Obama's Katrina -- Hurricane Rahm

President Obama's former chief of staff, Rahm Emanuel, is notorious for saying, "You never want a serious crisis go to waste," specifically with regard to energy policy. To fully understand the context of his comment, you need to watch the video. He also said, "For a long time, our energy policy came down to cheap oil" (see 0:23 to 0:26).

The BP Deepwater Horizon oil spill gave the administration its chance to put its words into action with catastrophic results for the economy of the Gulf States. The proof of this can be seen in the New York Times article "Should BP's Money Go Where the Oil Didn't," which details the imbalance of claims submitted to the BP fund Administrator Kenneth Feinberg between the states of Louisiana and Florida, with Florida outpacing Louisiana by 35,000 to 31,000 despite the fact that not one drop of oil washed ashore on the Florida peninsula (exclusive of the Panhandle). The article details the downturn in Florida's $60-billion tourist industry this year.

For a sense of the scale of this economic disaster, consider that the Florida legislature put the value of its four-year hurricane-insured losses from nine hurricanes at $31.3 billion. A key difference is that a hurricane comes and goes, leaving damage in its wake. The BP oil spill dragged on for months and would have gone on even longer had the administration been allowed by public opinion to rely on its ultimate solution, the relief wells. Having sold their "solution" to the media, the administration proceeded to use their Alinsky-style tactics to demonize BP, not help it "plug the damn hole." It was only under the pressure of Democrats such as James Carville that Obama deigned to allow BP to use a direct intervention technique, the "Top Kill." That is the essence of the problem with the government response, which was characterized by bureaucratic reactive, punishing behavior versus the necessary proactive interventions necessary to obtain results.

Containment vs. Intervention

In a rare moment of truth -- contrasting with the normally feckless behavior of the oil executives seeking to curry favor from the government regulators -- ExxonMobil's CEO captured the essence of the problem when he characterized the government's response this way:

"The lowest risk and lowest-chance-of-success options were chosen first," Exxon Mobil chief executive Rex Tillerson told a government forum on oil spill response last month. "At the end, what was done to contain (the well) - it's possible it could have been done in the beginning" (emphasis added).

The most clear-cut means to understand Mr. Tillerson would be to review the government's response to the Deepwater Horizon incident assuming that all the equipment provided under the $1-billion Marine Well Containment Company (proposed Finding 11 of the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling - Subcommittee on Offshore Drilling) had been in place on April 20, 2010.

ExxonMobil, Chevron, and Shell have taken the lead in forming the Marine Well Containment System with the details shown on Exxon's website.

This ought to look familiar to those who followed the Deepwater Horizon response; the consortium cribbed what BP actually did while playing holier-than-thou in public. You will notice the risk-averse preferences of the government in what was their containment and collection strategy. They built what was in effect a de facto production platform. They would have been ready to have BP collect the oil. But the collection could not proceed until BP cut off the broken riser. Remember all those intervening steps: the cofferdam, the RITT, the aborted Top Kill and Junk Shot? The government fiercely resisted severing the riser while bleating loudly that such an act would increase the pollution. It raises the question: in any future incident, will the National Incident Commander have the gumption to overrule the scientists and let the flow increase temporarily to stop the flow permanently?

The Exxon-Valdez Lesson Left Unfunded

Much has been made by the government about the size of the spill relative to the previous record-holder. The Center for Strategic and International Studies brought together some industry experts to lay out a reasonable course forward. Frank Verrastro discussed the economic devastation caused by the drilling moratorium. Lloyd Guillory discussed the formation and operation of the Marine Well Containment Company. But the star of the show was Albert "Alby" Modiano. His "get a rock" story is priceless. But what ought to play a big part in the evaluation of the government's role is his experience as Director the Minerals Management Service during the Exxon-Valdez incident. He was a government regulator close to the situation, but safely observing it from the peanut gallery as the Coast Guard took the heat as the lead agency. For the Deepwater Horizon incident, these positions were reversed, and Elizabeth Birnbaum took the fall for the administration. As Mr. Modriano pointed out, a key lesson learned was the early deployment of in situ burning of the oil. 

