Oil Platforms in the Gulf of Mexico - Worth the Risk?

A lot is being written and said about offshore oil drilling and safety. Is it worth the risk? As a resident of the Gulf Coast, I've pretty much accepted the fact that oil and natural gas are important enough to the nation's economy and national security to warrant taking some risk. And, over the last three decades or so, there have been some instances. But when you look at the sheer number of assets in the Gulf, the number of incidents pales in comparison to what's being produced.

The map below shows the complete plot of all oil and gas drilling and production platforms in the Gulf of Mexico. Not all of these are active, but every point represents a well, drilling rig, production platform or capped well.  There are approximately 4,300 points on the map.  If we included all locations drilled since recordkeeping began in the early 1970's, there would be approximately 6,600 locations.

Click the map image for a larger version.

From 1979 through the Deepwater Horizon incident, the Gulf of Mexico has witnessed five major oil spill events.

IXTOC, 1979
The first was the Ixtoc blowout, which is believed to be the largest accidental spill in history.  The well blew in June 1979 and wasn't capped until March, 1980.  Between ten and thirty thousand barrels of crude oil were lost each day over the eight month period.  Estimates vary widely, but as much as 4.8 million barrels were lost.

BURMA AGATE, 1979
Later the same year, the Burma Agate collided with a freighter near Galveston, Texas on November 1, 1979. The ship exploded,  killing 31 crew members, and spilled an estimated 2.6 million gallons of oil into the Gulf of Mexico. The ship and oil continued to burn until January, 1980.

MEGA BORG, 1990

The gulf stayed relatively incident free until 1990, when the Norwegian megatanker was transferring oil to smaller ships (called "lighters"). The megatanker suffered an explosion in its pump room, caught fire, and either spilled or burned 4.2 million gallons of oil for about a week. The fire was so large and so intense, firefighters could do little more than pump seawater onto the fire.

TAMPA BAY FUEL OIL SPILL, 1993
Early on the morning of August 10, three barges carrying fuel oil and jet fuel collided in Tampa Bay, collectively spilling an estimated 14 million gallons of petroleum products.  State and federal responders mobilized rapidly to contain the material, and their response (plus some help from Mother Nature in the form of favorable tides) mitigated much of the potential damage.

 

HURRICANES KATRINA AND RITA, 2005
US Coast Guard estimated that approximately seven to ten million gallons of oil and petroleum distillates were spilled during Hurricanes Katrina and Rita.  The losses were from various sources, including pipelines, storage tanks, drilling rigs, production platforms and industrial plants.

Creating one of the most famous images of the storms' havoc, Katrina ripped the Ocean Warwick platform from her seabed moorings, and ran her aground at Dauphin Island, just south of Mobile, Alabama.  The owners had hoped to salvage the rig and repair it.  But Hurricane Rita's storm surge (which reflooded New Orleans) hammered her again and she was scrapped in place the following year.

Those are pretty nasty events. But 31 years, anywhere between 4,400 and 6,600 platforms or wells, and only five major accidents? I'm thinking that offshore oil and gas production is about as safe as say, flying on a commercial jet.

Is it worth the risk to fly?

Extra Point: The red-tinted polygon on the map shows an estimate of the current size and location of the Deepwater Horizon spill.

The Jawa Report: Let them build their mosque at Ground Zero

The Jawa Report: Let them build their mosque at Ground Zero

I agree with Rusty on this--using government to prohibit the construction of a house of worship represents all that liberty-loving Americans should stand against. Yes, having a shrine dedicated to the deity in whose name a horrific terrorist attack left thousands dead located so near the site of the attack is offensive. But so are any of a number of other exercises of First Amendment liberties.

Take pornography, for example. The burning of the American flag. Christian religious symbols desecrated and presented as "art." Good and moral people unanimously find these expressions of liberty to be an affront to decency, but until three quarters of the states ratify amendments to the Constitution forbidding them, they're protected from the power of government to stop them.

So then, what is stopping the construction of an even larger shrine to those who lost their lives on that fateful day, on a spot right next door to the proposed mosque? Why couldn't a massive, permanent facility be constructed near ground zero, with artifacts, artwork and interpretive displays pointing out the fact that the followers who worship in the mosque next door carried out those horrific attacks in the name of a religion that uses force and violence to subdue and conquer?

Extra Point: Perhaps the New York Times could hold a cartoon contest. Whoever comes up with the funniest depiction of the prophet Mohammed gets to have his or her creation displayed on the floor of the new facility, so that visitors could walk upon the face of the man who called his followers to jihad.

Congratulations, Will!

Will Kimbrough and I went to survived high school together in Mobile during the late 1970's.  Even then, Will was a gifted guitarist and I can't tell you how many times I heard Will and the Henry Guyen Band play clubs and bars around the Gulf Coast.  His rendition of the Allman Brothers' Blue Sky made Dickie Betts blush.  Literally.

Will has aged much better than I have, despite the fact that he's a RAWK STAR and stuff.

In 2004, Will won Americana Music Association’s Instrumentalist of the Year award.  He's up for it again, this year.

