Over at Think Progress, Ben Armbruster points to the explosion of an oil and gas rig 80 miles off the Louisiana coast today, noting that just yesterday one of the senior employees at Mariner Energy, the company which owns the rig, had this to say about the offshore drilling moratorium:
“I have been in the oil and gas industry for 40 years, and this administration is trying to break us,” said Barbara Dianne Hagood, senior landman for Mariner Energy, a small company. “The moratorium they imposed is going to be a financial disaster for the gulf coast, gulf coast employees and gulf coast residents.”
Of course, the many gloom and doom predictions about the moratorium have not come to pass:
Unemployment claims related to the oil industry along the Gulf Coast have been in the hundreds, not the thousands, and while oil production from the gulf is down because of the drilling halt, supplies from the region are expected to rebound in future years. Only 2 of the 33 deepwater rigs operating in the gulf before the BP rig exploded have left for other fields.
While it is too early to gauge the long-term environmental or economic effects of the release of 4.9 million barrels of oil into the gulf, it now appears that the direst predictions about the moratorium will not be borne out. Even the government’s estimate of the impact of the drilling pause — 23,000 lost jobs and $10.2 billion in economic damage — is proving to be too pessimistic.
So the costs of the moratorium have been minimal – much less than predicted – and already we’ve seen a second rig explode in the Gulf this year. The oil industry should realize by now that cleaning up after a disaster is a far more expensive, messy process than ensuring that it doesn’t happen in the first place. It’s also terrible PR. But, of course, the oil industry does not realize that. Until each rig is inspected and safety on these rigs is ensured, I don’t see how the government can do anything but impose a moratorium. Of course, activist judges think they know better. I wonder how many more spills and explosions need to occur before we implement sensible safety and precautionary measures in our oil rigs? Kicking the costs down the road until something really bad happens is certainly not the answer, even if it is the likely outcome even of a disaster the size and scope of the BP oil spill.
Unlike the Deepwater Horizon, this explosion occurred in shallow water, operating at about 340 feet instead of 5,000 which makes any complications from a spill much more manageable. This, and the fact that no workers were killed, make up the story’s silver lining.
More on the explosion here.
Stillwater
I saw what you did there. Sneaking in that libertarian bent of yours.
The oil industry should realize by now that cleaning up after a disaster is a far more expensive, messy process than ensuring that it doesn’t happen in the first place. It’s also terrible PR.
Hmmm. I wonder why the oil industry hasn’t learned such an obvious lesson??? If only the invisible hand would guide their eyes to the unintended consequences page of the manual.
Mnemosyne
If the BP disaster didn’t teach oil companies that they’re better off adhering to safety standards, then absolutely nothing will. They’re like Merrill Markoe’s dog that ate a rubber hedgehog toy, had surgery to remove it, and then promptly ate the hedgehog a second time, requiring a second round of surgery.
They are completely incapable of operating in their own self-interest at this point.
gex
It is not that they don’t realize that the costs of clean up exceed the costs of prevention. There are a few reasons why they don’t care about this fact.
1. They are ideologically opposed to the idea of regulation and safety mandates and are ideologically inclined to pursue MAXIMUM profits.
2. The profits they made while running cheaply often exceed the costs of clean up, with the added benefit that if the rigs don’t blow up, then there are no costs associated with “safety”.
3. They will likely *not* pay anywhere near the full costs of the clean up. And if you recall the Exxon Valdez, this last point is the key.
When conservatives/libertarians complain about the exorbitant penalties in court cases in the pursuit of tort reform, they often forget that lacking the ability to really put it to corporations in a judgment they will simply factor in fines and limited liability into the cost of business.
ETA: The McDonald’s coffee burn case is a great example of how mangled the tort reform debate is in our country. In this environment, why does anyone wonder why companies behave like sociopaths? In the McDonald’s case they had been blatantly refusing to change practices, seriously hurt someone, and ended up being martyrs in the court of public opinion.
Linda Featheringill
I have been following the story of the new oil rig explosion and like you, I thought about all the grumbling [to state it nicely] about the deep water drilling ban.
Hopefully, this one won’t cause as many problems. And I am very happy that all of the crew survived.
Obama and the administration seem to be ahead of times a little bit on a lot of issues and much of the screaming and yelling comes to nothing when he is [again] proven correct.
