07/07/2010

Noelle Straub, E&E reporter

The Obama administration has asked a federal appeals court to reinstate the six-month moratorium on new deepwater drilling, saying it needs time to appeal a lower court’s lifting of the ban and to issue a revamped moratorium.

Because oil continues to spill into the Gulf of Mexico, “with catastrophic consequences to the environment and local economy — despite repeated efforts, using every available technology, to stop it,” the Interior Department had to take immediate action to minimize the risk of another spill, the department said in a court filing to the 5th U.S. Circuit Court of Appeals.

“The stakes are even higher now that it is hurricane season,” the department wrote. “The suspension orders give Interior time to further implement 22 already-identified new safety measures and to develop others as it gathers more information. Therefore, that decision was a rational exercise, under emergency circumstances, of Interior’s substantial discretionary authority under the Outer Continental Shelf Lands Act and its own regulations for suspending lease operations.”

The administration has been crafting a revised proposal since a federal judge struck down its original drilling ban.

President Obama in late May halted approval of new deepwater drilling permits and suspended drilling at 33 exploratory wells while an independent panel conducts a six-month study of offshore drilling safety. Hornbeck Offshore Services, an oil-field service company, sued over the moratorium, saying it would have severe economic consequences.

U.S. District Judge Martin Feldman agreed with the company and ordered the administration on June 22 to lift the moratorium, saying the government had not provided adequate reasoning for it and that it would have a permanent and harmful effect on the economy of the Gulf region.

The administration requested a stay, but Feldman two days later reaffirmed his order and gave the administration 30 days to comply.

In its request to reinstate the moratorium, Interior says it is “simply not true” that the department did not provide reason for the ban. The department says most of the country’s cleanup resources are already devoted to the current spill, and a second spill would further stress those efforts.

“Interior must protect the long-term public interest of the Nation in the prudent and safe exploitation and management of the OCS’s resources to ensure their viability for the future,” the filing says. “A short-term suspension of deepwater drilling while safety regulations are updated is necessary to achieve that goal.”

Interior also disputed claims the oil industry would collapse due to the moratorium, saying wells in production are unaffected and that the department must consider the effects of a second spill on the long-term health of the environment and economy.

The administration also said it would issue a new moratorium with some modifications, possibly including differentiating between areas where pressure and depth are known versus exploratory areas.

Last Wednesday, White House spokesman Robert Gibbs said a revised moratorium would come “in the next few days,” but the court filing said Interior would issue it “soon.” An Interior spokeswoman today declined to specify a timeline.

Industry and Gulf state politicians have strongly criticized the moratorium, saying it will serve as an economic blow to an already struggling region.

U.S. demands BP notice of sales

BP PLC confirmed today that it received a demand from U.S. authorities for advance notice of any asset sales or significant cash transfers, the Associated Press reported.

Assistant Attorney General Tony West, who heads the Justice Department’s Civil Division, wrote to Rupert Bondy, BP’s general counsel, on June 23. Normally, the U.S. Justice Department does not require advance notice of such deals.

BP has not yet responded to the letter, a company spokesman told AP.

The letter asks BP to inform Justice in advance of “any planned or contemplated events that may involve substantial transfers of cash or other corporate assets outside of the ordinary course of business,” Agence France-Presse reported.

U.S. authorities should also be told of any “corporate restructuring, reorganisation, acquisitions, mergers, joint ventures, sales, divestments or disbursements,” it demands.

BP chief visits Middle East

BP CEO Tony Hayward flew to the wealthy emirate of Abu Dhabi to meet officials amid speculation that the oil giant is looking to raise cash to cover cleanup costs from the Gulf of Mexico oil spill, the Associated Press reported.

Hayward arrived in the capital of the United Arab Emirates yesterday and would be staying “a couple of days,” a BP spokesman told AP. But he would not say whether Hayward planned to sit down with the region’s powerful investment funds, which have provided needed cash to Western multinationals in past times of crisis. BP has a long-standing partnership with the state-owned Abu Dhabi National Oil Co., which is responsible for crude oil production in the Arab emirate.

BP has approached sovereign wealth funds with a view to securing a strategic investor to fend off takeover bids while it deals with its massive U.S. oil spill, Reuters reported yesterday. BP executives have held talks with a number of sovereign wealth funds, including funds in Abu Dhabi, Kuwait, Qatar and Singapore, according to Reuters.

