Sunday, March 15, 2015

Macondo Blowout Still Leaks; BP Drills New Deep Well In Gulf

Since the Deep Water Horizon rig is no more, it is more accurate to refer to the blowout which is still leaking:
 A year after the well was believed permanently sealed, the oil is back.  At first I thought that I should rush this piece but then I realized that the blowout will be leaking as far into the future as I can envision.  In addition to the environmental issues and loss of life, wasting that immeasurable quantity of nonrenewable resource is appalling.
It is ridiculous to be calling for hearings into the advisability of deep water drilling while the blowout is still leaking.  How can they claim to drill safely while they still can’t stop the current leak? How do they assess the damage while new oil is being dumped on top of it? Forget the hearings, BP is already drilling a new deep water well in the Gulf, safe or not: 
It is difficult for people to have any understanding of the pressure that exists at the depths they are drilling.  You might feel your ears pop on an elevator or an airplane.  If you have scuba dived you have felt the density of three atmosphere’s at 100 feet.  Each 33 feet of water weighs about the amount of air overhead at sea level.
Macondo reached just shy of 40,000 feet down from the waves, more than 4000 feet of water and 35,000 feet of rock.  These are pressures far beyond our comprehension.  We have entered the world of engineering.  Their new well in the Gulf will start at 6000 feet of water.
If you have been following this you have heard a lot of chatter about blowout preventer, cement slurry, drill monitoring systems, etc.  The point is that all these technologies worked at lower pressures.  They are extending their established technologies.  It all may or may not have worked if they had responsible people in charge who would have told upper management:
-Fuck you, we don’t know what we are doing; we have to spend the money and wear belt and suspenders on this one until we do.
Instead they have MBA’s in charge.  An MBA by training and intellect does not say fuck you to upper management.  That is not what people with business degrees are for.  If you are attending business school and they are teaching you to stand up to upper management, you should transfer; they are imperiling your career.
People keep asking: is deep water drilling feasible?  That is not the question. What has been tested and answered is: Is deep water drilling feasible the way oil companies want to run their business?  Macondo answers that question definitively.
Please don’t mention government regulation.  Government regulation of companies that large and rich is impossible.  This has been repeatedly proven; this well is a perfect example.
At this point someone blubbers:
-But we need the oil.
The well did not blow up because they were pumping the oil.  IT BLEW UP BECAUSE THEY WERE CAPPING THE WELL.  Even once it was burst and gushing oil, any attempt speculative or otherwise to capture and pump the oil coming out of the well was for incineration.  They have absolutely no interest in pumping the oil.  When oil companies refer to excess refining capacity, they mean the competition. There is no financial reason for an oil company to have its own excess capacity. It’s therefore unlikely that they have anything approaching the refinery capacity immediately available that that volume of oil would require. 
I hope it does not shock you to learn that oil companies have no interest in lowering the price of oil.  The major oil companies have an effective monopoly. An effective monopoly does not require complete ownership, rather by predatory pricing and other collusions they determine price and supply. The only thing holding them in check is the fear that we, the consumers will change our patterns of consumption.  If you trade in your Toyota Tundra for a Honda Civic they have lost.  If you continue to drive your Tundra on your daily three hour commute while demanding they drill the artic and nuke Iran, they have won.
If the well had been successfully capped, BP would have published some fantasy about how much oil was available at some future date when the well was tapped.  These fantasies and the financial speculation on them are far more profitable than the mere mundane pumping of oil. So called “proven” reserves determine stock price and borrowing reserve. Setting aside the environmental costs it is financially preferable for BP to waste the oil than allow some other more aggressive company to claim these reserves.
A ban on deep water drilling is a fetcher bill; it is a solicitation not a solution. If we are to attempt a legislative solution we may as well go all in; the only responsible legislative initiative is to nationalize America’s oil industry.

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