Will Kimbrough nominated again for Americana award | al.com

Congratulations, Will.  I'll be pulling for you and I hope to see you again at Mardi Gras.

Alabama Professor says his method to stop oil leak "will absolutely work"

Alabama Engineering Professor Philip Johnson says he has the solution to stopping the oil leak in the Gulf of Mexico.

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"Having reviewed the video of the oil spill, I now know of a way to collect that oil that will absolutely work, is not hard to rig up, and that is very familiar to BP," Philip Johnson, wrote in an email to the Press-Register. "Basically it involves additional gas injection into a deep point on a pipe."


Officials with BP, the National Oceanic and Atmospheric Administration, and the Department of Homeland Security did not immediately respond to inquiries for comment about Johnson's suggestion.


Way to stop Gulf oil spill? University of Alabama professor says method 'will absolutely work' | al.com

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There's more at the link above. But, could it be this simple? And, once again, could it be that the braintrust at the University of Alabama has the solution that saves the gulf fisheries and tourism industry? Stay tuned!




Extra Point:  Auburn University, allegedly the center for engineering in the state of Alabama, has announced that it is shearing its flock of Alpaca's and sending the hair / wool / feathers / whatever to the region.  Gee, thanks.

High risk patients will still pay more

Well, surprise, surprise, surprise.  Madam Pelosi's statement that they'd have to pass it before we see what's in it may go down as one of history's most prescient.  The Associated Press, getting down to digging through a bill it should have dissected six months ago, finds that patients paying into high risk insurance pools will get virtually no relief from Obamacare, whatsoever. 

But in an exceptionally cruel "Screw You" quirk of Obamacare, patients who already pay into a high-risk insurance pool will keep paying high rates, while new patients enrolling in the new Obamacare flavor of the program will get coverage at much lower rates.

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Julie Kramer, 53, is feeling a bit cheated. She's paid high premiums — about $700 a month — for nearly seven years into Illinois' high-risk pool.

"It feels very unfair. It goes against the spirit of what health care reform was supposed to be," said Kramer, a self-employed writer and owner of Full Moon Marketing Communications in Vernon Hills. "This does seem like a low blow."

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Kramer's deductible, which she has to pay out of pocket before insurance kicks in, is $1,000. Last year, her medical expenses didn't reach that amount, so she paid all her medical bills herself.

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This is just one of a myriad of nasty surprises found in the 2,300+ page abomination, and it classically illustrates the pitfalls of "comprehensive" reform packages like Obamacare.  Such sweeping measures are inevitably shown to be incredibly large, incredibly foolish Rube Goldberg machines.  They routinely fail to address the problems they purport to address.  They routinely turn small problems into big ones and manufacture massive headaches where none existed before.

Ms. Kramer's situation is a dreadful one to be sure, but who is surprised?  Did anyone seriously think that Obamacare was going to create a net benefit?  Many of the programs' costs are scheduled to start kicking in this summer. Very few of its benefits will be realized until 2014, and "low blow" surprises like this are coming from a law not even two months old.

Freedom Boards Across America

Via Hot Air:

Extra Point: This could be coming to a roadway near you.

Lipstick on the pig of a pending crisis

The media, in its infinite hope that this pesky, scary mortgage meltdown will all go away and get better real soon now, is doing its level best to convince us that, despite some really painful numbers, things aren't all that bad.

Via the Associated Press:

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Millions of Americans are still likely to lose their homes in the coming years, but the foreclosure crisis is finally showing signs of subsiding.

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And not to be outdone, we have Reuters via MSNBC:

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Foreclosure activity fell in April as lenders repossessed homes at a record pace but started far fewer new actions against struggling homeowners, signaling a plateau in loan failures, RealtyTrac said on Thursday.

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Don't you believe that for one second. It's just so much lipstick on a pig.

On April 12, I wrote about a potential second mortgage crunch this year.  There are tens of billions in Option ARM's and unsecuritized ARM's scheduled for reset between now and January 11.  The Option ARM's are mortgages where borrowers pay very little actual principal and interest, rolling unpaid P&I back into the loan.  Once scheduled account caps are hit, the loan "resets," changing the terms and conditions of the loan and potentially forcing borrowers to either make higher payments or go delinquent.  Another large chunk of resetting loans are unsecuritized, meaning banks are servicing the loans with no backup from FNMA or FHMC. 

If large numbers of these loans go belly up--and many analysts think they could--Who's going to bail them out?  There's not enough money for TARP II.  I am not a doom and gloomer.  As a conservative, I have a predisposition to being optimistic and believing that, left to our own ingenuity, we'll get through any crisis and everything will work out.  We'll learn from our lessons and move on.

But we aren't left to our own devices and imaginations, and haven't been in decades.  The mortgage and home finance industry is another fine example of social engineering having precisely the opposite effect of what was intended.  Who do you think is going to be hit the hardest when all of the dust finally settles?  The people who banks would never have financed if government hadn't forced them to.

Extra Point: Read Purple Avenger's take at AoSHQ.

Yes, It's Just a Gimmick...

