Deepwater Horizon: the petro-oligarchs strike back

Bill Weinberg

In the wake of the Louisiana oil spill, Florida’s Sen. Bill Nelson (D-Orlando) called for President Barack Obama to reverse his recent executive order to open up areas of the Gulf of Mexico to offshore oil and gas exploration. Nelson also introduced legislation to stop exploration in the Gulf pending an investigation into the Deepwater Horizon incident. The bill would stop the Interior Department from developing a new five-year plan for Gulf drilling and exploration in the Outer Continental Shelf. “Stop the five-year plan on drilling on the offshore continental United States until we get to the bottom of this,” he told CNN April 30. (Florida Today, May 1)

The petro-oligarchy has of course wasted no time in striking back. Sen. Mary Landrieu (D-LA) insisted that the disaster should not deter off-shore drilling, saying on the Senate floor April 30: “I don’t believe we should retreat.” She also tried to minimize the disaster: “What’s important about this sheen is that 97% of it is a rainbow sheen. Only 3% contains emulsified crude… So it is important to understand that, while this is an unprecedented disaster—the oil slick is wide and covers a large section of ocean—97% of it is an extremely thin sheen of relatively light oil on the surface.” She repeated her call that there be no “retreat” in media appearances including, on CBS’ “Face the Nation” May 2.

Karl Grossman on Counterpunch May 3 had some advice for the “Face the Nation” producers:

Host Bob Schieffer might have asked Senator Landrieu whether her position had anything to do with the hundreds of thousands of dollars in political contributions she receives annually from the oil industry.

If a Face the Nation producer had done a Google search, reports would be found such as on SourceWatch: “Mary Landrieu has received $252,950 in oil contributions during the 110th Congress. $163,000 of those were from industry PACS. In total, Landrieu has accepted $574,000 from oil companies from 2000 to 2008, which makes her one of the highest recipients [in Congress] of oil money.”

She did acknowledge in her Senate speech that she is “an unabashed proponent of the [oil] industry.” She just didn’t explain the financial arrangement.

H. Sterling Burnett of the “free-market” National Center for Policy Analysis wrote an opinion piece on AolNews, May 3, “Don’t Let Deepwater Deep-Six Offshore Drilling.” He also paid lip service to the scale of the Gulf disaster—but for him the worst outcome is a potential backlash against drilling:

Another possible loss from the disaster would be if it derails the Obama administration’s recently unveiled plan to open new areas to offshore oil and gas production.

Put simply: We need the oil and natural gas off of the US coasts, and offshore drilling is historically the least likely to cause oil spills.

Over the next 20 years, US oil consumption is expected to grow by one-third, even with the passage of climate change legislation and increased use of renewable fuels. Natural gas consumption will grow even more.

Unfortunately, the US remains dependent on foreign nations for a majority of our oil needs. Many of these countries are either politically unstable or have governments that are hostile to US interests.

The US has large deposits of oil offshore. The Minerals Management Service estimates that the US outer continental shelf (OCS) contains more than 46 billion barrels of oil, more than double the current U.S. reserve, and more than 419 trillion cubic feet of natural gas. As much as half of this bounty lies in OCS areas that until recently fell under both congressional and presidential development bans.

Ending the moratorium on new OCS production was among the most responsible actions Washington has taken in the past three decades. President Barack Obama was right to continue along the path started by the Bush administration.

That Burnett is comforted by Obama’s policy should be deeply discomforting to the rest of us. The administration’s response to the disaster has indeed been modest. The Department of the Interior’s Outer Continental Shelf Safety Oversight Board, established by order of Secretary Ken Salazar April 30 in response to the disaster in the Gulf of Mexico, will “provide recommendations regarding interim measures” to enhance safety in OCS operations. The Oversight Board will also provide oversight of the Minerals Management Service (MMS) in its Joint Investigation with the US Coast Guard undertaken into the Deepwater Horizon incident. Secretary Salazar, who made the announcement on a tour of the stricken Louisiana coast, will provide a report to President Obama within 30 days on what, “if any,” immediate additional precautions and technologies should be required. (Interior Department press release, April 30)

See our last posts on the oil spill, the offshore controversy and petro-oligarchical rule.

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  1. Obama’s offshore plan political?
    Has it occurred to anyone else that he is dumping all the offshore development on the red states? From the New York Times, March 31:

    Obama to Open Offshore Areas to Oil Drilling for First Time
    WASHINGTON — The Obama administration is proposing to open vast expanses of water along the Atlantic coastline, the eastern Gulf of Mexico and the north coast of Alaska to oil and natural gas drilling, much of it for the first time, officials said Tuesday.

