Obama defends federal role in Boston bombing probe
Stocks pull back from record levels
Obama: US doesn’t know all the facts from Syria

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Florida sues BP on 3-year anniversary of oil spill
BP May Delay $10 Billion Mad Dog Oil Scheme in Gulf of Mexico
Gulf spill trial: Claim dropped against contractor

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Ohio teens guilty of rape, face year-plus in jail. Steubenville rape trial accuser’s veracity questioned. SAC affiliate pays $600M to settle trading charges. BP challenges ruling on oil spill compensation

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The markets opened higher today and remained in positive territory after an encouraging economic report. The Institute for Supply Management’s non-manufacturing index showed expansion in the services sector to a reading of 55.6 in January, which was in line with expectations.

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Today is the one-year anniversary of the oil spill in the Gulf of Mexico and  America’s energy security is in no better shape than it was last April! As we reflect back on the horrible accident lets keep the following facts in mind.

Tom Pyle President of IER (Institute for Energy Research) told TMR:

The Deepwater Horizon accident was a tragedy that should have never happened.  Thankfully, that disaster was not the standard for the industry but rather the exception.  Over 50,000 wells have been drilled in the U.S. Outer Continental Shelf with an unparalleled safety record.  Nevertheless, over the past year, scientists, engineers, and a host of other specialists have worked diligently to make sure that a tragedy like the Deepwater Horizon accident never happens again.

A consortium of companies created the Marine Well Containment Center, designed to seal containment so that no liquids escape into the water.  It can handle a blowout at depths of 8,000 feet and contain 60,000 barrels of liquid and 120 million cubic feet of gas per day.  Also, the Helix Energy Solutions Group developed a floating oil production facility, ready to deploy in the Gulf. It is currently capable of handling 55,000 barrels of liquid per day, and that amount is expected to increase by mid-summer.

These technological developments should be seen as a legacy of what we have learned from the Deepwater Horizon.  Unfortunately, the Obama administration is instead making a domestic energy freeze its legacy of the Gulf oil spill. The administration decided to freeze most drilling in the Gulf while dismissing respected scientists and industry experts whose safety recommendations would have allowed for more robust production.  To this day, the Obama administration continues to kill jobs in the Gulf and around the country by withholding the necessary permits to responsibly explore for domestic energy.

As the President continues to look abroad for solutions, telling Brazil that the U.S. wants to invest in their energy industry and saying nothing as Cuba prepares to drill in the same Gulf of Mexico he forbids U.S. companies to access.  The Administration has set noble energy goals, but its decisions to regulate, delay and shut down domestic drilling is far from appropriate under these circumstances.  While no part of the country is immune from this self-imposed energy freeze, the Gulf of Mexico region has borne most of the brunt from these missteps.  Here are some facts to keep in mind:

The President often speaks of his concern for those affected by the Gulf oil spill, but his drilling and permitting shutdowns have added economic catastrophe to ecological disaster.

• Even by 2035, oil and natural gas still will account for 57 percent of U.S. energy consumption.[1] Resuming work in the Gulf of Mexico is essential in meeting that demand, as independent experts project that GOM deepwater oil production will account for 30 percent of total US production and nearly 95 percent of offshore production by 2020.
• According to the Energy Information Administration, domestic oil production will fall 240,000 barrels/day through 2012, mainly due to the continued energy freeze in the Gulf.[2] Even a one-year delay in development increases potential losses to government revenue by an estimated $5.5 billion and a two-year delay increases that figure to $8.9 billion, squeezing local, state and federal budgets dry.[3]
• A drilling and permitting freeze in the Gulf threatens to force us to import an extra 88 million barrels of oil each year, at a cost of at least $8 billion.[4]

No one wishes to see another Deepwater Horizon tragedy, which is why the industry and government have developed two new containment and well intervention systems available for all companies operating in the Gulf.

