Energy & Environment
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Federal authorities are launching a criminal investigation into the Gulf Coast oil disaster.
Is this the right move?
Background reading here.
The people of South Louisiana are angry. For more than a week now, thick globs of oil have been entering our coastal marshes and threatening to inflict long-term damage to our culture and unique way of life.
President Obama held his first full press conference on this oil spill Thursday. During the conference, the president admitted that mistakes were made with the handling of the oil spill response, and I couldn’t agree more.
For more than two weeks, the president failed to act on a plan submitted by Louisiana Gov. Bobby Jindal to provide crucial protection to Louisiana’s fragile marshes. When this plan to build sand barriers was submitted, the oil had not yet reached our marshes. While the president and his administration sat idly by and refused to approve this plan, oil began to inundate our coast and is threatening our fragile ecosystem. This inaction cost us valuable time that should have been spent protecting our marsh.
In the 38 days after the Deepwater Horizon rig exploded and killed 11 workers, nearly 40 million gallons of toxic crude have gushed into the Gulf of Mexico. The oil slick now equals the size of South Carolina and has soiled more than 100 miles of Louisiana’s coastline. Hundreds of birds, sea turtles, and dolphins have died, thousands of fishermen have lost their livelihoods, and local economies are devastated. The magnitude of this spill, now the largest ever off of U.S. shores, has spread so far that we’re beginning to notice broader effects on the public’s health.
BP alone doesn’t have the manpower to clean up the mess it created, so fishermen who can no longer fish have been helping with these efforts along side Gulf coast residents and volunteers. They’ve helped set up floating booms and clean up beaches in an effort to protect their way of life and now they are becoming ill after working long hours near waters fouled with oil and chemicals that are known to be hazardous to human health. It’s gotten so bad that last week the Unified Command recalled vessels operating in Breton Sound after crew members reported experiencing dizziness, nausea, headaches and chest pains. Previous oil spills have shown that more serious health problems with clean-up workers may arise over time.
According to press reports BP failed to provide fishermen with any protective equipment. Instead they wore leather boots and regular clothes on the boat to work the spill. When asked what BP told them, one fisherman responded: “They (the BP officials) told us if we ran into oil, it wasn’t supposed to bother us.” Quite frankly, it is an outrage that BP, which made about $16 billion in profits last year, has such a terrible record on safety – for the drilling itself and for the workers trying to clean up the mess.
That’s why we sent a letter to BP’s president and CEO urging him to take the necessary steps that he is apparently not doing already to ensure the health and safety of the workers and volunteers cleaning up this giant mess. We also asked him to take steps to continue surveillance of workers’ health and monitoring of environmental conditions and air quality. BP must use the data collected to inform a public education campaign about associated risks and symptoms of extended exposure to these hazards.
We are considering congressional hearings on this topic as well and will continue to hold BP accountable for the full spectrum of side effects of this disaster. Responders to BP’s oil spill, including workers, volunteers and local residents should not be choosing to save the life of the Gulf region while putting their own at risk. The Gulf oil spill has already caused enough economic and environmental damage to the Gulf Coast we must do all that we can to protect human health from any potential long-term effects.
In 1989, the Exxon Valdez tanker leaked 11 million gallons of oil into Alaskan waters. The spill took over the American imagination - no one thought a single accident would cause so much ecological damage. It was, for lack of a better term, our environmental Chernobyl. Arctic habitats for birds and marine life quickly became a wasteland.
The lawsuits lasted for nearly two decades. Ultimately, the Supreme Court found a punitive damages judgment of $5 billion against Exxon excessive, and the company was asked to pay very little for the economic pain the spill had caused. Exxon recouped most of its cleanup and legal costs thanks to insurance policies. For the world's oil companies it was a signal that if disaster strikes, toughing it out is preferable to paying your fair share.
That cannot happen again with the BP Deepwater Horizon spill. It's time we brought corporate liability law in line with the scope of this catastrophe. According to the U.S. Geological Survey, Horizon has already leaked between 17 and 39 million gallons. It has officially eclipsed the Exxon Valdez.
This spill will impact the Gulf region, and the nation, for decades to come. There's no question that BP is to blame. There's also no question that when it comes to oil rig safety, we've lived in blissful ignorance long enough. Oil rigs can no longer be presumed safe and sound, either structurally or environmentally.