    The proposal—a compromise that will please oil companies and domestic drilling advocates but anger some residents of affected states and many environmental organizations—would end a longstanding moratorium on oil exploration along the East Coast from the northern tip of Delaware to the central coast of Florida, covering 167 million acres of ocean.

    Under the plan, the coastline from New Jersey northward would remain closed to all oil and gas activity. So would the Pacific Coast, from Mexico to the Canadian border.

    The environmentally sensitive Bristol Bay in southwestern Alaska would be protected and no drilling would be allowed under the plan, officials said. But large tracts in the Chukchi Sea and Beaufort Sea in the Arctic Ocean north of Alaska—nearly 130 million acres—would be eligible for exploration and drilling after extensive studies…

    The Obama administration’s plan adopts some drilling proposals floated by President George W. Bush near the end of his tenure, including opening much of the Atlantic and Arctic Coasts. Those proposals were challenged in court on environmental grounds and set aside by President Obama shortly after he took office.

    Unlike the Bush plan, however, Mr. Obama’s proposal would put Bristol Bay, home to major Alaskan commercial fisheries and populations of endangered whales, off limits to oil rigs.

    Actual drilling in much of the newly opened areas, if it takes place, would not begin for years.

    Mr. Obama said several times during his presidential campaign that he supported expanded offshore drilling. He noted in his State of the Union address in January that weaning the country from imported oil would require “tough decisions about opening new offshore areas for oil and gas development.”

    See our last post on the struggle for Alaska.

  2. Federal lawsuit seeks to stop drilling at BP Gulf platform
    DC-based consumer advocacy organization Food and Water Watch (FWW) filed suit in a US district court Monday against the US Department of Interior and the Minerals Management Service (MMS) for an injunction to halt drilling at the BP Atlantis Facility in the Gulf of Mexico. FWW joined suit with Kenneth Abbott, a former safety contract engineer for BP, claiming that DOI and MMS allowed BP to operate the Atlantis Facility without documented, approved final engineering drawings considered critical to safe operation. FWW and Abbot hold that although federal law requires 100% engineer-approved “as built” drawings for most platform systems, less then 10% of BP’s Atlantis Facility drawings had met these specifications. (Jurist, May 18)

  3. Feds bent over for BP even after disaster
    From Courthouse News Service, May 19:

    MOBILE, Ala. — Even after the April 20 disaster that set off what is likely to be the biggest oil spill in history, the Minerals Management Service authorized more than 20 “categorical exclusions” from environmental laws to several companies, including BP, the Defenders of Wildlife claims in Federal Court. The Defenders claim the MMS violated federal laws by “arbitrarily and capriciously” granting the exclusions, and finding that deepwater offshore drilling, including the Deepwater Horizon’s, was “not likely to have a significant impact on the environment.”

    The nonprofit environmental group also sued the Department of the Interior and its Secretary Ken Salazar.

    “In violation of NEPA [the National Environmental Policy Act] and its own regulations, MMS has authorized additional categorical exclusions for over twenty exploratory wells and drilling operations in the Gulf since the April 20, 2010 blowout, with over fifteen of these exploratory wells in waters classified as ‘deepwater’ pursuant to MMS regulations,” according to the complaint.

  4. Moratorium? What moratorium?
    From the New York Times, May 23:

    Despite Moratorium, Drilling Projects Move Ahead
    WASHINGTON — In the days since President Obama announced a moratorium on permits for drilling new offshore oil wells and a halt to a controversial type of environmental waiver that was given to the Deepwater Horizon rig, at least seven new permits for various types of drilling and five environmental waivers have been granted, according to records.

    The records also indicate that since the April 20 explosion on the rig, federal regulators have granted at least 19 environmental waivers for gulf drilling projects and at least 17 drilling permits, most of which were for types of work like that on the Deepwater Horizon shortly before it exploded, pouring a ceaseless current of oil into the Gulf of Mexico.

    Asked about the permits and waivers, officials at the Department of the Interior and the Minerals Management Service, which regulates drilling, pointed to public statements by Interior Secretary Ken Salazar, reiterating that the agency had no intention of stopping all new oil and gas production in the gulf.

    Department of the Interior officials said in a statement that the moratorium was meant only to halt permits for the drilling of new wells. It was not meant to stop permits for new work on existing drilling projects like the Deepwater Horizon.