[And please teach your spellcheck that Obama is a real word. :-)]
BGinCHI
These companies all sound like a sports team that refuses to have a referee at the match.
Warren Terra
@Mnemosyne:
In defense of the oil companies, i’m given to understand that rubber hedgehog toys are delicious.
t jasper parnell
According to this the exploding rig was unaffected by the moratorium.
Zandar
Doesn’t rightly matter. “Obama cost us thousands of oil jobs!” is all Gulf Coast GOP candidates have to say.
There’s no penalty for lying about a Democratic president.
beltane
NPR’s story on the latest oil rig explosion claimed that the industry sources they spoke to, off-the-record of course, were very, very sad about this turn of events, especially since it came right on the heels of yesterday’s pep rally. I’m sorry, but sad won’t cut it anymore.
Warren Terra
@gex:
I always love the McDonalds Coffee Tort Case example, because a lot of critics of lawyers (usually unwitting stooges of corporate power) still bring it up as an example of egregious plaintiff overreach, and none of the people who’ve brought it up when talking to me have known the first thing about what McDonalds was doing wrong or about what happened with the judgment.
RSR
“break us”
Using the language of labor, big oil tries to rally the working man (or woman) to their cause.
Dude, you’re not an air traffic controller, or anything similar.
What exactly would be the reasoning of ‘breaking’ gulf oil extraction? So we can then go invade more middle east countries? Open ANWAR?
A stupid, baseless statement.
Sentient Puddle
As a small point, framing this explosion in terms of the moratorium doesn’t exactly work. Wasn’t deep water, and it wasn’t a well.
That all said, it doesn’t really change the underlying point. Deepwater Horizon should have been one of those things that got the people in the industry thinking “Hey, we really should check and make sure our oil rigs aren’t going to blow up.” If they can’t take these basic steps, I really have no sympathy over whatever shit the government throws at them.
gex
@Warren Terra: “usually unwitting stooges of corporate power” is this your replacement for the word “glibertarian”?
I kid, I kid. But it is worth pointing out the naivete. Why don’t these guys realize the cost of clean up are greater than the cost of prevention? It’s as though we don’t really understand the way free market capitalism works or the incentives behind it.
BGinCHI
@gex:
Corporations don’t WANT to have to compete in a “free market” if they can help it. And boy do they try to help it….
GambitRF
@Sentient Puddle: As long as the deepwater rigs are just as capable of blowing up, and they’re owned an operated by the same handful of companies with horrible safety records (this company got a bunch of fines for violations earlier this year, I guess) I don’t really think it’s unfair to point to this as an example of why the moratorium is needed. Point is that the oil industry and the MMS have been extremely negligent with basic safety.
gex
@BGinCHI: Well, they believe in a different version of free market. To them it means free to do whatever they want. Only DFHs seem to want competitive markets which is when the free market works best.
RSR
The obvious answer to “this wasn’t deep water” is that when even the shallow water rigs are failing, we cannot risk another deep water catastrophe.
Now we don’t know why this rig exploded. I read that it was not ‘operating’ or pumping or whatever at the time. But until we know what happened…
BGinCHI
@RSR:
World Net Daily (or pick your fave) will blame the EPA for planting explosives on the rig in 3…2…1…
gex
@Warren Terra: I think this was a real inspiring moment for the GOP. Notice how they’ve distilled scientific research funding to the same ridiculous proportions. “How many millions for volcano monitoring?” is the new “How much did she get for being burned by coffee?”
El Cid
The only reason you’re having oil rigs exploding is Obama putting regulations on them and threatening them with inspections.
MobiusKlein
@Warren Terra: Lying about judicial cases has been the M.O. since at least California booted Rose Byrd.
Easy to make the 30 second frame of a ten week trial, and leave out all the parts you don’t like.
The Moar You Know
America: still drilling our way to freedom.
Maude
Exxon has come up with a plan for after a blowout happens. It’s better than no plan. It also stops the denial of there could never be a blowout.
It’s always about money and the ‘little guy’, well, too bad.
It’s gonna take a long time to set things to rights.
Silver Owl
I’m not getting the problem with having higher standards so a company can produce and function longer and not piss their customers off by constantly dumping the cost of their f*ck ups on them.
