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“Chief Counsel's Report” Means Put Gulf Back to Work

Earlier this month, Oil Spill Commission Chief Counsel Fred Bartlit released a new report detailing the April 20 disaster in the Gulf of Mexico. Key findings of the report include:

  • An unclear chain of command, poor risk management and a communication breakdown specifically attributable to the Deepwater Horizon led to an environment aboard the rig conducive of an accident.
  • A failure to disseminate crucial information, and a tendency to explain alarming onsite test results as the best possible scenario, with no clear supervision to correct this, led directly to the uncontrolled well blowout.

From these revelations, even from this overtly political commission, it is clear that this isolated incident can be attributed to one company’s failure to adhere to well-understood industry norms.

Click here to read the report in its entirety.

This report comes to light as Interior Department head Ken Salazar is set to ask Congress for more money for Interior.  Yet the Obama Administration’s continued moratorium on offshore drilling affects the $95 million paid into the federal treasury every day by the oil and gas industry.  Increased energy production grows the economy, reduces the federal deficit (without raising taxes), and increases employment.  Why does the Obama Administration continue to obstruct and prevent energy production in the Gulf of Mexico?

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“Chief Counsel’s Report” Means Put Gulf Back to Work

Earlier this month, Oil Spill Commission Chief Counsel Fred Bartlit released a new report detailing the April 20 disaster in the Gulf of Mexico. Key findings of the report include:

  • An unclear chain of command, poor risk management and a communication breakdown specifically attributable to the Deepwater Horizon led to an environment aboard the rig conducive of an accident.
  • A failure to disseminate crucial information, and a tendency to explain alarming onsite test results as the best possible scenario, with no clear supervision to correct this, led directly to the uncontrolled well blowout.

From these revelations, even from this overtly political commission, it is clear that this isolated incident can be attributed to one company’s failure to adhere to well-understood industry norms.

Click here to read the report in its entirety.

This report comes to light as Interior Department head Ken Salazar is set to ask Congress for more money for Interior.  Yet the Obama Administration’s continued moratorium on offshore drilling affects the $95 million paid into the federal treasury every day by the oil and gas industry.  Increased energy production grows the economy, reduces the federal deficit (without raising taxes), and increases employment.  Why does the Obama Administration continue to obstruct and prevent energy production in the Gulf of Mexico?

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Ask Speaker Boehner “When Can I Go Back To Work?”

Today, you can help give a voice to one small business owner suffering under the weight of onerous government regulation.  That small business owner is Thomas Clements, a Louisiana resident that has been forced out of work by the Administration imposed drilling moratorium in the Gulf.  Thomas asks:

With all the problems surrounding the budget deficit, why does the President continue to stall the economic lifeline of oil and gas production in the Gulf, and then propose drastic tax increases for U.S. companies developing these supplies? Are energy workers second class citizens? And when can I go back to work?

Vote TODAY to make Clements question number one by following these steps:

1.       Visit http://www.youtube.com/johnboehner

2.       Type in “Clements” in the box on the right that says Search.

3.       Click the Thumbs Up on Thomas’s video to show your support!

See the video here.

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Mr. President, Quit Moving the Goalposts

This week, energy majors ExxonMobil, ConocoPhillips, Chevron, and Shell announced the completion of a state-of-the-art Marine Well Containment System (MWCS) capable of controlling catastrophic spills on par with the Deepwater Horizon accident this past spring. Common sense would lead us to believe this new system, which can be quickly deployed to dramatically limit the environmental effects of another highly improbable offshore well blowout, would result in the federal government reopening the Gulf to energy production. The Administration’s prematurely declared six month moratorium has now dragged on for ten months, multiplying economic damage in the region most affected by the BP oil spill.

