Sunday, May 2, 2010

Oil Drilling and the Benefit of Regulation.

The oil spill in the Gulf of Mexico is an embarrassment for Barack Obama who accepted more drilling off the coast to secure the support of both Republicans and moderate Democrats to get the climate-change bill (especially the the cap-and-trade) through the Senate.
But even though the GOP is trying to spin the crisis into an "Obama's Katrina", it is the Republicans and their "drill baby drill" chanters who should be mortified.
Worse still, even though the investigation is still pending, it seems already that the oil well lacked safeguard device (WSJ) which is required by other countries and used by other oil companies.
In 2000, the federal agency that oversaw oil rig safety issued a safety alert that called added layers of backup "an essential component of a deepwater drilling system." The agency said operators were expected to have multiple layers of protection to prevent a spill.
The industry aggressively lobbied against an additional layer of protection known as an "acoustic system," saying it was too costly. In a March 2003 report, the agency reversed course, and said that layer of protection was no longer needed. (ABC News)
The investigation seems to focus on another big name - Halliburton which seems to have a poor record on the job :
Investigators delving into the causes of the massive gulf oil spill are examining the role of Houston-based Halliburton Co., the giant energy services company that was responsible for cementing the deepwater drill hole, as well as the possible failure of equipment leased to British Petroleum.
Halliburton has been accused of performing a poor cement job in the case of a major blowout in the Timor Sea off Australia last August. An investigation is underway.(LATimes)
According to experts cited in Friday's Wall St. Journal, the timing of last week's cement job in relation to the explosion -- only 20 hours beforehand, and the history of cement problems in other blowouts "point to it as a possible culprit." Robert MacKenzie, managing director of energy and natural resources at FBR Capital Markets and a former cementing engineer, told the Journal, "The initial likely cause of gas coming to the surface had something to do with the cement." (LATimes)
Halliburton, in case someone forgot, was the big oil company that was granted a major contract in rebuilding Iraq while Vice President Cheney was still on its payroll. (see here or here)
Ironically, the last time Halliburton was heard of in Louisiana was when they were granted a $29.8 million contract for cleanup work in the wake of Katrina through their subsidiary Kellogg, Brown and Root (Joker to the Thief & Molly Ivins)
Something that must have been missed by Senator Landrieu of Lousiana, a conservative Democrat and long supporter of off-shore drilling who continues to support drilling. I am not sure how well this is going to play with her electorate.
Some may agree with Sarah Palin that "No human endeavor is ever without risk", but most will probably wonder whether we can learn from past mistakes and support MORE REGULATION to minimize the risks. Something most right-wing republicans are too stubbornly ideological to see.

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