Hayward visited Azerbaijan yesterday and Russia last week to reassure the countries that the company is committed to investments there.

BP said it has no plans to issue shares to help pay for the spill.

_______________

Mike Soraghan, E&E reporter

There are probably a lot of things Interior Department officials would like to change about the how they looked at BP Exploration and Production’s drilling operations.

They’ve found one thing that they can change — their website.

BP’s status as a finalist for the “Safety Award for Excellence” from the disgraced and now-renamed Minerals Management Service has been deleted from Interior’s site.

Before the April 20 blowout at BP’s Macondo well fouled the Gulf of Mexico with millions of gallons of oil, MMS had announced that BP was a finalist for the prize, known as the SAFE award. The other finalists in the “high-activity” drilling category — meaning those that produce more than 10 million barrels of oil a year — were Eni U.S. Operating Co. and Exxon Mobil Corp.

A Google cache snapshot of the MMS website shows the page as it appeared on June 6, 2010. Click here for a larger version of the image.

The winner was to be announced at an MMS-sponsored awards lunch during the 2010 Offshore Technology Conference in Houston on May 3. But the awards lunch was canceled, and the winner has never been announced.

The drilling conference, whose sponsors included BP and Halliburton Co., was not canceled. And MMS has since been renamed the Bureau of Ocean Energy Management, Regulation and Enforcement.

Interior officials failed to respond to messages asking why BP’s name was deleted, except to e-mail a copy of the notice canceling the May 3 lunch. Interior spokesman Todd Hughes said the award has not been given out because the lunch has not been rescheduled.

BP has won the award once before, in 1992, when it tied with Conoco. BP was also a finalist in 2009, when Exxon Mobil won.

Transocean Ltd., which drilled the blown-out well from its Deepwater Horizon rig, won in 1999 and 2008. The company was nominated in 2007.

The department has been giving the award for 25 years. The current awards lunch and program at the Houston offshore conference began in 1999.

The award is intended to recognize offshore companies for outstanding work on safety and preventing pollution “by adhering to all regulations, employing trained and motivated personnel, and going the extra mile to enhance safety and environmental protection,” according to MMS materials. It is also designed to “encourage voluntary compliance.”

Much of the agency’s safety program for offshore drilling has been based on such voluntary compliance.

MMS adopted a voluntary approach to safety and environmental compliance in 1994 during the Clinton administration. Last year, BP joined with other oil companies such as Exxon Mobil to oppose a plan to switch to a more regulatory approach involving audits and unannounced inspections. The rules have not been not implemented (Greenwire, April 27).

The safety records of BP and other companies have taken on increased importance as the Obama administration and the industry try to determine the appropriate long-term response to the BP spill.

Other companies’ safety records were similar to BP’s

When U.S. District Judge Martin Feldman lifted the Obama administration’s moratorium on offshore drilling last month, he suggested that Interior Secretary Ken Salazar should have examined the safety records of the other companies that were hit by the moratorium (Greenwire, June 24).

“The secretary’s determination that a six-month moratorium on issuance of new permits and on drilling by the thirty-three rigs is necessary does not seem to be fact-specific and refuses to take into measure the safety records of those others in the Gulf,” Feldman wrote in his preliminary injunction. In a footnote, he noted that Interior’s “blitz” inspection after the explosion found all 33 other rigs in deep water to be safe.

But a Greenwire analysis of Interior safety records showed there was little difference between BP and its peers drilling in the Gulf. BP ranked a close third in penalties for safety violations. And statistics compiled on injuries and fires show that BP’s records were comparable to those of other deepwater drilling companies (Greenwire, June 24).

The plaque and citation that accompany the honor recognize the company’s performance in the prior year. Companies that have a fatality, a major spill or other serious problems during the award year are not eligible for that year’s award, indicating that BP and Transocean would likely not be eligible next year.

The SAFE Award finalists are selected through a process that includes analyzing safety inspection records, looking at the quality of the companies’ safety technology and the recommendations of MMS district, regional and headquarters officials.

“Only the top candidates who show outstanding performance in each of their respective OCS Districts will be considered a finalist for the National SAFE Award,” according to the department website.