  5. Judge who struck down drilling moratorium owned by Big Oil
    Surprise! First, from CBS News, June 22:

    White House Will Appeal Decision Blocking Oil Drilling Moratorium
    White House Press Secretary Robert Gibbs said this afternoon that the Obama administration will “immediately” appeal a judge’s decision to block the administration’s six-month moratorium on offshore drilling put into place following the Gulf oil spill.

    “We will immediately appeal to the 5th circuit,” Gibbs said. “The president continues to believe that … continuing to drill at these depths without knowing what happened does not make any sense.”

    Gibbs said Mr. Obama believes that drilling without more knowledge of what went wrong on the Deepwater Horizon rig puts the safety of workers at risk and that’s a “danger the president doesn’t believe we can afford right now.”

    Critics of the moratorium have said it places an unnecessary economic hardship on a region already reeling from the Gulf disaster.

    A judge in New Orleans said Tuesday that the Interior Department had not provided adequate reasons to justify the moratorium.

    Department of Justice lawyers are expected to ask Judge Martin Feldman to stay his order pending appeal.

    Now this, from Yahoo News’ The Newsroom blog, June 22:

    Judge who overturned drilling moratorium reported owning stock in drilling companies
    The federal judge who overturned Barack Obama’s offshore drilling moratorium reported owning stock in numerous companies involved in the offshore oil industry — including Transocean, which leased the Deepwater Horizon drilling rig to BP prior to its April 20 explosion in the Gulf of Mexico — according to 2008 financial disclosure reports.

    U.S. District Judge Martin Feldman issued a preliminary injunction today barring the enforcement of the president’s proposed six-month moratorium on deepwater drilling, arguing that the ban is too broad.

    According to Feldman’s 2008 financial disclosure form, posted online by Judicial Watch [pdf], the judge owned stock in Transocean, as well as five other companies that are either directly or indirectly involved in the offshore drilling business.

    It’s not surprising that Feldman, who is a judge for the Eastern District of Louisiana, has invested in the offshore drilling business — an Associated Press investigation found earlier this month [June 6] that more than half the federal judges in the districts affected by the BP spill have financial ties to the oil and gas industry.

    The report discloses that in 2008, Judge Feldman held less than $15,000 worth of stock in Transocean, as well as similar amounts (federal rules only require that judges report a range of values ) in Hercules Offshore, ATP Oil and Gas, and Parker Drilling. All of those companies offer contract offshore drilling services and operate offshore rigs in the Gulf of Mexico. Judge Feldman also owned between $15,000 and $50,000 in notes offered by Ocean Energy, Inc., a company that offers “concept design and manufacturing design of submersible drilling rigs,” according to its website. None of the companies were direct parties to the lawsuit seeking to overturn the ban.

  6. And on the subject…
    Just in case you missed this one. From Reuters, June 17:

    ‘Shakedown’ Lawmaker Is Big Oil’s Darling in US House
    Republican Joe Barton, who accused the White House Thursday of a $20 billion “shakedown” of BP, is the biggest recipient of oil and gas money in the House of Representatives.

    The 60-year-old Texas lawmaker, who later apologized for using the word “shakedown,” has collected at least $1.7 million in political contributions from oil and gas interests over the past two decades, according to the nonpartisan Center for Responsive Politics.

    Barton, a former oil company consultant, used his seat on the House Energy and Commerce Subcommittee on Oversight and Investigations to apologize to BP CEO Tony Hayward and castigate the White House for pressing BP to finance a $20 billion fund for damage claims from its Gulf of Mexico oil spill. He also later retracted his apology to the company.

    Barton is not the only panel member to receive oil and gas industry largess. All told, the subcommittee has collected more than $4.2 million from the industry and $90,000 from BP.

    1. Barton and the 30 days and NYT timeline
      Joe Barton also introduced the Energy Policy Act of 2005 which required MMS to act on drilling appeals within 30 days which was impossible and meant that drilling permits were automatic.