This whole attitude of executives should be allowed to whatever the hell they want, crap all over the place while everyone else has to clean up after them and suffer extremely negative and costly consequences, is really messed up.
We house train pets and potty train kids. How about training executives to be responsible adults rather than greedy destructive arses?
MikeJ
Cleaning up after the BP spill was expensive because BP’s name got attached. Had it been a smaller company, cleanup would have been free because they would have simply gone out of business after selling all their assets to a brand new hard charging startup.
handy
@El Cid:
The oil rigs are freedom loving ‘Muricans too and when faced with all this soshulist regulation they
explodeGo Galt!Suffern Ace
@Warren Terra: Yep. And the coffee case happened 15 years ago and were are led to believe that because of this current event, which even at the time was unusual, is the reason why we should just chuck major portions of the legal system. It’s kind of like demanding that no one ever can go to a fertility clinic again because the Octomom prooves that people who need those services are out of control.
Legal reporting is really bad all around. Very few reporters will report what evidence the jurors heard that might have made them make the decision that they made, or what laws they were supposed to be applying. But the reporters certainly like to talk about “slam dunk” cases that aren’t and “out of control” verdicts that are actually fair decisions.
daryljfontaine
@BGinCHI: The Vermilion 380 platform was James Lee’s last stop before the Discovery Channel building, don’tcha know.
D
Omnes Omnibus
As long as the perceived cost of prevention exceeds the perceived cost of clean-up times the likelihood of it happening, companies will not do prevention.
Linda Featheringill
@Warren Terra:
McDonald’s and hot coffee:
I agree with you. The lady in question first sued for hospital costs [she had to have skin grafts for the burnt area and these are expensive and Medicare didn’t cover all of it].
I saw a letter a couple of years ago written by her son-in-law. He said that McDonald’s was appealing the case and had not paid anything. Meanwhile, the hospital where she was treated was pursuing her aggressively to pay the hospital bill although she had very little money. He said the the lady was now living with him and his wife to cut back on her expenses so she could pay some to the hospital. In the meantime, he secured a part-time evening job so he could help her pay the hospital.
The son-in-law was concerned that the harassment by the bill collectors would shorten the lady’s life. And he might be right.
And McDonald’s has acted like a big bully all along.
Ailuridae
Honest question:
Has anyone ever established a way to effectively stop an underwater leak permanently besides a relief well? I realize the Deepwater Horizon was capped after many months but are there claims that is a repeatable process?
It seems to me that a pretty reasonable solution to this is to have the companies put the relief well all but into place before the flow of oil starts.
Frank
@gex:
Unless they lose money, then they expect the tax payers to step in and bail them out. Can you imagine if individuals were treated the same way as corporations?
PTirebiter
Yet the Heritage Foundation will have a talking head for every show asserting how NOBODY could possibly have more incentive to act responsibly here than the oil companies do.
And I dare say nobody, from NPR to Fox will bat eye, much less attempt to unpack the argument.
Maude
@Ailuridae:
That’s been talked about. A relief well is still a well and can have a blowout.
Bob
Comments like the one you provide from Barbara Dianne Hagood are unfortunately par for the course. Business is only concerned with short term, quarterly profits. So for them a moratorium looks like an attempt to “break” them. One needs only to look to today’s news, the $600 million fine levied on the maker of Botox, to discern sleazy business practices. Google “record fine,” it produces a list of greatest hits for business bad behavior. Ms Hagood must find it easy to utter such tripe. Given business standards her lie is a venial sin.
Ailuridae
@Maude:
I realize that but it is also not what I asked. Up until Deepwater Horizon no underground oil spill had ever been stopped using any technique except for a relief well, AFAIK. If I am wrong please provide a link.
So as much as it is wise to drill underwater at all it would seem that having the only repeatedly demonstrated technique for stopping the flow of oil in place already would be a pragmatic solution to the problem.
If a well blew out, and then the relief well blew out too that would seem to be a very low probability outlier and might possibly be a justifiable risk. But allowing drilling to continue as it has in the past (at least off the US coast) seems follhardy unless someone can actually demonstrate that if BP had the “safety mechanisms” in place they could have stopped the well without a relief well. None of those safety mechanisms have ever stopped a leak from anything I have ever seen.