Oil and gas industry representatives worked closely with offshore regulators to prepare the MWCS, investing considerable resources to create the most expensive well containment mechanism ever built. This should be more than enough for the government to lift their arbitrary moratorium and let our southern coast energy workers return to work. The ongoing moratorium continues to devastate small and large businesses alike in the Gulf. Seahawk Drilling, a household name in the world of domestic energy, declared bankruptcy just last week, unable to earn money and pay off the substantial capital investments necessary to afford expensive drilling equipment.

Small businesses such as Oilfield CNC Machining, a small parts manufacturer in Broussard, LA, are being affected as well. This company may have to close its doors as early as June if the government continues to block production. The energy workers in the Gulf have been excluded from the jobs conversation going on in DC and all but ignored at the discussion table regarding the moratorium. If the energy lockdown in the Gulf and elsewhere were truly about safety, it would seem hard for the federal regulators to ignore the new well containment system, especially since it was crafted in conjunction with the government to meet specific qualifications. But we know that the oil embargo has never been about safety. That is why, as with everything else in this long, twisted saga, the Administration’s predictable response will be to cast doubt on the effectiveness of the MWCS in order to preserve their stranglehold on domestic energy production in the Gulf. The government, in other words, will once-again move the goalposts to keep their anti-oil agenda in tact.

Directly following the sinking of the Deepwater Horizon, the President brought together a panel of experts to provide advice on how to proceed with Gulf drilling. Before presenting the expert report, White House environment czar Carol Browner’s office edited the report to make it appear the panel was in favor of the moratorium, a claim the experts have subsequently denied. It went forward anyway.

A federal judge overruled the moratorium as an inappropriate response, so the Department of Interior went around them and issued another moratorium with slightly different wording. The agency is now facing contempt charges.

The President appointed a Spill Commission to study the causes of the oil spill; a panel with plenty of oil and gas opponents and green energy lobbyists or lawyers, but not one expert in the drilling process. Therefore, it was no surprise that the panel blamed the entire industry for the spill despite several credible reports pointing to BP’s poor safety management record as the culprit. The commission’s report has ignited a discussion on Capitol Hill, and continued foot dragging by legislators teamed up with the Administration seeking to end Gulf drilling. Meanwhile, for their part, the Department of Interior has continued to freeze the permit process in both the deepwater and shallow waters of the Gulf.

Throughout this poorly executed federal response, the Gulf continues to suffer even after the spill was capped and the beaches were cleaned. Well over 20,000 jobs have been eliminated in the region, while billions in economic activity and government tax revenue go unrealized, crippling the support system for the new influx of unemployed.

Not willing to sit on their hands, ExxonMobil, ConocoPhillips, Chevron, and Shell took action immediately after the spill.  The result is the Marine Well Containment System, which is designed to not only cap a well, but cover it and catch the oil should the well prove difficult to cap, as was the case at the Macondo well last April. These four companies should be commended for stepping up to the plate. We can only hope the Administration and regulators take notice of the system, and take the leash off needed domestic economic growth from energy production by issuing offshore drilling permits. The government is running out of excuses for refusing to release their self-imposed embargo on Gulf energy production, job creation, and economic prosperity.

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Quote of the Day

Louisiana Judge Holds DOI in Contempt

This week, Eastern District of Louisiana Federal Judge Martin Feldman held the Interior Department in contempt for “dismissive conduct” in regard to the oil spill moratorium last year. After he issued an injunction blocking the moratorium on drilling operations in depths greater than 500 ft., the government quickly issued a new moratorium on all drilling operations which utilized a blowout preventer, effectively accomplishing the same goal. In Judge Feldman’s own words:

There is, however, more to the story. The plaintiffs also stress that the government did not simply reimpose a blanket moratorium; rather, each step the government took following the Courts imposition of a preliminary injunction showcases its defiance: the government failed to seek a remand; it continually reaffirmed its intention and resolve to restore the moratorium; it even notified operators that though a preliminary injunction had issued, they could quickly expect a new moratorium. Such dismissive conduct, viewed in tandem with the reimposition of a second blanket and substantively identical moratorium and in light of the national importance of this case, provide this court with clear and convincing evidence of the government’s contempt of this Court’s preliminary injunction Order. To the extent the plaintiff’s motion asserts civil contempt based on the government’s determined disregard of this Court’s Order of preliminary injunction, it is GRANTED.