The GOP's latest stunt is political gimmickry, but as gimmicks go, it's a pretty darned good one. Touted by House GOP Whip Eric Cantor as first-of-its-kind, YouCut is a website and program aimed at the runaway spending culture in Congress. It allows website visitors to vote via online and text message on cuts to spending programs. You get to vote every week, and Cantor promises to try forcing a vote based on the people's choice. It's novel, it's techno-fabulous, and it's sure to entertain.

But let's be honest, folks. You won't see any entitlement program appear on the list of choices you are asked to make. Don't expect to see any of Paul Ryan's Roadmap waypoints show up anytime soon. The real spending problem with Congress is its absolute refusal to address the miracles of compound interest found in Social Security or Medicare, and don't expect to see any calls for repealing Obamacare to show up on YouCut. The programs you will be seeing fall on the discretionary side of the budget, and anyone who's paid any attention to our looming budget crises realizes that you could eliminate discretionary spending altogether and still not address the real problems.

Still, as gimmicks go, engaging the public in such a fashion as this is probably going to be a hit.  How could it not be? It scores high on PR points, even if it really won't do much to rein in spending.

Extra Point: It's also a brilliant way to annoy the living hell out of the Pelosi - Reid cabal. Thumbs up, Mr. Cantor.

Years of National Denial -- Sound Familiar?

From The Observer:

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Deep inside the august halls of Athens University, the renowned political commentator Paschos Mandravelis will deliver a message this week that until very recently was lost on most Greeks.
His speech will focus on a single fact: that the country in the centre of the storm of Europe's worst crisis since the creation of the common market, missed the biggest story ever – its own looming bankruptcy. "Everyone," he says, "starting with the Greek media, was in an incredible state of denial."

The Greek spirit of resistance turns its guns on the IMF | World news | The Observer

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Does this sound familiar? Senator Chris Dodd famously told us that Fannie Mae and Freddie Mac were "fundamentally strong." Reuters and the Associated Press routinely and comically employ the adverb "unexpectedly" when communicating that the US labor market or economic output underperformed during the previous period. Pundit after talking-head pundit tell us on CNN and MSNBC that the economic recovery is well under way. That TARP saved the day. That the stimulus "saved or created" millions of jobs. Everything is fine. Pay no attention to runaway entitlement spending. Pay no mind to the shell game that Congressional Democrats used to ram through the Obamacare debacle. Ignore the fact that the only difference between Greece and the states of California, New York and Michigan is that none of those states have been bailed out by the IMF (yet).

The Greek financial crisis, which even after the pending bailout could still threaten other members of the EU, is a complete meltdown of the entire statist, entitlement-driven model of government. The "austerity" measures being "forced down the throats" of the Greeks include such draconian, near-inhuman measures such as reducing Easter, summer and Christmas bonuses for government employees and increasing the retirement age from an average of 61 to 65. What do the beneficiaries of these programs do? Having finally run out of other people's money, Greek socialists took to the streets. They looted, burned, pillaged, rioted and killed people to save their way of life.

What preceded the episodes of the last several weeks were several years of complete denial that the leftist Greek government was driving the country into bankruptcy. Virtually no one in Greek society was willing to admit that a serious problem loomed. Greek politicos denied it. The Greek media, as chummy with the socialists as the US media is with our own leftists, denied it. The people of Greece, living large off of government handouts and entitlements, denied it.

Does it all sound familiar?

Fed Independence is Sacrosanct -- Kill the Sanders Amendment

Over at e21, which is an economics and finance blog and part of my daily reading menu, is a staff editorial on the need for maintaining the independence of the Federal Reserve. e21 is responding to the growing number of adherents to the Sanders Amendment, which to my eyes appears to be nothing more than a blatant power grab and foolish attempt to politicize the Fed. The popularity of Sanders' folly is driven, in part, by the inability or unwillingness of certain segments of the population to comprehend a very demanding science. Writes the editor:

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While this information is more than adequate for those interested in understanding the mechanics of the emergency lending programs that saved the global financial system, it does not suffice for conspiracy theorists eager to tie the Fed to Saddam Hussein and Watergate. Since every $100 bill circulating internationally is a Federal Reserve Note, it is not unreasonable to think extremists could tie the Fed to funding for international terrorism, the narcotics trade, or whatever other illicit transactions are conducted with U.S. dollars.
Fed Independence is Sacrosanct | e21 - Economic Policies for the 21st Century

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The editorial provides numerous links to Fed-hosted websites that provide a better accounting of Fed activities, assets and policy decisions than what we get from the Executive Branch, or even your garden variety "too big to fail" bank like BofA, Goldman Sachs or Citibank.

I can see no additional benefit whatsoever by adding another layer of oversight to an already open-books process.  It runs the calamitous risk of politicizing monetary policy.  No amount of oversight is going to satisfy the hunger for the conspiracy nuts.  They're always going to believe that the Fed is hiding something of great international importance.  But no amount of oversight or control will be enough for progressive socialists like Sanders, either.  It's not about answering questions for these people.  It's about extending power and control.

The Sanders Amendment must be defeated, and if it makes it into the final legislation, it must be vetoed by the President.

Extra Point: The conspiracy theorists tend to originate from the right. Ask yourself: Does Bernie Sanders have a solid conservative basis for auditing and greater oversight?