28 May 2010

Offshore Drilling Realities

Earlier this week, Senator John Kerry (D-MA) dresses down someone (who, I wonder?) for apparently showing a lack of understanding of the realities of oil exploration in the Gulf of Mexico:
Now we are not going to stop drilling in the Gulf tomorrow, folks. Let’s be realistic. There are 48,000 wells out there. One of them went sour. About 30 percent of our transportation fuel comes from the Gulf. You think Americans are going to suddenly stop driving to work tomorrow? Do you think people are going to stop driving the trucks to deliver the goods to the department stores? Not going to happen.
Today's FT Lex Column offers some additional realities:

US regulations could become so onerous that offshore activity dries up in North America, but this would boost the appeal of fields off West Africa, Brazil and in the Barents Sea. And, though it seems callous with crude still fouling the Gulf, keeping North American offshore drilling viable may pose less environmental risk than other options. Incremental barrels would come from abroad by tankers statistically more likely to spill, or from ecologically damaging oil sands, today’s marginal supplier.

The economic attractions of offshore drilling are just too compelling for the industry to be spooked even by BP’s debacle. Oilmen will go where the oil is, however painful their burns.

It speaks to the perverse counter-intuitive nature of energy and climate policies that the best-intentioned actions -- strengthening US drilling regulations, could lead to greater environmental risks and do nothing to address carbon dioxide emissions. Policy design desperately needs to catch up with real-world complexities.


  1. The live feed of the Gulf efforts are here: http://www.bp.com/liveassets/bp_internet/globalbp/globalbp_uk_english/homepage/STAGING/local_assets/bp_homepage/html/rov_stream.html

  2. I've wondered if there ought to be a 3 strikes law for oil companies. In the midst of the ANWR debate, when oil companies were saying there's never been a spill on the north slope, BP stops running pigs through the pipes and there is a major spill. When insufficient refining capacity was the talked about in the media and leading to higher refined fuel prices, BP gets in front of the discussion and has a major exlposion and fire at their refinery. Now when offshore drilling becomes the focus of increase domestic oil production, BP again grabs the headlines with this blow-out. I don't know how BP times these things but from what I've heard about their operational standards, they are always only a amall blip away from making headlins.

  3. Roger wind technology relies on rare Earth minerals found predominately in China. China has made it illegal for private companies to export these rare Earth minerals. The shift to wind power has become a shift in reliance on Arab Countries to reliance on China for future energy IMO.

    Kerry speaks to the reality of American energy independence when he calls the USA the Saudi Arabia of natural gas and it is clear that NG is the best course towards energy independence that is not cost prohibitive at the moment, and doesn't rely on Chinese minerals.

    My wife and I currently emit an average of 5.5 tons each of CO2/year. I hope that within the next 5 years fuel cells will allow me to convert NG into electricity and further reduce our emissions another 1 ton/year each. It would sure be nice if my wife and I were credited with 16 tons of CO2 each(the 20% reduction target KLM seeks) and allow me to trade the 10 or 11 tons I wouldn't use for cash. I know that ETS is meant only to make the rich richer and provide political spending addicts more money to spend, but as Mr. Potato Head said in Toy Story, "I can dream can't I?"


  4. "...the perverse counter-intuitive nature of energy and climate policies..."

    On shore drilling is much safer. That is why closing off so much on shore areas such as ANWR is so nutty.

  5. I saw that quote from Kerry when it was originally published. I think the same thing now as I did then: the words don't sound like they came from the man. I've heard him on television and radio many times over the years - him being my Senator - and it just doesn't read like the way he speaks. Of course I could be wrong, but I can't help wondering in someone wrote that for him - in "plain talk" - and released it to some compliant media pimp. Kerry is a classic Senatorial bloviator, and never seems to get to the point of anything without a script.

    It doesn't change the story, but I do suspect media spinning here.

  6. -Mark B.-

    Actually, if you go to the link you can see Kerry saying this himself in the video. He seems pretty miffed at whomever asked him the original question (which is not shown).

  7. Mark B. said... 5
    "the words don't sound like they came from the man."

    A May 18th 2010 poll
    "80% of Massachusetts voters want the country to reduce its dependence on Foreign Oil"

  8. Oil Spill - Reality and the Press

    The press and television media are in full cry about the BP oil spill in the Gulf of Mexico. The have been emphasizing that this is the largest off shore oil spill in US history. However if one goes beneath the hype, one can easily find that this is not the largest spill in US history and not the largest offshore spill in the Gulf of Mexico. This Wikipedia article details the Ixtoc 1 oil blow out and spill that lasted for 9 months between 1979 and 1980.


    The average flow was about 30,000 barrels a day which is greater than that of the current one. The well continued to flow for three months after the first relief well was completed. The oil flowed towards Texas but because of the long lead time adequate relief measures forestalled any significant damage to the Texas environment.
    The largest oil spill in US history was the Lakeview Gusher that lasted for 18 months beginning in 1909. It spilled an estimated 9 million barrels of oil before it was brought under control in 1911


    What appears to be happening here is a collision between the needs of the television and Internet media for a dramatic emotional story and the reality of a leaking oil well in the vastness of the ocean We see images of crying congressman and demands that President Obama do something. What we do not see or hear is any detailed analysis of just what is going on. I have no recollection of any major concern about the Ixtoc blow out. I suppose that this is because it occurred before the development of 24 hour news channels and Internet streaming video.

    it took me only a few minutes and Google to find this out. I have seen nothing matching this in the extensive press coverage.