Category Archives: Uncategorized

Marketwatch: U.S. limits offshore drilling, for now

Wow. This is great news for the East and West coasts and the Gulf; at the expense of Alaska. DV

Dec. 1, 2010, 3:24 p.m. EST

Plans lease sales in already developed areas

By Steve Gelsi, MarketWatch

NEW YORK (MarketWatch) — The federal government on Wednesday said it would keep the eastern Gulf of Mexico and the Atlantic off limits for oil and gas exploration for now, while planning fresh lease sales in areas already under development.

In its first major oil-lease announcement since the Deepwater Horizon oil spill that began last April and ended in September, Interior Secretary Ken Salazar said the oil and gas industry already holds about 29 million acres of offshore leases in undeveloped areas where it⤠s now allowed to explore for new sources of fossil fuel.

Post-Copenhagen, a Cancun compromise?

There are lowered expectations as the world tries to agree modest steps to rein in global warming at U.N. climate talks in Cancun, Mexico.

Salazar canceled plans first disclosed in March to allow some oil and gas leases in the eastern Gulf of Mexico, since many of those regions now fall under a congressional moratorium against offshore drilling, he said.

Areas in the mid and south Atlantic, “are no longer under consideration for potential development through 2017,” the administration said.

The U.S. delayed lease sales from March in the western and central Gulf of Mexico but will still hold an auction by the end of next year or early 2012, he said.

The Cook Inlet and the Chukchi and Beaufort Seas in the Arctic will continue to be considered for potential leasing before 2017. One proposal from Royal Dutch Shell /quotes/comstock/13*!rds.a/quotes/nls/rds.a (RDS.A 62.29, +1.62, +2.67%) Â for an exploratory well in the region remains under consideration, he said.

⤦As a result of the Deepwater Horizon oil spill we learned a number of lessons, most importantly that we need to proceed with caution and focus on creating a more stringent regulatory regime,”said Salazar. “As that regime continues to be developed and implemented, we have revised our initial March leasing strategy to focus and expend our critical resources on areas with leases that are currently active.”

The decision drew a critical response from the American Petroleum Institute, a leading lobbying group for the oil and gas industry.

The group said the move, “shuts the door on new development off our nation’s coasts and effectively ensures that American jobs will not be realized.”
Steve Gelsi is a reporter for MarketWatch in New York.

Special thanks to Richard Charter

Holmes County Times Advertiser: Professor believes most spilled oil settled on ocean bottom & Press Enterprise Editorial: Gulf-spill lessons

http://www.chipleypaper.com/news/settled-7766-most-spilled.html

I agree with Professor Chanton that it will be impossible for BP to restore the damage it has done to the benthic communities of the Gulf. DV

Holmes County Times Advertiser: Professor believes most spilled oil settled on ocean floor
November 26, 2010 8:42 AM
SARAH OWEN, Florida Freedom Newswire

PANAMA CITY – The oil is still there, sitting at the bottom of the Gulf of Mexico and causing damage to the environment, a Florida State University professor who studies greenhouse gases, oceans and energy said Tuesday.

Professor Jeff Chanton compared natural oil seepage in the Gulf of Mexico to the Deepwater Horizon oil spill. About 1,000 natural ocean-floor leaks combine to trickle about 400,000 barrels of oil into the Gulf each year, Chanton said, but scientists estimate as many as 60,000 barrels of oil poured into the Gulf each day of the spill.

“While natural seepage is a normal process, what happened this summer was totally overwhelming,” Chanton said.

The professor said he thinks most of that Deepwater Horizon oil – as much as 70 percent to 79 percent of it -sank to the ocean floor, where it remains, sucking up oxygen and inhibiting life.

He and his colleagues are working to determine how that layer of sludge might affect the Gulf and how long it might take for the ecosystem to recover.

“But this is going to be a really hard thing to measure,” he said. “It’s likely that there will be this small, incremental degradation, but it occurs on such a slow scale, and human lives are so short, that people won’t notice it. It’s going to be anecdotal – people will say, ‘Oh, the fishing’s not as good as it used to be.’ ”

Scientists will need money to conduct that research, he added. He’s hoping some money BP is expected to pay in fines will be tucked away in a trust fund for long-term studies.

“The law says BP has to restore things to the way they were, but we don’t even really know how things were,” Chanton added. “It’ll probably be 10 years before we really know the effects.”

Dave Lobell, a self-employed engineer, said he sat in on the lecture to pick up professional development hours and also because he was interested in the topic.

“It was very informative,” Lobell said, although he added that he thought Chanton’s political views were evident in the lecture and that he didn’t necessarily agree with the professor. Besides talking about the oil spill, Chanton also discussed global warming and his opposition to offshore drilling.

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http://www.pe.com/localnews/opinion/editorials/stories/PE_OpEd_Opinion_D_op_26_ed_bpspill.369705c.html

Press Enterprise
Southern California
Opinion/Editorial

Gulf-spill lessons

10:00 PM PST on Thursday, November 25, 2010
The Press-Enterprise

Oil companies and the federal government need a better approach to oil-drilling disasters than improvising after the fact. The Gulf of Mexico oil leak shows that both the industry and government need to do a better job of planning, and put more money and effort into devising better ways to clean up oil spills.

