worst environmental disaster in U.S. history – BP’s image has likely taken a death blow. Sure, ExxonMobil survived the Valdez disaster, but it was a stain on their corporate image that will last forever. But unlike BP, ExxonMobil never pretended to be anything other than an oil company. Still, ExxonMobil since then has been viewed by many as the epitome of the greedy, dirty oil company.
The situation that has constantly come to my mind is the Bhopal disaster and the subsequent fallout. For those who are unfamiliar, in 1984 an accident at a Union Carbide plant in Bhopal, India wrought terrible destruction on the population there. The official immediate death toll was 2,259, but it has been estimated that ultimately more than 15,000 people died as a result of the incident.
As a result of this tragedy, Union Carbide’s reputation was destroyed. They would forever be viewed by many as a company with lax safety standards who put profits ahead of lives. They continued to function as an independent company for a number of years as the inevitable lawsuits played out, but this former component of the Dow Jones Industrial Average was ultimately swallowed up by the Dow Chemical Company.
It is hard for me to envision a different fate for BP. While the nature of these incidents is certainly different (I don’t mean to imply that the oil spill is comparable to thousands of people dead in India), BP will now forever be viewed as the worst kind of corporate polluter. That is simply reality. Many people will make it a point to never buy BP products again. Investors who bought into the rebranding – and hung around after Texas City – may have had their fill. There can be no rebranding in the aftermath of this.
BP’s stock has been pummeled in the aftermath of the disaster, and now a criminal probe has been launched. The witch hunt is on, and it promises to keep BP in the hot seat for a very long time. We will be bombarded with anti-BP news for years to come.
In any case, the name BP will not disappear overnight. BP’s refineries, oil rigs, and chemical plants will continue to operate. Union Carbide’s lawsuits took years to work their way through the courts before Dow bought them out. I think the same will hold true for BP. And although BP has long been a source of pride with many Brits, I can only wonder now if in the future we will refer to them as “BP, a subsidiary of ExxonMobil.”
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If I could have only one wish come true it would be that people across the board from Joe six pack to the CEOs of the most powerful global corporations would get the message that everything we do from here on out must be weighed against the potential impact it may have on our natural environments.
The decisions we make can longer be made without taking whole cost accounting into consideration and that can only be done if we base them it on the best holistic scientific knowledge available. We truly must advance to a biophysical based economic system.
Best hopes for a new age of Enlightenment 2.0.
Cheers! I'm heading to see still healthy pelicans on my local East Coast South Florida beach... (Priceless!)
We humans have lived without oil for hundreds of thousands of years and multiple civilizations existed before we had oil and oil burning machines. Can we live without a healthy ecosystem? Is the experiment we are now running of degrading our environment and changing our weather worth it? I think not.
They walked. Most human beings should be field hands.
Are they going to be willing to walk again? Will they settle for an existence in the fields?
What you mean "they" Kemo-Sabe?
Don't you know the Primitivist Creed? Life was simply wonderful in the Good Old Old Days... :-/
LOL! At least the pelicans were ediable then.
Paul did my post say anything about which way of life was more desirable, more fun etc. No. I just indicated the undeniable fact that for several hundreds of thousands of years humans existed without oil. The more we pollute the planet and change our climate the less livable it becomes. We are mammals. We live within certain parameters of temperature, we require a certain mix of gases in the air, we need edible food and we need water that doesn't poison us. If we change the planet so that it no longer can support human life how much oil we can extract is immaterial. Since we know humans can live without oil and we don't know what our experiment with our planet will do it seems the choice would be easy. The equation I proposed is about being alive or not being alive not about primitivist vs. modern western man.
The Denialist Creed seems to be "I want my way of life therefore I will have my way of life".
Yes, they existed, essentially as mere beasts. Beasts have existed for more than 600 million years. So what? If that's the alternative you're propounding, who cares?
PaulS,
Your post seems to take a very prejudiced view of the past. Until you carefully study so-called "primitive" cultures you can't claim what their way of life is/was like. To simply assume that "We have -- [advanced technology] or [the biggest population] or [plasma screen wide TVs] or [insert your favorite superlative here] -- therefore our way of life is best" is to not understand one's own culture or anyone elses. Between lattes and hot showers, there is plenty of stress and distress in modern life - even for those who can afford the lattes. And between bouts of hunger, primitive life offered a powerful and fulfilling connection with the natural world, something that is mostly lost these days. Admittedly, both ways of life inflict great suffering on some people, and afford great joy on occasion. But I wouldn't want to assume that "primitive" means "bad" or "animal-like". (Unless you also are willing to consider that a job working in the pits at the stock exchange is also "animal-like").
Someone else on this site mentioned the Hadza people still living traditional ways in Africa. A casual read of this National Geographic article reveals some perhaps unsettling differences from modern life, but also hints at how big the gulf is between modern culture and this single hunter-gatherer culture. When we can't understand a culture we are in no position to judge it.
You think? Absolutely! I see the advocacy of going back to the past as utterly devoid of both merit and humanity.
Exactly. What sane person, having heard that better things are possible, would choose a ridiculously short life under constant threat of predation, "red in tooth and claw", perpetually on the verge of hunger, with no chance of what is now called human development - save possibly for a self-satisfied tribal chief as seen through the eyes of a hopelessly naïve anthropologist?
Magical mystical outdated twaddle belonging in the furthest corner of the dustiest back room of the most utterly obscure museum.
Ah, yes, the tired silly old argument to the effect that we mustn't accept that it's dangerous to touch hot coals unless we have personally burn ourselves in order to be sure. Fortunately, the world is far too big for us to personally try everything, to live in every culture, in one lifetime, so we needn't worry too much about it.
Paul:
You have read enough of my comments, and others in the same vein, so that you know that, I and many others who participate and read TOD espouse maintaining as much as possible of what makes our lives better, while realizing (though not enjoying the prospect) and acknowledging that the age of oil is going to end. And, that it may happen sooner than later. While I doubt that I will see the worst of it, since I am not a young man, my grandchildren are quite young, and will either suffer or enjoy the future that we bequeath them.
You seem to believe that we can keep our business as usual, growth based, technological civilization. I disagree, and I differ from you in that while I believe that it is possible to keep the medical advances and much of the science that have helped to improve our lot, I also know that we will be going back to a much more 'primative' existence in production and distribution of materials, foodstuff, goods and services. Transportation will be limited somewhat to electrified mass transit and animal power. And I believe that this will happen, not because we want to, but because we will be forced in that direction by need and by new limits.
Ranting about why we are in this condition is no help. Today we face a nearly impossible task, and still we hear the howling morony of the BAU crowd. I agree that the 'good old days' is a myth; things were much less pleasant in the time of my grandparents' youth than they are today. I want to keep from falling all the way back, past even that relatively recent time to the conditions of the dark ages. To do that, we must preserve as much as possible of our knowledge, science and technology as will continue to function in the absence of cheap and easily available energy. Our energies must be invested in this task... in preserving some of the better parts of modernity, and engaging in the necessary triage of the rest.
Best hopes for a wonderful future.
Craig
That article on the Hadza people is excellent. I hope we don't contaminate their culture too much more than we already have.
I wonder if the five guys from "Meet the Natives" will ever recover ;)
One proof of the pudding is that child mortality in the US, while much better than developing countries, has the worst child mortality of any other industrialized country (ie, I'm not counting russia/china which have their own problems). https://www.cia.gov/library/publications/the-world-factbook/geos/us.html. At the other end of the age spectrum - the more industrialized, and supposedly 'better' countries have the highest rates of heart disease; the US is 13th out of 200+. http://www.nationmaster.com/graph/hea_hea_dis_dea-health-heart-disease-d...
So this is a better life? It depends on just what you value.
Beast? My wife has called me that more than once. According to her, it's not a bad thing ;->
We've been "beasts" much longer than not, and I'm not really sure we've changed much. There are beasts I trust much more than humans.
Paul, its not an alternative I am propounding, it is what I believe will happen. You have no power to maintain BAU no matter how much you rant (perhaps a sign you are scared of the future). I have no power to make my predictions come true so please calm yourself, take a deep breath. I am just noting that more and more our choices, if we have any, are extinction or life on a much simpler level. You can debate that. But you cannot debate the fact that humans existed for a long long time without oil. If you think extinction is better than returning to that life that is your right. But extinction of our species is about everyone, not just you.
My dad was born in 1914. Although his father was not poor there were many modern conveniences unavailable to him. I asked him recently if his life as a child was bad (in a discussion about oil). He said emphatically, NO I had a very good childhood.
Please note as well that our Western BAU rests on the backs of people who probably would rather the life of a hunter-gatherer than endless hours in a copper mine (life expectancy 45) or Chinese factory etc. Please carry some thought of the miserable lives that support the life you so desperately cling to.
"Yes, they existed, essentially as mere beasts."
Rome, Athens, Alexandria, The Mayan Cities, The Anasazi Culture..... yep, mere beasts.
I sit in the ruins of the Anasazi and the Fremont, here in the southwest USA. In my opinion, their lives were not at all bad. They made beautiful pots and figures from clay, their structures were simple, but complex at the same time, game was plentiful, but, above all, they knew one another. Chief Washakie, Chief of the Shoshone, lived to be 102 and the quality/best part of his life was before the Reservation. And, the "...mere beasts" have gotten along quite well, arguably better than we sentient humans have.
Best from the Fremont
Yah, but WE'VE got cluster bombs, smart bombs and predator drones. We've clearly separated ourselves from the mere 'beasts' of the past.
Ahh, the shining present, still Red in Truth and Law!
@PaulS
No one is advocating going back to the jungle. Can you not think of any changes that could be made to bring us into sustainability without turning us into caveman? Please. This is real life.
"No one is advocating going back to the jungle."
No one? Really? Some of the advocacy seems to be for large decreases in population to be carried out in far too short a time to be done humanely. Some of it seems rather explicitly to push for primitive agrarianism - or even the awful hunter-gatherer existence lived "for hundreds of thousands of years".
Don't confuse "advocacy" with a simple, pragmatic assessment of the situation. We have a huge civilization in serious overshoot here. Wishes are not going to be very effective in a future that has limited resources and no plans to deal with a cascading economy. Instead, we will be lucky to be able to live with what we get.
The future will find its sustainable levels, of human population, and of species. We are in the process of causing the sixth major die off of species today; our hope is that we can survive. Recognizing facts is not the same as advocating them.
The planet has a carrying capacity for humans that is limited by land, water, and soil, plus the energy to farm, transport and process the food. Your neighborhood market is supplied by large trucks many times in a week; should fuel be unavailable, and deliveries not be made, you will have to live on what you have stored, plus what you can grow, until the nest delivery arrives.
In addition, those goods coming in to that market are being delivered from all over the world. I have heard an average of 1500 miles, though I cannot claim that as a fact. I know much of it comes from overseas today, and much from California, so how far are you from there?
The farms in California, where so much produce is grown, are huge tracts of land, irrigated by a water supply that diminishes each year, and the soil itself is poor. The main reason so much is grown there is that the sunlight is dependable, and they are able to fertilize it, using commercial fertilizers derived from natural gas, and enormous machines manufactured by Catipillar Tractor Company (they are actually tracked vehicles, not unlike tanks). In place of human labor, they use oil. Once grown, they are harvested (some by illegal aliens and Hispanic labor, most by other monster machines), and taken to plants where they are processed, also using water, oil, gas and electrical energy. After packaging, they are transported, again mostly by truck, but also by train (in this country, that means diesel power) to trans-shipment points and finally to the market.
When oil gets short, there will be competition between production of plastics, pharmaceuticals, lubricants and textiles, and of course transportation and all of those tractors and farm equipment. Where do you suggest we make the first cuts? And, if you think, just spread the pain, there will be shortages, and the decision will be, 'who gets the stuff?' How would yuou make that choice?
Let's say that our free market economy makes the choices, and of course the food, plastics and especially the pharmaceuticals go to the wealthy folks... now you have a whole bunch of really hungry, angry people who want to eat. That is where the first culling of the species is going to take place. And, it will continue until either there is a general conflagration consuming all of mankind, or we arrive finally at a sustainable population, with food produced close enough to consumers to be transported there before it spoils. Other goods and products will go through similar permutations of triage.
There are those who believe this will take place on a gradual, multi step basis. Others look for a sudden crash, with civil unrest, local wars and the like. Still others believe another myth - that of technological bliss. "They" will find something, or create something that will make it all better. This, after all, is what we read in our novels, and watch on our televisions, and in our movies, isn't it? The hero always finds a way, and everyone lives happily ever after.
Not.
Best hopes of your happy ever after.
Craig
Son did you ever think that future humans and even current humans may not have a choice. We Americans revel in our choices, but sometimes we blunder into a future without any choice that we like. Midwestern plow boys found themselves with guns in hands headed off to war in Asia and ended up in Japanese POW camps. There they ate bugs and worked in horrific conditions. Some lived. Not a future they expected, and a future with no choice. Likewise some alive today and certainly the coming generations may be walking and working in fields or dying. Will they settle for that? If they don't they will die.
Well since man walked for many thousands of years, it won't hurt him to do it again. He could even learn how to use horses to his advantage. He doesn't have to go back as far as the primitive way of life. He could go back as far as pre-oil agriculture where they used horses to power agriculture machines. Yes, it was slower, but hey, we need to slow down a bit. Trains could take over the tasks that passenger and cargo aircrafts perform now. Face it folks, it's now or never. We need to re-adapt to a slower way of life. It could also be healthier for you in the long run, and your children as well.
As SonofSam, said above they walked.
I know we have talked about it here in the past, I heard someone talking about what Jesus would drive the other day again.
Jesus walked everywhere, and I guess he could of had angels carry him from place to place, The devil did say something very much like that in those famous 3 questions, fall and hte angles will pick you up before hit the dirt. But he said 'Do not put the Lord your God to the test.' So the real thing Jesus would do is Walk. I doubt he'd even had taken the public chariot service in the J'salem public service taxi company.
While we are here, we can walk, but we have horses and mules, and bike taxi, trikes, and loads of human powered or animal powered travel options. We don't even need trains and trucks, if you could get our needs down to a basic level. The only thing we'd need trucks for is hauling those 50 ton stone blocks to the new shrines.
We have this mindset that newer is better, it feeds on itself, because everything gets old about 3 seconds after you get it brand new out of the box ,it can break and get old real fast, just look at kids at christmas to get this drilled in your head.
So the new is better mindset got stuck and the bigger is better got stuck too, and the more is better as well. Now that has lead to the place we see ourselves.
