12 thoughts on “Top Kill”

  1. Was I the only one after the first couple days to wonder why they didn’t just pour a bunch of concrete and crap on top of the thing until it stopped leaking?

    This whole fiasco probably has a _great_ inside story. What a collision of Big Business and Big Brother so far in bed together they can’t untangle themselves when the house is burning down.

    Consider if Bush was president and if this company was Halliburton. Or if Bush was president, period.

    Somehow this is a failure of the private sector. Ok, fine. But apparently the best the government has been able to do is hope BP saves the day. That’s after taking their word that they are following safety regulations, as opposed to confirming they were following safety regulations.

    But, then again, the solution to government failure is more government.

  2. While I marvel at your sub-sea engineering acumen and prescience, there are a few things that I find confusing

    1. There is collusion between the oil business and the Government!!
    2. Bush was president and Haliburton is one of the companies involved
    3. Last time I looked BP was in the business of drilling wells in mile deep water, so they *might* (I say that in the sense of there is a possibility not a certainty)know something about sealing the well because that is the job they do every day.
    4. There is also the the Rand Paul Solution, “Sh-t happens”

    I think that off shore wellS should be rigorously checked and regulated. I doubt that leaving regulation up to the companies, themselves, is a solution.

    A couple of more blows like this could destroy the economies along the Gulf Coast from Texas to Florida.

    The Canadians apparently demand that a relief well be drilled when the main well is drilled as a safety precaution. Makes sense to me.

    This would seem like a bare minimum for regulation and should probably be put into place immediately.

    One of the more ridiculous comments about the whole thing came from Moody’s (You know, the ratings company that apparently is supervised when anyone takes their ratings seriously, but charge for them, nonetheless.), they said that the net loss to the economy would be minimal because the jobs lost in the fishing industry would be make up by those gained in the clean-up.

    I don’t know whether to file that one under Alice and Wonderland or Loony Toons.

  3. _”While I marvel at your sub-sea engineering acumen and prescience, there are a few things that I find confusing”_

    I wasn’t suggesting my prescience, I was raising the question as to just who is running the circus and whether their primary objective is to seal the leak at all costs… or perhaps to do so in a way that protects BP’s interests in the site. I’m further suggesting that leaving BP to handle things as they see fit isn’t exactly the kind of competence we are assured our government regulators are capable of. My point was I suspect a lot of people could have provided the simplest answer, but in the blame game we are witnessing that might not be the overriding concern.

    _”1. There is collusion between the oil business and the Government!!”_

    Indeed. And more than simply presenting the obvious, we are seeing the fruits of the fake crony capitalism our political elite have crafted us. Incompetence.

    _”2. Bush was president and Haliburton is one of the companies involved”_

    Redundant. We knew this was all Bush’s fault, pointing out exactly how we can leave to the media lackeys. I object to you interfering with their right to work by doing their jobs for them.

    _”3. Last time I looked BP was in the business of drilling wells in mile deep water, so they might (I say that in the sense of there is a possibility not a certainty)know something about sealing the well because that is the job they do every day.”_

    You’d think, yet here we are. Last time _I_ looked we’ve spent tens of billions of dollars since the Exxon spill on federal emergency planning and regulation, none of which has been evident in at a single step in this farce. Yet what will be the fallout? Double down on that spending. No question.

    _”I think that off shore wellS should be rigorously checked and regulated. I doubt that leaving regulation up to the companies, themselves, is a solution.”_

    Who said anything about that? I WANT regulation that actually regulates. Not gangsterism that helps out companies with friends in the right places so they maybe don’t need to follow every silly little rule. Make the right phone call and the rules get bent. When the government, particularly the oversight parts, is a player in the game instead of an arbiter, this is what we get. Have we heard a single name of a regulator or his bosses that have failed so badly? Will we ever? Do the bureaucrats in question ever lose their jobs, no matter how abject their failures?

    _”The Canadians apparently demand that a relief well be drilled when the main well is drilled as a safety precaution. Makes sense to me.”_

    Makes sense to me to. Wouldn’t take much to find out which politicians shelved that requirement in our country, and what their ties were. But we won’t hear about that either. The powerful protect the powerful when it comes to ‘real’ scandal, regardless of party or creed.

  4. Mark,

    Forgive me for my attempts at black humor. They were not aimed at you, but at the situation.

    The political situation in the country is a disaster. The Democrats are cluelessly walking into walls and the Republicans are following a death wish.