• A month ago, BOEM Director Bromwich said, “The most critical missing piece in the process of approving applications for permits to drill in deep-water is the demonstration of well control and subsea containment capability.” The industry now has supplied that missing piece, times two.
• The Marine Well Containment System (MWCC) and the Helix system are industry-supplied, mutually supportive systems that meet government requirements for well control and subsea containment and provide a significant ability in the Gulf to respond to and contain a major spill quickly.
• William Reilly, co-chair of the presidential BP commission recently described his reaction to the creation of containment options and the rapid response systems now in place: “From where I sit, the major obstacles to drill have been removed…The industry has responded in a way that is remarkable and reassuring.” He emphasized his belief that it was safe to resume drilling in the Gulf of Mexico, that the industry and government have both made great strides, and expressed optimism that the industry is working toward creating a safer environment for offshore drilling.

The oil and gas industry supplies good, high-paying jobs for Americans, particularly for Gulf residents who have been ravaged by a series of natural disasters.

• The average drill rig in the GOM employs 230 direct workers, who frequently earn between $40,000 and $100,000 annually.  Each rig also provides jobs for an average of 920 indirect support workers.[5]
• An estimated 38,000 off- and on-shore jobs are at risk as a result of the “energy freeze,” with a potential 120,000 jobs threatened by 2014 if drilling does not resume.[6]
• While it’s encouraging that BOEMRE appears to be moving ahead with the permitting process, a significant backlog of permitting requests remains, and there are concerns with BOEMRE’s readiness to process all of the applications and plans expeditiously. Each week’s delay can snowball into months or years given the large capital, human, and technical resource requirements of these projects.  At least seven rigs that operated in the Gulf have been relocated overseas for various periods while waiting for work in the Gulf.

[1] http://www.instituteforenergyresearch.org/2010/12/30/eia-releases-new-energy-forecast-fossil-fuels-still-reign-in-2035/

[2] http://www.eia.doe.gov/steo/#US_Crude_Oil_And_Liquid_Fuels

[3] http://www.api.org/Newsroom/upload/Final_API_The_Impact_of_GoM_DW_Permit_Delays.pdf

[4] http://www.politico.com/news/stories/0311/50417_Page2.html (This is the only place I could find these stats)

[5] gnoinc.org/…/Economic%20Impact%20Study,%20Part%20II%20-%20Moratoria%20FINAL.pdf

[6] http://www.api.org/Newsroom/upload/Final_API_The_Impact_of_GoM_DW_Permit_Delays.pdf

Lt Col Jeff Mayne of the LDWF Law Enforcement Division told the BBC today. ‘Originally BP was paying to cheques to just anybody who had a licence and that may have spurred some of the fraud,’ he said. ‘There were no real checks and balances on whether they were they really commercial fishermen. ‘I would like to say I’m surprised, but I’m not. It’s a lot easier to go and steal a resource than to rob a bank.’

(HT: Daily Mail)

Shirley Sherrod would be proud of these “fishermen”. Pathetic.

Read more: http://www.dailymail.co.uk/news/worldnews/article-1302463/How-BP-paying-millions-oil-spill-compensation-fraudsters.html#ixzz0wOWivWNE

The Institute For Liberty recently fisked a New York Times article that purported to report news on an energy tax proposal being pushed by Senator Robert Menendez, D-NJ.  Not surprisingly, Menendez supports ending “energy company subsidies”- i.e., taxing more of their income.  Also not surprisingly, the NYT frames its reportage in such a way as to persuade the unsuspecting reader  that any reasonable person would support such a proposition, rather than regard it as a highly debateable proposition.

Given the new focus on energy policy following the infamous BP oil spill, we must follow how energy stories are framed and hold the media accountable for its bias.  Follow this particular example at the IFL website.

- get a politically savvy CEO like Tony Blair

- merge with an attractive partner, such as Russia’s Gazprom

- study the crisis management techniques of the tobacco industry

The second item is particularly intriguing.  Could Barack Obama’s “divorce” from BP be putting a Putin in our future, right off the Gulf coast? !!!

At least NASA has the capability to provide the picture.  The grey and silver areas in the photo indicate the extent of the damage and the scope of the cleanup task. Since oil is a much better reflector of light than ocean, it is easy to see the contrast between the spill and the normal dark blue of the Gulf.

You can track NASA’s coverage of the oil spill at their website.