Suffern Ace
@Linda Featheringill: And in the meantime, most people who heard about the case when it was a hot topic and cried fowl over her frivolous suit, probably think that she is living in a huge mansion.
slag
I’d say one of the worse aspects of the BP spill is how insignificant future spills might look in comparison. BP set a new standard for horrifying, and we will have very little trouble adjusting to it, I’m afraid.
Tonal Crow
@Omnes Omnibus:
Also, executives’ interests often diverge from their companies’ interests. If an executive can increase short-term profits — and thus boost her year-end bonus — by cutting spill-prevention costs, she’d going to be tempted to do so, even though that creates long-term profit risks. And if the directors are short-termers too, they’re likely to support such compromises.
We really need to do something about corporate short-termitis.
slag
@PTirebiter: From NPR to Fox? That’s like going from Saint Paul to Minneapolis. In galactic terms.
maus
@Warren Terra: http://citizenvox.org/2010/08/31/warning-hot-coffee-may-change-the-way-you-view-our-justice-system/ !
Not that these people will watch it, just as I’ll never get my conservative friends to watch any Wal-Mart documentaries.
Warren Terra
@Linda Featheringill:
Also, the judge (or was it a higher court?) almost immediately reduced the amount of the award.
But that’s all about the size of the judgment; the rest of the meme is that she was dumb to spill hot coffee on herself in a freak occurrence and ignores the bit that won her the judgment: her lawyers were able to prove in court that McDonalds was, as a matter of deliberate corporate policy and in full awareness of the risks entailed, brewing and serving its coffee at superheated temperatures, because they had found tht they could save a penny or three on each cup that way: apparently using hotter water made it faster, or got more cups out of the beans, or something. McDonalds was fully aware that as a result of this policy their customers were often handed a beverage that was unsafe for contact with humans. As I recall, one reason that the judgment was initially so large was that the plaintiff was awarded an amount based on the amount McDonalds had saved on all the cups of coffee it had made and sold in this unsafe fashion.
joeyess
I disagree with this assertion. It’s not that the don’t realize it. Quite the opposite.
They realize that it’s cheaper to go to court and pay off the victims before the case is ever adjudicated.
Sorry, evil is as evil does.
Mnemosyne
@Sentient Puddle:
It works in the sense of, “Geez, these things are pretty dangerous even in shallow water, aren’t they? Maybe we should keep a closer eye on them.” But it’s not a precise comparison, no.
PurpleGirl
…the plaintiff was awarded an amount based on the amount McDonalds had saved on all the cups of coffee it had made and sold in this unsafe fashion.
According to Wikipedia (the easier reference to check): The punitive damages were based on the amount of money McDonald’s made from all coffee sales for one or two days. It was the trial judge who initially reduced the jury verdict. Both sides appealed and came to a undisclosed settlement before the appeal went to verdict.
Omnes Omnibus
@Tonal Crow:
Changing executive pay structures would do it. How to do that is another topic entirely. Guillotines might work, but that is just a guess.
PTirebiter
@slag: Funny. It’s a sad truth that I’m obviously not yet fully adjusted to. I think it was Chomsky who recently said that the spectrum for MSM news runs from far right to slightly left of center.
Cain
@gex:
After you’ve shruken the federal govt enough to drown it in a bathtub, they’ll have no teeth and no money to fix the problem. What will happen next then?
Sometimes you may need to go to that level and see things happen through. Jobs will dry up, eco systems will dry up, and people will find the american way of life has gone down the toilet and the pony they were promised with less govt is nothing but a farting aardvark.
cain
jonas
As long as the voters of the Gulf Coast continue to view themselves as the beat-down punk bitches of the oil industry, none of this will change. You know what? They can have this shit. I’m tired of feeling sorry for a bunch of people who keep getting screwed by the oil industry, but then get pissed off when the government tries to do something about it.
PTirebiter
@jonas: It really is amazing given their legacy from Huey Long. After the first big oil bust Texas diversified with electronics, I.T. etc. – Louisiana and Mississippi outsmarted everyone and went with Casinos.
TJ
Kabuki all around. A drilling moratorium doesn’t do bupkiss as far as the hundreds of producers already out there (one of which just exploded). Probably half of which are as fucked up as Deepwater was.
