Top kill fails to plug leak
nytimes.com
nytimes.com
http://www.nytimes.com/2010/05/30/us/30rig.html
This is not an engineering puzzle; good engineers in the oil industry have been drilling much deeper wells than this for years:
http://www.wired.com/cars/energy/magazine/15-09/mf_jackrig http://factoidz.com/the-deepest-offshore-oil-rig-in-the-worl... http://en.wikipedia.org/wiki/Oil_platform#Deepest_oil_platfo...
This accident is the result of greed and a failure of regulation; an economic and political problem. Once we have found the engineering solution to shut down this well, the pressure to prevent it happening again must focus on politics, not technology.
#2 It's the government capping BP's liability.
Not a libertarian, but please.
See http://www.law.cornell.edu/uscode/html/uscode33/usc_sec_33_0... subsection c.
1) The "if we could remake the world", fully libertarian state -- I can see some libertarians agreeing with you about knocking corporations down a peg here, but many other "libertarians" that are basically supply-siders or mainline republicans with affectations that wouldn't.
2) The things libertarians actually advocate for as far as real-world policy, as in people lobby for these things and vote for candidates that espouse them.
3) The subset of those things that actually get traction
Out of those, 3) winds up being an unabashedly pro-corporate set of policies advanced by the republican party and 2) actually seems to lean more pro-corporate than anti. YMMV. But I can see your point in regards to 1).
For example, if everyone in the BP executive chain were personally responsible, and would go to jail/get beaten up/etc. as a consequence of an oil spill, then this might not have happened.
Even if you did something as extreme as threaten jail time, the chance to make millions still outweighs the chance of any punishment.
Thats all it is at that point, its gambling. Either you make a ton of money, or you loose. The only problem is, when you loose, you make a whole shitload of other people and the environment loose in the process.
And if they'd been "regulated" by an insurer who promised to pay the cleanup costs of the once-a-decade spills, you can bet that these regulations would be to a higher standard.
Given that a large insurance provider called AIG promised to pay massive clean up costs and utterly failed at regulating its clients, I think your theory is incorrect. At the very least, it is incomplete.
Your theory needs to incorporate the fact that human organizations often behave irrationally, and even when motivated by appropriate incentives, they are prone to systemic reasoning errors. In addition, it needs to deal with the fact that a representative government cannot credibly refuse to promise to clean up messes of this sort, so an element of moral hazard will always remain.
1. they do carry insurance. Their fuel assets are insured by Jupiter Insurance ltd. ( a wholly owned subsidiary of...BP itself. According to their annual report, they consider external insurance a poor economy and carry as little as possible - basically $1 billion per incident, figuring that any overages can be paid for out of revenues. Awesome.
http://www.bp.com/liveassets/bp_internet/globalbp/STAGING/gl...
2. OK, so make them carry more insurance...but then you're back to the dead hand of government regulation or whatever you want to call it. And with the best will in the world, sometimes events take place which are beyond our ability to predict. I imagine the government's recent cautious endorsement of more offshore drilling was based on a careful look at the number of rig disasters in recent years, and the assumption that the industry was sufficiently mature to appreciate the importance of risk management. It's kind of ironic that this occurred right after Obama upset the 'ban all drilling' crowd.
Really now, this "solution" boils down to "assume the existence of insurance companies that act radically differently from any insurance companies we have experience with"...tis much like "now, assume a can opener".
I'm no Libertarian, but I think it's unfair to characterise their position as being a kind of corporate anarchism.
Libertarian != Anarcho-capitalist
Stop trolling.
You seem to be confusing anarchists with libertarians.
For example, motorcycle helmet laws do not prevent any external cost. Motorcycle drivers pay extra for insurance (except when the government prevents insurance companies from doing this), and the only other "externality" is caused by government action (forcing ERs to service people who don't have insurance). I don't know enough about sarbox - what externalities does it prevent?
