Blue Marble - July 2010

API: We Like Our Handouts!

| Tue Jul. 6, 2010 11:58 AM EDT

The Gulf oil disaster has created some impetus in Congress to reduce the lavish subsidies granted to oil companies to incentivize and spur domestic production. Multiple bills are under consideration that would rescind billions of dollars in tax breaks and other handouts to Big Oil. But the industry's lobbying group, the American Petroleum Institute, isn't about to let these giveaways go without a fight.

API launched television ads in ten states this week to attack what they classify as "new taxes on the oil and natural gas industry." Actually making oil companies pay their fair share like other industries, API claims, would have a "devastating effect on our jobs, economic recovery and our energy security."

A bid to cut $35 billion in tax subsidies to oil companies from Sen. Bernie Sanders (I-Vt.) lost by a vote of 35-to-61 several weeks ago, but there are several other legislative efforts underway to cut major subsidies for oil companies.

Sens. Bob Menendez (D-N.J.), Bill Nelson (D-Fla.) and Jeff Merkley (D-Ore.) have also introduced a bill that would raise more than $20 billion in the next 10 years by recouping royalties that oil companies haven't been paying to drill on public lands, barring oil companies from dodging US corporate taxes, and ending some tax breaks granted to oil. In the House, Rep. Earl Blumenauer (D-Ore.) has circulated legislation to eliminate $30 billion in tax breaks for oil companies. The Obama administration put its own plan forward well before the Gulf crisis, which would raise up to $39 billion in the next 10 years by cutting 12 tax breaks for oil, gas, and coal companies. Some manner of subsidy reform is expected to be included in an energy and oil-spill package after the July recess.

Sima J. Gandhi, a senior policy analyst at the Center for American Progress, has a good takedown of API's arguments. And it's worth noting that even the proposed cuts to subsidies would be just a fraction of what US citizens hand out to oil companies every year. Between 2002 and 2005, we spent $72.5 billion on fossil fuels between 2002 and 2008, an analysis from the Environmental Law Institute found last year. This is even more absurd when you consider that most of these oil companies really don't need a hand, given how much money they make every year. Exxon made $6.3 billion in the first quarter of this year alone; BP made $5.5 billion pre-oil disaster. 

The API ads start today in Colorado, Michigan, North Carolina, North Dakota, Pennsylvania, Virginia, Maine, Missouri, Ohio, and West Virginia.

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BP: Putting the "Fun" in Dysfunction

| Tue Jul. 6, 2010 11:50 AM EDT

Talk about creepy foresight meets dark humor: The UK Metro unearthed a 1970s board game marketed by BP, "Offshore Oil Strike." The game's tag line, "The thrills of drilling, the hazards and rewards as you bring in your own …" seems somewhat regrettable given the company's current situation.

Metro explains how the "exciting board game for all the family" works:

Up to four would-be tycoons can compete at exploring for oil, building platforms and laying pipelines to their home countries.
But BP Offshore Oil Strike players must also avoid the dreaded 'hazard cards', which state: 'Blow-out! Rig damaged. Oil slick clean-up costs. Pay $1million.'
Unhappily for BP, that is just one per cent of the amount it has spent each day tackling the very real Deepwater Horizon leak, which has seen millions of barrels of oil gush into the Gulf of Mexico and hit the southern US coast.

The House On The Hill Toy Museum in Stansted, Essex, is the proud owner of a mint-condition game. "The parallels between the game and the current crisis… are so spooky," museum owner Alan Goldsmith told the paper. Spooky indeed that simulated blow-outs were once BP's idea of family fun.

Enviro Links: Anderson Cooper vs. the Coast Guard, API Defends Subsidies, and More

| Tue Jul. 6, 2010 8:00 AM EDT

Lots of oil disaster news over the long weekend:

Anderson Cooper gives a spot-on criticism of the Obama administration's new policies regarding media coverage of the Gulf oil disaster. "We are not the enemy here," said Cooper of the new rules, which create fines of up to $40,000 for members of the media who violate a 65-foot "safety zone" around cleanup operations.