Indeed, this spill is only a surprise to those who weren't paying attention. On Feb. 24, before Horizon exploded, I wrote a letter to recently departed Minerals Management Service (MMS) Director Elizabeth Birnbaum calling for an MMS investigation of why BP was allegedly allowed to operate a separate rig known as Atlantis, also in the Gulf of Mexico, without 90 percent of its subsea construction documents approved by an engineer. A whistleblower brought his concerns to BP's and MMS' attention last year, but nothing was done. Why should it take an act of Congress and a major environmental emergency to get MMS to investigate credible allegations of mismanagement at one of the world's largest oil rigs?
This was not a one-time slipup - the entire MMS culture of cheerleading for the drilling industry has to be recognized for what it is, and it needs to end. MMS is currently conducting its investigation of Atlantis' safety, but has recently said it will miss its original deadline of May 31 to issue its report. I eagerly await the agency's findings. But whatever MMS concludes regarding Atlantis, we already know much of what we need to know: oil drilling is about large profits, and MMS allowed industry to pursue those profits at any cost. This is not just hyperbole. Eleven people died on Deepwater Horizon. We're told that no one could have predicted this, and no one is to blame. I don't believe that, and neither do the American people. Neither should Congress.
BP will pay for the Gulf cleanup, which some experts estimate could cost as much as $14 billion. The effort will take years. But the damage done extends far beyond the environment. Fisherman cannot fish. Tourists are not visiting the hotels or beaches. Restaurants and other small businesses are losing customers left and right, and the tide of oil shows no signs of stopping. The economic life of the Gulf has been devastated. Yet the Oil Pollution Act of 1990 limits the liability of parties responsible for offshore oil spills to cleanup costs, plus $75 million in economic damages. $75 million will not even scratch the surface of the long-term economic damages that Horizon has wrought.
That's why, last week, I introduced HR 5355. The "no cap" bill would completely eliminate the arbitrary $75 million liability cap, because the best way to ensure responsible behavior is to make corporations responsible for their actions. They benefit when things are going well, so why should taxpayers take the hit when things go badly? A single dollar of public money spent to clean up after BP is one dollar too many. When the bottom line is at stake, industry will change its behavior for the better. Any cap we place on economic compensation is inherently arbitrary, so let's not have one.
Hundreds of millions, if not billions, of dollars in revenue will be lost as a result of BP's careless actions. Livelihoods will be put on hold or simply destroyed. Under current law, BP will only have to pay for a fraction of the damage -- yet the company is still blocking journalist access to affected beaches for fear of exposure. It's time to demand greater responsibility and accountability from the oil industry. Only when these multi-billion dollar companies are forced to bear the full costs of their actions will they take safety seriously. Let's send a simple, responsible message to Big Oil: "You break it, you buy it."
Crossposted from The Huffington Post.
The United States’ reliance on carbon-based energy is the result of a market failure—markets do not price carbon dioxide despite its harmful effects on our climate. Senators John Kerry and Joe Lieberman have introduced the American Power Act to reduce our use of carbon-based energy. The legislation will create a market for tradable carbon dioxide allowances under a cap-and-trade system, finally putting a price on carbon dioxide. A market price for carbon dioxide will create incentives for us to switch to less harmful forms of energy.
Our energy choices are the result of the markets we use to organize economic activity. Markets do a wonderful job of producing and allocating goods. They are the reason that supermarket shelves are stocked with thousands of products and the reason we continue to innovate and grow our economy. But, as we have seen recently, markets don’t always lead to sound, sustainable outcomes.
Markets organize economic activity by aggregating vast amounts of information on the costs and benefits of the goods we produce and consume in the form of prices. Consumers buy the products that give them the most benefit for the prices they pay. Producers manufacture products only if the prices they receive cover their costs and yield profit. This system works extremely well—markets direct scarce resources to the uses that people value most and reward innovators. Yet the market system has led us to energy sources which threaten our climate.
The problem is that the market prices that guide individual decision-making sometimes fail to capture all of the costs associated with producing the things we want. Take gasoline for example. The price of gasoline reflects the costs of drilling, producing, and refining, but not the cost of the greenhouse gases emitted by burning it. Because market prices do not reflect the hidden costs of greenhouse gas emissions, markets make it appear that gasoline is cheaper than it really is. As a result, consumers and producers have favored carbon-based energy without considering all of its costs relative to alternatives.