Libertarians may differ on things like regulation of drilling. Some believe the externality only exists when the harm actually occurs (and should be handled by tort law), while others believe the risk of harm is an externality(I lean towards the latter).
But I'm pretty sure the boundary between libertarian and anarchist is when you call for the government to stop protecting people from the bad acts of others.
This is why libertarian arguments always become absolutely ridiculous when you try to apply them in the real world. In what world would an ER turn away someone with a massive head wound because they don't have insurance?
Sarbox is intended as a fraud prevention scheme. Libertarians tend to be opposed to it on principle because hey it's just creating a bunch of extra unnecessary paperwork, drag on the economy and all that. If corporations aren't committing fraud, why do they have to do all this unnecessary work and let the capital-G Government snoop all over the business? All fair points until Enron and Worldcom collapse and blow up a million people's retirement funds. I'll take the drag, thank you. (actual implementation of sarbox could undoubtedly be improved).
You might be right about that boundary, but it's all in how you define bad acts. I'm glad that you see the risk as being an actual thing (5% chance of it means you caused 5% of the damage, statistically speaking, even if someone else drew the unlucky number).
I suppose it's all in how you define externality too. I'm all about hiking up the gasoline tax by 2-3 bucks a gallon over the next decade. We have a trillion dollar defense budget, a boatload of strategic issues and dubious alliances all based around oil - those aren't priced in, and that's why we have such a hard time getting off of it. But most libertarians would probably tell me that that's a perfectly functioning market, oil even gets traded on commodity exchanges, how can that not be a market? It's all in your frame of reference, I guess.
"Going out of business" is a product of regulation that
artificially separates the assets and liabilities of a
corporation from its owners.
That regulation is the essential ingredient required to allow capitalism to function. It reduces the amount of risk that the natural persons involved in a company run. The company is the legal person carrying the full burden of risk, but it is also in the position to take on that risk, because it has the assets to do so. No individual person would ever have enough assets to take on the risk that a company like BP does. However, companies can also leverage more risk that they can chew and go out of business. However, the natural persons involved would have gone bankrupt long before that.In short: the problem with straight up libertarianism is that it would destroy capitalism.
If a supplier of a company agrees on limiting liability on the corporation, as they do now by obligation, that's ok. But if you commit an agression, as this oil spill is, there should not be any limit on the liability.
But we can't do that, the whole point of LLPs and Incs. is to limit the investor's liability.
This is partly why we have agency risk.
This is why while I consider myself a libertarian, I still think we need competent and aggressive regulators in all the places where the market is not self-corrective.
But I'm not sure how we could avoid regulatory capture for ever.
How will you determine what these costs are? It might be simple if I have a fishing business in Louisiana, but what if I'm a bar owner who depends on the dollars of hard-drinking oil workers when they're on shore? What if I'm just depressed by the whole thing and miss work? There are millions of people living in that area, and the gulf coast economy is about 2-2.5 trillion. You simply can't handle every individual case in court, it's going to be a series of class actions. And without some kind of judicial standards for how those should be handled, the result will be arbitrary at best.
Additionally, BP will argue that oil drilling is fundamentally risky and the residents of the area liked it when the going was good. So there will be further arguments about the degree to which it is really their fault. Again, without agreed standards in place the outcome of such wrangling will be arbitrary.
Finally, whatever a court orders BP to hand over as compensation for its poor drilling practices is purely hypothetical unless there is some way of enforcing it; BP might just sink the remains the of the rig, announce the failure of its 'gulf operations subsidiary' and just turn its attentions to operations elsewhere, where they have never had an accident. Perhaps they'll just blame the whole thing on inferior oil workers in that region.
So without standards for judging claims and liability, or mechanisms for enforcement of judgments, the situation will not be properly resolved. Those standards and mechanisms are the basis of laws, and we elect governments to serve as our agents in establishing and promulgating them.
Fishing business would then not pay those owners to operate in their property and lose an opportunity, but they are not owed anything, since those owners have no obligation of letting the fishing business operate in their property.