Wrapping our heads around why all these are falsehoods is the hard part. Those of us who have come to realize that our current actions have to change, are doing so, but there is millions if not billions of other people who need to listen to our words and our actions. So I say it can be done, but you have to have a bit more faith in the outcomes.
China and India already have had bike systems, but they changed them to be more like the west. Now the west has to go back to being like them but with the twist that we could build downward, without losing the good things that are in the system now.
I have hopes that movements like Alan Drakes, and folks like Will Stewart and Nate, will help get people to wrap their heads around change for the betterment of mankind, without all the greed that could be involved.
Christians have to have the care and love for their fellow man, just as much as anyone else. Religion and faith is not a bad thing, but if you use it to spread hate, and anger it is. Peace can be had, you just have to work at it, by changing what you think, and telling others to have hope. I am not trying to convert you to be jesus lovers, that is up to you. But my faith tells me I can help my fellow man, get off the streets and be fed and housed everyday of his life, and not be slaves to anyone, not the dollar, not the corporation.
I judge no one, I am friends with all I meet, and I try to help anyone that asks for it. it's even on my answering machine message. But I know that I am just one small voice. That my neighbors wtill have have 3 cars too many, and most water their lawns weekly and wash their cars with city water, and drive just to get coffee or dinner, when they have it at home. Tonnes of things people could change, and not lose to much comfort, and still make it a better place for the rest of the world.
Hopefully BP failing or getting hit this hard, will point people in the right direction. Obama spoke on a time of change, well this is the time we have to Change, or else it will be to late to live as one happy free nation.
Charles,
Hugs,
BioWebScape designs for a better fed and housed future.
"Jesus walked everywhere"
But I thought Jesus rode an ass.
See. There he is.
I like the little kid doing the fist pump.
(I thought we invented that)
That was the way a king entered Jerusalem. I did not enter that because he only did it twice that we know of. Once in mommies belly and once a week before his death. But if you only ride in a car once in your life, does that ruin your anti-car reputation?
Thanks for the photo of the painting.
Did you get anything else I said about how we have to change to make a better world?
Charles,
Hugs,
BioWebScape Designs for a better fed and housed future. With less Fossil Fuels needed.
"Did you get anything else I said about how we have to change to make a better world?"
Yes Charles, I get it. Unfortunatly, deep here in the Bible belt, most Christians I know will let Jesus change their heart (and world view) but not their consumption levels much. Perhaps it's the message that needs to change. In truth, a story that focuses on achieving an ideal afterlife seems to have the opposite effect for many. When someone wrote to our local paper last week urging the kinds of change you speak of, he got this typical response:
"The residents of [our] County will treat the present as a gift, praying.....The future is a mystery."
These are the same folks who worship the "Prince of Peace" yet have voted overwhelmingly for war,and they won't think twice about driving their big SUV or bus to get to the revival, VBS, or for doing the "Lord's Work", so many of us quietly make the changes we see are necessary, with or without supernatural assistance.
I was in Target to pay my bill and had to get someone at the deli to call for a clerk, while there, I spied drinks, promising myself to come back for one.
When I got back there I had to decide and picked V8 over Chocolate milk. As I stood there, I was flipping the bottle about in my hand. Then I thought, why not. I sat the bottle on my head, balancing it, you have to have a striaght back and head high. A father with his two kids pointed me out to them and I smiled almost laughed, Told him in as loud of voice as I could without distrubing the bottle that, I can't laugh. His kids have wide eyes and then it is my turn in line, so I slowly walk forward to pay for it. I get close, feel it slipping and let it drop in my hands.
I told the clerk that I haven't had something balanced on my head in a while, usually it is a 6 foot stave. Last year having my back hurt, was a slow year. My back still hurts, but I can deal with it.
As I was leaving I noticed the kids and father eating at a table, and then noticed something written on their shirts. I got the father's attention, thanked him for the audience and left them alone. But did get to see the message on the shirt.
Lead By Example.
As a Christian I am to lead by example, and you all know I am not a normal christian because of what I say about sustainability and how I try life a low impact lifestyle. I have always been aware that God did not tell us to waste the world. I can't find the quote that many use, of subdueing the world( but remember that Cain was going to have the land curse his efforts, because he killed his brother. ) So I am still not sure the old sayings that you hear, are even in the bible. People are always taking things out of context and misquoting things. So I am mindful of that.
I wish, and pray that other christians were better examples of what they claim is God sending them to do his work, but you and I will have to treat them as if they just need to be reminded that they might not be following Christ. As it says the rain falls on the just and unjust alike, which means, everyone gets a fair shake from God. If they are not showing love to everyone, then they are not following Christ. Now I make mistakes, but I ask for forgiveness from those that I have hurt, it is the only right thing to do.
I push sustainability on my blog and in person to fellow Christians. I know several in my Lutheran church here in town that grow gardens, save money, drive few miles and help the needy. And don't talk about hating others in the world. But it seems to me that we are a rare breed at times. Which saddens me.
So Ghung, if you want to discuss this issue more, email me. Sorry if I might have sounded like I was being snotty.
This is the only planet we have, and we have to live on it just like everyone else, why can't we take care of it? Jesus would thank us for taking care of the place, proving to be good stewards of the gifts he handed us.
So chalk me up as an abnormal christian. You might even give these people my email address and tell them I want to talk to them, maybe they just need to hear it from someone that can talk their talk.
Cheers, and hugs all around,
My tomatoes are 6 feet tall and still growing. And it is hot outside, I am getting tanned now even in the morning.
Charles,
BioWebScape designs for a better fed and housed future for everyone alike.
...and therein, as usual, lies the (priceless!) irony. Only a few people can afford to live within walking distance of an ocean beach; it's a 'positional good'. Or, in southerly climes, there's the heavy cost of repetitive wreckage by hurricanes, with Uncle Sam's unearned largesse covering only so much of it. Most people, if they ever see a beach at all, will see it only as visitors.
A tiny percentage of visitors take the subway to Coney Island, or some such thing. But any of the rest who ever head to a beach will need to drive there, or else fly there, especially if they are the affluent German tourists who keep Florida schlumping along on minimum-wage no-benefits antisocial-hours mcjobs. To afford driving and flying, visitors need a reasonably robust economy, not an economy that's tanked into a Great Depression by ill-considered overreaction. For most people, if they were imprisoned within walking distance of home, the beach could just as well be on Mars.
Oil: can't live with it, can't live without it, can't get it except where there's still some left, can't practicably attain the absolute zero of risk.
If there were only a few of us, we could all live near the beach (and yes, I do live less than a mile from a public beach on the coast of an inland freshwater sea (no pelicans, though...lots and lots of F#$%G geese, however...))
This is the start of the wind-down. We need to reduce population and resource usage. This will mean either cataclysm (keep drilling and flying without any attempt at mitigation) or a more orderly decline featuring shorter lifespans (you die from cancer the first time through, and that heart attack does you in because there is no open heart surgery) and a reduced fertility rate.
The choice is pretty clear. If we try to run BAU to the bitter end, there will be too many people, too many old people, a poisoned resource base, and a totally inappropriate and/or decayed infrastructure.
We can only delay the end of a high-energy culture. We can't stop it. I believe we have to step up to the plate here and find a compromise between mass death later and the inconvenience of smaller families and a shortened lifespan now. If for no other reason, consider that it is going to suck to be old when the crash comes.
There's a pretty good chance that those beaches are going to be oil filled and not tourist friendly...maybe those German tourists will come on an eco-tourist package (perhaps on a tall ship?) and help Fred clean oil off of Pelicans.
Drilling more oil will make things worse.
Lloyd
Well even if we were to consider the US population your statement is false.
BTW I hope you are not holding out Uncle's Sam's largesse, as witnessed in the aftermath of hurricane Katrina as an example, unless you mean for the already wealthy.
If you are trying to suggest that I myself am privileged, I guess compared to vast majority of people in the world I certainly qualify. Though if the bar is the general population of the USA, then I'm no longer so sure.
I became unemployed over a year and a half ago and instead of depending on government largesse I decided to start a small business that has yet to turn a profit.
At present I'm barely making ends meet to pay my bills and the mortgage for a very modest one bedroom condo, I can't afford health care at the moment and I yet I still have to pay child support, etc..etc.. To be clear I'm not complaining, just putting things in perspective.
There are certainly people who are better off than myself who live close to the very beach that I visited this morning. Though having access to that beach and the nearby coral reefs and being able to harvest a nice fish or some lobster, now and then is certainly an added benefit, it's also probably cheaper than psychotherapy and paying for the gym. But I digress!
Here's the facts:
http://www.livescience.com/environment/060718_map_settle.html
Here's a direct link to the population distribution maps of North and South America.
So you can take your positional good to some state where the sun don't shine and where they don't depend on natural resources to survive. Good luck with that. As for me I'll continue trying to eek out a living right here where I am. After all someone's gotta live here and it may as well be me and the people who love this place and would defend it with our lives. Please don't come visit us!
It's quite blindingly obvious from your map that the great majority of the additional North Americans are going to visit the beach, if at all, by traveling there in a vehicle, not by walking there. Even in a coastal city like New York, most will drive or take the subway. The proportion owning or renting beachfront property, or living within walking distance, is small.
Most of the general population does not live in New York City. The proportion living at the beachfront or within walking distance will be even tinier. Observe that the great majority of the North American hotspots in that map are not on the coasts, but are far enough away to require a vehicle to access the coast.
So we really have little factual disagreement here. I don't know where beachfront property would be inexpensive, except where something about the local environment makes it virtually unlivable (such as when it's actually swamp-front property with thick swarms of mosquitos.) Normally it's the province of at least the highly affluent, indeed very much a positional good. (That a person who already lives there might become less affluent for a time and yet be able to hang on doesn't really change the overall picture; one might best not over-extrapolate from personal circumstances.)
P.S. I thought I was snarking about Uncle Sam's largesse, which, after the typical manner of politicians, tends to cost the taxpayers the earth without serving the supposed beneficiaries to anything even approaching the campaigned-upon extent. They always lowball the costs beyond absurdity, and wildly exaggerate the benefits.
Fred, do me a favor. Go to the beach and enjoy yourself. While you are there take loads of pretty pictures of what you see, then load them to a photo sharing site and give us all a link to it, also mail PaulS, a link so he can have some too.
The reason for this is, Only so many people can have a beach, only so many can have virgin forests right out back, only so many can have anything on earth that is good. But we have been givent he tools to share those good things with each other. We can post videos and photos and give talks and do it all online.
Freedom to enjoy is not limited to the kings and rich men any more. We can enjoy in our own homes, when we can't afford to go enjoy in person. Why do we need to have anyone but a few camera crews filming the wilds. Set up cameras all over Yellowstone and leave the humans at home.
They get to watch it in real time in the many many camera spots. Why are we going woa is me, I can't see how it will have a happy ending, gee someone do something? Sad sack and dooming? Can't you understand that you have enough smarts to get up in the morning to go to work, but you seem like you don't have enough smarts to grow your own food, or drive less, or find money saving ideas when you get told you have to work only part time or let go. I am with my brother at times getting frustrated at people for not seeing the moon for all the rockets they have pointing up, in his case. In mine I am frustrated with people who have the tools at hand and don't seem to know that they only have to pick them up to use them.
The internet is here, Cell phones allow people to talk to people half way round the world( only can go half way out, before you start coming back when living on a globe.( mapping experience showed me that, lol)) Why are we saying we can't do it. Can't got no one nowhere, can got the pyramids built. Can got stone henge built. Can got everything that we have ever built, built. If you believen in can't then you were one of those people with the picket signs in Roman times telling the leaders that the Collo see um, was ruining your veiw of the sky, and you can't let that happen. I fugure the protesters got to go to the first games in the place.. LOL.
Fix the problem by doing your part and spreading what you do around to others, use the internet. Make up ads, join photo sharing, get a youtube channel, blog, forum site, etc etc. We just need to think about getting it done and not giving up when it gets hard.
Charles,
Hugs,
BioWebScape designs for a better life, even when it is hard to see a better life ahead, I have cave designs and garden designs.
(( caves either manmade or in the hills can have stable temps all year long, and if designs don't fit your needs I have earth shelter, and even wood frames, brick, stone, and others, just ask, we will get you fixed up. ))
LOL/WTF. I hope you realize that on this philosophy, you don't really need Yellowstone any longer once you've gathered more pictures than anybody can view an a lifetime, which could be easily done through the seasons over just a couple of years. In fact you don't even need Yellowstone at all, just take stock footage and hire a Pixar to expand it. Even better, just have them synthesize movies of the pristinely depopulated arcadian utopia seemingly imagined by a number of commenters.
More seriously, though, I understood everyone discussing this up to now as considering real experience, not some form of TV, even when there was little agreement on anything else... and after all, we haven't got the technology to go swimming or diving in a blog channel... so this must be a new form of what is pejoratively called "techno-cornucopianism" in these parts... thanks, one learns something new every day...
Finally something rational on this subthread. NOTHING will ever be accomplished on the fashionistas' absolute-zero-of-risk NIMBYS-rule-the-world model.
Paul,
I did not want a pixar movie of yellowstone, I wanted to leave yellowstone,( I just picked a big place, there are others places men should tread lightly in the wild world) alone from the crush of human mashing of the wild places.
If I could get my way, I'd Have off limit signs, ala, Arthur C Clarkes vision of Africa in the book( I forget the title) where the father clones himself and raises the kid as his son, and then in the next book, the son does something simular to that. They lived off planet, it has been over 25 years since I read the story. But Africa was wild again. All of Africa was people free.
I'd have places like yellowstone people free, unless on an offical visit., Maybe that way we'd have some virgin places on earth in 20 to 200 years.
That is what I'd do, but since I can't, then you could visit and others could see the place on youtube. As if we don't already do that now.
And you need it because it is an active place, you can't just take one years worth of pictures of yourself and tell everyone that you will be the same in 40 years. DUH!
Natural systems change, but you can keep our messy hands out of the cookie jar if we really set out mind to it.
And this was not the only point I was trying to make, How many people could save going places and wasting gas if they did more things in a low energy use way of thinking. Teaching comes to mind, why bus kids all over creation, when they can have a video conference, with web cams so the teachers know they are watching, getting together once or twice a week. More people doing the stay in town for that confernce in Resort Town X, and just paying for the internet time, not all the flight time and energy wasted.