South of I-10
Y’all have said pretty much everything there is to say. For extra points you need to look up KATC on Facebook and read the comments to the articles about the fire on the production platform. Apparently Obama actually set the fire himself in an effort to stop all drilling. Nola.com is reporting that Mariner had 10 accidents in the last 4 years, ranging from a flash fire to a blowout. It can’t be the operator, it is all the President’s fault. I need a big glass of wine.
conumbdrum
Jesus effin’ Christ. Guess what the right-wing response to the latest rig explosion is. Just fucking guess.
Actually, don’t bother. It’s even worse than you think.
Courtesy of Roy Edroso at Alicublog:
When I heard there was yet another oil-related disaster in the Gulf (platform, fire), I wondered if rightbloggers would go there. Now reader teh mantis has alerted me and I know: Yes, they would and they have, on jet skis.
Melissa “The Chiropractor” Clouthier:
…I have a theory about the unfolding explosion on another Gulf Oil Rig today. It has to be an environmental wacko. I mean, they’ve been getting out of hand recently. And as the James Lee guy demonstrates, these people do tend to be given to violence.
Shannon Love of Chicago Boyz:
We went 31 years without a major oil spill in the Gulf prior to Deepwater Horizon. Now we have a second explosion so soon. Meanwhile, some Greenpeace “direct action” types are attacking an oil rig off Greenland.
Hmmmm,
There’s no evidence of any human agency in either explosion. Still when you look at the utter frothing hysteria directed against drilling and the oil industry in general, it’s pretty easy to imagine a group deciding that a little violence now will save a lot of lives later.
Left Coast Rebel:
What do you think? How long do you think that it may take for the investigation behind this to prove that it is a case of eco-terrorism? Perhaps one of the 13 workers that were saved may provide insight into the cause of the Vermillion 380 oil rig. Does James Jay Lee have a friend that works on oil rigs?
Making this extra adorable, LCR later complains about liberals rushing to judgement on the Vermillion Bay fire (“Can you believe the communist nutroots?”).
Anything’s possible, I suppose. But think about it: When they heard about a second oil disaster in the Gulf, their immediate thought was: I bet liberals blew it up.
Or maybe it wasn’t their immediate thought — maybe they first considered several options, and then went with this. Which is even worse.
Suffern ACE
@conumbdrum: If I didn’t actually have to live in the world made in response to the way people imagine it to be, I would sleep better at night.
Scamp Dog
@gex: I think the deal is that the managers making the decisions on site (an individual rig) figure they will get a bonus for saving a million bucks a day (or whatever) most of the time, while the corporation/taxpayers will pick up the tab for the occasional screw-up.
In the meantime, the CEO gives speeches (in public and to employees) about safety, which serve to reassure the public but don’t fool the employees who know how bonuses actually work. Lather, rinse, repeat.
SMR
My husband works near Houston for an oil services company. The secretary was handing out flyers for that gathering in Houston. Guess who was one of the organizers in small print at the bottom — FreedomWorks. Niiiiiiice.
My husband nearly went ballistic over it. I convinced him to take it up at the next office meeting, to point out that having those sorts of flyers distributed & posted on the bulletin board makes them look like a bunch of tea party loonies, and wholly unprofessional.
As far as I can tell, this moratorium hasn’t resulted in as many layoffs as there were at one blow to our company when oil was $10/bbl. We lost 400 people about 6 months prior to that, then when it hit $10 we were bought out and another 400 laid off. That was the story with most of the oil companies. And that wasn’t that long ago, 1999. How short memories are when it comes to oil.
As long as Americans demand that they be able to fuel up their SUVs for less than $3/gal they will never be able to acknowledge the true costs of oil, not just economic, but also moral/social, and environmental. We’re the only country that expects a free ride in that area. Other countries pay around $10/gal for fuel (Canada is sky-high, but not quite what it is overseas), and don’t support the endless oil-motivated wars. And just because Bush made Blair his bitch doesn’t mean that the average UK citizen supported either Blair or the Iraq war.
Scamp Dog
@Cain:
I am definitely stealing that one!
b-psycho
@El Cid: Going Galt? Sounds to me more like those oil rigs are going… Jihad!!!