There are apparently a number of people who still think nuking the hole in the bottom of the Gulf is a good solution.

Claims against BP are now up to $3.12 billion.

Oil-slicked beaches didn't deter tourists from making their way to Pensacola Beach for the holiday weekend.

Determining the full extent of the damage that the BP spill has wreaked on the Gulf will be difficult for quite a while.

The National Oceanic and Atmospheric Administration says there is a 61 to 80 percent likelihood that the oil spill will hit South Florida and the Keys.

Nigeria knows all about oil spills. For 50 years foreign oil companies have dumped an estimated 550 million gallons of oil into the Niger River Delta.

The new, best hope for pulling oil out of the Gulf is the Whale–a giant skimmer vessel from Taiwan that responders are now testing.

The American Petroleum Institute is running television ads in 10 states against congressional efforts to repeal large subsidies to the industry.

The US Fish and Wildlife Service went along with the conclusion of the Minerals Management Service that the risk an oil spill in the Gulf of Mexico would pose to wildlife was "low," reports the New York Times.

Enviros Call on Obama to Step Up His Game on Energy

| Fri Jul. 2, 2010 5:08 PM EDT

Senate Democrats are expected to introduce an energy package shortly after the July 4 recess, an as-yet undetermined combination of energy, oil-spill, and possibly climate-change measures. The Senate was expected to debate the package the week of July 19, but with no clear picture yet of what that package might look like, that seems less likely.

A number of environmental groups want the president to step in and give the Senate some clear guidance on the package, which they say is crucial at this point. "White House leadership is the only path we see to success, just as your direct leadership was critical in the passage of the recovery plan, health care reform, and other administration successes," wrote the heads of nine environmental groups in a letter to Obama.

President Obama met with a bipartisan group of senators on Tuesday of this week, but the meeting didn't make the picture any more clear. Senators said Obama called for the package to include a price on carbon, but most of the Republican senators (save Olympia Snowe of Maine) outright rejected that idea.

Hill staffers briefed on the meeting say it was more of a listening session for Obama than one in which he outlined what he wants in a bill. Press secretary Robert Gibbs signaled as much at Thursday's press briefing. "The president had a good meeting a couple days ago with senators from both parties that have led on this issue," he said. "We have not made any final determinations about the size and scope of the legislation except to say that the president believes, and continues to believe, that putting a price on carbon has to be part of our comprehensive energy reform."

The heads of the Alliance for Climate Protection, the Blue Green Alliance, the Center for American Progress Action Fund, Environment America, Environmental Defense Fund, League of Conservation Voters, National Wildlife Federation, Natural Resources Defense Council, and the Union of Concerned Scientists signed onto the letter, which called on Obama to give the senate more direction on the issue. Here's the key portion of the letter:

The Senate needs your help to end this paralysis. With the window of opportunity quickly closing, nothing less than your direct personal involvement, and that of senior administration officials, can secure America's clean energy future. We strongly urge you to produce a bill, in conjunction with key Senators, that responds to the catastrophe in the Gulf, cuts oil use, and limits carbon pollution while maintaining current health and other key legal protections. We further urge you to work with the Senate to bring that bill to the floor for passage before the August recess. White House leadership is the only path we see to success, just as your direct leadership was critical in the passage of the recovery plan, health care reform, and other administration successes.

EPA Dispersant Tests "of Very Limited Utility"

| Fri Jul. 2, 2010 3:10 PM EDT

The EPA on Wednesday released the first round of information on the testing the agency has been conducting on chemical dispersants. The agency concluded that, in general, the eight dispersant products it tested have "roughly the same impact on aquatic life" and are less toxic than the oil itself. But as other scientists have pointed out, the first results were on the dispersant products alone, not on their toxicity when mixed with oil.