    The mindless, anarchic Tea Party movement is revealing itself, as I said in January, as a disloyal disaster for the GOP.

    It infuriates me that the Party in Kentucky could not defeat a case of arrested development like Paul. The last time I heard a political philosophy like his was when my son was 15.

    Things do not look very good on any front.

  5. Well, the director of the USG Minerals Management Service just “resigned”. That’s something.

    Back to handling things like this according to conservative principles, if BP is subject to unbounded liability for the consequences of this accident, the net effect on our society could be positive in the (very) long run. (Tough on the people whose livelihoods are destroyed, though.)

    If you’re a corporation that’s going to be given permission to do something risky but potentially very profitable, then you need to be subject to the risk. In this case, the risk of environmental disaster is, and should be, a real part of the economic equation. BP must be liable for all the consequences of its disaster.

    Catastrophic payouts with low probability is precisely what insurance is created for. If an attractive deal presents itself, and you can’t afford to pay the insurance premium, then you can’t afford that deal. The government enforces that you either have good enough insurance, or deep enough pockets, to cover your potential liabilities.

    If you do pay for the insurance, the insurance company will include clauses that require you, for example, to keep the battery charged on your blowout preventer, which is one of many reasonable and prudent things that BP didn’t do.

    This failure was not a technical failure. It was a failure of management and judgment. The policies that let it happen are ones that don’t apply the consequences of actions to the responsible parties. In this case, the corporation itself is the responsible party, not just the individuals involved.

    If taking the consequences for its failure drives BP into bankruptcy or even dissolution, then the lesson should concentrate the decision processes of other major corporations wonderfully.

  6. Indeed, here’s to the engineers, who *may* be finally succeeding at the technically demanding job of closing the door, a month after the idiocy of the managers allowed it to be blown open. I applaud them.

    But having paid the very high tuition for this lesson in the School of Hard Knocks, it would be a bad mistake to be distracted from learning the lessons we have paid so dearly for.

    Lest we get to pay that tuition all over again next time.

  7. bq. “The Canadians apparently demand that a relief well be drilled when the main well is drilled as a safety precaution. Makes sense to me.”

    Not surprised, given that Atlantic Canada’s offshore weather can be quite hostile. If something goes wrong at the wrong time, there may not be a ton of time or opportunity to monkey around implementing a fix. I can’t even imagine trying to do what BP is doing now, in the teeth of a Hiberbnia winter storm.

    The oil companies already have very substantial incentives not to have accidents. As an example, the Exxon Valdez spill cost that company something like 600 times as much as the value of the oil carried. This one will be an even worse ratio. There’s a reason that events like this are so rare, despite all the offshore drills.

    Having said that, there is a place for regulation. There’s also a place for saying “Hey, Mr. commuter, you don’t really want to walk 40 miles to work every day.” What Armed Liberal calls the (phony) “clean hands” brigade need to be defeated ignored, but there are other people and economic sectors affected by this stuff. Overall, I endorse Beard’s approach, with the provision that “liable” means “for calculated damages, not punitive damages”:

    bq.. “If you’re a corporation that’s going to be given permission to do something risky but potentially very profitable, then you need to be subject to the risk. In this case, the risk of environmental disaster is, and should be, a real part of the economic equation. BP must be liable for all the consequences of its disaster.

    Catastrophic payouts with low probability is precisely what insurance is created for. If an attractive deal presents itself, and you can’t afford to pay the insurance premium, then you can’t afford that deal. The government enforces that you either have good enough insurance, or deep enough pockets, to cover your potential liabilities.”

    p. The upshot? More expensive fuel, as production is pushed to offshore areas that create widespread liabilities, in addition to being more difficult and expensive to drill. But that’s all part of a trend that’s happening anyway. Unless we can lever the vast recent expansion of natural gas supply, to start a shift toward using more of it as a fuel for vehicles.

  8. You’ve got to take the baby steps first.

    As far as I can tell, most of these disasters (banking as well as oil) took place due to total lack of reasonable prudence by large corporations that were able to externalize the risk (i.e., lay it off on the public) while internalizing the profits.

    If the price of oil is artificially low because real costs (i.e. risks) are being ignored, then it has to get higher. If that’s uncomfortable, too bad. Welcome to the real world, instead of fantasyland. The price of gas in Europe is at least three times the USA cost. People drive, but they are careful about it, and their trains are great. Worthwhile tradeoff, I’d say.

