If President Calls It Safe, Watch Out

Earthquake and Tsunami damage-Dai Ichi Power Plant, Japan

President Barack Obama is a good fellow at work in a difficult era, to say the least. So this post is not intended to be a slam on the president. Still, it is a good idea for Obama to be much more cautious when he draws from conventional wisdom, and the word of aides, to publicly express his view that a big energy sector is safe.

You’ll recall that on March 31, 2010, President Obama announced the government would open much of the Atlantic coastline and the eastern Gulf of Mexico to oil and gas exploration, deeming the benefits to the economy and security higher than the risks. Three weeks later the Deepwater Horizon exploded, releasing a torrent of oil into the Gulf.

Then in January, the president called for tripling public financing for new nuclear power plants in the State of the Union, and in public statements before and afterwards cited Japan’s long record as evidence that nuclear-generated electricity was safe. Seven weeks later, after being struck by an earthquake and tsunami, Japan’s 4,696 mw Fukushima Daiichi nuclear plant is completely destroyed and leaking life-threatening levels of radiation.

The Telegraph is reporting that Japan was warned about the vulnerability of its nuclear plants and that “an official from the International Atomic Energy Agency (IAEA) said in December 2008 that safety rules were out of date and strong earthquakes would pose a “serious problem” for nuclear power stations,” in Japan.

The Fukushima plant, by the way, is the 27th largest power generating installation in the world, the 12th largest nuclear station globally, and the second largest nuclear plant in Japan. It’s also one of the oldest nuclear plants in Japan.

— Keith Schneider

Oiled Dogs of May: Obama’s Gulf Crisis

Obama Visits the Gulf Coast | Gulf Oil Spill
Obama Visits the Gulf Coast | Gulf Oil Spill

Day 40. Great gouts of oil still rush from the ruptured BP well at the bottom of the Gulf of Mexico. A frustrated president visits the scene of the disaster to literally dab his finger at a tar ball washed up on the Louisiana beach. Television news, enlivened by easy-to-get pictures, sets its stand-ups in strategic positions, broadcasting the drama of competition between spreading pollution and technological limits to a nation that clucks about the damage and still races down the highway in 18 mpg SUVs.

It’s convenient to compare Obama’s Gulf crisis to Bush’s Katrina crisis. Same region. Same antecedent: a nation devoted to oil and so ‘shocked’ when the consequences of its use produce a calamity.

Arguably, though, a more apt simile is Carter’s hostage crisis. The day-after-day countdown of quavering orders and quashed expectations. The grim Democratic president schooled by surprises and anxious to project managerial competence over details he has surprisingly little capacity to manage. And everybody involved — the company, the administration, the region, the nation — acknowledging the magnitude of the event but exhibiting no appetite for changing the rules of the game that would steadily reduce the need for dangerous deep-sea oil exploration and development.

How did the nation react after the hostage crisis? Americans turned right, discovered Ronald Reagan’s “morning in America,” built bigger homes on more cul-de-sacs, and bought Chevy Tahoes and Ford Explorers.

How will America react after BP’s undersea oil geyser is stopped? Maybe they’ll make a change in the White House. But they also have exhibited fierce resolve to secure what they have – cars, homes, choices, and mobility.

That means exploring for more oil or penetrating even deeper into the cultures and economies of other nations to acquire it. In 2009, according to the most recent figures from the Energy Information Administration, the U.S. consumed 18.7 million barrels a day, and imported over 13 million barrels.

Public opinion polls consistently show that a healthy majority of Americans support more offshore exploration. Those same polls find a decline in the sense of American urgency about climate change. Only a third of those polled in a Pew survey released on May 19 said it was very important for Congress to address climate change.

And with gasoline selling at under $3 a gallon for most of the last two years — it was $2.60/gallon in Muskegon, Michigan on Friday — Americans aren’t stressing nearly as much about prices.

President Obama is smart enough to know that the Gulf catastrophe is momentous. He’s apparently unsure about what precisely the moment demands. That’s why although last week he took the first step to explicitly link the need to pass a comprehensive climate and energy bill to the largest oil spill in American history, he wasn’t that enthusiastic.