SMR
This is a great article about the moratorium. I bought the magazine because it was so enlightening & interesting.
http://www.rollingstone.com/politics/news/17390/111965
On the other hand, finally got my drilling engineer husband to read it the other day, and he said the inaccuracies in regard to the drilling portion ruined it for him, as they could easily have been checked.
The bottom line is that the moratorium’s scope is so narrow that it affects almost nobody. Many companies (and individuals! just ask LA fishermen contracted out to BP!) are benefitting from this.
And now you’ve got those assholes at BP saying the moratorium (which is supposed to be over in 2 months IF you can prove you’re fit to drill wells, I guess) threatens their ability to pay spill claims. Well then get out of the Gulf jackasses! Sell more of your assets!
Note: My husband and I were both BP employees. The commenter above who talked about bonuses was spot on. Mention of the shoddy profits over safety culture was missing, though.
Want to be put off BP further (if possible)? Read the Rolling Stone article I linked to, you just have to love the BP exec referring to Texas refinery employees as little piggies who don’t need an expensive brick house, that it is cheaper to pay the families of dead piggies than to make needed repairs & modifications to the Texas refinery made out of straw.
Chris
As far as I’m concerned, representatives of the oil and gas industry can shut the hell up about Obama and Democrats trying to destroy them until the oil and gas industry stops doing shit like this that threatens to destroy everything around them.
Either that, or they can start jabbering about how horrible regulation is after they chug a cocktail consisting of one gallon Corexit, one gallon light sweet crude oil (or whatever BP spat into the Gulf because it was cheaper than obeying the fucking law they’d paid to have scaled back and under-enforced), and one teaspoon humility.
It’s the last part – that invisible, intangible tidbit – that they’re all going to like the least.
someguy
What makes up the silver lining, is that this provides enough ammo for the Democrats to shut down our polluting offshore drilling industry for good. Well, other than the fact they’re gutless and all.
Zuzu's Petals
Well it appears it wasn’t even an explosion:
And the reports of an oil sheen seem to have been premature:
Since it wasn’t a blowout, it seems unlikely that any oil on or in the water would be anything but oil and diesel used on the rig itself.
And the moratorium was not imposed so every rig could be inspected (which happened anyway), but so that the entire methodology behind deepwater drilling could be evaluated and any necessary regulatory changes could be put in place.
Love the bit about the “activist judges” knowing better than that, though. The ruling was that the government had simply not made its case.
Zuzu's Petals
@SMR:
I have to agree with your husband. It was so laced with bad information it was hard for me to trust the whole of it.
However, it does make the point that no one escapes culpability here.
SMR
@Zuzu,
I used that article as an example in class today of an article that had important information to share, but was ultimately undermined by its lack of attention to technical details that could easily have been verified via a 1/2 hour discussion w/a petro engineer. So much in that article needs to be out there — but the baby gets thrown out w/the bathwater because of some details that didn’t get checked. The emails are real. They, to me, are the most horrifying bit. The scope of the moratorium (or lack thereof) appears to be legit, but who knows, did the writer pay the same amount of attention to those details (least he could get away with) as he did to the technical details?
I wanted to be able to use that article to change some minds down here in dumb ass Texas headquarters (or maybe that’s Dallas, I don’t know), but guys/gals! in the industry are going to call bullshit, and rightly so in regard to some of it. On the other hand, if the moratorium details are correct, these TX people are all just a bunch of whiners. But then I already knew that.
Zuzu's Petals
@SMR:
I can imagine you’re in a tough spot, and more power to you.
Let’s hope that time will yield some well-balanced, well-researched analyses.
I don’t know what to say about the moratorium’s overall effect. Clearly the cleanup effort provided work to a lot of those laid off or underemployed, and there are a variety of reasons why the drilling companies decided to stick it out. Again, I think time will give us a balanced story.
Alexander Phinney
I think it’s funny how BP and other companies try to rally the “working man” behind their cause, i. e. “Obama is costing us thousands of oil jobs” etc. What about the working man who drives a car to work every day and wants to take a vacation on a coastline that isn’t permanently ruined every once in a while? I’m glad that no one is fooled by BP and others pretending to care about the environment, but some of their appeals and whining are just too sickening to listen to. The fact that anyone is naive enough to actually believe that they stand for the “working man” is about the saddest part of tragedies like this.