Louisiana Federal Judge Blocks Drilling Moratorium 691
eldavojohn writes "In the ongoing BP debacle, the Obama administration imposed a six-month moratorium on offshore drilling and a halt to 33 exploratory wells going into the Gulf of Mexico. Now a federal judge (in New Orleans, no less) is unsatisfied with the reasons for this and stated, 'An invalid agency decision to suspend drilling of wells in depths of over 500 feet simply cannot justify the immeasurable effect on the plaintiffs, the local economy, the Gulf region, and the critical present-day aspect of the availability of domestic energy in this country.' The state's governor agrees on the grounds that blocking drilling will cost the state thousands of lucrative jobs." The government quickly vowed to appeal, pointing out that a moratorium on 33 wells is unlikely to have a devastating impact in a region hosting 3,600 active wells. And reader thomst adds this insight on the judge involved in the case: "Yahoo's Newsroom is reporting that the judge who overturned the drilling moratorium holds stock in drilling companies. You can view his financial disclosure forms listing his stock holdings online at Judicial Watch (PDF)."
Drill baby drill! (Score:1, Informative)
I love his comparison that just because one went doesn't mean the others will. Gee they use largely the same hardware and have virtually identical disaster response plans. Nope no risk at all. I think all that he sees at risk is his stock portfolio.
Re:Crying in your oil... (Score:4, Informative)
As always, units matter (Score:5, Informative)
The above quote should read "a moratorium on 33 drilling wells". Drilling wells are a rate (ie 33 wells per month), active wells are a stock. The distinction is important. The vast majority of oil and gas jobs are involved in the drilling and completion process. Operating a well after it has been completed requires very little resources. For example, a typical onshore well may cost $2-3 million to drill and complete in a 14-30 day time period, but only cost around $2,000/month to operate after completion.
Please note that I'm not saying a drilling moratorium should not be passed. Just that the moratorium will likely have significant impact on the Gulf economy, and that the state of Louisiana's concerns are quite valid, and that the Federal government's dismissal of them here is misleading and likely inaccurate.
Biased article much? (Score:5, Informative)
Re:So? (Score:5, Informative)
Another article at http://www.bloomberg.com/news/2010-06-22/u-s-deepwater-oil-drilling-ban-lifted-today-by-new-orleans-federal-judge.html [bloomberg.com] provides a little more insight.
They also said regulators failed to tell Obama that all active deepwater rigs passed an immediate re-inspection after the Deepwater Horizon exploded and sank, with only two rigs reporting minor violations and the rest getting approval to continue operations.
Re: Crooked Judge (Score:2, Informative)
The Judge has the power to decide on things like this because in the United States the President does not have absolute authority over the United States.
When Katrina hit the Gulf Coast the President of the United States couldn't send military forces and aid to Louisiana because the Governor of that state didn't authorize Federal troops to act in a law enforcement role.
http://en.wikipedia.org/wiki/Criticism_of_government_response_to_Hurricane_Katrina#Louisiana [wikipedia.org]
As for this being a "great national emergency", the President has not authorized an exclusion to the Posse Comitatus Act nor has the Attorney General requested that the Secretary of Defense provide emergency assistance if civilian law enforcement is inadequate to address certain types of threats involving the release of nuclear materials, such as potential use of a nuclear or radiological weapon.
So, the Legislative, Judicial and Executive branches still have separation of powers.
Re:You don't know what you're talking about. (Score:5, Informative)
I apologize, I do not want to live in a country where anytime a citizen or a corporation does something that is legitimately wrong is subject to some sort of political pressure that is again in my words amounts to a shakedown. So I apologize.
For the record, even Fox News has his statement. Many of his fellow Republicans were ashamed of his original statement. They even continued to be ashamed of his spoken statement and he later sent out a written statement in an attempt to appease members of his own party. Rep. Barton's statements were completely self serving considering he is on the House Energy and Commerce Committee as well as a very large recipient of big oil and BP's campaign donations. Even more so, if you take his statement for face value, he is saying that nobody should ever be punished for their misdeeds.
Re:So? (Score:4, Informative)
This concern isn't about producing wells. It is about drilling rigs.
It was recently reported in various news channels that Anadarko was trying to break a contract with a drilling operator in the gulf because Anadarko couldn't use their contracted drilling equipment due to the moratorium. The owner of the equipment replied they could use it elsewhere. The drilling costs IIRC were on the order of $400,000/day. Other deep water drilling day rates I've seen go up to $800,000/day.
If the moratorium continues, the drilling rigs will move where they can be utilized, and they'll stay there while there is work. Most won't just sit around and wait the moratorium out and hope it isn't extended. There are limited numbers of deep water drilling rigs, they take time to build, and nobody wants to build replacement rigs to meet a spot shortage because they've all moved to other areas due to this. So there could be a longer term impact even if the moratorium does end in 6 months.
Likewise, the exploration companies are going to pick places to explore for oil based on the likelihood of being able to produce from them, and the moratorium also puts that at risk. There are many variables in that equation that are continually reviewed, but politics in all its forms factors in heavily.