The Kuwaiti oil fires spilled more oil per day (6 million barrels) than the exaggerated total gulf oil spill of 5 million barrels over three months. Burning the oil lessened the environmental impact of that spill, confirming the usefulness of in situ burning. How well did the Coast Guard learn that lesson? A key deficiency of the spill response was the lack of fire boom. Congress had not funded the purchase of the fire boom by the Coast Guard in the intervening decades, so the Coast Guard was caught totally unprepared. Deployment of adequate fire boom took months.

The "Wizards" of the National Laboratories

We have already discussed Energy Secretary Steven Chu's abortion of the Top Kill when it had just stopped the flow of hydrocarbons into the Gulf. What about his other "achievement" -- bringing to bear a gamma ray source strong enough to image (similar to an x-ray) the blowout preventer? Did that really help? If they had a good enough image to "see" inside the blowout preventer, they would have known whether there was a tool joint in the drill string caught in the blind shear ram preventing it from cutting the drill pipe and closing fully. That would have influenced the drive to require two blind shear rams so as to ensure they missed the tool joint. Would it surprise you to learn that Daun Winslow of TransOcean was successful in closing the blind shear ram and severing the drill pipe on April 22 using the "hot stabbing" intervention? Now that the blowout preventer has been recovered from the sea floor, it is possible to take a visual tour and see that the ram is closed, though the elastomeric seals were eroded away, allowing reduced flow past the ram. All the flow went through those two eroded channels visible at about 1:59 on in the YouTube video. Could it be that the "missing oil" never flowed out of the well in the first place? Where is the recognition of that erosion in the flow estimates being used by the administration to bully BP into creating the $20-billion slush fund?

Do you trust the Obama administration to tell you "the truth, the whole truth, and nothing but the truth"?
President Obama's former chief of staff, Rahm Emanuel, is notorious for saying, "You never want a serious crisis go to waste," specifically with regard to energy policy. To fully understand the context of his comment, you need to watch the video. He also said, "For a long time, our energy policy came down to cheap oil" (see 0:23 to 0:26).

The BP Deepwater Horizon oil spill gave the administration its chance to put its words into action with catastrophic results for the economy of the Gulf States. The proof of this can be seen in the New York Times article "Should BP's Money Go Where the Oil Didn't," which details the imbalance of claims submitted to the BP fund Administrator Kenneth Feinberg between the states of Louisiana and Florida, with Florida outpacing Louisiana by 35,000 to 31,000 despite the fact that not one drop of oil washed ashore on the Florida peninsula (exclusive of the Panhandle). The article details the downturn in Florida's $60-billion tourist industry this year.

For a sense of the scale of this economic disaster, consider that the Florida legislature put the value of its four-year hurricane-insured losses from nine hurricanes at $31.3 billion. A key difference is that a hurricane comes and goes, leaving damage in its wake. The BP oil spill dragged on for months and would have gone on even longer had the administration been allowed by public opinion to rely on its ultimate solution, the relief wells. Having sold their "solution" to the media, the administration proceeded to use their Alinsky-style tactics to demonize BP, not help it "plug the damn hole." It was only under the pressure of Democrats such as James Carville that Obama deigned to allow BP to use a direct intervention technique, the "Top Kill." That is the essence of the problem with the government response, which was characterized by bureaucratic reactive, punishing behavior versus the necessary proactive interventions necessary to obtain results.

Containment vs. Intervention

In a rare moment of truth -- contrasting with the normally feckless behavior of the oil executives seeking to curry favor from the government regulators -- ExxonMobil's CEO captured the essence of the problem when he characterized the government's response this way:

"The lowest risk and lowest-chance-of-success options were chosen first," Exxon Mobil chief executive Rex Tillerson told a government forum on oil spill response last month. "At the end, what was done to contain (the well) - it's possible it could have been done in the beginning" (emphasis added).

