Saturday, May 29, 2010

Obama and the Gulf: Why I remain grateful - and puzzled

We're a long way from knowing what went wrong in the Gulf. It does appear, however, that we don't have the technology to cost-effectively extract this kind of oil (assuming cost includes environmental and commercial damages from accidents). So it makes sense to stop all further exploration and drilling while we reassess our true capabilities.

I like to think that's a common-sense observation. The astounding thing, for those of us who remember GWB, is that my President is saying the same thing ...
Obama Restates Need for More Oil Before U.S. Uses Less - Dot Earth Blog -

... So the overall framework, which is to say domestic oil production should be part of our overall energy mix, I think continues to be the right one. Where I was wrong was in my belief that the oil companies had their act together when it came to worst-case scenarios.

Now, that wasn’t based on just my blind acceptance of their statements. Oil drilling has been going on in the Gulf, including deep water, for quite some time. And the record of accidents like this we hadn’t seen before. But it just takes one for us to have a wake-up call and recognize that claims that fail-safe procedures were in place, or that blowout preventers would function properly, or that valves would switch on and shut things off, that — whether it’s because of human error, because of the technology was faulty, because when you’re operating at these depths you can’t anticipate exactly what happens — those assumptions proved to be incorrect...
I don't think Obama is Saint. We know he has to have a galactic ego, and we assume he lies about his smoking addiction.

Even so, I almost tear up when I read him saying this stuff. He makes sense. He's not insane, he's not frothing, he is a clear thinker. It's mind-boggling to have a President who's not a whack job.

We had Cheney/Bush. We could have had Palin/McCain. We got Obama.

That still puzzles me.

How the heck did we get Obama? We're not that smart ...


level-head said...

It does appear, however, that we don't have the technology to cost-effectively extract this kind of oil (assuming cost includes environmental and commercial damages from accidents).

Failing to have the relatively inexpensive tools at hand is not at all the same as costing too much to do at all, in my opinion.

It would be like working in a kitchen and forgoing a fire extinguisher, and ultimately burning down a restaurant. It does not mean that we don't have the technology to cost-effectively cook food indoors.

This situation is horrifically bad -- but it overshadows the hows and whys of the tools not being available. That situation, to me, is eminently fixable.

===|==============/ Level Head

John Gordon said...

I'm hoping we'll get some good analysis from the Challenger-style panel that's been assembled to review the risks of these operations.

It's possible that, when we put in place all the safety protocols and redundant systems needed to lower the risk to whatever we decide to accept, that the oil will be too expensive to extract at current prices.

Of course I expect the price of oil to rise over the next decade, so even if the cost increases two-three fold we'll still do it within a decade -- just with more expensive precautions.

level-head said...

Did you expect the cost of oil to drop by more than half a couple of years ago? I did, and made the prediction when it hit $147 that it would drop to less than $75 over the next months.

The price of oil is based on many factors, and the US getting serious about pursuing its own oil would depress the price further.

It seems unlikely to me that the current investigation is likely to find Federal employees negligent for not implementing the safeguards mandated in the 1990s -- but undoubtedly that is playing a part in this mess.

This situation is certainly bad. It is not, by far, the largest spill in the Gulf of Mexico (note how carefully the reports are saying the "largest in American history") but it's quite bad enough, especially as it has been handled or not handled.

I think that the aftermath of this will be improved Top Hat style containment mechanisms, coupled with wet-parking andsurface containment, and then business can go on. But I'll bet that the administration will NOT authorize safer, land-based extraction such as the Rocky Mountain shale, despite how much more contained the impacts will be.

Decades ago, oil prices skyrocketed (by fiat from some of the current OPEC countries), and when we began drilling in earnest, the price of oil collapsed by around three-fourths. (A graph of rotating rigs against price is quite interesting.)

I think we can do something like this again, though China's consumption is a factor now and was not at the time. We could end our dependence upon Middle Eastern oil in ten years, and all foreign oil in fifteen. And I think we should. Eventually, solar and others (I particularly like space solar power) will catch up; this would give them time, and free up capital to pursue these technologies.

===|==============/ Level Head