Oh well, business as usual. I'll do my part and if you don't do yours, not my problem. But I wish you'd think out of the box sometime, if not oh well I can only do so much and most people won't listen to me, so no skin off my nose.
Cheers, When you run out of food, some see me, I'll fix you up.
Charles,
Hugs,
BioWebScape designs for a better fed and housed future.
And what happens if they've weighed the potential impact, decided that losing a year of fishing and tourism once every other decade costs twenty billion a time, so on long-term average a billion a year, whilst the taxes on extracted oil are two billion a year, and so you should feel sorry for the pelicans, strengthen regulation, keep drilling and have a fund for cleaning up the Gulf when things go wrong?
Whole-cost accounting seems to be a way to allow pressure groups to set the cost of things they don't like unviably high in this sort of balance: you can't do accounting if people set the cost of exterminating a small mosquito-eating fish at infinity.
Then it's time for specially privileged know-it-alls to void the decision and impose their own will, since, as know-it-alls, they surely must know best. Indeed, whoever is privileged to pull the "accounting" numbers out of thin air gets to dictate the result according to their subjective and arbitrary personal preferences. You certainly can't be assured of getting the result you might want or anticipate.
Nice piece Robert...thanks. It will be interesting to see if BP re-invents itself. Granted that will take many years. Consider ExxonMobil: they are easily one of the most safety conscious companies I've worked with in recent years. No doubt the Valdez incident played a big part.
In the GWN (Great White North), I've found all the oil majors I've worked with to be safety conscious going back to the late '80's when I started work after university. Matter of fact, as an indoctrinated young adult of the go-go '80's with the engineer can solve and do anything mindset, it was quite a shock to have one's reins pulled back some. Almost popped an Esso electrician once and that was the last time I ever rushed ahead full steam to git 'er dun.
But there are blind spots no matter how conscious and hard they try. My clearest example is how any company will insist staff brave snowy and icy dangerous roads to get to work by eight where they can then begin to work in a safe environment. Or, they'll have all sorts of propaganda posters to "work safe at home", so I guess the interval between home and work is inconsequential? Or, commuting is not "work" and therefore irrelevant?
This speaks to the larger issue of our compartmental way of thinking, and the lack of holistic awareness that is leading us into these situations time and again.
Yes... years ago when I had an interest in a computer business, we had a really big overnight blizzard. The chef (or was it sous-chef) at the restaurant next door got in two or three hours late - and got fired. Lots of people who stopped in for morning coffee and scones, or had an interest in some nearby business, had "chats" with the owner. (Some lived nearby, a few had walked in to work, and a fit young fellow had skied in, so there were witnesses to the local conditions.) After a bit, the guy got un-fired: just not reasonable, although IIRC the owner quite got over it completely. In bigger-company settings, of course, such happy-ish endings are rarer.
OTOH, with ever-snowballing living expenses, many arising from ever more onerous government mandates, we simply can't afford to just shut down all winter long. So the safest feasible thing (not absolutely free of all risk) is to wait a bit until the roads clear or are cleared, and then drive in a car that's properly equipped with air bags and crumple zones. Which is what irks me when glib commenters living in places of eternal summer, such as coastal California, seem to suggest that everyone can and should ride bicycles - and not just when it might be appropriate and reasonably safe (again, not absolutely free of all risk), but also in the rutted winter ice.
One complication, of course, is that the commute is not the company's issue, just as the ice hazard is not the glib commenter's issue. In either case, the costs are incurred by the commuter rather than the boss or the would-be social engineer.
I commute year-round by bicycle in snowy New England. It's quite do-able. In fact I have a set of snow tires for my bike.
People lived and worked in Maine, northern Vermont, Quebec, etc. (winter and summer!) for a couple of hundred years before automobiles and electricity were available.
I posted this comment yesterday on the main TOD thread but it is more relevant here:
I will tell you this. What’s going on above the surface makes this underwater fix look like a kid’s video game. Some of the most brilliant, money and blood thirsty financial minds, the same piranhas that brought you CDOs and CDSs and synthetic CDSs and mezzanine tranches and the Gaussian cupola are circling BP like a sick guppy. They can smell multi-million $$$ bonuses. BP’s protectors are the British government and the poison pill of untold damages. And every BP suit smells the stink of his own fear right now.
Added comment for this post: The only question now is: "When is it safe to eat?" We are watching the (self) destruction of another jewel in the British Empire's crown. British Petroleum will soon be like the East India Company and "The Charge of the Light Brigade" and Khartoum Gordon, a legend, but there will be no Tennyson or Kipling to memorialize its death.
The British Government is no longer Bush Pig's protector. The Gov't sold off its interest decades ago under That Bloody Woman, for a quick profit for HM Treasury.
Bush Pigs is now the creature of The City, who will prostitute themselves for a fee 60/60/24/7/52 + 1 extra day in a leap year.
The only protection is the poison pill of untold damages.
After Chevron's adventures in Ecuador associated with its Texaco asset acquisition, which western oil company would want BP?
Would CNPC want to but the mess? Snigger snigger, TNK???
Funny thing, BP have been brought down by the cost cutting regime under Lord Brown(e) in their US subsidiary.
Tony Hayward for Upper Class Twit of the Year!
And, as I understand it, British pension fund's holdings of BR stock? And what are these pension funds relationship to the British government? Is it BP stock > pension funds' holdings > British government guarantees of pension funds?
Edit: A dog's breakfast?
In theory the pension protection fund is supposed to be funded by levies on pension funds (same way US FDIC is supposed to protect banks using a levy on banks). In practice, if many big schemes go wrong at once that clearly can't work. Who know's what'll happen then? This suggests it won't get backstopped.
http://www.guardian.co.uk/money/2010/jan/12/conservatives-pension-protec...
Most of Harry's post is gobbly-gook, but I have to admit Upperclass Twit of The Year is a good one! Hayward probably wins the "Slamming the car door to wake the neighbour" leg of the race every time. Always an MP favorite.
http://www.youtube.com/watch?v=TSqkdcT25ss
Translation:
Bush Pigs = BP
That Bloody Woman = TINA (if you are Scottish) = Mrs Thatcher The Milk Snatcher
The City = the city of London, the Great whore of Babylon
Etc.
I shall now start channeling william Blake ....
BP = Bull Patties
He stole it from Monty Python. See Twit of the Year on Youtube. I have been saying Tony the Twit for several days on the main comment page.
Yes, that's why I linked to the sketch on You Tube. Pretty sure I lost my virginity to Monty Python, or it might have been Up In Smoke, or maybe Pink Floyd. Regardless, you get the idea of the atmosphere and mindset conditions at the time.
This is an image Financial Times showed on its blog, when talking about the possibility of takeover. (I hope it will show up for everyone.)
The article indicated there were problems involved with any combination one could think of.
My own guess is that Petrochina will see it as an opportunity to pick up reserves around the world that they can set aside for their own use, especially if there are problems in international markets.
Absolutely. Yes. I agree. PetroChina with a little help on the deal from Goldman and/or other US friends. How much has international pressure dissuaded the Chinese when opportunity knocks for oil or other commodities? Anyone in India? Some of their corprorations have been very aggressive.
Reliance is the largest Indian private petrocompany - but they are much smaller than BP.
Coming soon to a gas station near you!
Perhaps they'll call it LOTUS Petroleum.
"BP Plc may have to sell some of its most-valued assets, including a stake in the biggest US oil field, to pay cleanup costs, fines and legal damages from the largest offshore spill in American history.
The 26 percent stake in Prudhoe Bay on Alaska's North Slope and other BP assets could attract suitors such as China National Petroleum Corp (CNPC), Occidental Petroleum Corp and Hess Corp, said Douglas Ober, chief executive officer at Petroleum & Resources Corp in Baltimore, the oldest US oil fund."
http://www.chinadaily.com.cn/world/2010-06/04/content_9932086.htm
As I replied to Prof Goose post a few weeks back, I'd expect BP have already partitioned off the US assets, and will be looking around for the best bidder for that specific bit. My guess has been China, since they could exchange US debt 'assets' for real assets - something they have been trying to do for a while now. From a purely business aspect, that would appear to be a good move since its unlikely any more deepwater drilling will be allowed in the US for a long time, so its a good time to get out (eg its a mature, declining, market). Don't neglect a middle east sovereign wealth fund either - strategically, controlling production of oil in a potential aggressor has advantages.
The other interesting facet is if they can partition off liabilities. My guess is yes, so the majority of BP will walk away from the US, leaving a rump that needs to be allowed to produce to pay off excessive, invented, court costs. With them will go a lot of deepwater experience, and let's face it, after the regulators get stuck into the area who's going to want to chance the deepwater of the GoM for the limited rewards on offer? In short the upshot will be an even faster decline rate in US production.
I think this is going to be an example of the US cutting off its nose to spite its face. By going on a witch hunt for someone to blame for an accident - rather than accepting that accidents are built in to the environment; they will hasten their own decline.
Great thoughts Robert! Thanks for sharing them.
Corporations seem to have a special place from a legal perspective. They have all of the legal protections of an individual citizen, but none of the potential penalties for misbehavior.
If an individual started dumping thousands of barrels of oil into the GOM, he would wind up in jail. Yet, if no individual within BP was negligent, no one will will be behind bars.
Can a corporation do something so egregious that society should revoke its corporate charter? Fines are levied today, but most are small enough that they don't have a deterrent effect. Maybe this exists today, but I am not aware of it happening.
For misbehavior an individual can have their liberties revoked (for a period of time)- that's what prison is. A similar penalty should exist for corporations. Due process must be followed of course.
In reality this penalty will be the end of that corporation. A corp. cannot stop doing business for a few years then start up again. Some orderly process will be necessary to sell off the assets and wind down the company. Shareholders and the board of directors would receive nothing.
The BP spill is another of a series of extreme corporate malfeasance. Union Carbide/Bhopal was mentioned previously - the recent mega-bank created crisis is another example.
Would the corporate risk management process be different if its existence depended on it? I think it would. Accidents will happen, and I'm not referring to those. I don't think the BP refinery explosion was an accident - seems like negligence to me. Same with the recent Massey coal mine deaths.
There are certainly tons of details necessary - who gets the value from the assets? And, corporations are chartered by states not the federal government. But this is just the Saturday morning ramblings of one fellow.
Thoughts appreciated as always.
SB: The problems with sending a corporation to "jail" are 1. Unemployment 2. Competition gobbles up their customers, suppliers while they're gone so its a death sentence 3. Loans 4. Pension funds share holdings now worthless 4. Equipment maintenance while they're gone 5. ad infinitum This is not a perfect world. But BP may receive the corporote death sentence. See Gail (above) and Merril, Lynch and WaMu and several thousand other financial companies. Who remembers the Penn Central Railroad?
EL: You're correct on most points. It's meant to be painful so that the board of directors and management work really really hard to avoid it. Overall I would expect employment to increase. If company B misbehaves and is closed, their competitors will need to hire in order to handle the added work. If company B wants to avoid that fate, they must be sufficiently staffed to operate responsibly.
A good example for me is a certain coal mining company. For years they have been operating mines that rack up numerous safety violations. Investors (and management) may consider those fines as a cost of doing business. Insurance pays out medical costs and death benefits. Are the stock returns diminished more by the insurance costs than enhanced by the "low operating costs?"
However, if the investor in that mining company has the possibility of losing all of their investment because of the on-going safety violations, that changes the game.
I suggest jail sentences to everyone in the company making more than $500K per year. Atleast all the officers of the company, including board of directors. No downsides, there.
Jails too good for 'em. Up against the wall with anyone making more than twice what I do.
How about 'up against the beach'?
You spill it, you clean it. There's some job security, there!
NPR reported that TH said in his interview this morning that BP'd return the Gulf of Mexico to it's original condition
OGMaB!
You have addressed the issues I was thinking about posting on.
So I'd like to widen your discussion: Is it possible this catastrophe could lead to a tightening of constraints on all corporations, such that responsibilities to the public become more important than responsibilities simply to the corporation or its share-holders?
Thus, are we looking at more than the demise of BP? Has BP's behavior and the subsequent catastrophe resulted in a tipping point? Could we see it become harder for lobbyists to sway the public or the politicians into selling the soul of our land and its soil, water, and air etc. to feed the corporate beast?
I can't help but wonder...
If the public is willing to pay for it, or live in the bleak world it would create, which, I suspect, they won't want to do.
I highly recommend David Korten's 'When Corporations Rule the World'
In it he points out that early US corporations were held to much stricter standards than those of today. There was definitely the idea that corporations should serve the public good, rather than simply the profit of their managing officers and shareholders.
Given the power that modern corporations have, it may take a cataclysmic change to bring corporations to heel, so to speak, and make them once again serve the public good.
TheraP: This corporate stuff has been around since before the formation of the East India Company in 1600. It's all Queen Elizabeth I fault. It's gonna take a whole lot of weight to tip 410 years. But I've seem less expected things. You'd have to change the corporate laws in 50 states. You want to try Alaska? And a state like Delaware with it pro-Board of Directors laws and courts take in a lot of revenue by having corporations register in their state because of all the associated fees of being a "person" in that state.
In spirit I support the idea. However I think a lot of thought needs to go in to how to appropriately balance incentives. In the UK we've had some horrific train crashes that have been traced to poor maintenance of track and trains, and sometimes falsification of documentation for said maintenance. There has been bad press, fines and risk of criminal prosecution for "corporate manslaughter" for top management. One consequence is that building firm Jarvis (IIRC) stopped doing work on railways because the profit was too low relative to the various risks. (In one of their other fields of commercial engineering, if you build poor office blocks you might end up having to compensate/make good issues but you'd really have to cut corners to actually cause a death.) Given Jarvis record I think good riddance, but I would be worried about ill-thought-out penalties that make having profit-making companies perform some socially important jobs impossible. I think that probably means you need more inspectors who'll pounce on minor violations of safety codes rather than ratcheting up the penalties for when violations cause huge disasters.
"Is it possible this catastrophe could lead to a tightening of constraints on all corporations..."
I think that is coming. Our domestic oil reserves have just taken a huge hit. The 3 million gallons a day that we eventually expected to exploit from deep water is probably off the table now. We are going to mandate energy conservation, revisit BAU assumptions.
The only way to manage resource pressure is to manage the commons.
It has been suggested that BP be placed under receivership until all civil liabilities are satisfied. Receivership would give a bankruptcy judge power to fire top management and Board of Directors and appoint new management. It would prevent the payment of dividends to shareholders until damages are fully paid. They are currently fighting paying any damage costs while still planning to pay billions in dividends.