On Tuesday, Obama met with Senate Republicans and, according to a White House statement, told them “that the gulf oil disaster should heighten our sense of urgency to hasten the development of new, clean energy sources that will promote energy independence and good-paying American jobs. And he asked that they work with him on the promising proposals currently before Congress. “

The next day Obama toured Solyndra’s solar thin-film manufacturing plant in Fremont, California and noted that even as “we are dealing with this immediate crisis, we’ve got to remember that the risks our current dependence on oil holds for our environment and our coastal communities is not the only cost involved in our dependence on these fossil fuels.  Around the world, from China to Germany, our competitors are waging a historic effort to lead in developing new energy technologies.”

The climate action and clean energy communities have been pushing the White House for weeks to leverage the oil spill as an event that could remind Americans of the serious consequences of an economy powered by fossil fuels, and galvanize political support for comprehensive legislation. Of all the options available to the president, really pushing for legislation that pushes the nation’s energy industry to address the markets and threats of the 21st century makes the most sense. It’s just the sort of big step out of the mainstream of conventional Washington thinking at a time of crisis that could help Obama really close the deal on his campaign promise of doing just that.

The American Power Act, introduced in the Senate earlier this month takes into account public support for offshore drilling — as well as the political influence of the oil industry — and provides developers access to new areas for offshore exploration. The proposal, though, also includes a range of other measures to spur clean energy development and restrict carbon emissions that are meant to diminish market demand for polluting and dangerous fossil fuels.

As a candidate in 2008 and as president Obama has made it a point of loudly and consistently promoting clean energy development, while also instituting the energy efficiency and emissions reduction regulations to respond to climate change and support new markets. The dual initiatives – public investment in clean energy tools and federal regulatory action — form the administration’s primary industrial development and climate action strategy. Just how powerful that combination is in generating jobs and new industrialization is now emerging in Michigan, where roughly $6 billion has been invested over the last year in new battery manufacturing plants for the next generation of clean cars.

With so many Americans calling on the president to do something about the Gulf mess, just not something that causes too much change, Obama’s next big move seems obvious. Press the Senate hard to pass climate and energy legislation. The bill is another factor in pushing the country in the right direction.

— Keith Schneider

Bubbling and Crude: Gulf Coast Spill Reflects Devotion to Wealth, Power, and Oil

On March 17, two weeks to the day before President Barack Obama laid out a new plan to expand offshore oil exploration in the United States, a government auction of federally controlled oil and gas reserves in the Gulf of Mexico was held at the New Orleans Superdome. It took just a few hours for 77 energy companies to pledge $1.3 billion to the U.S. Treasury to look for oil and natural gas across a 2.4 million-acre expanse of bottomlands 200 miles from shore, and in most cases thousands of feet below the surface.

The lease sale, one of the most lucrative on record, bolstered the Gulf’s global reputation as one of the hottest deepwater oil and gas plays on Earth. The Gulf of Mexico is responsible for a quarter of the 5.5 million barrels of oil produced daily in the U.S., according to the Department of Energy. And of the 1.4 million barrels produced daily in the Gulf, 1.1 million barrels comes from over 100 deep sea production platforms. The Interior Department predicts that by the end of the decade, deep sea production in the Gulf could reach nearly 2 million barrels a day.

See USCAN Oil Spill Page

Semi-submersible drilling platform

Source: The Economist

Though offshore oil production is dangerous – 165 people died when an offshore platform exploded off the coast of Scotland in 1998; 10 more people were killed in a drilling rig explosion off the coast of Brazil in 2001 – a kind of Titanic syndrome had set in with Gulf coast oil explorers. The high-tech, semi-submersible, nearly $1 billion floating drilling platforms that operated in the deep Gulf waters were seen as too big, too modern, too well-equipped to fail.

Moreover there is so much oil (and natural gas) beneath the deep Gulf bottomlands – 85.9 billion barrels of oil, according to several estimates – and so much money to be made at $70 to $100 a barrel, that downplaying the risks made economic and political sense. Federal drilling permits obtained by developers normally did not require extensive and time-consuming analysis of the environmental risks, the government has acknowledged.

On April 20, an explosion and fire aboard Transoceans’ Deepwater Horizon drilling platform, which was operating under contract to BP, killed 11 workers. The accident provided the latest unmistakable evidence of the workplace hazards of deep sea exploration. Then two days later, on Earth Day’s 40th anniversary, the Deepwater Horizon sank and simultaneously produced an oil slick that the government says is growing by about 5,000 barrels of oil daily.