Special thanks to Richard Charter

http://www.nola.com/news/gulf-oil-spill/index.ssf/2010/07/sand_berms_a_dubious_solution.html

Sand berms a dubious solution:
A guest column by Len Bahr
Published: Monday, July 05, 2010, 6:00 PM
Contributing Op-Ed columnist Contributing Op-Ed columnist

The coast of Louisiana occupies North America’s largest delta, which has
been rapidly shrinking and sinking for a century. River channelization,
flood levees, upriver dams and coastal oil and gas production continue to
take their toll. But a decade from now, the unprecedented discharge of
perhaps 100,000 barrels a day of oil directly off our coast for months on
end may prove to have been as damaging to the delta as these historic
stressors.

Obviously no handbook exists on effective responses to such a massive oil
release. This policy vacuum, combined with panic and desperation among
coastal residents, created an irresistible opportunity for grandstanding on
the part of our ambitious young governor.

In this highly charged political climate it is not surprising that Bobby
Jindal would opt for responses to the oil crisis based more on drama than
effectiveness. For example, he would likely prefer to be videotaped in front
of a massive, noisy dredge boat stirring up mud than observing small craft
silently skimming the water surface.

Thus, the governor’s most widely discussed response to the coastal oil
assault is to pile up defensive sand barriers. The rationale for this action
is to intercept the oil before it can contaminate the wetlands that hold
delta sediments in place, nourish fish and wildlife and protect people from
storms.

About 80 miles of 6-foot-high sand berms are now under construction on the
lower east and west sides of the Mississippi River. The total quantity of
sand required to complete this project is said to be 56 million cubic
yards — the equivalent of 11.2 times the volume of the Superdome!

Some of this (sacrificial) sand is being dredged from the lower river
channel, but most is being mined from old barrier islands that have sunk
beneath the sea. Although the dredging doesn’t leave a visible change at the
surface, it alters the subsurface profile of an area and reduces the bottom
friction that formerly absorbed hydraulic energy during approaching storm
surges.

On the basis of 22 years of academic training and experience in coastal
science and 18 years of policy experience in the Governor’s Office of
Coastal Activities, I’m strongly opposed to the governor’s sand berm project
for the following nine reasons:

1) Absence of science: Vague plans for the sand barriers were hastily drawn
up by “outside experts” from Holland, with no input from Louisiana coastal
scientists. Project details subsequently released have been universally
panned by these scientists.

2) Questionable justification: The sand dredging project was proposed by and
heavily lobbied by vested dredging interests, and it reeks of potential
conflicts.

3) Opportunity cost: This emergency and temporary project will deplete and
waste finite sand resources needed for a credible barrier shoreline
nourishment project.

4) Environmental cost: Dredging holes in the very delta that we’re trying to
restore is irrational.

5) Changes to natural flow regime: Attempting to barricade tidal passes
speeds up water velocity, causing barrier island erosion and potentially
sucking even more oil into the estuary.

6) Lengthy construction time: The contractors project a completion date nine
months away, by which time deflecting BP oil could be a moot issue.

7) Sand berm fragility: Sand-filled Hesco baskets (a type of sand berm)
completed three weeks ago by the Louisiana National Guard along Holly Beach
to protect against BP oil washed away like sand castles during a glancing
blow by Hurricane Alex.

8) Dubious benefits: A huge volume of crude oil has already drifted into the
very marsh areas that would supposedly be protected by sand barriers.
Completed berms could trap rather than repel some of this oil.

9) An alternative active response: Whether or not BP pays for the sand
barrier project, there are more effective and risk-free ways to spend $350
million. For example, I estimate that for that amount 2 million tons of
oil-absorbing hay could be spread on the oil by boats and planes, soaking up
perhaps 4 million tons of oil, then raked up by shrimp boats for onshore
disposal.

I’m not alone in challenging this project, although I can afford to be more
vocal than most of my science colleagues. Many of them, along with their
employers, fear the financial consequences of alienating Gov. Jindal, who
tolerates no criticism of his sand berm fantasy.

Len Bahr, Ph.D., is a former LSU marine sciences faculty member who served
18 years as a coastal policy adviser to Louisiana governors from Buddy
Roemer to Bobby Jindal. He edits LaCoastPost.com. His e-mail is
leonardbahr@gmail.com.
Special thanks to Richard Charter

http://www.google.com/hostednews/ap/article/ALeqM5j5k1tn_9yTMQTCny1MIeKSGBoP9gD9GPS7HG3

By JUAN A. LOZANO (AP) – 4 hours ago

HOUSTON – A new group will pool Texas’ brightest minds to come up with better and safer ways of drilling and producing oil and natural gas in the wake of the Gulf oil spill, Gov. Rick Perry announced Tuesday.

