The “Deepwater Horizon”, a semi-submersible Mobile Offshore Drilling Unit, was operating under lease to BP, formerly known as British Petroleum, and tasked with drilling an exploratory deep-water oil well in American waters located in the Gulf of Mexico in water 5,000 feet deep. The rig was certified to operate in waters as deep as 8,000 ft deep so this was well within their operating tolerances. And In fact, it should be noted that many counties have similar oil production units in the Gulf of Mexico, and worldwide deep water drilling is considered a safe technology. Please remember that during Hurricane Katrina, not one of the oil rigs in the gulf, many of which were badly damaged or destroyed, created any oil spills.
The weather was clear and the seas were calm on April 22, 2010 when the Deepwater Horizon, which received a safety award from federal government regulators for a perfect safety record during 2009, experienced a series of errors and bad decisions which aligned perfectly. The result was that it exploded in a giant fireball. About 100 crewmembers were able to successfully bail out, but sadly eleven crewmembers were killed and the rig ultimately sank to the ocean floor. The well it had been drilling started releasing a giant plume of oil into the Gulf.
The reaction from the Obama Administration was swift. Well, sort of… They demanded answers! They searched and found scapegoats to be vilified in the regulating agency, the Department of the Interior’s Minerals, Mining, Service. However they didn’t actually do much to help correct the situation right away, and in the mean time it’s estimated that many millions of gallons of crude oil are creating what is now referred to as this nation’s worst oil spill, ever; which will likely become the worst ecological disaster, ever.
But now the second oil disaster has occurred. This one has been created by a knee jerk political reaction being applied to a situation which really needed thoughtful governance. The Obama Administration has applied an across the board six month moratorium to all deep water drilling operations. And remember; only the U.S.A. is imposing this moratorium. The rest of the world will continue blithely drilling away in the Gulf and elsewhere.
According to the Wall Street Journal, the offshore drilling industry is responsible for 200,000 jobs in the Gulf region alone, Deep water wells generate 80% of the Gulfs Oil production, and 45% of its natural gas… Furthermore this could result in up to 10,000 jobs lost in the coming months, which is a terrible economic disaster in an economy that only created 41,000 private sector jobs in May.[1]
And in an article in today’s Wall Street Journal, Obama wants BP to be financially responsible for all the workers his unilaterally arrived at policy will have thrown out of work![2] It’s not all bleak; however, that policy alone should provide plenty of employment for BP’s and the government lawyers.
Let’s be honest. Our national economy and prosperity requires plentiful energy sources to power our factories, power plants, offices, stores and homes. We need to also honestly face the fact that the only reason oil producers are drilling for oil a mile under the sea is because we won’t allow them to drill on land or in shallow water due to environmental and aesthetic concerns.
Nuclear power is very carbon neutral but even though France and Japan create a majority of their electricity from Nuclear power, our country hasn’t licensed a Nuclear power plant in over thirty years.
And yes, we need to recognize that wind, solar and geo-thermal energy sources are really great, low or no polluting sources of energy, but they’re emerging technologies that have future potential but cannot replace petroleum yet, if ever.
If we’re truly concerned about the environment and the economic recovery, maybe it’s time to reconsider the policy decisions which have chased our domestic oil producers into deep water and shunned nuclear energy.
[1] Wall Street Journal June 09, 2010 “Review and Outlook”
[2] Wall Street Journal June 10, 2010 “US Ramps up Tab on BP by Guy Chazan and Stephen Power
Comments 1
Wow, footnotes!
Great post, Jerome! When you mentioned that your latest post was on the BP oil spill, I was curious to see what your angle would be. I’m curious, since you mentioned the safety awards, whether you think regulators failed to catch problems with the deep-water drilling, or whether you think the accident was mainly caused by human error.
(Did I mention that my uncle works on an oil platform in the North Sea? It sure is a dangerous job. I feel so terrible about the people who died in this accident. )