America Awake?
By any measure, the Gulf spill has reawakened the nation and magnified the human, environmental, and political consequences of oil production, especially from such treacherous places as the deep ocean. But the spill has not yet made clear what, if anything, the nation is prepared to do in response.

Indeed, the Deepwater explosion and the spreading slick are apt metaphors for an era of striking domestic risks related to energy production and consumption and growing uncertainties about how to reduce them.

Not Santa Barbara, Not 1969
There is no longer much reasoned debate that America’s devotion to fossil fuel, and especially to oil, has contributed to dangerous energy insecurity, rising atmospheric concentrations of climate changing gases, increasing costs, decreasing incomes, and a ferocious national recession. Yet the national response is so different than the  January 1969 oil spill in Santa Barbara, California, which soaked the beaches with crude oil. That spill produced a momentous national that helped to launch Earth Day and a decade of policy making that cleared the skies and cleaned the waters.

In contrast the Deepwater spill, so far, has produced modest public concern nationally and little more than that.

President Obama on April 30 announced he would suspend his March 31 decision to open new areas to offshore exploration pending a full investigation of the Deepwater accident. In the Senate, where a climate and energy bill has been delayed because of partisan infighting, lawmakers debated whether the Gulf spill would 1) break or 2) cement the deadlock.

It is clear the United States needs a new energy policy. The devastating spill has heightened awareness on Capitol Hill to the dangers of U.S. dependence on oil. Democratic Senators Robert Menendez and Frank Lautenberg of New Jersey, and Bill Nelson of Florida held a news conference this week to alert their colleagues that including additional offshore oil exploration has no place in a comprehensive climate and energy bill.

Halting the Spill
In the Gulf, BP says it is moving as fast as it can to plug the well and on Wednesday the company announced that it had stemmed one of three leaks in the pipe that once attached the well to the Deepwater drilling platform. Fishing in the coastal waters, some of the most productive fishing grounds on the planet, has been suspended. Meanwhile the governors of Louisiana, Alabama, Mississippi, and Florida expressed concern about the expanding spill, which was drifting closer to their shores.

Production Data by Year
Deepwater Production
(WD > 1000 Ft)
Total GOM OCS Production % of Total Production
Year Oil, STB Gas, MCF Oil, STB Gas, MCF Oil Gas
1985 21,053,752 33,849,349 350,345,117 4,057,692,707 6.009 0.834
1986 19,077,066 36,900,361 355,542,244 4,043,350,172 5.365 0.912
1987 17,070,926 44,259,499 327,567,672 4,524,823,392 5.211 0.978
1988 12,984,552 38,228,499 301,206,145 4,577,391,080 4.310 0.835
1989 10,007,573 31,889,109 280,717,909 4,636,327,746 3.564 0.687
1990 12,141,988 30,502,933 274,588,473 4,907,774,159 4.421 0.621
1991 22,886,754 58,434,483 294,773,846 4,707,640,841 7.764 1.241
1992 37,295,127 87,256,174 304,865,294 4,650,566,185 12.23 1.876
1993 36,769,914 119,895,532 308,595,948 4,655,807,596 11.91 2.575
1994 41,803,238 159,473,125 314,096,027 4,823,738,315 13.30 3.306
1995 55,200,884 181,019,918 345,074,597 4,778,657,050 15.99 3.788
1996 72,213,069 278,233,940 368,869,292 5,076,875,432 19.57 5.480
1997 108,514,650 381,759,185 411,622,518 5,145,646,361 26.36 7.419
1998 159,232,680 560,475,922 444,286,882 5,041,746,574 35.84 11.11
1999 225,089,761 845,581,180 495,172,107 5,057,740,045 45.45 16.71
2000 271,144,316 998,859,653 523,029,835 4,958,172,377 51.84 20.14
2001 315,392,362 1,178,429,028 558,790,340 5,060,515,587 56.44 23.28
2002 348,566,124 1,286,974,486 567,887,406 4,526,660,570 61.37 28.43
2003 350,151,883 1,425,729,552 561,457,768 4,428,661,841 62.36 32.19
2004 347,916,489 1,396,450,720 535,313,731 4,005,649,257 64.99 34.86
2005 325,565,912 1,189,574,009 466,916,529 3,155,021,736 69.72 37.70
2006 341,286,543 1,093,900,026 472,034,405 2,921,947,061 72.30 37.43
2007 328,111,873 1,027,012,933 468,007,128 2,812,063,179 70.10 36.52
2008 310,628,395 997,860,793 421,221,179 2,328,093,003 73.74 42.86
2009 454,502,063 1,094,148,891 566,000,231 2,427,822,032 80.30 45.06
Deepwater Production Increase – Year to Year
Year % Increase, Oil % Increase, Gas
1985 to 1986 -9.3 9.01
1986 to 1987 -10. 19.9
1987 to 1988 -23. -13.
1988 to 1989 -22. -16.
1989 to 1990 21.3 -4.3
1990 to 1991 88.4 91.5
1991 to 1992 62.9 49.3
1992 to 1993 -1.4 37.4
1993 to 1994 13.6 33.0
1994 to 1995 32.0 13.5
1995 to 1996 30.8 53.7
1996 to 1997 50.2 37.2
1997 to 1998 46.7 46.8
1998 to 1999 41.3 50.8
1999 to 2000 20.4 18.1
2000 to 2001 16.3 17.9
2001 to 2002 10.5 9.21
2002 to 2003 0.45 10.7
2003 to 2004 -0.6 -2.0
2004 to 2005 -6.4 -14.
2005 to 2006 4.82 -8.0
2006 to 2007 -3.8 -6.1
2007 to 2008 -5.3 -2.8
2008 to 2009 46.3 9.64
Average (through 2008) 16.7 18.3