    One good place for regulation is for the government to mandate immediate payouts from the responsible corporation for various levels of damage to ordinary people and their livelihoods. Then everyone can go to court and argue about where the actual damages should be, relative to that baseline. In the (unlikely) event that the payout was too high, the government can pay it back and collect it in taxes. The principle is that, if you are the innocent victim of someone else’s disaster, they need to make you whole. Waiting 20 years for the payout does not make you whole, no matter how much money you get.

    I agree with toc3 about the quality-of-life argument, too. That argument carried weight in the ’60s and ’70s, but it’s a different time now, and it seems like people (especially market-oriented conservatives) have to be convinced with the purely economic argument. Maybe eventually we’ll grow up again, and appreciate natural beauty. But maybe we’ve gotten used to seeing our trees only in the tree museum. (Apologies to Joni Mitchell, but her song that I always thought was over-the-top foolish satire turned out to be a dead-on right prediction.) We’ve got to take baby steps.

  9. Hi,new to the blog, but had to comment on this.
    I had lunch with some very experienced petrolium engineers today. It seems that the story so far is that BP will try a few long shots until Aug when they will complete the drilling of two relief wells to eliminate the flow of oil.
    To qualify this, I’m a software engineer, not a petrolium engineer, but according to the very smart people I was eating with today, the prospect of a relief well that far down (the bottom of the ocean is the top of the well) is not completely impossible…it is “f’ing impossible”.
    Hitting this target with a relief well would involve an unbelievable amount of luck, as the “cone of certainty” is far wider than the target they would need to hit.
    Their take on the matter:
    1) The Valdez oil spill is trivial compared to that this will be.
    2) There is no way they will be able to stop the flow by Aug as we have been hearing in the media.
    3) buy the stock in oil companies other than bp since the new regulations that will result from this result in much higher oil prices.

    -Archiver

  10. Joe, is a gulf with a season of 4 to 8 hurricanes any less tumultuous than the North Atlantic.

    I will answer the question for you. NO

    _The oil companies already have very substantial incentives not to have accidents. As an example, the Exxon Valdez spill cost that company something like 600 times as much as the value of the oil carried. This one will be an even worse ratio. There’s a reason that events like this are so rare, despite all the offshore drills_

    I really don’t see how this is relevant accept in the view of those who know the price of everything and the value of nothing.

    _Having said that, there is a place for regulation._

    How gracious of you.

    _The upshot? More expensive fuel, as production is pushed to offshore areas that create widespread liabilities, in addition to being more difficult and expensive to drill._

    More expensive fuel!! we can’t have that!! Can we? Isn’t this a cost of doing business? you state it like it is a transgression against the First Commandment.

    _Unless we can lever the vast recent expansion of natural gas supply, to start a shift toward using more of it as a fuel for vehicles._

    A perfect way to kick the can down the road and ignore the present problem of deep water drilling and what we can see are the catastrophic events they can cause, much worse than we see now.

    As far as regulation is concerned, I can see an argument in having these Freaking things run under martial law.

    It seems to me that every company running one of these things should voluntarily come forth with a detailed safety profile as to the condition of the rigs as they stand today.

    By the way, I don’t know how much experience you have in damages litigation, but in my experience, as one of my mentor’s told me, “you don’t go to court for justice, you go to send your lawyers kids thought college.” is pretty much right on the money.

    If large areas of the Louisiana Coastal Wetlands are destroyed it will take decades at best for them to come back. how long do you think it will take for the people along that coast to be compensated. 5, 10, 20 years. Check up on how long it rook for payouts on the Exxon Valdez, or don’t you think that that should be worked into the equation, like make sure that costs and interest payments are mandatory in all settlements.

    I once got 9% per year ordered by a judge which was nice, but didnt compensate me for the 8 years of nonsense I had to go through to collect it

    I grew up in Howard Beach on Jamaica Bay, in Queens a borough of NYC, As a kid, I spent my summers crabbing day in and day out. The bay was teeming with blue fish snappers, blue claw Black Fish, Flounder Fluke eels, clams, mussels etc. as well as waterbirds by the hundreds of thousands. A few dumps of petrochemicals by the new Idlewild airport put and end to that in the 50’s and it has never recovered. So the insurance/compensation argument, from my point of view, is either ignorant, naive or both or at best as I have mentioned the view of those who know the price of everything and the value of nothing.

    Conservatism is not the Markets. It is a lot more than that. If you can not see that in the face of this disaster, I just don’t know what to say.

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