August 23, 2010

Collateral Damage: WSJ FindsObama Knew Well the Damage His Offshore Ban was Likely to Visit Upon Gulf Coast- 23K Lost Jobs; Think He Batted an Eyelash? WallStreet Journal (8/21) reports, "Senior Obama administration officialsconcluded the federal moratorium on deepwater oil drilling would cost roughly23,000 jobs, but went ahead with the ban because they didn’t trust theindustry’s safety equipment and the government’s own inspection process,according to previously undisclosed documents. They show the new top regulatoror offshore oil exploration, Michael Bromwich, told Interior Secretary KenSalazar that a six-month deepwater-drilling halt would result in "lostdirect employment" affecting approximately 9,450 workers and "lostjobs from indirect and induced effects" affecting about 13,797 more. TheJuly 10 memo cited an analysis by Mr. Bromwich’s agency that assumed directemployment on affected rigs would "resume normally once the rigs resumeoperations." The administration has said in court filings that theeconomic effect of suspended drilling wasn’t as severe as the industryasserted. In a filing with federal court in eastern Louisiana June 23, the dayafter a judge overturned the initial six-month halt, Justice Departmentattorneys said it affected 33 deepwater wells, "less than 1% of theexisting structures in the Gulf dedicated to oil exploration andproduction." A study by Louisiana State University economist Joseph Mason-publishedin July and commissioned by the American Energy Alliance, a group funded partlyby oil and gas companies-concluded a six-month shutdown of the 33 deepwaterrigs would result in a net loss of 12,000 jobs.

Good Money After Bad: PerhapsPreparing for Backlash from Today’s Journal Hit, Salazar Hastily Files Defenseof Offshore Ban in Today’s Houston Chron. Interior secretary Ken Salazar writes (8/22) in the HoustonChronicle, "In addition, under Bromwich, we are substantially increasingthe number of inspectors for offshore oil and gas drilling rigs and platforms.For too long, the agency that regulates offshore drilling has been short onresources. Together, the reforms we are implementing are strong, fair andrisk-based. In shallow waters – where the risks are different than deep waters -drillers can continue drilling if they meet the new standards and play by therules. Production throughout the Gulf of Mexico has also safely continuedthroughout the BP oil spill. However, in the deep-water areas, where theDeepwater Horizon blowout occurred, it is necessary and appropriate to requireoperators to demonstrate improved safety, blowout containment and spillresponse practices before allowing drilling to continue. To be sure, both thedeep-water drilling moratorium and the reforms we are implementing have drawnfire from the same powerful interests who have, over the last two decades,systematically fought regulation and oversight of offshore drillingoperations.  But make no mistake:Our country needs these reforms and we will deliver them. We will raise the barfor deep-water drilling. We will hold the industry accountable. And we willbuild the strongest and safest offshore energy development program in theworld. Salazar is secretary of the Interior.

Funny Thing About Ratepayers:They Prefer Affordable Electricity Over the Expensive Stuff – Which Is Why(Lots of) Coal Plants are Being Built Across the Country. AssociatedPress (8/22) reports, "Utilities across the country are building dozens ofold-style coal plants that will cement the industry’s standing as the largestindustrial source of greenhouse gases for years to come. An Associated Pressexamination of U.S. Department of Energy records and information provided byutilities and trade groups shows that more than 30 traditional coal plants havebeen built since 2008 or are under construction. The construction wavestretches from Arizona to Illinois and South Carolina to Washington, and hasemerged despite growing public wariness over the high environmental and socialcosts of fossil fuels, demonstrated by tragic mine disasters in West Virginia,the Gulf of Mexico oil spill and wars in the Middle East. Utilities say theyare clinging to coal because its abundance makes it cheaper than natural gas ornuclear power and is more reliable than intermittent power sources such as windand solar. Sixteen large plants have fired up since 2008, and 16 more are underconstruction, according to records examined by the AP. Combined, they willproduce an estimated 17,900 megawatts of electricity, sufficient to power up to15.6 million homes – roughly the number of homes in California and Arizona.

Finally, a Gov’t Agency with aClear Understanding of Its Mission: Interior Dept. Declares Better Oversight ofOff-Road Desert Racing a "Top Priority." TheHill (8/20) reports, "The Interior Department’s Bureau of Land Managementpledged to toughen oversight of off-road racing on public lands after anaccident that killed eight spectators at a truck race Saturday in California’sMojave Desert. BLM said Friday it would "carefully review on a case-by-casebasis each approved and pending request to hold Off-Highway Vehicle races onpublic lands for which it issues permits." "We have launched an internal reviewof the tragedy and we will be taking a very close look at all approved permitsand pending requests and determine whether they are appropriate on acase-by-case basis," BLM Director Bob Abbey said in a statement."When we permit any activity on the public lands, our first priority ispublic and employee safety and health. We will look at these requests carefullyand consider the safety record of the individual or organization requesting apermit." He said the agency is "deeply saddened by the tragedy in theCalifornia Johnson Valley OHV open area" and that BLM will increase itspresence at future events.

Sen. Menendez Sees PoliticalOpportunity in Re-Writing Liability Laws to Prevent Independents from Producingin the Gulf – But Will Landrieu Let Him Get Away with It? E&E News (8/21,subs. req’d) reports, "Louisiana Democrat Mary Landrieu expressed confidenceyesterday that she and a fellow moderate Senate Democrat were close to acompromise on oil spill liability language after offering two separate proposalsearlier this month. Landrieu said she and Sen. Mark Begich of Alaska were closeto a consensus on liability language they are developing to hold oil companiesaccountable for spills without placing a burden on taxpayers and withoutshutting out smaller companies from operating offshore."We’re working veryclosely together," Landrieu said on the sidelines of a Washington eventfor her brother, New Orleans Mayor Mitch Landrieu. "And I think by thetime we get back here, we’ll have reached a consensus." Landrieu andBegich have been vocal critics of the unlimited liability language in SenateMajority Leader Harry Reid’s (D-Nev.) energy and oil spill-response package (S.3663). But the two could not come to an agreement on an alternative proposal beforeleaving for recess earlier this month.

Hava Nagila! Massive Natural GasDiscovery Off Coast of Israel Seen as a Game-Changer Not Just for Economy, Butthe Country’s National Security, Geopolitical Standing. NYTimes (8/20) reports, "Enormous deposits of natural gas have been detectedoff the Israel’s northern coast. Last year, the United States Geological Surveyestimated that more than 120 trillion cubic feet of recoverable gas reserveslie beneath the waters of the Eastern Mediterranean, most of it within Israeliterritory. Several months after the report, another field of 8.7 trillion cubicfeet was found off Israel and a second, twice that size, was detected and is thoughtto have a 50 percent chance of proving out. Christopher Schenk, a geologist wholed the Geological Survey’s study, said in a telephone interview that there waslittle doubt of the area’s enormous gas potential. Israel’s energy needs willeasily be filled for the next generation by the gas, and the country could wellbecome an energy exporter. Energy companies have been helping drive the TelAviv Stock Exchange into a swirl of anticipation, and the talk has grown heady."This is a huge deal that could change the geo-strategy of the region andIsrael’s resources for years to come," commented Einat Wilf, a member ofParliament who serves on the foreign affairs and defense committee.