The lack of readiness is evident in the findings of two reports, released this week, from the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling. President Barack Obama established the panel in May to examine the Deepwater Horizon incident. That offshore well exploded in April, killing 11 people, and spewed oil into the Gulf of Mexico for five months. One report addressed the efforts to stop the leak, while the other assessed cleanup methods.

The reports portray a response to the disaster hindered by an absence of planning for such an event, and cleanup technology that had made only marginal advances since the 1989 Exxon Valdez spill off Alaska. The Deepwater Horizon leak spurred some quick advances in cleanup methods — but only because a catastrophe had already happened.

One of the reports notes that oil companies spend almost no money on researching and developing new ways to scour the ocean after a spill, despite earning billions in profits each year. Over the past two decades, the companies did put some funding behind nonprofit oil spill removal organizations, but those groups focus on cleanup, not research into new technology.

The federal government, likewise, devoted little money to oil spill research over the past two decades. A 1990 law, enacted after the Alaska spill, authorizes up to $28 million a year in such funding, but federal agencies, including the Coast Guard and the Minerals Management Service, have never spent even half that amount in any one year. Nor do federal deficits explain the reluctance to spend: The money comes from a tax on oil production earmarked specifically for cleanup activities.

Oil companies argue that funding research into better ways of preventing leaks is more cost-effective. But while prevention is a crucial safeguard, accidents do happen, as the Deepwater Horizon incident demonstrated. And the aftermath of a spill is the wrong time to start considering more efficient methods to recover leaking oil.

The reports suggest that the federal government should encourage more spending on cleanup research. Steps such as increasing the cap on oil companies’ liability for cleanup costs or offering tax credits for research, for example, could spur development of new technology. The report recommends that the government beef up its research efforts into new cleanup methods, as well.

Federal agencies should also require oil drillers to produce a detailed plan for responding to well blowouts, to show the companies are prepared to deal with such disasters. That step should have been standard long before now, but federal regulators have a history of deferring to the oil industry on safety matters.

The Deepwater Horizon blowout caught the industry and the government off balance and unready. Both failed to learn from the Exxon Valdez disaster two decades earlier — and neither should repeat that mistake this time.

Special thanks to Richard Charter

Athens Banner-Herald Editorial: Government’s oil spill response a problem

ATHENS BANNER-HERALD (Georgia) –

http://www.onlineathens.com/stories/112410/opi_740633452.shtml

Published Wednesday, November 24, 2010

University of Georgia marine scientist Charles Hopkinson, director of the Georgia Sea Grant program, ate shrimp and oysters for six days in a row during a recent visit to New Orleans for a meeting, according to an Associated Press report from late last week.

He’s “still here,” he told attendees at an international conference in Charleston, S.C., that considered whether seafood from the Gulf of Mexico, where the Deepwater Horizon oil rig disaster spewed millions of gallons of oil, is safe to eat. But, he told the conference, he didn’t base his dining decisions on assurances from the federal government that Gulf seafood doesn’t pose a health hazard.

The U.S. Food and Drug Administration and the National Oceanic and Atmospheric Administration reported recently that less than 1 percent of the 1,700-plus seafood tissue samples tested by the government held any trace of chemicals from the dispersant used in the Gulf of Mexico to break up the oil in the wake of the April explosion.

The FDA and NOAA tests, however, have been criticized in some quarters for not comprising a large enough sample, and not testing for all of the possible toxic components of the dispersant, or for possible toxic components resulting from the dispersant mixing with seawater and oil.

Outside of those criticisms, though, is the simple fact that the government’s record in reporting on the oil spill has done little to inspire public confidence in federal competence or desire to investigate the spill and its aftermath fairly and accurately.

A recently released draft report from the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, a group of seven people with expertise in the legal, environmental and engineering arenas, and in the oil and gas industry, noted that the administration of President Barack Obama – who, in fairness, established the commission – made erroneous early estimates of the spill’s size and mischaracterized a government analysis by saying it showed most of the oil was gone. More recently, NOAA was reporting that it had not found evidence of oil on the sea floor.

In the wake of those announcements, other scientists, including Hopkinson and fellow UGA marine scientist Samantha Joye, debunked government claims. Regarding the supposed disappearance of the oil, UGA marine scientists noted that the analysis actually indicated only that the oil was dispersed, which meant that most of it still was in the water. Regarding the NOAA report on a lack of oil on the sea floor, a research team led by Joye reported finding thickly embedded oil.

Unfortunately, with that kind of track record preceding its claim that Gulf seafood is safe to eat, it’s little wonder that Hopkinson, calling the government’s errant analyses of the disaster “really disheartening” at the Charleston conference, would further ask, “So why should I believe their claim that the seafood is safe?”

Why, indeed? And there’s a larger issue here, too.