Could a bankruptcy judge force a stock split and giving the new shares to those now bearing the costs of lost income, attempts to minimize on shore damages, suffering medical problems from exposure to evaporating toxins, and the costs to the taxpayers that the Coast Guard and other agencies are enduring? Then there are the lost royalties from every barrel that is not going to market.
Could they, should they, would they?
They won't because British Petroleum is a multinational corporation beyond the legal reach of the society in any one country. The proponents of globalizaton, such as BP and President Obama, will ensure that BP survives. The stage was hastily assembled in April, and the play is ongoing. It began with inattentive media coverage. Obama has allowed the principle suspect to remain in charge of the crime scene. No special prosecutor has been assigned to preserve evidence. The government is allowing the continued use of toxic dispersant to hide the full extent of the leak under water. No one is keeping track of the amount of crude oil gushing from the BP Macondo well so that it becomes legally impossible to apply the fine of ~$4,500 / barrel of spilled oil. BP hiring unskilled clean-up workers for $10 / hour demonstrates their lack of commitment to clean up their mess. BP agents and U.S. Coast Guard officers are chasing reporters away from oil saturated beaches. Coast Guard admirals are parroting BP announcements. Congressional testimony is laying the foundation to frame the dead guys. The Republicans in the U.S. Senate foiled a bill to raise the liability for consequential economic damages from oil spills from $75 million to $10 billion. BP pledges money to study the disaster while, left unsaid, is the likelihood it will only fund studies that yield results favorable to BP. BP, LLC. is one bankruptcy away from absolving its parent company of liability and vaporizing all the promises to the contrary as so much hot air. Aristocrat Tony Hayword presents the media with a bumbling dog and pony show to demonstrate his absolute power and keep us distracted while the POTUS, just below the camera, kneels licking the shoes of his corporate master.
Offshore drilling will resume after some cosmetic enhancements. BP will not pay just compensation. The majority of Americans will guzzle every drop of fuel they can find. BP will survive. The ecosphere in the Gulf of Mexico and along its coastline might not. The costs will be externalized onto the victims of this catastrophe.
Won't all this hesitancy in deep water investment effect the mega-project forecasts in regard to that other little issue of Peak oil?
or storm in a tea cup cos BP will be broken up sold with the job going on regardless of who won or lost playing musical chairs in EC2?
I suspect deep water drilling will continue full speed ahead everywhere but USA, who will suffer even more pain under the weight of even more oil imports.
I'm guessing that drilling in new off shore areas and Arctic Refuge will not now go ahead either.
Well i guess those above ground factors will keep it all in the ground for a later generation.. the Irony is the biggest users get the pain in the short-medium term but have a long term strategic resource that is off limits for now..
the world is not a fair place
to stay at the top of pyramid they will have to pay the price to stay there..if people get my meaning
its the cheapest in real spending power terms per capita for those who consume the most.. and if they start soaking up more of the export curve?
to me this suggests another price spike... what does everyone else think?
I don't think the cessation of drilling in USA will have an immediate impact. Impact will feed in slowly over years as exploration and development projects scheduled for now will not deliver in the years ahead.
I would imagine many of the rigs that are ceasing drilling as soon as it is safe to do so are already making plans to float off for very long stays offshore of Africa, Asia, South America, etc.
NYT yesterday had an article on the local impact of rigs moving elsewhere: Spill’s Economic Ripples Seen Beyond Oil Industry - NYTimes.com No doubt linked by Leanan. Anadarko stated Thursday of its intention to go force majeure, no doubt the first of a series of companies which will do so.
Ostensibly these rigs moving to other waters will shorten development times elsewhere - leading to recklessness and more accidents? Or just increased production all the more sooner? FWIW absolute peak of US imports of crude/products was Aug '06, 14697 kb/d, peak of crude imports June '05 at 10765 kb/d. Dec '09 was 10487 and 8133, respectively - demand figures not seen since 1999.
True enough, until an LNG tanker blows up in a harbor or terrorists blow up a few supertankers crossing the keys.
We'll go from one knee-jerk crisis response to the next until prices go up and we have another recession, and eventually we'll come back around and drill AL and deep-water again.
I'm OK with putting things off limits, though. We'll need the oil a LOT more later than we do now. Maybe a string of "unforeseeable" accidents is just the thing to shift behaviors?
US production will drop sooner. But on the bright side that oil will be there for us to extract in the 2020s.
I expect once gasoline hits $5 per gallon the shift back in favor of GOM drilling other deep water drilling, and ANWR drilling will commence. At $6 per gallon (if not before) public support for more drilling will be back to where it was before the Deepwater Horizon disaster.
From the keypost:
Seems to me Robert is indeed contemplating an impact on that other little issue, such as bringing on its effects sooner, when fewer alternatives have been built out. But I wouldn't even try to predict what mixture of your two outcomes will come to pass, 'cos that will largely be up to inscrutable politicians trying to divine what course of action might garner the most votes from a fickle public.
Still, I expect states like Florida to discover that You Can't Have It Both Ways, no matter what. The consequences of oiled beaches may be obvious (less obvious is how bad this will be for Florida.) However, "living with shortages" could just as well also mean fewer tourists. For one thing, people who fear being stranded at hundreds of dollars a day may think twice about frivolous travel. (Consider all the shouting in Europe over who is to be stuck with that enormous bill in connection with Eyjafjallajökull - one can glibly make fun of the awfulness of being stranded overtime in Paris, but many people stretch well beyond what they can really afford, just to visit at all.) Or, if people driving can expect to be partially immobilized every other day, the extra hotel bills, and extra days wasted, may cause them to think twice.
Most of all, if the government throws the economy into a state of (worse) depression by gumming up all manner of businesses abruptly with fuel shortages, fewer people will be able to afford such luxuries as flying to the beach. So if you think there are political fireworks now, just you wait until the tourists are showing up in greatly reduced numbers, and spending as little as possible. Get out the popcorn, that political show will be a real doozy. Welcome to office, President Palin?
Not sure I comprehend why tourists would come to oil-laden beaches, however! And that's the downside of your argument.
Exactly. Therein lies the rub. Never said oil-laden beaches would bring the tourists, although perennially present tarballs sure weren't a huge deterrent in the Northeast back in the bad old days. Just implying that shutting down the economy won't bring in the tourists either. No easy answers.
There's simply no zero-risk, 100% downside-free upside, no utopian course available. That's life in this universe, suck it up. They can incur a major economic depression and lose a good chunk of their tourist trade and a good deal else for a generation or more, or else they can go on taking the chance that once in a blue moon they lose use of the beaches, and the tourists but little else, for a season.
How about a trip to the mountains? ;)
I live in the mountains near a Western national park. Local business are cheering the oil leak on. Seriously. If you don't go to the beach for vacation, you will go somewhere. One business proposed a "no oil here" ad campaign. Problem is our economy is bases on gasoline consuming tourist transportation called cars. Not to worry. We'll soon have fusion driven cars. Technology will solve everything. Technology voodoo. [I must stop ranting.]
Switzerland manages electric-powered trains to the bottoms of its mountains, and often half-way up; a mountain-climbing holiday by public transport in Switzerland isn't at all problematic. But the mountains in the US are rarely densely inhabited enough for this to work ...
If we have folks (outside the strip of coast likely to be seriously affected) cheering that way, then we can already guess where the great preponderance of votes may lie once the relief wells have been drilled and people are too exhausted to stay in high dudgeon. If emotional overreaction causes or extends a Great Depression, that pushes "if you don't go to the beach for vacation, you will go somewhere" - a recent phenomenon - off the table for many. We can guess which way that might drive even more votes.
It could get "interesting" by the 2012 election; more certainly by 2016. One might anticipate increasing political instability continually and randomly driven by the glandular reaction du jour.
hey, toyota has invested in tesla ...
TheraP = saves on suntan oil.
Because I'm not a skier either! ;)
The potential economic damage from lost tourism revenue will go way down when the number of tourist visits to Florida plummet. Once oil production starts going down a few percent per year there'll be a lot fewer people visiting Florida beaches. Already the sales of recreational boats is a small shadow of what sales were back in 2005 and 2006. Lots of boat stores have gone under and the remaining ones are trying to outlast each other to be among the few survivors.
The strategic direction of BP changed again when Hayward took over from Browne, away from renewables and back to their core business, oil and gas.
Of course, if BP collapse, the deepwater drilling may be taken on by a company with worse standards...
I think it's the end of big private oil, too. Putin nationalised Russia's energy production, as detailed in Michael Klare's "Rising Power Shrinking planet"
We really are too dependant on foreign oil. Our whole way of life is designed around abundant supplies of cheap energy, energy that is running out. We are screwed, man are we screwed.
Instead of funding decent public services like health and education, we arelosing two wars at great cost in a culture that proudly yeals "drill baby drill."
We are headed for collapse.
Maybe. But that will take "decent public services like health and education" completely off the table. Can't have it both ways.
Robert Rapier wrote: "No longer can drilling proponents point to decades of safe operation. No more can they reassure people that something like this can’t happen."
(great post BTW)
No longer can the drilling proponents claim much integrity either. It is now widely known that (from quite early on) BP did anything and everything possible to hinder any measurements of the flow from the damaged well, to avoid showing high-quality video of the leaks, to prevent others from getting on the scene to measure the flow, etc. Using that too-cozy awl-bidness relationship with the government, they induced the USCG to go along with an official flow rate that was probably less than a quarter of the rate earlier on when the well was more wild.
From now on, is anyone going to trust an oil company that says "oh, it's only leaking X barrels per day, nothing to worry, just move along" when in fact the leak could well be many times that? Is anyone going to take seriously an oil company's assurances that it's drilling safely, when now it's quite obvious that the oil industry here has lobbied intensively to avoid the same sort of safety measures required in, say, the North Sea fields?
BP's behavior in this does not at all inspire confidence or trust. Quite the opposite.
What is the evidence that BP did "everything possible to hinder any measurements of the flow from the damaged well" and "to avoid showing high-quality video of the leaks, to prevent others from getting on the scene to measure the flow, etc."?
What is the evidence that BP "induced the USCG to go along with an official flow rate that was probably less than a quarter of the rate earlier on when the well was more wild"?
What is the evidence that "the oil industry here has lobbied intensively to avoid safety measures"?
I'm seeing lots of serious accusations against BP and the oil industry. Perhaps they are all true, but I am not seeing much in the way of evidence offered in support of those accusations.
here is the evidence:
http://abcnews.go.com/Blotter/bp-feds-withheld-videos-showing-massive-sc...
Why BP won't measure the oil spill
Scientists have come down hard on BP for refusing to take advantage of methods available to measure the oil. The New York Times reported Thursday that BP was planning to fly scientists from the Woods Hole Oceanographic Institute to Louisiana to conduct volume measurements. The oceanographers were poised to use underwater ultrasound equipment to measure the flow of oil and gas from the ocean floor when BP canceled the trip.
BP officials have portrayed measurement efforts as a distraction from the real work of plugging the leak. Rep. Ed Markey of Massachusetts challenged BP's estimated flow rate in a letter to the company's leadership last week, but BP is so far standing by its 5,000 barrel a day figure. Scientists and environmentalists worry that underestimating the flow rate will skew development of oil spill response capabilities as well as the debate over offshore drilling.
/end quote
Size of Gulf oil spill is a guesstimate
We the people: are we chained to a sinking ship?
Note: Since this article was submitted, the “Top Hat” idea was abandoned. After weeks of requests, BP finally released tape of the oil leak only last Wednesday. Independent scientific analysis of that tape shows that the oil eruption (within 30 percent or so) is at least ten times worse than previously reported. The oil volcano is blowing out an Exon Valdiz of oil every four or five days. BP refuses to let Woods Hole place a flowmeter at the vent to reduce the margin of measurement error.
/end quote
I'm shocked .. not that this happened (although it's bad enough in itself) that BP won't dignify this forum with higher-quality paid shills.
I take it you don't own a TV or a radio or ever read a newspaper. Well you do have a computer so there is no excuse for you not seeing evidence of those accusations. Just google BP lies and deception and you will get all the evidence you can read, even if you read all night.
Ron P.
And also, here is the evidence -
http://www.guardian.co.uk/business/2010/may/02/bp-deepwater-horizon-oil-... - BP among the 20 highest spenders in lobbyists
http://www.greenchange.org/article.php?id=5889 - has hired 27 more former congressional types just this year
The oil and gas industry, of which BP is a member, reported $169 million in 2009 lobbying expenditures.
By way of comparison, "the entire environmental industry spent $22 million on lobbying in 2009 -- not much more than BP alone spent for the year. http://www.commondreams.org/headline/2010/05/01
Ah yes, the Greenhorn from gCaptain. I am as data driven as the next guy, but you come across as determined to paint a rosy scenario over all of this. You sound a bit like Tony Hayward. I notice there are several responses to your comment, replete with links. I have been following this since the explosion and if there is one thing I am sure of most of the folks who post here don't "shoot from the lip" so to speak. Hopefully you will come to that conclusion before you post again.
I think this incident has negated all the oil industry's anti-regulation lobbying, and that for the next decade or so the US deep-water off-shore oil industry will be as regulated and as safe and as sluggish and as constrained as, say, NASA after the Challenger disaster. It seems that regulation starts to degrade about fifteen years after the last serious screw-up, so probably there'll be another one of these in 25 years.
I suspect the USCG will get a billion dollars to buy half a dozen ROVs, and some ability to insert itself into corporate rules of operation so that it can do reasonably meaningful undersea work; I suspect the organisation who figures out how to build a device that can measure the rate of fluid flow inside well-casing inside concrete a foot from the machine will make a few hundred million as the US (and UK, Norway, Brazil ...) regulators insist that such devices be placed everywhere reasonable.
But when the real-time 3D sonar imagery from the ROVs working for the Discovery Channel gets so routine that the video from this incident looks amusingly primitive, people will forget.
The death of BP is being greatly exaggerated.
http://news.bbc.co.uk/2/hi/8491892.stm
They made 14 billion *profit* in 2009, a crash year.
How much do you really think they're going to be fined/sued for?
10 to 20 billion.
Some suggest even more than that.
http://www.marketwatch.com/story/bp-spill-costs-could-reach-37-billion-a...
.. and it has to be paid as soon as Exxon Mobil finally pays for the Valdez.
Further, the Supreme Court may hold a hearing to decide if these funds can go directly into political campaigns, or whether they must first wait in line and be laundered along with the Pelicans and Mangrove marshes. .. wah!