      There is a brutal timeline of the technological failures in the NYT

  7. Federal judge refuses to reinstate original drilling moratorium
    A judge for the US District Court for the Eastern District of Louisiana on July 21 refused to reinstate a six-month drilling moratorium issued in May by the Obama administration in response to the BP Deepwater Horizon oil spill. Judge Martin Feldman issued a preliminary injunction against the moratorium last month, holding that the drilling ban caused irreparable harm to the plaintiffs, small oil companies that were affected by the ban. The Obama administration has since issued a new drilling moratorium affecting only specific types of drilling equipment. Advocacy groups, including the Defenders of Wildlife, asked the judge to consider reinstating the original moratorium thta would have effectively halted all deepwater oil drilling. The newly-issued moratorium will not have such a broad effect. The advocacy groups argued that Feldman should be disqualified from the case because he owned stocks in several oil and drilling companies. Feldman denied the request saying it had no basis in the law. A lawsuit was filed July 21 in federal court challenging the administration’s new drilling moratorium.

    Earlier this month, the Obama administration asked a federal appeals court to reinstate the original six-month drilling moratorium, arguing that it should be upheld because the government would likely win its appeal of the lower court’s ruling. The Justice Department originally asked the court of appeals to stay the preliminary injunction in June, on the basis that another deepwater spill could overwhelm the ongoing efforts to clean up the spill with catastrophic results. More than 120 million gallons of oil have leaked already from the rig’s broken pipe and has now surpassed the Exxon Valdez oil spill as the worst in US history. (Jurist, July 22)

  8. Texas AG challenges drilling moratorium
    Texas Attorney General Greg Abbott (R) on Aug. 11 filed a legal challenge to the Obama administration’s new offshore drilling moratorium, claiming it violates federal law. The complaint, filed in the US District Court for the Southern District of Texas, argues that the moratorium was created in violation of the Outer Continental Shelf Lands Act, which requires the US Department of the Interior to “cooperate with the relevant departments and agencies of the Federal Government and of the affected states.” The act, which affects all decisions relating to the “exploration, development, and production of minerals in the Outer Continental Shelf,” also says states are entitled to an opportunity to participate in the process. Abbott said that the federal government ignored his state throughout the process. (Jurist, Aug. 12)

  9. Federal judge rules against drilling moratorium
    A judge for the US District Court for the Eastern District of Louisiana on Sept. 1 denied the government’s motion to dismiss a lawsuit filed by Hornbeck Offshore Services and several other drilling companies challenging the government’s latest moratorium on offshore drilling. The moratorium directive was issued on July 12 by Secretary of the Interior Ken Salazar after the district court and US Court of Appeals for the Fifth Circuit granted an injunction against the government’s initial directive issued on May 28. The drilling companies maintain that the latest moratorium is substantially the same as the previous one and that it would cause the same financial injury to the industry as the first moratorium. (Jurist, Sept. 2)

  10. US introduces new offshore drilling regulations
    US Interior Secretary Ken Salazar on Sept. 30 announced new guidelines intended to increase the safety of offshore drilling. The Drilling Safety Rule addresses specifications for and oversight of flow control mechanisms and well bore integrity, while the Workplace Safety Rule mandates the implementation of a Safety and Environmental Management System (SEMS) to identify and compensate for potential hazards. The former will become effective upon publication, after which a public comment period of 60 days will follow. The rule will then be either confirmed as final or republished in a revised form. Defenders of Wildlife described the measures as a “positive step” toward more comprehensive reform. In his speech introducing the regulations, Salazar also indicated that he is not yet prepared to rescind the previously issued six-month moratorium on specific drilling techniques. The American Petroleum Institute reserved its response to the new rules for the impending comment period, though reiterated its request that the government lift its ban, which primarily affects technologies used for deepshore drilling. (Jurist, Oct. 1)

  11. Environmental group sues to reinstate drilling moratorium
    The Center for Biological Diversity filed a lawsuit Oct. 22 against Interior Secretary Ken Salazar, seeking to have the deepwater drilling moratorium reinstated. The lawsuit, filed in the US District Court for the District of Columbia, argues that Salazar’s order to lift the ban without conducting a comprehensive review of the effects of drilling on wildlife and the environment violated the National Environmental Policy Act (NEPA) and is arbitrary and capricious. Earlier this month, Salazar announced the end of a six-month moratorium on certain types of deepwater oil drilling, seven weeks ahead of schedule. The moratorium was put in place following the Deepwater Horizon oil spill in April, in which the Center states spilled more than “200 million gallons of oil into the Gulf of Mexico.”

    The lawsuit comes as the Department of Interior is considering granting the first drilling permit since lifting the moratorium. In lifting the drilling ban, Salazar said that the new drilling regulations and industry safety strategies developed in the wake of the spill have reduced the likelihood of future incidents such that the ban is no longer needed. (Jurist, Oct. 24)