Gulf Moratorium

A few weeks ago we witnessed the phony end to the moratorium on drilling in the Gulf of Mexico.

By any reasonable measurement, the moratorium remains in place. Oil companies still have to wait to get approval for whether their rigs meet a long list of new regulations before they can resume drilling, with the Secretary of the Interior saying there are more new regulations to come.

Even the head of the Bureau of Ocean Energy Management said it would be weeks, if not months, before new permits will be issued.

The fact of the matter is, after failing to initially move quickly to stop the blowout, the government has overreacted to the BP disaster.

Rather than helping the oil industry get its act together so that it can begin drilling in the Gulf again, the government is throwing obstacles in the industry’s path, which hinders its ability to resume drilling.

As a nation, we need the oil from the Gulf. Oil we don’t produce in America, and its outer continental shelf, will have to be bought from other countries. Buying foreign oil hurts our balance of payments and is bad for our economy. Not drilling for oil also kills jobs.

So what has been the result of the BP disaster?

Birds, turtles and fish have been killed; there is no question about that. But, has the worst oil spill in history permanently damaged huge swaths of the environment and killed millions of birds and animals?

Here is data from the U.S. Fish and Wildlife consolidated collection report as of October 7, 2010.

A total of 8,181 birds were collected, of which 3,827 had no visible signs of oil.

A total of 1,130 sea turtles were collected, of which 387 had no visible signs of oil.

A total of 106 mammals, including Dolphins, were collected, of which 97 had no visible signs of oil.

While it’s distressing to see any wildlife hurt, the BP oil spill was not Armageddon. In fact, it pales in comparison to the Valdez spill where there were over 400,000 dead birds.

Of course, there was other damage, such as to the wetlands, though reports have indicated damage to the wetlands was minimal.

With people swarming over the Gulf trying to find something wrong, there will, no doubt, be some scary reports in the future. Hopefully, the media, or some group, will objectively evaluate these future reports to separate the wheat from the chaff.

One potential problem is people trying to get as much money as possible from BP’s $20 billion clean-up fund. BP should pay what’s right, but payment shouldn’t be based on “creative formulas” as Assistant Secretary Strickland has suggested.

Interestingly, nature has been cleaning up from oil leakage in the Gulf for thousands of years. An archeological report indicated that the Karankawa Indians were using tar in their pottery-making in pre-Columbian times.

A researcher, at the Ocean Sciences meeting in 2000, estimated that 500,000 barrels of oil seep into the Gulf of Mexico every year. The national Academy of Science, in its report in 2002, estimated that 60% of oil in maritime waters around the United States came from seepage.

The phony moratorium on drilling is hurting the United States.

Reuters reported that four deep water rigs have been or are being moved from the Gulf of Mexico to other countries, including Egypt, Nigeria and the Republic of Congo.

The shallow water industry estimates that 70% of its fleet in the Gulf will soon be idle. Rowan Companies Inc. announced that two of its jack-up rigs will be moved from the Gulf before year’s end.

The BP Deep Horizon accident that killed eleven workers was a disaster, but we need to keep the environmental consequences in perspective, and resume drilling for oil as quickly as possible.

The U.S. Fish and Wildlife report is available at:

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0 Replies to “Gulf Moratorium”

  1. Donn I like your take on the moratorium. I did not know about the seepage, been studying up on it for a good part of the last hour after reading your blog, interesting stuff, although I haven’t heard of any seepages that can be seen from the space station like the BP spill 😉

    My concerns with deep water drilling is the lack of oversight that caused this Gulf disaster, Frontline on PBS had a great show about it recently. I am all for exploiting our own natural resources but I also feel very strongly that it has to be done responsibly.

    When spills like that happen it can easily cost billions in lost wages for an area which can have ripple effects through the entire economy. If BP had not cut corners this likely would not have happened.

    Im okay with waiting a couple months to make sure everyone else is compliant, in the meantime BP did set up an additional $100Million fund to pay salaries for out of work drillers. Its unfortunate to hear about rigs leaving the Gulf , but how many are going because they won’t pass the new standards, and if that’s the case would we want them there anyway?

    • I’m no fan of BP. They had a safety record that was questionable at best, and they were hypocritical with their Beyond Petroleum slogan.
      My main concern is that the government is overreacting because of ideology, and that Salazar’s objective is to curtail drilling as much as possible. His actions thus far with stopping development of oil shale and trying to stop drilling on Federal lands would support my concern.
      I didn’t see Frontline so can’t comment on it.
      With respect to government oversight, I am never comfortable with bureaucrats trying to second guess people in Industry on technical issues. The people best qualified to pass judgment on technology are those who work with it daily. Unfortunately they will make mistakes. Accidents will happen when dealing with envelope pushing technology. Think of Apollo 13 and the fire on Apollo1.
      The answer to safe operations is for companies to instill a culture of safety. I think they will do this for no other reason than the financial consequences of an accident are huge.

  2. No doubt about BP’s record, apparently they had 700+ serious violations in the last 5 years compared to much less for their competitors.

    I too worry about too much bureaucracy interefering with development, but at the same time large spills can be incredibly costly to everyone.

    I should state, I have no issues with deep water drilling, so long as its safe. Hard to say where the line should be drawn but after what just happened I feel more comfortable having the other rigs/businesses checked thoroughly. Even if there is no drilling for a short period all the oil will still be there in a couple months.

    You are right, the people that tend to know best are usually the ones involved in the industry, but that also means they know how to play with the system to cut costs, (as we have recently seen with BP)

    Financial consequences can work very well, I believe Exon-Mobil’s track record is 3 violations in the last five years, signifigantly better than BP’s and was mostly a result of what happened with their spill years ago.

    The problem I see is the safety record seems to depend on who is managing whichever ‘company’ at that time. I do think we can safely drill this oil as long as smart decisions are made and I believe, on the whole, the industry will come out safer and stronger in the long term (except maybe BP :))

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