Exxon has paid 4.3 billion for the Valdez. The Coast Guard and the State of Alaska ruled the clean up was complete.
The Supreme Court does not like excessive punitive damages. Most Americas are wildly enthusiastic about necktie parties. We like to hang 'em high, and ask questions later. The Supreme Court is a tad more deliberative.
Take all their money, then hang 'em, after the re-education process so they'll feel bad.
How about walking the plank in the middle of the oil slick?
You sure?
Seems there are a lot of claimants still waiting.
http://earthfirst.com/exxon-valdez-payments-delayed-again/
'The Supreme Court is a Tad more deliberative..'
How about - 'Deliberate' ..in their unquestioned support of Corporate Power? Getting XOM to actually pay those who suffered real damages 20 years ago is not akin to a "Necktie Party" in fact, abstaining from paying is more a form of economic lynching, as far as that analogy goes.
I think what you'll find is, after the Supreme Court sent it back to Alaska, the plaintiffs and their lawyers got into a huge fight as to how to divide up the shrunken punitive damage award. There was nothing Exxon could do except wait for that side to sort out their differences.
So they were not abstaining from paying. The other side was abstaining from being paid.
I have not heard lately, but if they're still infighting, then they are still abstaining from being paid.
And, had their lawyers settled for a billion several years ago, Exxon probably would have paid them off on the spot. They were greedy; they fought for 5 billion; they lost big time.
"Exxon probably would have paid them off on the spot."
You ever hear of gaming the system?
'Nothing Exxon could do except wait..'
Right.
Yes, one more "system", this time for allocating damages, that, possibly owing to its inherent (and irremediable) intrusiveness, seems to require unanimous consent. Too big, complex, and "diverse" a world for that to be workable.
and the herring fishery there, 20 years later, still has not recovered
I read that it did improve quite a bit, but then fell back. This is an open scientific issue with ongoing studies. The scientists do not yet know why herring have not recovered. So if the scientists do not know, how can others? Wait for the science.
WAY more than that, but it won't matter.
Chances are they're being circled by hedge funds already. Some group will meet in a nice restaurant and plot their attack. The stock will be butchered and then some other companies will make unsolicited takeover attempts. Most likely BP will already have some crown jewels out for sale to build a war chest, but it won't be enough.
The new owners will squash the precious dividends, and all of Britain will squawk. BP alone may be enough to tumble Britain into a deeper recession.
The only hope BP realistically has is for the British Gov't to back-stop them, and/or help them cut off the rotten US limb. That won't go over very well, so you can bet Obama is already on the phone.
I'd put the chance that BP survives in any meaningful form (as a publically-traded worldwide oil company) at less than 25%.
It's only a matter of time before only national oil companies remain. BP may end up a national British oil company.
Just my opinion. Could easily be wrong.
My guestimate:
The fine for leaking crude oil of $4,500 / barrel:
1,000 b/d for the first 2 weeks;
5,000 b/d for the next month;
A few thousand barrels/day over what BP collects from using the top hats, say 2,000 b/d for the next 2 months;
for a subtotal of ~$1.3 billion.
$75 million for consequential economic damages.
~$500 million for relief wells and attempts to stop and reduce the flow from the blown out well.
~$1 billion for cleanup since dispersant is hiding the oil underwater and diluting it.
~$300 million for legal fees over the next 30 years.
~$1 billion for settlement of lawsuits.
~$0 on successful judgments against BP due to all three branches of U.S. government favoring corporations.
Total: ~$4.2 billion
This amount will likely be reduced further by various legal maneuvers related to limited liability companies. After emotion fades and during the next oil price shock, Congress will probably grant immunity to BP upon the encouragement of the president and U.S. consumers clamoring for a lower price for fuel.
Business-as-usual is likely to prevail.
This is an inappropriate use of the term 'witch hunt'. A witch hunt implies a loss of moral bearings and/or a kind of hysteria among the public often leading to an extra-judicial execution. Or it can refer to state-sanctioned actions against individuals in which established rights, liberties and procedures, such as rules of evidence, are arbitrarily suspended or ignored.
Except for signs of hysteria and a rush to judgement among bloggers, what is happening in the US with regard to BP/offshore is not, even remotely, akin to a witch hunt.
Muslim Americans may have had reason to fear a witch hunt post 9-11. BP need not have any such fear.
From wikipedia (see link below):
http://en.wikipedia.org/wiki/Witch-hunt
There is no panic in the US, not among the public and not in the administration, although million-dollar ranters are trying to induce panic as best they can. It seems they're unhappy at the moment because Obama's not showing enough emotion. Which emotion?
He is calm. This matter will procede according to law and established rules.
There is nothing like the Permanent Sub-Committee on Investigations on the scene today.
I'm urging calm myself. Panic will do us no good!
We have the wingnutters calling for trials of uhh Climate scientists. I think think we are all that far from that sort of malady.
At least one different emotion for each and every ranter. Maybe the DOE can hire Pixar to create a bazillion different You Tube clones, LOL...
BP's safety record is appalling - Alaska pipeline leaks, Texas City Refinery fire, Thunderhorse almost sunk and now Macondo. Interesting to note that the big problems are all with the US arm - where culture may be influenced still by Amoco, bought by BP around 1999.
I doubted BP's ability to survive this from the outset, guessing eventual costs including punitive damages in the region $10 to 30 billion.
BP in a way is a strategic resource to the UK providing energy security through their involvement in Asia and Africa and so I doubt the enterprise will be allowed to fail or fall into foreign hands. Best guess would be they are forced to sell their US assets - to pay for costs, undoing the Sohio, Amoco and Arco deals. Alternatively a merger with Shell (seen as British by most Brits who choose to ignore the Royal Dutch bit) would seem most likely.
Was out with some engineers this week who pointed out that BP may have insurance. This been discussed anywhere in all these threads? It could be that someone else is left to pick up the bill.
Make Piper Alpha look like chicken feed!.. just about did for lloyds thou they did offset the risk in a massive circle jerk.
167 good people died on Piper Alpha. While in no way diminishing the impact of the DWH disaster, the human death toll here is less.
We are all culpable as oil addicts.
BP is self-insured:
http://www.businessinsurance.com/article/20100423/NEWS/100429963
what does that mean, they pay out? or have they sold the risk on to someone with themselves acting as the brokers?
You mean, did they bet against themselves? Or for themselves? Or did they bet on both sides?
It boggles the mind!
I'm in the same boat as you on this?.. strictly speaking according to my wiki fu self insurance means they have set aside money for such incidents which given the size of this accident strikes me as unlikely.
Ok, you're asking my off the top of my head guess: Maybe there is no law that says they have to have an "escrow" account. So I'm guessing they figure that they'll pay off the lobbyists and pay off the politicians and pay off the public... and cross fingers on wing and a prayer - hoping they can escape a spill and escape responsiblity!
Thanks. But claims for loss of rigs is still going to hurt a bit:
http://www.upstreamonline.com/live/article216745.ece
Self insured means just that. The company has enough resources to pay out reasonable claims and doesn't need a third party to underwrite. This claim is made for the execution of Contracts when each Party to the Contract is required to show proof of insurance for the agreed upon amount.
However, if the CFO (or Accounting) decide the insurable amount is too much risk for the company, they will purchase third party insurance on a contract by contract basis, i.e. Lloyds.
Under this practice, if you happen to have $10-20 million lying around, you wouldn't need to purchase vehicle insurance to drive on public roadways because you have sufficient means to satisfy any reasonable claims.
well if they are in the hole for $10-30 billion then they are pretty much done is my guess
It depends where they spread the risk around. I find it difficult to accept - or it was entirely stupid and both are in the realm of possibility - BP would enter into this drilling project with other parties without taking on some underwriting.
If one looks at the economic numbers for this quarter, don't be surprised if there are some positive numbers of some magnitude. For the past six weeks I'll bet BP U.S. operations has been burning up cash by rushing through on equipment and goods deliveries and managing to make forward payments on accounts payable they can. They are circling the wagons and trying to make BP U.S. look cash weak while shifting assets to other corporate holdings by means that do not look blatantly suspicious (i.e. making large transfer payments to BP Cayman Islands).
The large corporation executive mind seems to operate in a dimensional world not familiar to us and they may choose to liquidate or sell off divisions so they can remain "strong and competitive". Who knows, but the pain will be felt all around and you what they say about sh!t's directional tendencies...
well I'm confused now. Your saying its likely they have laid some of the risk off ie not completely self insured?
Yes, self insured would be for the typical day to day and lower end capital projects. If they were entering into a project valued in the 100's of millions with other large corporations (who have rooms full of lawyers too), and in the riskier deep water, they would purchase underwriting. This is common in the large project business.
E.g. if BP were to reconstruct a process unit in a refinery valued at $30 million, they would go with self insured. If they are doing a deep sea well leasing a rig worth over $1 billion, they would get underwriting by Lloyd's because the rig owners could also go after consequential damages; that is, lost business and opportunity due to the loss of the rig. It gets very expensive at that point.
BP are a *big* company, and while they wouldn't like to pay such a fine, it wouldn't be hard for them: sell ten-year bonds at 5% and lower their dividend payoff by 20% until the bonds are paid off. That is, if they don't think selling off the American interests to people more politically connected is a better way to proceed; they have sold off great chunks of their gas developments in Russia, essentially because the Russian government was being insanely obstructive.
Not great for the widows and orphans whose pension companies have counted on BP dividends, but not irredeemably catastrophic even for them.
My understanding is that BP is self-insured.
Nice passage, which reveals the Epic nature of this calamity.
I've always believed Sophocles to be the best commenter on modern life...
People keep hammering on the depth. I don't get it. ROVs are not such bad divers.
To me the big problem is not depth; it's the water. Move Macondo to 499', what have you got?
mike -- Some clarification I think you probably already understand. The blow out well was drilled to a depth of 18,000' below sea level. It was not uncommon for wells to be safely drilled to that depth 40 years ago. And often into reservoirs with much higher pressures than the blow out well encountered. And some of those wells did blow out when safe drilling protocols were not followed. But thousands of wells were drilled to this depth safely. About two years ago I was on a rig that drilled to 34,000' in the DW of the GOM. Even though it encountered much higher pressures than the BP well it was drilled safely. OTOH hand I had a well drill to 6,000' and it blew out because safe drilling protocols were not followed. But what obviously put the BP blow out into a whole nuther class is the water depth. Consider the BOP failure. The same type of failure has occurred any number of times on onshore and shallow water wells. Nothing new about that problem. But did BP, the MMS or any other operators develop plans to deal with such a problem at 5,000' below sea level? Not my area but from the statements by all parties they say they are trying to fix a problem never anticipated. Granted it's easy to be critical after the fact. But the potential for drill pipe getting stuck in the BOP and preventing closure has been well known since the first subsea BOP was deployed decades ago. Is putting the BOP below 5,000' of water going to make it more reliable? Just my own suspicion but I'll guess this potential problem has been discussed often with the conclusion that it would be extremely difficult to deal with. Thus the plan would be to make damn sure you don't blow out in 5,000' of water. IOW use the safest drilling protocol imaginable. Guess someone at BP forgot this part of the plan.
I'm in pretty much the same boat. I fear the political repercussions of the inevitable oil crucnh more than the (slight) decline in the oil supply, so I still argue that we could go ahead after we reform the companies/regulations etc. Of course I recognize that on this matter I am now a lonely voice in the wilderness, so I can only state it as an opinion, with little confidence that anyone is listening.
I tend to have a different view of corporate punishment. It probably comes from having been a midlevel technical person with stock options in a corp. I think of all the stakeholders who have essentially no say in the corporations culture and malfeasence first, and the bad apples in the executive tower last. A company like BP has many millions of stakeholders both within and without the corp. Heck, I have some money in international mutual funds, I must indirectly own some shares. In any case the vast bulk of the wealth that would be destroyed by punishment would come from the legions of innocent stakeholders, only a small fraction from the PTB that made the bad decisions (and those guys got golden parachutes, and more money than any normal person could spend already).
Perhaps we need to learn to be more informed investors. It's a bit disingenuous to say "I can't influence the company's behavior but I accept the dividends earned via actions I don't condone."
There are a number of self-defined socially responsible mutual funds - each using a slightly different definition. (liquor? oil? tobacco? defense industry? etc.)
Social Investment Forum
Thats not a realistic thing to ask a diversified small time investor to do. A diversified investor owns tiny pieces of thousands of firms, he can't possibly investigate them. And most stakeholders are simple pension fund beneficiaries. Then anyone who owns realestate or has a business near where the corp has a major center are also unwitting stakeholders. Now admittedly for the truly diversified investor taking funds from bad boy corp X and giving them to corp Y should be a wash. But transfering them with the lawyers taking a big cut is a transfer of wealth from average Joe's to big fish lawyers.
I agree that a diversified small investor is not able to investigate hundreds or thousands of firms, but s/he should be able to investigate several of the mutual funds identified in the Social Investment Forum linked above to see if one of their filters comes close to matching his/her investment criteria.
The whole issue of pension funds is trickier. As a side note, the California state pension fund just changed policy to allow investment in commodities, to try to make up for losses it suffered in real estate and equities. That should end well.
Nothing quite like investors, or gamblers, "trying to make up losses"...
There's the problem with the whole situation. In order to perform like a "good" corporation, BP had to make a profit for those innocent investors. This pressure led to the cost-cutting that many people now regret. The problem is the structure of the situation - corporations are required to produce profits, and therefore all other possible goals - which might include goals beneficial to society - are either eliminated, ignored, or given lower status.
According to Jay Lemke, "The structure of our institutions conveys a more powerful message than their content".
But nobody seems to be talking about the fact that this is what we get for allowing corporations to exist in their current socipathic form.
Thought-provoking post. There's another analogy worth considering: Arthur Anderson LLC was found guilty of criminal charges (obstruction of justice), voluntarily surrendered its CPA licenses, and sold off its auditing practices, after failing to meet its professional obligations in its auditing of Enron.
http://en.wikipedia.org/wiki/Arthur_Andersen
Possibly relevant, BP has an official Code of Conduct, mandating that every employee follow all applicable laws everywhere:
http://www.bp.com/liveassets/bp_internet/globalbp/STAGING/global_assets/...
Wondering if anyone knowledgeable of international corporate law would comment.