Source: Minerals Management Service

— Keith Schneider

Though the Need is Urgent, Earth Day’s Best Moment May Lie in Past


This week, just a day before the nation marked the 40th Earth Day, the Deepwater Horizon drilling platform exploded 50 miles from the Louisiana coast, leaving 11 people dead, dozens injured, and a pulse of crude oil that is spreading across the Gulf of Mexico. The blast, which caused the platform to sink on Earth Day itself, came 16 days after 29 men perished in a West Virginia coal mine – the worst American mining disaster in 40 years.

The two calamities embody the relentless risks – human and environmental – that come with the unceasing pursuit of fossil fuel. They also highlight a stubborn feature of the original Earth Day – the consequences of America’s dangerous reliance on oil and coal – that has expanded and deepened in the 40 years since.

On Monday, Senators John Kerry, Lindsey Graham, and Joe Lieberman are scheduled to make public a proposal for comprehensive climate and energy legislation they hope will change that vector. By some accounts the steps it takes to diminish oil and coal use will include a phased in cap for the electricity and industrial sectors. It may also contain a pollution fee for transportation fuels and new measures to foster the development and use of domestically produced cleaner energy alternatives.

In these and other provisions, the Senate proposal is said by Congressional staffers to differ substantially from the House energy and climate legislation enacted in June 2009. The House legislation contained robust measures to cap carbon emissions and to develop an emissions trading market that has potential to generate billions of dollars to accelerate the low-carbon economy.

In anticipation of the Senate climate and energy proposal, Public Opinion Strategies, a national market research firm, released on Earth Day the results of a poll that was conducted in five moderate to conservative states.  The firm found that a majority of 800 voters polled earlier this month in Alaska, Florida, Iowa, Idaho, and Virginia favored what the pollsters called an “overhaul the nation’s energy system to reduce polluting emissions and increase the use of renewable energy sources.”  The pollsters also discovered what they said was “strong support” – regardless of party affiliation -for any plan to put a price on carbon to also include refunds to citizens.

I’ll be busy on Monday reporting for USCAN on the Senate bill’s content, gather a summary of reactions from the climate action community, and describe the shape of the policy debate over the next few months.

Forty years ago, in response to the first Earth Day, 20 million Americans demonstrated their commitment to Mother Earth in marches, actions (I painted the White Plains train station and dragged tires out of the Bronx River), teach-ins and much more. The civic activism prompted a generation of bipartisan federal and state legislation that cleaned the air, cleared the water, and protected man and animal alike from a good number of industrial hazards. It also opened the way to a much more efficient economy that is many times larger today than it was then.

The legislation made public on Monday is driven by motives and energy that is consistent with the first Earth Day. But the political culture is so much angrier, divided, jealous, and immature — and that encompasses the behavior of extreme voices on every side. The result is that in an era when environmental dangers are just as urgent, and the potential for doing good just as keen, the federal government has scant chance to enact a measure that comes close to what’s needed.

— Keith Schneider