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March 10 2012

22:42

Big Oil Rakes In Billions, Still Complains Taxes Are Too High

The President rolled out his FY2013 budget recently, which includes eliminating $40 billion in tax breaks from Big Oil companies, such as BP, Chevron, ConocoPhillips, ExxonMobil, and Shell. Meanwhile, the American Petroleum Institute's response would have you believe that cutting the subsidies would be the equivalent of moving back into their parents' basement.

It's propaganda at its most repetitive, crying that they are "job creators" and that it's so "unfair" to raise taxes because they already contribute millions to the economy every day, and if you do they swear to god prices will rise and the inevitable dependency on foreign oil will bring about the apocalypse itself if you don't let them have their way.

That's like Donald Trump begging to not get kicked out of rent-stabilized, low-income housing even when raking in billions annually, and then threatening to trash the place once the landlord actually puts up an eviction notice.

It's true. The combined profit of the "big 5" oil companies listed above was $137 billion last year, with ExxonMobil, Chevron, and ConocoPhillips coming in first, fourth, and 15th, respectively, on the Fortune 100 list of most profitable companies.

read more

May 06 2011

10:05

Fracking the Future: How Unconventional Gas Threatens Our Water, Health and Climate - Report

The United States is at the center of a high profile controversy over the threats posed by unconventional gas drilling, particularly surrounding the industry’s hydraulic fracturing (fracking) and horizontal drilling techniques. Amidst the dirty energy industry’s rush to drill the last of America’s dwindling fossil fuel reserves, a growing number of independent scientists, politicians, environmental organizations and impacted citizens are urging the nation’s lawmakers to adopt a more cautious and informed approach to the fracked gas boom.

The oil and gas industry, however, is fighting back against calls for caution, suggesting that it has everything under control – much like it did prior to BP’s offshore drilling disaster in the Gulf of Mexico.

In a new report released today, “Fracking the Future: How Unconventional Gas Threatens Water, Health, and Climate,” DeSmogBlog details the concerns that scientists, cancer specialists, ecologists, investigative journalists and others have raised about the unconventional gas boom. Featuring original interviews and unpublicized reports, “Fracking The Future” delves into many of the key issues in the unconventional gas debate.

DeSmogBlog is calling for a nationwide moratorium on fracking, citing the fact that the potential impacts on water, health, and climate appear greater than previously understood. A moratorium is necessary to protect the public while fracking is studied much more thoroughly in order to determine if the risks of this practice outweigh the benefits.  <!--break-->

Additionally, since state regulators have failed to safeguard the public from the ill effects of gas fracking, federal health and safety officials must be empowered to hold the gas industry accountable for damage to public health, drinking water and the environment.

The report traces the massive industry lobbying efforts to confuse the public and stifle long-overdue federal oversight of the unconventional gas drilling bonanza. We review the sordid history of industry favoritism by the Bush administration, typified by the infamous Halliburton Loophole, which created a recipe for recklessness that has led to air and water contamination and drilling-related accidents.  But the prioritization of industry greed above public health and safety didn’t start there.

Since the Reagan era, those charged with protecting health and the environment have instead worked with the gas industry to minimize public awareness of its practices, and to hide the early warning signs regarding the inherent dangers of drilling deeper into the Earth for fossil fuels. State agencies have been pressured to accommodate the industry’s increasingly dangerous drilling techniques, and have largely enabled the poor, unmonitored practices common in the industry today.

The gas industry is investing millions of dollars each year to restrict oversight to the state level and thwart all federal involvement. The number of gas industry lobbyists has increased seven-fold in recent years, exhibiting the dangerous political sway the dirty energy industry exercises in Washington and at the local level across the nation.

Industry front groups like Energy in Depth (EID) play a pivotal role in the dissemination of misinformation and efforts to attack and silence those who attempt to call polluters to account.

Despite EID’s claims to represent small, independent “mom and pop” gas producers, internal industry documents uncovered by DeSmogBlog reveal that the group was created with seed funding from Big Oil multinationals. When communicating with its industry friends, EID continues to repeatedly tout the funding it receives from BP, Halliburton, Shell, Chevron, ConocoPhillips, ExxonMobil and other oil giants that certainly don’t fit the “mom and pop shop” characterization. 

With international attention focused on the U.S. experience with unconventional gas, “Fracking the Future” urges a cautious approach and much greater industry transparency.  The public deserves to know the true costs of fracked unconventional gas before allowing the oil and gas industry to carry on with its pursuit of this fossil fuel.