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Oil Spill Commission Report, a ‘Pipe Dream’

Far too often it seems political figures call for actions that far exceed the bounds of reality. Case in point: William K. Reilly, the chairman of the President’s National Oil Spill Commission.  Reilly, the former President of the activist group World Wildlife Fund, recently suggested that the U.S. make a treaty with Mexico and Cuba regarding offshore drilling standards in the Gulf; a lofty suggestion that seems quite odd considering the U.S.’s severed diplomatic relations with Cuba.

Similarly, the commission’s formal recommendations often seem to turn a blind eye to reality, in favor of ideological pipe dreams.

The politically crafted report suggests the federal government create yet another agency within the Department of the Interior, this one to oversee the overseers at the newly created Bureau of Ocean Energy Management, Regulation, and Enforcement (BOEMRE). The addition of another layer of bureaucracy would not only be redundant, but provide an even greater opportunity for regulatory delays in the already slow offshore drilling permit application process.

While slowing the application process would guarantee continued economic hardship in energy producing regions, it would likely do little to guarantee improvements in safety.

Another conclusion drawn by the commission suggests that the liability cap for oil spills should be lifted above the current $75 million limit. This recommendation is confusing considering that the commission’s primary charge – “examining the relevant facts and circumstances concerning the root causes of the Deepwater Horizon explosion” – was left largely unanswered.

That the commission had time to pontificate on liability funding regimes, but failed to identify with any certainty the root causes of the spill itself, should raise serious questions about the priorities of commission members. It appears they were more interested in using tax payer dollars to address their own ideological agenda, rather than completing an independent evaluation of the BP spill.

If anything useful can be taken from the commission’s flawed and speculative report, it is quite simply that the commission was not the appropriate body of individuals to investigate the root causes of the spill. Comprised of lawyers and environmental policy advocates instead of engineers or safety experts, the true purpose of the commission was clearly to provide the current administration with the political cover needed to sideline expanded offshore drilling. While very successful in their pursuit of blocking future resource development, their work has done nothing to make Gulf communities safer.

In fact, in terms of safety, the commission may have actually been worse than useless. One of the many unintended consequences of the administration’s drilling moratorium has been to encourage drilling closer to the delicate reef eco systems of the coast of Florida than ever before. This drilling activity comes at the hands of Chinese companies seeking to tap the Gulf’s valuable resources by operating in Cuban waters.

With the fate of U.S. operations uncertain and a growing need for fuel worldwide, Chinese investors quickly seized on the availability of idled drilling rigs to begin production in Cuba, despite the inherent economic risk associated with operating in a country with few legal protections for property owners and businesses.

Drilling operations in Cuban waters will mean no economic benefit for U.S. workers, fewer safety and environmental standards for the rigs themselves, and new drilling operations outside the reaches of the U.S. courts should an incident occur. This triple fail demonstrates what happens when policy decisions are driven by ideology rather than factual assessments.

It’s important that Congress learn from that lesson when evaluating the recommendations of the commission. Far from a technical description of the problems with BP’s procedures and the specific mistake aboard the BP Deepwater Horizon rig, the commission’s report is much closer to an offshore energy policy manifesto. Accordingly, it is not the factually sound cornerstone needed to help build America’s offshore energy policy for the 21st Century.

With Chairman Reilly apparently already focused on solving bigger issues than the oil spill, such as U.S. diplomatic relations with Cuba, it’s unlikely further reports or study under his tutelage will produce anything better. The commission’s unrealistic view of complex, highly technical issues makes for great headlines. They just don’t hold up to the test of reality.

Thomas Pyle is president of the American Energy Alliance and its latest project, Save U.S. Energy Jobs.

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