That is a good point to pursue NatRes. Adherence to all local laws is a common clause in professional and executive employment contracts, and can be a serious means for dismissal. (Although, I guess it really depends on who is holding how much dirt on whom). Or, the secondary means is to use the consequential malfeasance.
e.g. Hayward is a geologist. In BC, they are members of the professional organization with professional engineers - they are the "G" in APEGBC. Condition of employment is to remain in good standing with the professional body; and, the professional body is much more strict and quick to act in cases of gross public negligence or criminal activity. Have his license withdrawn and he loses his job as a result.
Now, Hayward, I'm sure, is not employed at BP as a geologist and this may be irrelevant to the cause, but it is a sneaky backdoor. The reason corporations are rarely charged in criminal activities, (but corporate officers and board members are liable for criminal charges), is we like to point the finger at the person and find it difficult to prosecute the larger amorphous entity of "they". We have been conditioned not to see the criminal and moral behaviour of the collective because we focus on the innocence of the individuals that in isolation did not seem to partake of the wrong activity; but the collective effort certainly did.
I think Enron is the classic case study for this phenomena.
I know it's swimming up stream here, but if I'm wrong I'd love to be corrected:
1. Most of the oil will evaporate, biodegrade, or get sucked up before the well is killed in August;
2. The beaches will be back to normal by next summer;
3. The dead animals will be cleaned up and gone by next summer;
4. Mother Nature will be the major source of oil in the oceans again by next summer;
5. CERN will publish papers by next summer on the link between solar activity, cosmic rays, and clouds- it is very possible that this link will remove CO2 as a significant source of global warming;
6. The economy will still be underperforming next summer (given the average underperformance after a financial crisis is 10% for 7 years).
7. This one well alone could have supplied all the gasoline needed for every ambulance and fire truck in North America, let alone the jets and limos of the liberal elite;
8. BP made $6 Billion in the first quarter of this year;
9. BP is already paying claims for damages and lost income;
10. There will be fraudulent claims exposed as such, and reasoned discussion over the limits of BP's liability- it will not be unlimited by any means;
11. The British government and their new Prime Minister will look for fairness regarding dealings with BP;
12. BP and the rest of the industry will find root causes and corrective actions/error proofing for this spill while other disasters in other industries will get attention;
13. All of this will culminate in a vigorous debate about offshore drilling, with pocketbooks eventually outweighing dead birds;
My conclusion: By 2013, offshore drilling will be as expansive as ever in the US, and BP will be as major a player as ever in that business.
Time will do that for you.
Dirk wrote:
My conclusion: By 2013, offshore drilling will be as expansive as ever in the US, and BP will be as major a player as ever in that business.
I sincerely hope you are correct!
Unfortunately, I would have to agree. It's depressingly cynical, but I'm not expecting any revelations of the larger moral behaviour anytime soon.
I've always maintained that when the crunch comes the rallying cry will not be "Drill, baby, drill", but "Burn it all".
This little bit of life's lesson comes from the same corporate BS where I learned to never trust a desperate man, especially one with a house and two kids. Courage in the face of the right thing to do is hard for many, whereas cowardice veiled behind the skirts of the corporation is very easy.
Often in the upper right of theoildrum web page is this quotation:
“It's difficult to get a man to understand something if his salary depends on him not understanding it.” — Upton Sinclair
Dirk;
I appreciate you are trying to look at the brighter side, and surely some things may not turn out to be all that terrible.. but the remnants of Exxon Valdez are still present and highly toxic in Prince William Sound, and while that ecosystem is no less important than the GOM, we'll feel the effects of this one in many more ways, as it provides incomes and seafood for much of the country.
Oil plagues sound 20 years after Exxon Valdez
"This Exxon Valdez oil is decreasing at a rate of 0-4 percent per year," the Exxon Valdez Oil Spill Trustee Council stated in a report marking Tuesday's 20th anniversary of the worst oil spill in U.S. waters. "At this rate, the remaining oil will take decades and possibly centuries to disappear entirely."
http://www.msnbc.msn.com/id/29838444/
I'm afraid your comment sounds to me like those of many folk who are eager for a few months' time to play the part of the cavalry, coming in to save us from what looks now to be a true and enormous and lasting catastrophe. As was said above, wait and see. But instead of JUST waiting, think about what things might look like in a year if your optimistic hopes don't work out, and we could have been using this time to (Finally) start building up alternatives that are non-polluting, that don't send our dollars overseas for every tankful, etc..
There may be many close calls here, and we'll luck out again, but I hope you're also cautious and aware that this is simply another reminder that we need to be changing course, and the earlier we begin to reset the rudder, the easier that turn will be.
Bob
Americans like pretty; hate butt ugly oil. Take a photograph of Price William sound today. It's stunningly beautiful.
and yet, you barely have to scratch the surface to see what's really there..
if you read the scientific studies, the spill area where one can dig down a short distance and hit crude oil is not the entire area of the spill, which was quite vast. The fact is some areas are virtually free of oil, some have varying traces, and there some where a shallow dig will hit liquid black gold. How it can still be there after summer where oil hit $145 is a mystery to me.
The same is true of marine life, and land life. Some species still struggle; others are partially recovered; some are fully recovered.
Scientist are crawling all over the place all of the time.
I assume tankers still sail up and down the sound, and there are probably fewer of them as Prudhoe has gray hair.
You need to back some of that up. What studies? Which Crawling Scientists?
I don't think that is a valid comparison. Oil degradation is temperature dependent, and will proceed many times faster in the GOM. Also GOM is a larger body of water. The better comparison is IXTOC-1, and what I read claimed little impact was visable after two years.
Bob, thank you for the thoughtful reply.
Before selling my company I was involved in the effort to bring lower cost solar technology to the market. The good news is that we were making progress on our component. The bad news is that most of our customers didn't see a need to invest in production tools because their costs weren't competitive with $30 oil and $.03/kwh coal. But they were competitive with $120 oil and $.05/kwh coal.
The upshot of this is that the technology is there, but the need is not. So what is the problem investing before the need arises? Jimmy Carter proposed investing billions in the 70s. Had he had his way, we would have spent billions on 70s technology solar panels that were 300X less efficient in terms of kwh/$. It's like small mainframes back then to a laptop today. Would it have made sense to spend billions subsidizing IBM to build more mainframes? Or let the market drive technology as it made sense?
The best news is that the technology and production capacity continues to move forward, and when it is needed I am confident we will have plenty of energy. And the cost to do that will be less if we use the cheap energy the good Lord blessed us with to build it out- and share it with the world.
I may be wrong about BP, but knowing that CPV has already proven out 40% efficient, i'm pretty confident that energy shortages are not going to be the long term downfall of mankind. I'm much more worried about what a very small cadre of people can do with nukes or bioweapons...
Good thoughts, Dirk.
My only comment would be that investing early to anticipate such a need is, in this case prudent if one is considering that the energy available to make this transition is itself in question. It's always the rub of buying today, and knowing there may well be a better model out tomorrow.
It's clearly a hedge, and one can balance that investment/preparation however they choose.
Altough the physics doesn't support #5, it is quite possible you are right. I do think that once the spill is over we will discover it wasn't nearly as bad as the TV coverage made it feel at the time. Then we will be gobsmacked by $150-$250 oil, and the frantic search for scapecoats will finger anyone who said "stop the drilling". We will likely swing from one sort of frenzied emotional overreaction to another. All the while those who don't display enough "emotion" will be pilloried as unathentic.
I use the BBC as my 'breaking news' source. I have been very disappointed that their news re BP & this disaster has sent me several times to the oildrum hopeful; only to realize i had been reading, at best, 'hopeful spin'.
yes Robert i remember the Union Carbide disaster. between that & then Challenger & Chernobyl (both in '86), i came to see technology as 'part curse'.
Yes Robert, i too will live with shortages. thanks for taking a stand.
Exxon also didn't have to deal with the internet. Photos and videos from the spill in the Gulf have spread quickly thanks to blogs, youtube, etc.
I understand that BP only has 65 percent of this well, with Anadarko at 25 percent and a Japanese company (Mitsui?) with 10 percent. As non-operators I believe they are just as much on the hook, proportionately, as BP.
Anadarco's price has dropped even more than BP's.
Thanks for the thoughtful article Robert. However, I think the following is a premature conclusion:
And frankly, as someone who has argued that the U.S. needs to invest in more offshore drilling lest we face oil shortages and increasing dependence on other countries for our energy, I can’t make that argument in light of this sort of disaster.
In the first place, we still don't know what caused this accident, so there is no way to evaluate its likelihood of recurrence.
Second, the massive Ixtoc spill doesn’t seem to have had serious, lasting environmental consequences -- at least none that I’ve seen documented. That certainly doesn’t prove such consequences won’t occur from this spill, but it is a point of evidence to consider.
Third, at the conclusion of this accident, the oil industry should know far, far more about how to react to, and contain, such a blow-out accident in the future. I say “should” because at this point, there is no guarantee of that. However, I have a hard time believing nothing significant will be learned when all is said and done.
Over-reacting to this disaster is not in anyone’s interests -- except the anti-civilization wing of the environmental movement.
There has not been over-reacting at this point expect to blame Obama for the poor results of an impossible clean up and ask for the military to take over something they know nothing about. However, if civilization depends on multinationals in order to survive, we are already toast.
I think it is quite apparent that one thing after another appears to nudge us ever closer to disillusionment and cynicism. Could the announced BP shareholder payout merely be stuffing the face of friends on the eve of 'last round'. When something smells to high heaven, there is usually a reason. Obama should get off his ass and state that if the shareholders are paid out before the cleanup is declared complete, then all US BP assets will be seized.
This is a message that needs to be sent.
To blindly trust these self serving companies is absolute folly. The lifeboats for the rich and powerful are hidden away and regular people continue to be duped by company shills.
I am not anti-civilization nor a part of any rabid environmental movement. I'm just pissed off, and more so by the day. I am for doubling the price of fuel if it means not having to see oil fouled animals and ruined environments.
Paul
Paul
I don't think this is an overreaction
It seems to me that understating the issues is as bad, if not worse, than overreacting.
It is refreshing to see your thoughtful, informed article, Robert. Being a retired journalist, and an old guy who once doodlebugged for GSI shooting all the old Gulf and Humble leases off the lower Texas gulf coast as a summer job while going to U of Texas, I find TheOilDrum a breath of fresh air.
On my blog I have posted my idea for a redesigned BP logo . . . the bright cheery enviro-daisy has become an "oopsie daisy"
Larry
http://theihandbill.blogspot.com/
I make these comments from the perspective of an Environmental Technical Director for a fortune 100 manufacturing corporation based in the U.S. I have been doing this job for just under 14 years. I direct small and large remediation projects throughout North America.
1. BP has an income larger that most 3rd world countries GDP.
2. The British economy and likewise our economy is in an unstable position at this point in time.
3. Nobody will benefit from a BP sale, dissolution, bankruptcy, or any other financial crisis that could befall BP.
4. The macondo well spill will eventually be stopped.
5.There will not be a magic bullet, fairy dust, magic microbe solution to the oil spill. It will be a labor intensive project to remove the large gross spilled oils. Remaining contamination will be remediated through “monitored natural attenuation” (that means nature will take care of the remaining oil). The microbes that are alive in the presence of oil in the spill areas right now will in effect eat the oil. There are limiting factors that limit the growth of these microbes and those limiting factors can be addressed to maximize the effectiveness of the microbes, but there will be tradeoffs in oxygen depletion and others as well (subject of a separate discussion).
6. BP appears to be distancing itself from the spill by putting an American in Charge.
7. At some point there may be a large asset move by BP to transfer the responsibility for this to another entity, or to transfer BPs assets to another entity.
8. If this happens then expect that there will be a move by the entity similar to the GM/Chrysler bankruptcies to rid the entity of the financial burden of environmental clean-up.
9. Once the bankruptcy thing happens then the taxpayers will have to fund the clean-up and it will be largest superfund project ever.
10. Nobody wants that to happen so, the government will not fine BP out of existence.
11. A fall guy will be identified, there will be the US equivalent of a public flogging, some fines, perhaps limited jail time for a few, and then our media and the collective public mind will move on to the next flavor of the month.
12. BP will need to grow in order to cover the bottom line losses for this event. So it is likely that they will acquire additional assets to expand.
13. Now and for the foreseeable future the US and every other developed country is reliant on petroleum production. We can’t change that in the short term. So, like it or not we will be continuing to drill in the GOM, at depth, but with changes that will likely cost more and provide little effective protection against this sort of deep water spill.
14. Eventually the environment will recover.
15. Local folks will suffer, businesses will close, lawsuits will be filed, attorneys will make a whole bunch of money and most of the lawsuits will be settled for small sums because corporations like BP in general spend money on attorneys in order to outlast the other side.
16. Welcome to The United States of America
Hi m-dizzle.
A few days ago, I wrote a comment suggesting that the likelihood of BP having to answer for the health and safety of it's workers and contractors was remote. However, since then there have been articles about BP's appalling previous safety record and possible health problems currently being suffered by said workers, and pressure is being applied by the federal government to make BP obey the law. I haven't been proven wrong yet, but I hold out some hope that I might be.
Best hopes that you are at least as incorrect as I was on points #6 through 13 and # 15.
Lloyd
IMO, BP is to the US oil & gas industry as a malignant cancer is to a human body.
An online poll by the Houston Chronicle asked if BP should be banned from operating in the US. The comments were predominantly against the idea, but the poll results were even divided, 47% in favor, 47% opposed. Of course, there is no way of knowing where the votes came from, but it is instructive that a Houston newspaper ran an online poll like this.
Lol, X-ARCO and X-Amoco.
It's probably also worth pointing out that BP just shut down their solar cell (photovoltaic) manufacturing facility in Frederick, Maryland and laid off several hundred US workers only a few months ago - all apparently in the interest of cost cutting. Sound familar.
There's an obvious word for attempting to project a 'greener' image while at the same time laying off a major portion of your actual 'green' labor force.
sad and stupid
They shut down their Australian PV plant as well.
Beyond Petroleum indeed.
Since RR's post has little to say about the mechanics of the 'Demise of BP' or processes attended thereto, it will be interesting to see how this post develops through the commentary, the TOD collective 'wisdom of the crowd'.
A suggestion was made on one of the remediation threads that Gail or another with finance interest analyae BP's situation and outlook. It's probably too early to do more than make a sketch, but the trend in various aspects of the oil industry is pretty clear.
The primary economic issue is the relationship between overall oil output and the money that pays for that production. What happens with money - specifically cash dollars - is going to effect the economic 'container' within which the oil businesses function. Specifically, the price of oil - determined by supply and demand - is at an economic upper bound beyond which it cannot rise without causing overall economic failure.