The government’s previously erroneous statements on the extent of the spill can be seen as a political exercise in trying to put the best face on the federal response, at the expense of keeping the public fully and honestly informed. It may be, in fact, that Gulf seafood is safe. But a government assertion of that point necessarily will be met with skepticism. Only now, that skepticism will do more than prompt the public to shake its head at the latest example of government incompetence.

At a time when this country needs to have more people working, a lack of trust in the federal government could adversely affect the working lives of any number of Gulf Coast fishermen and the working lives of people in related businesses.

Originally published in the Athens Banner-Herald on Wednesday, November 24, 2010
Special thanks to Richard Charter

Platts.com: BP Atlantis suit may set tone for US Macondo litigation

http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/8222228

BP Atlantis suit may set tone for US Macondo litigation
New York (Platts)–24Nov2010/1226 pm EST/1726 GMT

Hundreds of lawsuits were filed in reaction to the Macondo well blowout and subsequent oil spill in the US Gulf of Mexico earlier this year, but legal experts say one of the most important legal actions that will affect those suits was filed almost exactly a year before the disaster.

In that case, Kenneth Abbott, a whistle-blower, filed suit against BP on behalf of the federal government alleging fraud in the company’s certificate of safe operation and sound equipment for its Atlantis development, also in the Gulf of Mexico. The case is being heard in US District Court for the Southern District of Texas in Houston before Judge Kenneth Hoyt.

At the close of business November 23, both sides were anticipating the US attorney’s office to file an amicus brief, but the office could not confirm if that had taken place.

“If BP is found to have committed fraud, that would establish a pattern of behavior predating Macondo,” said one attorney familiar with the case. “That could influence all the other litigation arising out of the [Deepwater Horizon] explosion and spill.”

On November 9, BP moved to have the case dismissed; Abbott replied the next day, and the US brief is in support of Abbott. Sources with knowledge of the proceedings say both Abbott and BP will have a week to reply to the US amicus filing, then the judge will consider the motion to dismiss.

If that is denied, a jury trial will proceed, with the discovery process running from April through September 2011 and arguments to begin in November.

Some sense of how major other Macondo-related litigation will play out is also coming into focus. The third pre-trial procedural hearing in the consolidated damage and injury cases took place November 19 in US District Court for the Eastern District of Louisiana before Judge Carl Barbier in New Orleans.

Counsel for the Department of Justice reported that the forensic testing on the failed blowout preventer had begun. The testing was scheduled to be completed in January, with a report due in March. Attorneys for some plaintiffs argued that certain information disclosed to the Gulf Coast Claims Facility was protected from discovery in the litigation. The judge instructed the two sides to meet separately and try to come to an agreement. The next pre-trial hearing is scheduled for December 17.

The other big group of consolidated cases, those involving shareholder actions, has yet to get under way. Sources familiar with the action before Judge Keith Ellison in US District Court for the Southern District of Texas in Houston say that remanded cases continue to trickle in, but that the judge is hopeful of setting a schedule before the end of the year.

Another pair of important cases is being heard before two separate judges in Houston, both involving Anadarko Petroleum seeking to invoke force majeure to cancel contracts for offshore drilling rigs, one with Diamond Offshore and one with Noble Energy.

A scheduling hearing took place before Judge Gabrielle McDonald November 19 in the Noble case. Expert reports are due by June 2011 with discovery to be completed in August and arguments to begin in September.

The two sides reported that they are both agreeable to mediation, and are in discussions, but nothing about the trial schedule has been changed so far. Attorneys indicate the Diamond Offshore case is not quite as amicable, with Diamond moving for dismissal and Anadarko countering. On November 9, Judge Gray Miller converted the motion to dismiss to a motion for summary judgment, and will make a ruling on that January 10. –Gregory DL Morris, newsdesk@platts.com

Similar stories appear in Oilgram News. See more information at http://www.platts.com/Products/oilgramnews

Special thanks to Dave Curtis

The Huffington Post: Oil Spill Found On Shrimp Seafood In Newly Opened Gulf Waters (VIDEO)

http://www.huffingtonpost.com/2010/11/23/shrimp-boat-hauls-in-tar-_n_787411.html

This is just the beginning of a long term problem. DV

The Huffington Post | Joanna Zelman First Posted: 11-23-10 12:23 PM | Updated: 11-23-10 12:23 PM

375 Tar Balls. Not quite as appetizing a shrimp side dish as cocktail sauce. But according to FOX 10 News, that’s just what the shrimp boat Our Mother caught in its net this past week – enough tar balls to ruin thousands of dollars worth of shrimp.

The boat was trawling in newly re-opened waters north of the Deepwater Horizon well site when it hauled tar balls in with its shrimp. Due to this boat’s disturbing catch, NOAA (The National Oceanic and Atmospheric Administration) will perform trawls in the same area, and probably sample the shrimp for seafood safety. Based on their findings, the NOAA may consider re-closing the area. In the meantime, piles of shrimp sit spoiled on a nearby dock.

Special thanks to Diana Dodson