One way to solve this problem is for the government to impose command-and-control regulations over carbon-based energy. Experience shows, however, that such policies lead to inefficient and undesirable outcomes especially when applied to pollution. Having the government dictate how we generate energy is a bad idea.
Harnessing market forces, however, offers a way forward. That is, markets are part of the problem, but also part of the solution.
The Kerry-Lieberman cap-and-trade proposal offers a means by which market forces can take the cost of greenhouse gas emissions into account. Under a cap-and-trade regime, those involved in economic activity that generates greenhouse gases would be required to purchase allowances authorizing those emissions. The market will set the price for allowances based on the supply available and the demand for them. This price captures the cost of greenhouse gas emissions and, by requiring emitters to purchase allowances, they will recognize the cost of the greenhouse gases they create. Thus, cap-and-trade leads the market to incorporate the cost of greenhouses gases into the prices of the goods our economy produces. Carbon-based energy will become more expensive as its full costs are realized, leading us to conserve and switch to cleaner energy sources.
The proposal by Senators Kerry and Lieberman is not an effort to subvert the free market. Rather, it is an effort to improve the markets we have and lead them to recognize costs that they do not capture on their own.
About the authors
Steven Peterson is a senior vice president at FTI Consulting, Inc. and has an economics Ph.D. from Harvard University. Andrew Lemon is a senior economist at FTI Consulting, Inc. and has an economics Ph.D. from Yale University.
For more than a half century, Alaska has helped assure America’s energy security by providing a significant portion of our nation’s oil and gas needs. As an energy and climate change bill picks up steam, Alaska is prepared to continue to serve as America’s energy storehouse.
That’s why I am frustrated by the Obama administration’s decision Thursday to halt offshore development in the Arctic for at least a year. Coming on the heels of a decision to cancel four planned Alaska OCS lease sales a few months ago, this delay will raise energy prices and export jobs while we import more oil from some unfriendly places.
Certainly the Gulf of Mexico oil spill is a tragedy highlighting the need for much stronger oversight and accountability. In Alaska, it also underscores the need for additional research into how to safely develop oil and gas in Arctic conditions.
Shell recently updated its plans at the administration’s request and made significant investments to address the concerns raised by the Gulf spill. They make an effective case that we can safely explore for oil and gas this summer.
For four decades, Alaskans have been safely producing oil and gas for America under some of the most challenging conditions on earth. Yet, efforts to meet this energy demand are increasingly stymied by the federal government. Alaska’s Arctic National Wildlife Refuge holds an estimated 16 billion barrels of oil. But Congresses and presidents have prohibited development there since 1980.
Another federal roadblock has been put up in the National Petroleum Reserve-Alaska. This South Carolina-sized refuge was set aside in 1923 as a national oil repository, with an estimated 13 billion barrels of oil. But earlier this year, the Army Corps of Engineers nixed a proposal by ConocoPhillips to access the oil.
Alaskans are some of America’s strongest environmentalists, firmly committed to protecting the clean air and water and healthy fish and wildlife we cherish in our state. If granted the opportunity, we are fully capable of helping meet America’s energy and national security needs by safely developing the enormous resources under our lands and waters.
So, on the biggest issue we can deal with in this Congress, President Obama just weighed in big-time: "There's been some good work done by John Kerry and Joe Lieberman and Lindsey Graham. Let's go. Let's not wait. Let's show the American people that in the midst of this crisis, all of us are opening our eyes to what's necessary to fulfill the promise to our children and our grandchildren." That's right -- the President is pounding the bully pulpit to pass comprehensive climate and energy legislation.
But, ahh, Washington -- if you want a peek at why important statements like this get lost and why the 24/7 cable coverage turns into food fights sadly removed from the reality of real problems, look no further than the garbage churned out on a near daily basis by big monied interests dressed up to look like "think tanks," which publish pieces to distort the debate.
We get a great example today in the Hill, where a William Yeatman from the Competitive Enterprise Institute takes a big nothing-burger off the grill to muddy up my argument that climate change endangers our national security.
Reading his words, you'd think I was the only guy in America who sees the link between the dangers of climate change and our security. He conveniently ignores that I base my argument on the words and findings of the Pentagon, the CIA, analysts in the Bush Administration, generals like Anthony Zinni, Admirals like William Fallon, Defense Secretary Robert Gates, and, oh, gee, literally hundreds of other national security experts. Against that, we have someone from the Competitive Enterprise Institute, an organization bankrolled by those trying to hold onto the status quo that has Americans sending $100 million a day to Iran for oil.