The Gulf Project will focus on developing and testing current equipment as well as new technologies for the next generation of oil and gas drilling, Perry said. The group also will look to develop better ways of monitoring the equipment once it’s in place and improve training for responding to oil spills.

“Texas must take the lead in this effort because Texas leads in energy,” Perry said at a news conference at Johnson Space Center, which he suggested could help in testing new equipment. “We are perfectly suited to lead the effort into improving safety and reliability in our continued quest for new and better sources of energy.”

Texas’ energy industry supplies 20 percent of the nation’s oil production, one-fourth of its natural gas production, a quarter of its refining capacity and nearly 60 percent of its chemical manufacturing.

The Gulf Project will be comprised of researchers, policy experts and state officials. But Perry also called on the oil and gas industry to join in its efforts.

“We must do better in preventing disasters of this kind,” he said of the spill, caused when BP’s Deepwater Horizon oil rig blew up April 20.

Tom “Smitty” Smith, director of the Texas office of the activist group Public Citizen, said while his organization appreciates Perry’s efforts to improve drilling technologies to prevent another oil spill, endeavors such as the Gulf Project will only work if regulatory agencies can do their jobs.

“In Rick Perry’s Texas, they are underfunded, underpaid and told to hurry up and permit whatever kind of plant comes their way. That is a recipe for the kind of disaster we are seeing in the Gulf.”

Smith also said that he doesn’t believe any recommendations from the Gulf Project will ever be implemented.

But Perry said the group wasn’t created to only come up with a study.

“There will come clear directives and technologies and an action plan that will make our industry safer and protect our environment,” he said.

Meanwhile, Perry cautioned against stopping offshore oil drilling because of the spill, criticizing the Obama administration’s effort to implement a six-month moratorium on deepwater drilling.

“That response … is neither appropriate nor is it likely to solve the actual problem in the Gulf,” Perry said. “Considering our growing energy needs, it is not realistic either.”
Federal lawmakers and officials from drilling companies who attended a round-table discussion Tuesday at the University of Houston echoed Perry’s criticism of the moratorium.

“We can’t just shut down natural gas and crude oil production,” said Rep. Gene Green, D-Houston. “The country as a whole needs domestic production.”

A federal judge in New Orleans last month struck down the moratorium. The federal government has appealed the ruling.

Associated Press Writer Elida S. Perez contributed to this report.
Special thanks to Richard Charter

http://www.mcclatchydc.com/2010/07/03/96989/bp-wasted-no-time-preparing-for.html
|
By Marc Caputo | McClatchy Newspapers
TALLAHASSEE — In the immediate aftermath of the Deepwater Horizon disaster, BP publicly touted its expert oil clean-up response, but it quietly girded for a legal fight that could soon embroil hundreds of attorneys, span five states and last more than a decade.

BP swiftly signed up experts who otherwise would work for plaintiffs. It shopped for top-notch legal teams. It presented volunteers, fishermen and potential workers with waivers, hoping they would sign away some of their right to sue.

Recently, BP announced it would create a $20 billion victim-assistance fund, which could reduce court challenges.

Robert J. McKee, an attorney with the Fort Lauderdale firm of Krupnick Campbell Malone, was surprised by how quickly BP hired scientists and laboratories specializing in the collection and analysis of air, sea, marsh and beach samples — evidence that’s crucial to proving damages in pollution cases.

Five days after the April 20 blowout, McKee said, he tried to hire a scientist who’s assisted him in an ongoing 16-year environmental lawsuit in Ecuador involving Dupont.

“It was too late. He’d already been hired by the other side,” McKee said. “If you aren’t fast enough, you get beat to the punch.”

At the same time it was bolstering its legal team, BP was downplaying how much oil was spewing from the Deepwater Horizon well — something that lawyers say is likely to be a critical factor in both court decisions and government fines.

“The rate we’re seeing today is considerably lower, considerably lower, than what was occurring when you saw the rig on fire,” BP America’s chief operating officer, Doug Suttles, told NBC Nightly News on April 25, three days after the Deepwater Horizon sank.

BP would stick to low estimates of how much oil was leaking — first, 1,000 barrels a day, then 5,000 barrels a day — until the Obama administration stepped in under congressional pressure nearly a month later and set up an independent commission of scientists to determine the flow.