Take a nominal production rate from the Deepwater Horizon experience (as it'll be replaced ASAP), multiply it by 365 and then by 33+. That's a lot of barrels of oil and cubic feet of gas produced locally each year that we don't have to depend on less stable countries for. Regardless of your opinions on alternative forms of energy for cars, we're going to be dependent on oil for many years to come. Why shut off a good source?
Everybody learned something from this disaster, including the major oil companies. Nobody wants to repeat it, although at some point one probably will. If the government doesn't like the consequences, maybe they should open up more shallow water tracts in other areas of the country where problems can be fixed more easily when things go wrong.
Re:What is the opposite of insightful? (Score:5, Informative)
>>>Consider this week the news is full of European countries enacting substantial budget cuts. We know that's the wrong thing to do.
"We" do? Not all of us agree. I'd estimate about 1/3rd of economists say cutting spending & taxes is the Correct thing to do, because it frees excess money to the private sector who can use it to invest in new factories and jobs and personal goods. In fact that's why the Depression of 1921 only lasted a year - the government cut spending/taxes and it freed-up money to be invested (at the corporate level) and spent (at the consumer level).
The EU states are doing precisely the right thing according to the Hayek, Friedman, and Austrian economic models.
Re:As always, units matter (Score:1, Informative)
Double the cost, 2 rigs for every well, and you may not realize this but relief wells can also experience blowouts.
It's an interesting idea and not particularly practical, but as long as you're happy with, say, 1.5 to 2x more for the price of gas at the pump, it could probably be done.
Re:So? (Score:3, Informative)
It is to BP's credit that they have said since the beginning that they would not hide behind the liability cap. However, the cap does not apply if negligence was involved in the spill. The rig, quite frankly, was not up to the level of industry standards at the time of the spill. That is strong evidence of negligence. Even if BP had tried to hide behind the liability shield, they likely would have failed.
Bush 41 didn't establish the liability cap. He *raised* it to 75 Million.
As most people are now realizing, there should not be a cap at all. The problem is that Congress, in response, is going to raise the cap to $10 Billion or some other arbitrary number. When the next disaster happens in twenty years, the cap will be too low again. Hopefully Congress will realize this and abolish the cap completely, but I don't have much faith that they are that forward thinking. Or worse: maybe they realize that if they completely abolish the cap, they won't be able to score environmental points by repeatedly raising it in the future every time there's a disaster.
Re:What is the opposite of insightful? (Score:5, Informative)
Yes, Keynesian economic policies were recently practically killed by - believe it or not - a group of Harvard economists. Here is a link to the paper [hbs.edu]. It turns out that if you measure the economic effect of government spending, that effect is net lower employment, net lower commerce, and net lower investment.
Essentially, no one in their right mind competes with someone supported by the government.
Re:So? (Score:3, Informative)
would be perfectly happy to see the rigs gone, lest this get worse, or happen again
Honest question: Why do people seem to accept this argument as valid for oil rigs, but using Chernobyl as a reason against nuclear is (generally, and rightfully) rejected as irrelevant and a piss poor argument?
How about the simple fact that all of this has happened 24 years ago. The government moratorium now proposed to shake up the industry is only 6 months. That is 6 months is all the regulators think is needed for an industry to get it's act together.
The statement you're questioning is talking about current events. Clearly something has gone wrong with current technology in the industry as it is currently regulated. People have every right to want these things gone out of their water. 24 years from now things may look very different! The same applies here to the Nuclear industry.
Would I support a really old Chernobyl style reactor being built anywhere in the world? Hell no! Since then reactors have been redesigned several times over. Some reactor designs like Pebble bed reactors [wikimedia.org] are fail safe, i.e. will not suffer thermal runaway in a self sustained reaction, and thus will not melt down even without the presence of an active safety system. Other modern reactor designs such as CANada Deuterium Uranium [wikimedia.org] or CANDU reactors are also inherently safer, and not only produce little and far less radioactive waste, but it can also use existing radioactive waste as a feedstock.
This is a sign of an industry that has for 24 years been trying to appease the world and rid itself of the past reputation as unsafe and deadly. It is time to embrace the changes that are there for the taking, and not get caught up with a past which does not at all reflect the nature of the present.
If we applied the line of thinking that if a part of an industry is even remotely dangerous we'd have no chemical industry left. The Bhopal incident killed 10000 people and injured 200000 (yes two hundred thousand), yet that didn't cause a cease in production of methyl iso-cyanate (an intermediary in a lot of chemical processes). The process industry especially is defined by not repeating a past mistake. I wonder what it will look like in the next 24 years to come.
As an aside one of the local refineries in my city in the last 25 years has gone from having a small standard process distributed control system to installing a brand new distributed control system along with an independent SIL3 rated emergency shutdown system, and from a control room made of asbestos with windows pointing directly into the process area 5m away to a completely blast proof bunker. Things change.