Now, let's look at the facts used by Mr. Yeatman, because they're a great example of what we're up against. He says that a single glacier area in Pakistan is getting larger and that anti-mosquito campaigns and sleeping nets help stop the spread of malaria. That's it. Well, of course mosquito nets help stop malaria. It's a complete non sequitur to the point that an unstable, warming climate will foster more disease and pandemics.
As for his other point, it's a textbook tactic from climate change deniers. They point to one localized event to try to discredit the global trend. It's true that a single glacier complex in Pakistan is growing, but that doesn't change the fact that globally, we're losing glacier mass at an alarming rate. This is exactly like the people who claim that a couple of snow storms in Washington, DC mean the climate isn't changing in dangerous ways.
The reality is that climate change is extremely dangerous in the very region Mr. Yeatman uses to make his point. India and Pakistan, two nuclear-armed nations, share the waters of the runoff from the glaciers of the Himalayas, glaciers that are, over all, melting. The World Bank reported last year, "High population densities, a large concentration of poverty, and the region's climate variability have all combined to make South Asia especially sensitive to the consequences of climate change." And Reuters quoted last month, "High levels of poverty and population density also render both countries particularly vulnerable to climate change-related water shortages, said Munawar Saeed Bhatti, of Pakistan's ministry of foreign affairs."
So, you can believe Mr. Yeatman, or you can believe the World Bank and the Pentagon: instability will cause more pandemics, drought and famine, and will cause upheavals in societies around the world. These are the breeding grounds of extremism and terrorism, and they accelerate threats to our national security.
We could let that happen, or we could pass the American Power Act. Mr. Yeatman's last point is that our national security is dependent on a strong economy. On this, I couldn't agree more. That's why the American Power Act -- according to a study out today from Third Way -- cuts down on our imports foreign oil, creates 1.9 million jobs in just the first ten years, lowers energy bills for Americans, and finally starts to wean us off our oil addiction. Just ask anyone on the Gulf Coast how important that last point is.
Look, it's no surprise that these are the tactics they are using. I had my staff build a website, TruthFightsBack, just to fight back against this nonsense. Here's a page on TruthFightsBack pushing back on this specific distortion:
Cut and paste that link into your Facebook page, use the Twitter tool on that page to write a tweet on it, or email this page to anyone you think should hear this. Only by pushing out the truth can we beat back the well-funded distortions of the other side.
Now let's get at it.
Cross-posted from the Huffington Post
The theologian Thomas Berry wrote that the great work of our lives is to reconcile with nature, to come to establish a communion with every living species on the planet--with all humans, all animals, with the plants, with the land, the air and the water.
As children with a common creator we are part of every living thing. This requires reverence for the natural world. When we look at the oil disaster in the Gulf of Mexico, we learn how far we must journey to reconcile with nature.
The false doctrine of subduing the natural world puts us in danger of extinction because it ultimately attacks the precondition of human existence, and because it separates us from an understanding of the essential interconnectedness of all life. So we’re lulled into distancing ourselves from the oil disaster, from its effects on the natural world, from its effects on future generations.
Nature’s god is not just up there, but it is in all of us. And only when we truly understand the deep significance of the Deep Water Horizon disaster, will we be prepared to take a new direction, not only with our energy policies, but with our way of life.
I rise today with a heavy heart to remember the 11 men that died on the offshore rig Deepwater Horizon.
Those men, and thousands other like them, travel out to offshore rigs every day to work hard and provide opportunities for the rest of us to make a living.
As the crisis in the Gulf of Mexico continues to grow we see shorelines, fisheries and other economies threatened. This unprecedented event has the entire Gulf Coast – and country – watching to see how soon we can end this.
Setting aside the present crisis for a moment - I am proud to stand with members of this Congress to remember those men who represent a very human face to this tragedy.
I would also like to take a moment to recognize the families of those 11 people. Those men were doing what so many other men and women do in Louisiana every day – they were working to provide a better life for their families, while braving difficult and sometimes dangerous conditions to provide the domestic energy needed to drive our nation and our economy. Our thoughts are with these families and I pray that their grief is not forgotten by the rest of us.
And we should also recognize the courageous work of the emergency responders who fought the blaze and saved lives that night.
The loss of those 11 workers is a high cost to their families, and so I ask everyone to remember the personal side to this tragedy.
Please keep them in your thoughts and prayers.