Read more: Fracking the Future: How Unconventional Gas Threatens Our Water, Health and Climate

September 30 2010

20:50

The BP Deepwater Horizon Report: Blame Petroleum


Oil burning in the Gulf near the site of the Deepwater Horizon disasterEarlier this month, after a four-month long internal investigation, BP released its findings as to the cause of the worst oil spill in US history, with the conclusion that:

The team did not identify any single action or inaction that caused this accident. Rather, a complex and interlinked series of mechanical failures, human judgments, engineering design, operational implementation and team interfaces came together to allow the initiation and escalation of the accident. Multiple companies, work teams and circumstances were involved over time.”

In the company’s press release, former CEO Tony Hayward who had once admitted that BP hadn’t done enough planning before the “natural disaster,” stated, “It is evident that a series of complex events, rather than a single mistake or failure, led to the tragedy. Multiple parties, including BP, Halliburton and Transocean, were involved.”

In fact, the report places the majority of the blame on its contractors, Halliburton and Transocean. “Of their own eight key findings, they only explicitly take responsibility for half of one,” remarked Rep. Edward J. Markey (D., Mass.), chairman of the House Energy and Environment Subcommittee,“BP is happy to slice up blame as long as they get the smallest piece.”

Specifically, the 8 key findings are as follows:

1. The annulus cement barrier did not isolate the hydrocarbons. This was essentially because “shortcomings in the planning, design, execution and confirmation of the cement job reduced the prospects for a successful cement job.”

2. The shoe track barriers did not isolate the hydrocarbons, as a result of either the design or contamination of the cement.

3. The negative-pressure test was accepted although well integrity had not been established. BP well leaders and the Transocean rig crew, expected to know how to read a key negative-pressure test, misinterpreted it and the well became unbalanced.

4. Influx was not recognized until hydrocarbons were in the riser. A requirement for safe Drilling and Completions (D&C) operations, and explicitly stated in the Transocean Well Control Handbook, is that all phases of operations should be continuously monitored. However, Halliburton’s Sperry–Sun mudloggers, and Transocean’s rig crew, failed to do so and thus did not recognize the influx, or act to control the well, until it was too late.

5. Well control response actions failed to regain control of the well, because the rig crew routed the fluids to the Deepwater Horizon mud gas separator (MGS) instead of the overboard diverter line, as they were supposed to, which would have allowed for more response time and reduced the severity of the accident.

6. This diversion to the mud gas separator resulted in gas venting onto the rig.

7. The fire and gas system did not prevent hydrocarbon ignition. According to the report, “Because of the low probability of hydrocarbons being present before a well produces, only a small area of Deepwater Horizon was electrically classified…If a flammable mixture migrated beyond these areas, the potential for ignition would be higher.” Unfortunately, in this case, the HVAC system transferred a flammable gas rich mixture into the engine rooms, creating a source of ignition.

8. The BOP emergency mode did not seal the well. The emergency disconnect sequence was most likely disabled by the explosion and the fire, and the equipment had not been properly maintained. The batteries in one pod were not charged sufficiently, and in another, there was a faulty solenoid valve.

So basically, the report concluded that it was not the design of the well that caused the explosion and subsequent spill but Halliburton’s use of faulty cement and cement design and its failure to “conduct comprehensive lab tests that could’ve identified potential problems,” as well as the “lack of a robust Transocean maintenance management system.” The crew, particularly Transocean’s and Halliburton’s, was also to blame for failing to  properly maintain the equipment, monitor the well, interpret a key test, recognize and respond to warning signs, and did not perform the correct and intended safety procedures

In response, Halliburton and Transocean blasted BP for not taking enough of the responsibility. Halliburton said that it “noticed a “number of substantial omissions and inaccuracies” in BP’s report, and is confident that its work on the well was “completed in accordance with BP’s specifications.”  Furthermore,

Deepwater operations are inherently complex and a number of contractors are involved which routinely make recommendations to a single point of contact, the well owner. Contractors do not specify well design or make decisions regarding testing procedures as that responsibility lies with the well owner.”

Transocean considered it “a self-serving report” that concealed the fact that that the explosion  was really a result of “BP’s fatally flawed well design, ” and ignored evidence that “BP made a series of cost-saving decisions that increased risk—in some cases, severely.”

For example, BP dismissed, if not outright ignored significant criticisms against itself; such as the decisions for the long string design of the pipe, the final cement plug, and the use of 6 centralizers, instead of 21 as recommended by Halliburton.

Cost saving decisions that increased risk? Omissions and inaccuracies? Really? Are we talking about the same company that is responsible for  at least 10 deadly and disastrous accidents as a result of equipment failure and negligence; all because of cost saving decisions that placed profits above safety measures, the welfare of its employees and the environment? A company that was cited in 2007 by The Minerals Management Service for a “lack of knowledge of the system, and lack of pre-event planning and procedures?”

This is the same company that, prior to the accident, was already being accused of cutting corners on a well that was 43 days and more than $20 million behind schedule at the time of the blast. A well that was considered a “crazy well,” a “nightmare well” by its own engineers who warned BP managers to shut it down.