The most clear-cut means to understand Mr. Tillerson would be to review the government's response to the Deepwater Horizon incident assuming that all the equipment provided under the $1-billion Marine Well Containment Company (proposed Finding 11 of the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling - Subcommittee on Offshore Drilling) had been in place on April 20, 2010.

ExxonMobil, Chevron, and Shell have taken the lead in forming the Marine Well Containment System with the details shown on Exxon's website.

This ought to look familiar to those who followed the Deepwater Horizon response; the consortium cribbed what BP actually did while playing holier-than-thou in public. You will notice the risk-averse preferences of the government in what was their containment and collection strategy. They built what was in effect a de facto production platform. They would have been ready to have BP collect the oil. But the collection could not proceed until BP cut off the broken riser. Remember all those intervening steps: the cofferdam, the RITT, the aborted Top Kill and Junk Shot? The government fiercely resisted severing the riser while bleating loudly that such an act would increase the pollution. It raises the question: in any future incident, will the National Incident Commander have the gumption to overrule the scientists and let the flow increase temporarily to stop the flow permanently?

The Exxon-Valdez Lesson Left Unfunded

Much has been made by the government about the size of the spill relative to the previous record-holder. The Center for Strategic and International Studies brought together some industry experts to lay out a reasonable course forward. Frank Verrastro discussed the economic devastation caused by the drilling moratorium. Lloyd Guillory discussed the formation and operation of the Marine Well Containment Company. But the star of the show was Albert "Alby" Modiano. His "get a rock" story is priceless. But what ought to play a big part in the evaluation of the government's role is his experience as Director the Minerals Management Service during the Exxon-Valdez incident. He was a government regulator close to the situation, but safely observing it from the peanut gallery as the Coast Guard took the heat as the lead agency. For the Deepwater Horizon incident, these positions were reversed, and Elizabeth Birnbaum took the fall for the administration. As Mr. Modriano pointed out, a key lesson learned was the early deployment of in situ burning of the oil. 

The Kuwaiti oil fires spilled more oil per day (6 million barrels) than the exaggerated total gulf oil spill of 5 million barrels over three months. Burning the oil lessened the environmental impact of that spill, confirming the usefulness of in situ burning. How well did the Coast Guard learn that lesson? A key deficiency of the spill response was the lack of fire boom. Congress had not funded the purchase of the fire boom by the Coast Guard in the intervening decades, so the Coast Guard was caught totally unprepared. Deployment of adequate fire boom took months.

The "Wizards" of the National Laboratories

We have already discussed Energy Secretary Steven Chu's abortion of the Top Kill when it had just stopped the flow of hydrocarbons into the Gulf. What about his other "achievement" -- bringing to bear a gamma ray source strong enough to image (similar to an x-ray) the blowout preventer? Did that really help? If they had a good enough image to "see" inside the blowout preventer, they would have known whether there was a tool joint in the drill string caught in the blind shear ram preventing it from cutting the drill pipe and closing fully. That would have influenced the drive to require two blind shear rams so as to ensure they missed the tool joint. Would it surprise you to learn that Daun Winslow of TransOcean was successful in closing the blind shear ram and severing the drill pipe on April 22 using the "hot stabbing" intervention? Now that the blowout preventer has been recovered from the sea floor, it is possible to take a visual tour and see that the ram is closed, though the elastomeric seals were eroded away, allowing reduced flow past the ram. All the flow went through those two eroded channels visible at about 1:59 on in the YouTube video. Could it be that the "missing oil" never flowed out of the well in the first place? Where is the recognition of that erosion in the flow estimates being used by the administration to bully BP into creating the $20-billion slush fund?

Do you trust the Obama administration to tell you "the truth, the whole truth, and nothing but the truth"?

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