Friday, April 30, 2010

Oil spills — there's no free lunch

Here we go again. The tragic explosion on the Deepwater Horizon rig and subsequent oil spill has stirred up the usual offshore drilling debate in the United States. Apparently, the Halliburton people had just finished completing the well when something went terribly wrong. Such incidents are relatively rare, and it's not known what the (over) reaction will be yet.

A U.S. Interior Department official on Thursday would not rule out a pause in new deepwater oil drilling until oil companies can demonstrate they are able to control spills.

"Everything is on the table," Deputy Interior Secretary David Hayes said at a White House briefing on what the government is doing to handle the widening oil spill in the Gulf of Mexico caused by an oil rig explosion last week.

It is impossible to demonstrate that oil spills can be controlled unless you can anticipate future events. In so far as only God and Warren Buffet can do that, new deepwater drilling should not be halted for this reason.

Oil spills — theres no free lunch

The oil slick moves toward the Louisiana/Mississippi coast. The spill has been sweeping across the gulf for nine days. At first, BP
estimated the flow from the snapped-off, mile-down well at 1,000 barrels a day; now, officials say the flow is more like 5,000 barrels (about 200,000 gallons) per day

There's little doubt in my mind that this oil spill will be a terrible environmental disaster. How are they going to cap a snapped-off mile-down well? Assuming this can be done, how long will it take? This oil is not coming from a tanker run aground as with the Exxon Valdez.

At times like this, the only thing I can tell you is that Americans have made their bed and now they've got to lie in it. The oil & gas industry has an excellent safety record in the United States, but shit happens. It is naive to believe that we don't need deepwater oil unless lots of us decide to drive a lot less. But we created an economy based on energy from fossil liquids, so we won't have much of an economy if Americans drive a lot less. Our dependence goes on and on and on. There's a price to pay for all this, and now we're paying it.

There's no free lunch, but some people prefer to think lunches are free. For example, Frances Beinecke, president of the Natural Resources Defence Council says—

Offshore drilling is dangerous work, as this tragedy reminds us. It also puts our oceans at risk, as we’re now seeing to our horror. We have an oil slick the size of West Virginia smothering marine life across the Gulf of Mexico and threatening to poison the fertile Mississippi Delta and the ecologically rich coastline along four states. And the best solutions our officials have come up with is to set it on fire. We have to do better than that.

Not only are our coastal ecosystems at stake, but so is America’s ocean-based economy, which each year generates more than $230 billion and provides more jobs than the entire farm sector. Ocean-related tourism alone supplies 2 million jobs — jobs that depend on clean, healthy beaches and abundant fish, not oil slicks.

Yes, yes, this is a terrible tragedy, but here comes the nonsense—

We simply don’t have to jeopardize our oceans economy in the name of fuel production. If we want to boost our domestic oil supply, we should focus on enhanced oil recovery from existing fields, a process that can supply more than 10 times the amount of oil that could be produced by drilling in our oceans over the same period. The better use of existing oil fields — together with fuel efficient cars — can help transition us to the 21st century without harming marine life or marine jobs.

Yo, Frances! NO FREE LUNCH! I was writing about EOR long before somebody told you about it. Who the hell told you enhanced oil recovery (EOR) can supply more than 10 times the amount of oil we get from the offshore in the same period? Was it Vello Kuuskraa? Who makes a living writing bullshit, feel-good reports for the government? If not him, then who?

The oil problem in the United States has been 40 years in the making if we date it from the peak of domestic production in 1970. There are no easy answers, so we took the easy way out: we imported more and more of the stuff. Just more and more heroin to feed our habit, no methadone and no cold turkey.

And now we're paying the tragic consequences. Our civilization has been and continues to be built on fossil energy. As a consequence of that mindless development humans have trashed their environment.

Drill, baby…oops!Economy picks up with service sector growth, more home contracts

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