http://www.nytimes.com/2010/05/26/opinion/26dowd.html?emc=eta1
http://www.nytimes.com/2010/05/25/opinion/25herbert.html?emc=eta1
While we hope that BP's latest effort (scheduled today) to try to stop the oil tragedy in the Gulf works, T. Boone Pickens, in remarks published today, suggests that the spill might take 3 months before it is stopped.
Federal funding for oil spill research was cut in half between 1993 and 2008, falling to $7.7 million.
Geoffrey Orsak (Dean of the Lyle School of Engineering at SMU) sits on the National Petroleum Council (NPC) which advises the U.S. Secretary of Energy on oil and gas issues. The NPC produced what Ray Hunt (CEO of Hunt Consolidated) calls the definitive report (Hard Truths About Energy) on where we stand on the future of energy supplies in the world (oil, gas, renewables, etc.). Orsak's perspective is that most of the industry's research investment has been on extracting value, not on the unlikely but catastrophic problems that come about from poor maintenance, human error and random acts.
Twenty one days into the catastrophe, BP said it was contemplating shooting rubber tire shards, golf balls and other debris to clog the hole and stem the flow. This is when Orsak realized that "... these people were seriously out of their realm. If golf balls are your contingency plan, you have not thought this through at all."
Borrowing from Bob Herbert's 5/24 article attached: "On October 25, 2007, the U.S. Department of Justice issued the following announcement: British Petroleum and several of its subsidiaries have agreed to pay $373 million in fines and restitution for environmental violations stemming from a fatal explosion at a Texas refinery in March, 2005, leaks of crude oil from pipelines in Alaska, and fraud for conspiring to corner the market and manipulate the price of propane carried through Texas pipelines." Does this look like a well managed company?
Maureen Dowd (5/25 article attached), just having fought her way thru all of the "acronyms" of the worldwide financial crisis, now finds herself doing the same for this situation. She points out that the Interior Department's Minerals Management Service (MMS) is charged with collecting royalties from Big Oil even as it regulates it - an "... absurd conflict right there." She recounts a Washington Post report on Tuesday that there is a growing suspicion that the money concerns of the companies involved with the well created "an atmosphere of haste" that may have spurred the spill." We would point out that anyone watching a "60 Minutes" interview two weekends ago with one of the survivors of the BP explosion and fire on that platform could not help but agree with that perspective.
Dowd goes on to point out that Mary Kendall, acting Inspector General of the Department of the Interior, described in a report released this week an agency that followed Dick Chaney's lead in letting the oil industry write the rules.
Quoting Dowd: "Just like those SEC employees who were watching porn and ignoring warning signs while Wall Street punks created financial Frankensteins, some MMS employees were watching porn, using coke and crystal meth and accepting gifts like trips to the Peach Bowl game from oil and gas companies, the report said." Again from Dowd: "As we watch a self-inflicted contamination that has no end in sight, consider this chilling arithmetic: one oil industry reporter reckoned that the 5,000 barrels a day (a conservative estimate) spewing 5,000 feet down in the gulf counts for only 2 minutes of oil consumption in the state of Texas."
We wish everyone involved in trying to stop the spill well and we hope a way is found to end it soon.
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You know, Charlie, when I was in your office the other day I was trying to remember something I was going to tell you and we got sidetracked. This post reminded me.
ReplyDeleteOffshore drilling of Canada? Yeah, it exists, guess what Canada requires?
Relief wells. Pre-drilled.
I'm sure you can see how that might be a good idea at this point.
Craig: Great point! Canada is also looking to get a 2,000 mile underground oil pipeline that would run from Alberta to the Texas Gulf Coast approved by the U.S. government. Canadian oil sands will become America's top source of imported oil this year. If this new pipeline is approved, it will "double" the amount of oil coming in from Canada. At 178 billion barrels of proven oil reserves, Canada is second only to Saudi Arabia.
ReplyDeleteHopefully this will inspire more effective management elsewhere throughout the various agencies and departments. It drives me crazy some believe their job will get done if they do not do their job.
ReplyDeleteNice catch Craig.
Professor Hazzard, maybe Canada will gain some market share in and BP will lose some.
Hopefully, J&J, Toyota, Goldman Sachs, and BP will remind top executives of doing the job completely right instead of cutting corners. No one person is probably to blame in each of these instances, which emphasizes the importance of corporate culture. Picking the right mix of personalities and values can be as important as the right mix of skills and experience.
Persuasion and communication skills should probably be taught more in the business program. The serious business scholar must understand human nature through and through. Arguing to spend money to prevent these disasters probably requires adept strategy and planning to win arguments, especially when management takes the opposite side.
That is some crazy but true stuff you wrote. Kind of makes me wonder how many of these people in key government positions do not care. I do not expect Congress or auditors to do much. Congress lacks time, human resources, skill, and/or responsibility. Auditors (GAO) can shout on the mountain top about problems, but that does not mean any changes will occur. I hope that a remnant among the many will strive improve things. I have heard nightmares about people working very long and hard only to achieve nothing. However, sometimes some people miraculously shift our country's government operations, strategy, and so forth in a slightly better direction. Good luck to the US Government and BP with this problem. None of us wanted this to happen, but we all have to be realistic that bad decisions have negative consequences. It sounds obvious, yet everyone is guilty of this. Sometimes we all get caught up so much in our own objectives and beliefs that we stop thinking about exactly how much our actions affect others.