In mid June, the so-called Flow Rate Technical Group said the well is gushing 35,000 to 60,000 barrels a day — but the delay and imprecision of that estimate will make how much oil escaped into the gulf a matter of debate for years.

In the early days after the spill, BP also included a liability waiver in the paperwork it gave fishermen and prospective workers. That prompted Florida Attorney General Bill McCollum, among other Gulf coast officials, to warn citizens: “Do not sign waivers.”

A BP spokesman said the company doesn’t comment on lawsuits and “won’t be giving running commentaries” on the number of court actions it’s facing.

In Florida, however, the company has hired Akerman Senterfitt, the state’s largest law firm and a major player in the state’s capital. It’s a strategy the company is likely to follow throughout the Gulf. When President Barack Obama met with BP executives last month to set up the $20 billion fund, BP was represented by Jamie Gorelick, who was deputy attorney general under President Bill Clinton.

The grounds for the suits and potential suits run the gamut: federal pollution and environmental laws, general maritime law, international treaties, public-nuisance codes and even state and federal racketeering laws.

Under the federal Oil Pollution Act, state and local governments can sue to collect lost tax revenues and the cost of increased governmental services as a result of a spill. That can include lost sales and hotel room taxes in tourist-dependent towns all across the Gulf coast.

So far, an estimated 250 court suits have been filed against BP, and more come each day. Florida Gov. Charlie Crist has tapped Steve Yerrid, one of the so-called “dream team” of lawyers that won Florida $11.3 billion in a landmark tobacco suit, to assemble a new legal crew to provide advice. Counties and cities are hiring lawyers as well.

Brian O’Neill, a lead attorney in the 1989 Exxon Valdez oil spill case, said the Gulf Coast states and residents should realize it will take years to clean the waters, the marshes and the beaches. Three years after the Alaska spill, salmon stocks started to return, he said, but the herring population was “exterminated” in Prince William Sound.

Exxon spent $2 billion and cleaned up just 8 percent of the oil, he said. And the oil never left.

“You’re going to have to wait years to figure out what happened and what is happening,” O’Neill said. “The oil goes where you don’t expect it. You will clean a beach and the oil will just come back in a few months or a year. The beaches could be oiled and oiled again.”

The fight against the oil company is likely to take decades.

“Exxon has shown you can stiff those you hurt and tie them up in court for 21 years and nothing bad happens to you,” he said. “You hope BP won’t do that.”

St. Petersburg crabber Howard Curd is expecting a long battle. His blue- and stone-crab fishing grounds in Tampa Bay were killed off when Hurricane Frances blew out a retaining wall at a phosphate pit that spewed acidic water into the bay.

The fertilizer company, Mosaic, persuaded a trial court and an appeals court that Curd and other fishermen couldn’t sue because they didn’t own the seafood that was potentially killed, so they weren’t technically damaged.

Finally, six years later, the state Supreme Court on June 17 reversed lower-court opinions and said Curd and other fishermen could sue. Curd now has to prove damages in court. The ruling in his favor arrived just in time for Florida’s 23,422 commercial and charter fishermen who could use the new ruling to press pollution claims against BP.

Curd said crabbing in the bay is bouncing back, but the BP spill is depressing seafood sales even though the oil is nowhere near the western coast of Florida.

He’s prepared to sue BP, but harbors no illusions about facing a big corporation in court.

“They’ve got all the money, and all the attorneys and all the experts on retainer. It really doesn’t cost them anything,” Curd said. “It’s like it’s cheaper to pay their attorneys and fight in court than paying the money to people they hurt and doing the right thing.”

(Caputo reports for the Miami Herald.)

Special thanks to Ashley Hotz

Sent: Thursday, July 08, 2010 3:24 PM

Subject: MEMORANDUM: Governor’s Call for Special Session – July 20, 2010 through July 23, 2010

Memorandum
DATE: July 8, 2010
TO: Interested Media
FROM: Sterling Ivey, Governor’s Press Secretary
RE: Governor’s Call for Special Session – July 20, 2010 through July 23, 2010

Continuing his commitment to recovery efforts in the Gulf of Mexico, Governor Charlie Crist today called a Special Session of the Florida Legislature from July 20, 2010 through July 23, 2010, to address a constitutional amendment banning offshore drilling in Florida waters.

If you have any questions or need additional information, please call Governor Crist’s press office at (850) 488-5394.
# # #

Special thanks to Richard Charter