Simply; as cheap oil disappears, the 'cheap oil economy' also disappears. Since our industrial economy requires the constant expansion of inputs at near- zero costs, the general outcome isn't hard to imagine. As costs rise - either in nominal or real terms - the businesses most dependent on low cost inputs fail first. As un(der)employment increases the spiral of diminishing demand takes hold. At some point even firms adapted to high input costs fail as they have fewer customers for their (expensive) products. I cannot claim any theories or special insights, but this seems to represent most closely what is actually taking place in the real world.
At issue is what money - specifically the US dollar - represents. All money is a proxy for something, it exists in place of some surplus output that is either inconveniently distant or currently unwanted. As the great proto- economist Jean- Batiste Say pointed out, "products are paid with products". At issue are what products? If oil is to be exchanged for something that thing exchanged must have equal value. What is being called into question by the alignment of dollars to oil is the value of the thing oil consumers offer in exchange for it.
Does the money (dollars) represent the economic product of the oil's use? Or, is it the representation of the oil itself? Exchanging oil for oil does not allow much for commercial use. By the mechanism of supply and demand the costs of production rise higher than the value of the products themselves. The economic value of products derived from oil shrinks as the value of the oil itself increases. Holding the oil is more profitable than using the oil. This can only change when the use of the oil can generate higher returns. The same returns that are currently constrained by the structure of the cheap oil economy.
The oil cycle is similar to the effect of the increasing value of gold - accelerated by declining gold production. Gold becomes gold too valuable to use for anything but to exchange for other gold. We can call this a 'value trap' akin to the famous 'liquidity trap'.
This self- amplifying cycle of increasing costs/value with diminishing returns is the large economic environment within which all companies including BP operate. As the value of energy and its dollar proxy increase further the result will be an increase in real energy and money costs where prices will remain stable or decline but money to buy energy will be increasingly hard to find.
The alternative is high nominal energy costs with cheap money where prices rise to much higher levels with money being available. I think this is much less likely because the upper bound represents demand destruction and resulting lower nominal prices.
Bottom line here is that BP will indeed go bankrupt and so will all the other industial companies. The cost cycle is well underway and has been visibly manifest since 2004 when the observation of high oil prices appeared in Federal Reserve Open Market Committee meetings. The Fed mistakenly interpreted this as inflation rather than as the inflection point on oil production relative to demand and the distortion in the money system that demand represented. The hard dollar effect became apparent last fall and has been amplifying in both intensity and effect since. Since the hard dollar effect is both self- reinforcing and cumulative, it can be safely said that the so- called compounding debt (or claims) spiral that is effecting Greece, Ireland, Portugal, Hungary and other countries is already taking hold here in the US.
The micro environment includes regulatory and remunerative issues such as what will the effects of this particular spill have on stockholder value? What effects will the spill have on the overall operating environment not only for BP but for other companies? Will the liabilities accreting to BP reach the point where the company dissolves and is restructured? What will the effects of this restructuring be?
This is a daily chart of BP's ADR's price (BP is a British company whose stock trades in London, ADR's are US stock equivalents) and you can see that the shareholder value has plummeted since the Deepwater Horizon blew out. The wisdom of the investing crowd suggests that the end of the problem is nowhere in sight, it also suggests that BP is an increasingly tempting takeover target. Events taking place over the past few days suggest that the BP management is in the process of 'walling off' liabilities into a 'Bad Bank' entitiy that would then be split off from the parent company, which would then merge with another oil firm such as Sinopec or Shell Oil.
As the history of the drilling business suggests in Nigeria, Ecuador and elsewhere including in the US, the companies consider spewing waste into the environment a way to generally cut costs or are - at worst - a temporary business expense that can be 'amortized' by using what is effectively a client - the legal system - to spread liabilities over time.
Complicating the issue are two factors. One is the complicity in the oil business' operation by customers who know that conservation is a necessity, but who currently do all they can to avoid the issue. The question here is whether BP's corporate missteps will change public attitudes toward consumption without limits as well as about BP? If (when) customers disappear (use less oil) the industry will shrink.
The second factor is the diffidence of the government - particularly this government. The issue of the Demise of BP stands right alongside the likely Demise of the Obama Administration. By effectively treating BP as a special class of citizen with rights that other citizens cannot share, the Administration demonstates that it lacks the courage of its convictions. A basic conviction that all governments must express is primacy of law and stewardship. This isn't simply an 'Obama- the- politician Problem', rather a long- running 'America Problem' that has trickled down to other countries and economies. Nevertheless, Obama's regime hangs in the balance, because he is here and the problems can be blamed on him.
A one- time manifestation of conviction on the part of the Obama team to take more than symbolic actions to gain control of BP's assets would likely dissolve the BP corporate whole and leave a collection of component parts with questionable collective value. Alternative to a nationalization, the downward spiral of effects on the Gulf and Atlantic economies also diminishes the merger value of BP's parts or whole to potential suiters. BP's efforts to wall off Gulf operations from the parent are not outside the reach of courts which cannot be considered reliable oil company clients any more. The spill is off the American coast - close to TV stations and news media - rather than the Angolan or Persian Gulf coasts where there is little property to ruin with spilled oil ... or Alaska which has little real estate development upon its shoreline. Litigation will have its effect on BP's activities rather than on its cash, moreso if the spill reaches the UK/Ireland as the current flow would suggest. In this case, time would not be on the side of BP as litigants would be either licensing entities who would be seeking to 'pull the plug' on the company or those with infinite lifespans such as governments or other corporations. All of this reduces BP's takeover value. While BP's reserve assets have value, separating the assets from claims against them is easier said than done.
The current spill interferes with the axiom that potential oil development sites will inevitably be made available for production. Questions about technological limits, spill outcomes, costs v. benefits and agency wrangling will make production of all kinds more difficult. Oil businesses are businesses first; they have to sell a product and if the product is either unavailable or too expensive there is no business.
Which illuminates a third factor: the spill's effect on the US Gulf Coast (and perhaps Atlantic Coast) economies. Certainly this may NOT be the US' greatest environmental disaster - the Dust Bowl is probably tbe worst - but it will certainly be the costliest. Moratoria on Gulf oil drilling resulting from BP's cavalier practices is idling production and causing layoffs. There are knock- on effects from the drilling halts including declining sales of products and services to producers, families and downstream oilfield dependent businesses. The effects on fisheries and those dependent upon them in the Gulf is well documented. Since much of the current value of US real estate is located on the coasts, the effected areas will see drops in real estate value. Hard- hit Florida will likely be hit again as the coast's values have held up to now better than that of inland areas such as Orlando. The tourism, hospitality, liesure travel, sport fishing, recreational boating and entertainment industries will suffer as the coasts are turned into polluted industrial sites.
Keep in mind that the perception of harm is as hazardous to BP as the harm itself. The claims against BP for oil spill pollution will be as enduring as those against Manville for its asbestos products. As liabilities mount and are directed against BP it will be increasingly difficult for management to extract assets from under the onrush of claims against them. In a sense, the failure of the US government to freeze BP assets both in the US and abroad will make sorting out BP much more difficult and costly for the company, its shareholders as well as for those making claims. Robert Reich has suggested putting BP into receivership for other reasons, most of which have been illuminated here on TOD.
The issue of claims brings the topic back to the beginning; is the product of BP equal in value to what has been so far been exchanged for it? Suggestions are made that this is the Chernobyl of the oil industry. Until that manifests in the activities of all the oil industry participants - the auto users - and does so by voluntary reductions in consumption, the result will be the submergemce of BP under its aggregation of claims against it in front of the backdrop of the submergence of the world's industrial economies under the value claims laid against them.
I think you have it surrounded
Well I would argue those that consume the most are the richest irrespective of monetary value
If capital can't find a home in oil, or other ways to generate 'watts', it will gravitate to the production of negawatts. USland has more negatwatts than anybody else. How well USland does economically during this transition will as always depend on public policy.
The mix of interventionist and market led capital formation in the negawatts industry will vary from jurisdiction to jurisdiction, depending to a great extent on the relative power of different elites.
Expectations of systemic failure due to declining consumption of oil and scarcity of other low entropy resources reflect a poor comprehension of financial structure and economics.
Time will tell, won't it? (Dryly.)
Perhaps this thread should be named 'The Continuation of BAU?' instead?
Yes, of course. This is a reminder of some of the costs associated with continuing business as usual which hadn't made themselves quite clear so recently and so near rich Westerners; and the answer is that it's expensive, but not bad enough to give up on business as usual ... the clean-up to date has cost about as much as the FDIC spent (www.fdic.gov/news/news/press/2010/pr10097.html) on clearing up the insolvency of two of the larger banks in Puerto Rico.
It looks as if the mid-point of opinion here is that moving as far away from business as usual as they want requires the kind of changes which it would be reasonable to oppose with satchel charges, anti-tank mines and snipers if they were being imposed by an invading power; the far point starts to look like Pol Pot. These don't strike me as reasonable arguments to have.
Are you saying with your second paragraph that the majority opinion at TOD is to make lifestyle changes that most 'reasonable'(by your definition) people would feel compelled to conduct an armed rebellion against?
I have been noticing a counter trend: that more and more folks on TOD champion a BAU, 'no-pain-no-gain', 'you will pry my 12 MPG SUV from my cold dead hands' attitude.
I personally think that we in the U.S. will move (slowly but surely) towards modifying our lifestyles to use less energy. I don't think that such changes merit riots in the streets...that would make matters all the worse.
There are certainly some people who are against any changes at all, but the impression I get is that, particularly among the commentators who use the term 'BAU' pejoratively, there's a subset whose set of desired changes - abolish great chunks of the banking system, aggressively hair-shirt rationing, turn the country back to being predominantly agrarian - are so drastic as to deserve armed rebellion.
There will be big changes, but I suspect to get any backing for them they'll mostly have to be structural enough that they won't be lifestyle-changing: changes in the mix of sources providing electricity to the grid, a more efficient grid, rather more expensive electricity, but still electricity from the grid rather than self-generated. More expensive gas, more electric cars, but still private cars. More expensive flights, perhaps less convenient times, but still flights. More efficient HVAC in buildings, you probably will wear a sweater indoors in the winter and sandals in the summer, but the control panel will look much the same (I don't know how big the difference in energy use between making a building human-inhabitable in the Montreal winter and making it comfortable-for-suit-wearers has to be); get annoyed that the lights at work turn off automatically and sometimes your computer doesn't automatically unhibernate in the morning, but there'll still be offices and the computer on your desk will look much as it does now.
I think I'm probably agreeing with you vigorously.
I've called this particular sort of change BAU-lite. (I happen to be a proponent). The problem with BAU-lite is that it has to be embarked upon early enough and earnestly enough to be viable. Otherwise the destabilizing effects, such as very expensive oil, leading to widespread bankruptcies and economic contraction could get the better of us. I'm not sure how much stress a misinformed population can take before it grabs for the pitchforks and torches. Obviously a well informed and united people can take many times this level of stress, provided they agree upon the cause and the course of action (think Britain during the Blitz). Given our disinfotainment media, and the general disregard for the truth that prevails, we would probably rather fight among ourselves than take the obviously adaptive course of action. Consider the following: telling your debate opponent that he/she is simply wrong because..., is considered to be arrogant elitism.
This is mindful of the Tea Party arguments; what are they for, exactly?
Cheap gas, pedal to the metal.
There are no guarantees in life, for anything. Rioting for cheap gas is pointless.
BTW, everyone will soon get their cheap gas. Nobody will have any money so the price will be cheap. What this means in real terms, the price of gas will be unaffordably high.
It's hard to riot about being broke. If there were riots about being broke or poor there would be riots all the time. If you are poor it's your own fault ... right?
Very expensive oil and widespread bankruptcies are happening already, we're there. We are now in the 'post- expensive oil/bankruptcy' period. It simply means the real price of oil will increase even more and there will be even more bankruptcies. You can chose between door number one and door number two.
Behind door number two is door number one. Funny how that works, eh?
What peeps don't understand is that 'BAU lite' needs BAU heavy to subsidize it. No giant pickup trucks and SUVs means no electric cars. The real price of electric cars is too high for ordinary commerce to support. In fact the addition of electric car costs will make the PU trucks and SUVs unaffordable as well.
This is also true of alternative power sources which require conventional power sources to fund them.
So dream on and riot, go ahead ...
The river Styx, and Steve the Boatman. Like it or not, whoever you are, you're on this boat. That's the way it is........
See you on the other side.
"No giant pickup trucks and SUVs means no electric cars. The real price of electric cars is too high for ordinary commerce to support. In fact the addition of electric car costs will make the PU trucks and SUVs unaffordable as well."
Please back this up with something. I'm sure someone said the same thing about Chaise Buggies and Dog Wagons a few decades back.. it didn't make it true.
Undersea flare. Need to provide an oxydizer: perchlorates, peroxides, nitrous oxide. Lots are available, cheap and pressure-tolerant. Ignition and then the sea absorbs the CO2.
It would be good for us to back off of offshore drilling because it would lead to shortages. It would be much better to have those shortages now when they are at least somewhat artificial than to have real fundamental shortages later.
A whole raft of electrics and plug-in hybrids are about to hit the market from Chevrolet/GM, Nissan, Tesla/Toyota, etc. We need more expensive oil to push uptake of those vehicles in order to further prime the pump for their production, thus decreasing their future cost via manufacturing economy of scale.
The best thing we could do really for the future of our economy would be to double the tax on oil and use it to provide tax breaks for anything-but-oil. But if this does the same thing, then great. Again, it's better to have an artificial shortage than a real shortage and we know for a fact that real shortages are coming within 50 years at the most. (Probably more like 10...) We should use this crisis. Our future pain will be inversely proportional to our pain today... today we still have the oil to fuel the transition.
Excellent point.
@ AdamI:
+10
was thinking something similar myself
The "new breed" browsing TOD have no idea.
Higher oil prices make it easier to purchase new personal transport? That higher oil prices will have no other effect on the economy?
Higher oil prices will enable cost effective manufacturing of vehicles? Higher oil prices not affect other forms of transport, for example air? That higher oil prices will not affect the price of road transport and everything reliant on it, for example food? That higher oil prices will not affect employment?
To expect we can spend and engineer our way out of a situation brought about by cheap plentiful energy like oil, then expect we can continue to live in the manner to which we have grown accustomed by using less and at a higher price of same is nothing short of preposterous.