The EPA tests concluded that Corexit 9500, the dispersant BP has been using most in the Gulf, WAS "practically non-toxic" to fish and "slightly toxic" to shrimp. Yet Richard Denison, a senior scientist at the Environmental Defense Fund, notes that the chemicals were tested alone, rather than in combination with oil. The EPA already had most of this data on short-term toxicity, as companies are required to test that before submitting products for approval. Other studies, however, have found that the oil-dispersant combination is more toxic and thus presents more of a threat to Gulf ecosystems than the dispersant alone.

These tests also only studied how much of a dispersant is needed to kill half of the organisms exposed to it for a relatively short amount of time. Gulf organisms, however, will be exposed for much longer periods. Denison concludes that this first round of testing is "of very limited utility in answering any of the more profound questions surrounding the use of dispersants."

Of course, the EPA cautioned this is just the first round, and there will be more in the coming weeks. But in the meantime, we don't know a whole lot more about the impact of the chemicals BP has been dumping into the Gulf in record volumes.

Gulf Disaster Hits Another Milestone

| Fri Jul. 2, 2010 11:48 AM EDT

The BP oil disaster in the Gulf may have passed a milestone yesterday, and it wasn't a good one. The oil spill likely became the largest ever in the Gulf of Mexico, eclipsing the previous Ixtoc I spill off Mexico's coast.

The Ixtoc disaster spanned 9 months, from June 3, 1979 to March 23, dumping 140 million gallons into the Gulf.

The highest estimate from the government flow rate team for the current BP spill is that 2.5 million gallons are spewing into the Gulf every day, which would put the total as high as 159 million gallons at this point. Even the lower-end government estimates would put the spill at 83 million gallons so far.

The disaster might now be the biggest in the Gulf, but it still doesn't qualify as the worst in world history. That was in Kuwait in 1991, when up to 520 million gallons were dumped when Iraqi forces opened the valves on an oil terminal to impede the advance of US troops.

The Gulf disaster still has plenty of time to set even more disgraceful records. It's expected to keep flowing for at least six more weeks until the relief wells are finished (most likely in mid-August). Incident commander Thad Allen, who officially retired from the US Coast Guard Admiral this week, said the government has directed BP to figure out how to capture up to 90 percent of the gusher by mid-July. But he was hesitant to give any more optimistic estimates of an actual date when they can stop the spill.

"I'm reluctant to tell you it will happen before the middle of August," Allen told reporters yesterday. "I would rather under promise and over deliver with you folks."

In any case, the tragedy is far from over.

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Eco-News Roundup: Friday July 2

| Fri Jul. 2, 2010 7:52 AM EDT

Politics of Healthcare: How's it doing? This new poll gives a rough idea.

Temperature of Trade: Cap-and-trade has gotten a cold Republican reception this year.

BP Buddies: Five ways the US Chamber of Commerce shills for BP.

Can't Sue: A maritime law prevents families of the BP rig explosion's victims from suing.

High Seas: The BP disaster is now even worse due to hurricane-blown waves.

Ivory Towers: How Big Pharma influences doctors, in school and seminars.

Private Army: Police officers near the Gulf moonlight for BP, while in uniform.

Spill Widows: Wives of fishermen in the Gulf face a heavy psychological toll.

Who Will Take the Hit for the Drilling Moratorium?

| Fri Jul. 2, 2010 6:00 AM EDT

The six-month moratorium that the Obama administration has imposed on deepwater drilling may complicate its effort to compensate Gulf residents affected by the oil spill. Kenneth Feinberg, whom President Obama has appointed to administer the $20 billion claims fund BP has agreed to establish, has said that this fund will not distribute claims to people affected by the moratorium. The White House, on the other hand, has said that it will.

Confusion abounds in the Gulf as everyone from small businesses to big oil companies attempt to sort out the economic damages of a catastrophic spill with no end in sight. A New Orleans judge blocked the drilling moratorium last week, a decision the Obama administration is appealing to the Fifth Circuit. Drilling projects remain stalled, however, and more and more claims are piling up. A Louisiana State University economist told Bloomberg that if rigs are idle for a full six months, the payroll loss alone could hit $450 million.