In defense of BP and the report, Mark Bly, BP’s head of safety and operations, and of the investigative team, said that the team had been directed to look only at the immediate causes of the accident, not any other issues that might have led to it – including cutting of corners or rushing to save money. “We’ve really tried to understand what happened and to the extent possible, why.”

Bob Dudley, BP’s new CEO, stated, “We are determined to learn the lessons for the future and we will be undertaking a broad-scale review to further improve the safety of our operations…to ensure that a tragedy like this can never happen again.”

Chairman of the Board Carl-Henric Svanberg commented: “It is of the utmost importance to the Board to ensure that BP learns from this and further enhances the safety of its operations for the future.”

To demonstrate the lessons learned, the team developed 25 recommendations for itself, its service providers and the industry in general, to ensure safer procedures and operations and prevent similar accidents from happening in the future. These include strengthening oversight on, clarifying, updating and establishing standards and practices for blow-out preventers, well control, well integrity, emergency systems, gas and drilling fluid systems, cement jobs and testing, rig audit and verification, and personnel competence. Other recommendation include providing more specific detailed instructions and training for monitoring, testing, reporting and safety procedures and action plans, and improved communication, risk management and management of change.

Be that as it may, too bad they hadn’t figured this out before nearly, if not definitely, destroying the Gulf. Perhaps the most important lesson learned is  that offshore drilling, particularly deepwater drilling – actually any drilling for that matter – is incredibly and inherently complex, risky, and dangerous. For, cutting corners or not, the tragedy in the Gulf is not just a result of BP’s or its contractors negligence, but an endemic risk of the entire industry. In the twenty years of deepwater drilling, there have been numerous and serious problems and accidents, and it’s obviously not getting any safer.

Because here’s the thing, with nearly 4000 rigs in the Gulf, 60 percent of them involved in deepwater drilling, and nearly 14,000 deepwater wells around the world, there’s a pretty good chance that another disaster will occur in the not-so-distant future. Especially since, as observed from the Congressional Hearings earlier this summer, none of the other big oil companies have any better safety plans in place. Forget their assertions (pdf) of a “Nobody Gets Hurt” culture – that they do not “proceed with operations if we cannot do so safely,” their “practices for deepwater wells are safe and environmentally sound,” and “safety and environmental protection are, and always will be,” their “top priorities.” Not one of them can give the American public 100 percent assurance that that their drilling operations “are free from a similar accident as Deepwater Horizon.”

Recommendations or not, are we really willing to take that risk? It is a risk that becomes clearer as more and more oil is found on the ocean floor, as the clean up continues, and the Gulf residents attempt to receive their promised claims and move forward with their lives. Are we really that addicted to keep returning to the dealer who has such a legacy of destruction, devastation and death? Sounds dramatic, but seriously, isn’t it time that we truly move beyond petroleum?

Let’s just hope that the other investigations come to the same conclusion, and before the temporary suspension on deepwater drilling in the Gulf expires.

The full report and the Executive Summary are available online.

Image credit: SkyTruth, courtesy Flickr

August 23 2010

23:07

Oil & Gas Industries Spent Record $175 Million Lobbying Against Climate Action

The oil and gas industries unleashed a massive $175 million lobbying spree last year to derail U.S. efforts to address climate change, according to a new series of reports by the Center for Responsive Politics (CRP).  

OpenSecrets.org blogger Evan Mackinder reveals just how badly oil and gas interests pummeled the environmental community, which spent its own record $22.4 million trying to convince Washington to get its act together to fight global warming.  

As CRP notes, "Goliath whipped David."

CRP's new series, titled "Fueling Washington: How Oil Money Drives Politics," details the oil and gas industries' outsized influence in Washington. 
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In the recent battle over climate legislation, ExxonMobil alone spent more than all the environmental groups combined, stuffing $27.4 million into K Street coffers to ensure the status quo addiction to fossil fuels can continue unfettered by concerns for the climate.  

Combined with the contributions from Chevron, ConocoPhillips and the now infamous Koch Industries, Big Oil as a whole "hammered away in the background" while Washington debated healthcare reform, working to derail support for a carbon tax or cap-and-trade or anything else having to do with protecting future generations from dangerous climate disruption.  

Over an eighteen month period, Big Oil spent nearly $250 million to block climate action in the U.S. House and Senate, CRP reports.  

And Big Oil's K Street spigot is still flowing. So far in 2010, "the oil industry spent nearly $75 million between January and June -- equivalent to the government budget of a mid-sized American city -- lobbying the federal government," OpenSecrets blogger Andrew Kreighbaum notes.

With the political fallout from BP's destruction of the Gulf of Mexico set to last well into the next Congress, there's no doubt that Big Oil's lobbying gusher will keep spewing indefinitely.

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