Is it understood that cheap, plentiful energy has permitted the worlds population to explode from two billion to nearly seven billion in a hundred years.
Those hundred years have severely depleted nearly all essential resources including water, soil, oceans and forests.
Every competing animal or bird has been hunted to extinction or near extinction or had their habitats destroyed so the human species can expand.
Now we are concerned that we may not get the chance to manufacture millions of life saving hybrid and electric vehicles.
How much psychopathic human behavior can we continue to display before wreck every living thing on earth?
You have the right idea. Facts are a bit off...
World Population Growth
Year Population
1 200 million
1000 275 million
1500 450 million
1650 500 million
1750 700 million
1804 1 billion
1850 1.2 billion
1900 1.6 billion
1927 2 billion
1950 2.55 billion
1955 2.8 billion
1960 3 billion
1965 3.3 billion
1970 3.7 billion
1975 4 billion
1980 4.5 billion
1985 4.85 billion
1990 5.3 billion
1995 5.7 billion
1999 6 billion
2006 6.5 billion
2009 6.8 billion
2011 7 billion
2025 8 billion
2050 9.4 billion
http://geography.about.com/od/obtainpopulationdata/a/worldpopulation.htm
So, world population was 1.6 Billion in 1900, and didn't reach 2 Billion untul 1927. Of course, the industrial age begain with coal and steam about 1800 (Population just under 1 Billon), and really got cranked up with the age of oil! It is only fossil fuels that allow us to maintain more tha 1 Billion or so, though I have heard that with the newer sustainable organic farming methods, it could go as high as 1.5. Who knows?
But, we will find out, won't we.
Best hopes for a world where men are sane.
Craig
There's a very easy way to reduce population: raise living standards, educate people, make women and men equal, and then make contraception available. In some cases it works so well that it creates the opposite problem: serious economic issues resulting from demographic collapse and top-heavy pension systems.
The scope of your reasoning is breathtaking.........
Raise living standards: Where?, To what level? By when? How? Costing?
Educate people: What people? Where?, In what? To what standard? By when?
Make woman and men equal: Make???? By what means? By when?
Make contraception available? Do contraceptives prevent humans from breeding when they want to? We don't need to stop people from having six or seven children, we need them to stop having as near as practicable, zero children for a couple of generations.
The first world has become accustomed to the advantages of cheap and abundant energy.
The means to factory farm the land, sea and oceans to feed us.
All assumptions for the future must calculate how we can continue to pollute, degrade and reduce finite resources, feed everyone and facilitate a reasonable decline, let alone growth or sustainability.
The Earth has called "all in", the whole world must decide if we call or fold. We had better have a good hand if we call. I doubt the Earth is bluffing.
We know for a fact that real shortages are coming within 50 years at the most. (Probably more like 10...)
More like two to five years.
You are a newbie here at TOD.
That has been our main focus and raison d'être.
Best Hopes for Starting Soon,
Alan
PS: Bicycles are a faster and more practical option than Chevy Volts. As is Urban Rail and electrifying railroads and shifting freight to them.
Alan, there is real ... then there is 'Real'.
Which real do you want?
The real behind door number 1 or the real behind door number 2?
Door number 1's real is the money real. Prices - not barrels - along with supply/demand relationships determine available crude oil relative to consumption. Behind door number 1 Peak Oil took place in 1998.
Our crash- and- burn economy is testimony.
Door number 2 is peak in physical production. Barrels produced - not the market price at any given time - determines crude relative to consumption. Behind door number 2 Peak oil took place ... when?
Let's say it was last year ... prices have fallen since the price peak in 2008. Is there some kind of disconnect between price and production?
With peak oil in the late 1990's, physical shortages would have been taking place beginning in 2003 or so. The expansion of credit worldwide allowed crude oil buyers to bid up prices with business output or production they didn't currently possess, but what they could borrow from the future. So ... there were indeed shortages, but these were allocated to those with no or small access to credit. These losers weren't end users - the individual gas purchasers who could afford the lower incremental costs - but instead were business that had very small marginal returns on their fuel/transportation bills or that of their customers.
The shortages were there ... just hidden.
But not for long, the borrowing and resulting increase in crude price started causing an economic backlash starting around the same time. Instead of the shortages manifesting themselves in gas lines or rationing, the shortages manifest themselves in higher interest rates and - starting around 2004 - more business failures.
More shortages ongoing means more of the same ... the hollowing out of the financing mechanism and increasing business failures, less employment and lower wages, declining values of goods and services and increasing fuel prices relative to economic output. As even a casual reading of a newspaper over time can illustrate, the finace crisis today is more or less unchanged since it emerged into the daylight 4 years ago. This, despite the addition of almost $50 trillion in replacement credit during that interval. Our problem isn't credit ... and it certainly isn't a solution.
Soul- ution. Park the car, play some music. More fun and less damaging to the environ ... oops, economy.
hear hear !
Not only the coastlines, Robert, but the seas and oceans too!
I forget what it was but a publication I used to read had a regular feature that would describe an event as a "sign of the apocalypse". DWH would definitely qualify.
I was getting ambitious and headed over to the MMS web site to rummage around and found a "Fact Sheet" entitled "OCS Five-Year Oil and Gas Leasing Program" issued in April 2007. This little ditty starts off stating that the Outer Continental Shelf (OCS) is the "source of 27 percent of domestic oil production and 15 percent of domestic natural gas production" and most of that from GOM.
Even more amusing farther down in this summary is the following:
I have a t-shirt that says "Stupidity: How's that working for you" and is this "Fact Sheet" is the heart of the stupidity of how we got here.
The question is where and how do we go from here?
Is there an oil major that does not have a history of environmental degradation in it's past? I don't think so and maybe it's not possible to expect that man in general and profit-seeking corporations are able to put the interest of our and our planets survival ahead of their short term interests.
So we have Congressional oversight and Executive-branch agencies that nod their heads and swallow the kool-aid they're given in response to what should be their oversight role. If anyone has failed us here it is those entities, not the profit seeking corporation.
Personally I cannot be any more disillusioned than I am right now about all of it.
I do not know which oil company has spilled the least, but if I had to bet my life on it, I would bet it's ExxonMobil.
And my only concern would be lack of knowledge about Mobil's past, not Exxon's.
How could it be otherwise in an era when Congresscritters, funded by lobbyists and driven by voters who Feel Entitled To Have It Both Ways, routinely enact cheap fuzzy sentiments instead of laws. Every item is either untestable - how long, in a world where nothing is truly permanent, before you ought to agree that an observed change is "long-term" or permanent? - or it exists solely in the eye of the beholder - how much is enough to be "substantive" or "extensive"?
I prefer creating a third choice. Develop technology to contain any leak. Drilling underwater without the technology to contain any possible leak is like building a power reactor without a containment building. BP, in the gulf, and the Russians at Chernobyl have demonstrated the foolishness of that. Containment domes can be built with the technology to collect oil and gas leaking from a failed BOP, minimizing the environmental impact of any failure.
I also support development of diverse ways to cut off the flow of oil after a failed BOP. One option would be a device located 500-1,000 feet below the BOP that would use explosives to pinch off a wild well. This would not be the simple crushing of drill pipe. The materials and dimensions would be carefully selected and tested to produce a reliable closure without creating another leak. I see such a device using liquid explosives that would be emplaced only after all other options failed.
Not being an engineer, I cannot comment on the practicality of your specific proposals. I would say, though, that from a liability standpoint, having in place a tested and workable system of containment should be the absolute minimum, and required to avoid criminal liabilities and assessment of punative damages.
Thank you for your insight.
Given your very interesting background, would you comment on the positives and negatives involved in the recent nuclear technologies involving highly recyclable fuels? How long would those extend the availability of nuclear fuels? What are the long-term implications as to nuclear waste (how much could be recycled and reused, what are the real disposal problems, etc.).
I would like to see an extended post at some time, if not from you, Bill, then from someone with an industry background.
Thanks.
Craig
Craig, it’s off the subject but I would suggest you start with this blog.
http://nucleargreen.blogspot.com/
It covers all the issues and has excellent links to other sources. I also recommend the video’s by Dr David Leblanc.
http://nucleargreen.blogspot.com/search?q=leblanc
RR:
IMHO it would be useful to try and separate the technical issues of deepwater drilling themselves on the one hand, and the issues of BP's management culture on the other. I have seen strong indications that it is the latter that are primarilly to blame for this whole affair - and indeed, maybe for the earlier Texas City incident as well. In fact, I would go so far to say that the whole emphasis of cutting corners and disempowering employees in the name of protecting profits, rather than the environmental catastrophe itself, may actually be the most damning indictment of the company, and reason enough to hope for its quick departure to the dustbin of history.
Accidents happen, and I can forgive that. What I cannot forgive is a number-crunching corporate pooh-bah second guessing the people actually on the line and vetoing their doing what they feel they have to do to protect their own safety and that of the rig. Such a corporate management needs to just be sent to jail and put out of business. We don't need them.
As for the technical question of deepwater drilling itself, I don't have the expertise to judge that. I don't know if it can be made 100% foolproof. On the other hand, apparently the technology they did have in place was not installed and operated properly, and that was a management problem. I don't know if proper management would have been enough to ever prevent something like this from happening in the first place, but it is evident that a combination of best-practice technology AND best-practice management are going to have to be absolutely essential before we even THINK about permitting deepwater drilling again.
BP was a takeover target by Shell in 2008 (when stock was around $60/share). It's currently at $37. If this happened anywhere else besides the Gulf (which is the breadbasket for US seafood industry), I'd say BP would be fine. But the uncertain costs in handling "legitimate claims" puts a lot of everyday financial certainties in doubt. They intend to pay $10 billion this quarter to shareholders in dividends … so the scale of handling this spill (and the cost so far) appears to be quite small to the company. The moratorium offshore won't last, but more dire to the industry is the repeal of tax subsidies and royalty relief (which have sustained the industry offshore for many years). The Gulf is one of the most expensive regions in the world to produce oil (with finding and lifting costs on new wells reaching $65-75/bbl). Without tougher regulations, the response to date is only going to create additional pressure on industry to cut cost offshore. As with any of these tough national challenges … the US needs an energy policy, and there needs to be a comprehensive approach (rethinking everything from clean energy, incentives for conservation, price on pollution and other externalities, working with auto makers, mass transit and high speed rail, modernizing electricity grid, managing risk, all the rest). Leaving it to BP to decide (and to performance measures in free market) only assures more of the same … regardless if the oil and gas has a BP, Shell, or ConocoPhillips logo attached to it.
Well now that the oil is here on my local beach I cannot help but be sad. Right now I watching Ozzy on YouTube, 'Revelation Mother Earth'. http://www.youtube.com/watch?v=z9ESCyNlkrw
"Mother please forgive them, for they know not what they do, looking back in history's books it seems it's nothing new..." "..Father, of all creation, I think we're all going wrong, the course they're taking seems to be breaking and it won't take too long..." "...had a vision, l saw the world burn and the seas had turned red..."
I know we are in trouble when I can understand Ozzy. Yes, I know the Madman was paraphrasing Jesus, but appropriately. Can I nominate a TOD theme song?
I am off to take new pics of the beaches, good luck all.
In response to Mr. Rapier's prediction that the BP spill will be a death blow for deep water drilling. The first thing to address I suppose is the title. BP will be drilling oil as long as there is oil to drill for. BP profits are staggering, as well as the worth of is assets. BP will promise anything and everything to mitigate the current anger of the public. Once the spill is plugged there will be another drama that occupies the minds of the public, and in time the spill will only be a memory dredged up from the back of the public's mind on occasion that has lost most of its emotional baggage, only to recede in the dust bin of memories reserved for events that are beyond any resolution by us, and just as quickly as the news report brought the memory to the surface it will be out of mind. The locals who's livelihood has been destroyed will be bitter, but most of them in time will move on because they will have no choice.
The court process will drag on for years and will probably never be resolved.
“If the choice is to deal with oil shortages or risk a disaster off the coast of Florida, I am going to vote to live with shortages.”
That is admirable, but once the public is stranded in their suburbs without the ability to buy gasoline due to rationing, or not being able to pay for it due to the price and the inability to find gainful employment in an economy that no longer operates millions of vehicles being pushed countless miles for the end use to ostensibly push some paperwork around, cut someones hair, or other service related work that will either no longer be applicable, necessary, or needed with all the free time needed to do things your self or without travel, then people will sacrifice the beaches of some distant place like Florida, and think nothing of it, just like they think nothing of the apx. 1million Iraq lives lost, and 4 million people displaced due to the war crime of our invading a helpless country that had been under siege for over a decade as well as systematically bombed for years prior to the invasion, and where the UN reported that during the course of the siege 500,000 Iraqi children under 5 died due to the siege, and when in 1996 then Secretary Of State Madeleine Albright was asked if she thought the death of 500k Iraqi children was worth it she stated “we think the price is worth it”
The government goes on about the loss of 11 lives, but the loss of life for those roughnecks is irrelevant to the government. Our government has no motive to care. American soldiers are sacrificed in Iraq and Afghanistan to secure a supply of oil for our country and to support the American dollar, which without the backing of our military, would soon be only worth the paper it's printed on. It would not surprise me that many more soldiers are sacrificed in the near future, and possible many thousands in the fight over America's need to insure the oil flows towards it, rather than to what in the end, may be the rest of the world. Alliances change with governments not according to any law, treaty, or agreement previously signed, but to the dictates of what is necessary and expedient. The inherent nature of a soldier to a government is that of an expendable asset.
http://business.timesonline.co.uk/tol/business/industry_sectors/natural_...
Well now, the filing I'm looking at for the Q1 2010 shows cash of $6.8B and a net cash outflow of $1.5B.
They are still #6 on the market cap list for oil majors, even after the pounding their stock has taken recently.
I think many people have misunderstood what I am saying. It isn't that they can't financially survive it; I agree that they probably can. But the brand is forever damaged. That is why I don't think BP has a long-term future.
A name change is in order and they will thereby keep on doing bau while fleeing from thier reputation.
RR is almost certainly correct that if the leak is stopped anytime soon,BP will survive as a company.
If on the other hand, it cannot be stopped soon, or there is an unexpected upheaval in politics,or a suprise decision made by some court........
George Monbiot,
The oil firms' profits ignore the real costs
The energy industry has long dumped its damage and, like the banks, made scant provision against disaster. Time to pay up
http://www.guardian.co.uk/commentisfree/cif-green/2010/jun/07/bp-oil-pro...