BP has set aside a separate claims fund of $100 million for workers affected by the moratorium. As opposed to the $20 billion spill fund, which was the result of an explicit agreement with the White House that obligates BP to replenish the fund if necessary, BP has described the moratorium fund as a "goodwill gesture." This framing is clearly designed to imply that, although the Deepwater Horizon spill was the impetus for imposing the drilling moratorium, BP is not liable for damages resulting from it. It is unlikely that BP would contribute more to the moratorium fund when the money inevitably runs out.

Congress' Oil Industry "Reforms" = Election-Year Greenwashing

| Thu Jul. 1, 2010 8:45 PM EDT

This morning's Washington Post reports on efforts in Congress to strengthen regulation of oil companies.

Two key Senate committees approved legislation Wednesday that would change the way the federal government regulates offshore oil drilling and penalizes companies for oil spills…Both measures passed on bipartisan voice votes. One approved by the Energy and Natural Resources Committee would raise the civil and criminal penalties for a spill, require more safety equipment redundancies, boost the number of federal safety inspectors and demand additional precautions for deep-water drilling. The other, passed by the Environment and Public Works Committee, would remove oil companies' $75 million liability limit and retroactively remove the liability cap for BP and the Deepwater Horizon explosion.

The Post says that these measures demonstrate "lawmakers' eagerness to respond to the disaster in the Gulf of Mexico." They might more accurately say that the measures demonstrate lawmakers' eagerness to look like they are responding to the disaster. In the real world, the proposed measures will serve mostly as election-year greenwashing, with little genuine impact.

FEMA's Formaldehyde Trailers are Back in the Gulf

| Thu Jul. 1, 2010 4:16 PM EDT

As if people in the Gulf coast didn't already have enough health concerns due to the BP disaster, now it appears the infamous formaldehyde trailers used in the region after Hurricane Katrina are making a reappearance.

After Katrina, the Federal Emergency Management Agency (FEMA) provided 120,000 trailers to people who lost their homes during the storm. The government banned them from use for long-term housing though, after they were found to have high levels of formaldehyde, which can cause cancer, respiratory problems, leukemia, and other health conditions. They were back in the news earlier this year when the federal government put some of the trailers up for auction, sparking concern among environmental and public health groups. Now the New York Times reports that they're making a comeback as living quarters for cleanup workers:

Ron Mason, owner of a disaster contracting firm, Alpha 1, said that in the past two weeks he had sold more than 20 of the trailers to cleanup workers and the companies that employ them in Venice and Grand Isle, La.
Even though federal regulators have said the trailers are not to be used for housing because of formaldehyde’s health risks, Mr. Mason said some of these workers had bought them so they could be together with their wives and children after work.
"These are perfectly good trailers," Mr. Mason said, adding that he has leased land in and around Venice for 40 more trailers that are being delivered from Texas in the coming weeks. "Look, you know that new car smell? Well, that’s formaldehyde, too. The stuff is in everything. It’s not a big deal."

Of course, many, many others would disagree. The tainted trailers are supposed to have placards on them noting thy are "not to be used for housing," but as the Times reports, these warning are not always in place. There's also a risk that the trailers, which are going for as little as $2,500, could be resold several times in the coming months and years, long after the warnings have disappeared (if they were ever posted in the first place).

The policy of selling the trailers off to likely unsuspecting and probably low-income people, is highly questionable by itself. But a piece on the auction in the Washington Post in March included this ominous passage, which made it clear that the government hasn’t made much of an effort to change its ways:

But the U.S. Centers for Disease Control and Prevention still have not issued a contract for a long-promised study of the health effects on children who lived in trailers; no binding safety standards for formaldehyde in housing have been set; and FEMA is still fleshing out how it would manage housing in a future Katrina-scale catastrophe.

Now we're in the midst of that next Katrina-scale catastrophe, and FEMA was no more prepared.