Obviously, it wasn't a good gamble this time, but it should be no surprise they've acted as our rules and regulations incented them to.
Even if the liability cap is pierced during this particular incident, that's still orthogonal to the impact it has had on the behavior of exploration up until now.
sounds pretty cut and dried to me. http://www.law.cornell.edu/uscode/html/uscode33/usc_sec_33_0...
Financially, they are incented to cut corners and risk paying MMS the occasional $25k, when the drilling platform costs $500k/day.
Yes, automobiles have many negative externalities but they are distributed and stochastic. Arguably, it is actually the petrol that is directly responsible for these externalities as simply owning a car endangers no one and only has a sunk environmental cost.
In the case of automobiles, we have, as a society, agreed that this is a good trade-off. In the case of industrial accidents, we have, as a society, agreed that the scale of the potential failure should be matched with commensurate concern for safety.
BP clearly has difficulty controlling their risk and they should be held liable for that just as you or I would be held liable for causing an auto accident.
Despite all it’s shortcomings, motorized individual transport still seems like a pretty sweet deal to me – I can’t really fault the government for forcing everybody and me to pay for the infrastructure, especially if – like you seem to argue – there is no other way to get that kind of infrastructure.
Somehow I don’t really think you are making a good case for your argument.
If the standard is endangering thousands and wreaking ecological destruction at a wide scale, the disastrous choice of designing cities to favor the automobile over other forms of transportation is not only a failure, it's a government failure more so than a market failure.
The problem is, the folks who think that more regulation is the answer seem to think that the government regulators are benevolent gods who themselves never make mistakes, are not subject to greed, corruption, political influence, negligence, incompetence, etc.
Give me a break. When you've finished tearing that straw man to pieces, maybe you can seek out what real people who support effective regulation are saying about it.
See the case of multiple time convicted felon and statistical mass murderer Pfizer, where the law mandated a corporate death penalty, but the government hacked around that requirement.
http://www.cnn.com/2010/HEALTH/04/02/pfizer.bextra/index.htm...
The only way it would really harm BP would be if BP's share of oil production approached the US's proportion of global oil consumption, and even then, its effect would be to raise US oil prices.
For similar reasons, the notion of relieving the US from its dependence on foreign oil is similarly meaningless. Oil is fungible, and the price of oil for the man on a US street will still be affected by events in the Middle East, even if not a drop of oil he uses comes from outside his own country.
BPs total revenues in 2009 were $239 billion - of which about $130 billion was from the USA.
They would maybe take a % hit, however they'd still sell all their oil. Banning them in the US would not cause that $130 billion dollars to just "vanish"
Why does the corporation need to be held responsible for something like this? Why not hold the employees behind these incidents accountable?
Not that any of this is going to happen in real life. But as long as we're speculating . . .
I love how people act as if it were in Transocean and BP's interest for the well to explode, people to die, and the ocean to be poisoned. They didn't want this to happen. BP shareholders have already lost $52B. Transocean shareholders are down $6B.
"Politics" is not a great way to solve this and the engineers on the rig were not driven by greed. For wells this deep, it looks like the risks are higher than estimates, and a relief well needs to be prepared. Human progress requires us to try new things. We learn what works, and what doesn't. We learn to price the risk.
Avoiding accidents by drilling more safely and expensively is not in the interests of BP and Transocean; it makes more sense for them to be risky, gamble 50 times on other wells, make 10x more than they would if they were doing it more safely, and use those profits to cover this one unlucky time.
Forcing them to do it safely even though this makes the well 2x, 5x or 10x less profitable is the purpose of government regulation. In the case of the US oil industry, the regulator is corrupt, completely in thrall to the industry with no accountability.
Hence, the solution is not about pricing risk -- BP have already done that, and this is the logical result. The solution is a regulatory one, which means a political decision.
Despite the costs of cleanup, we're not anywhere near the point where it makes sense for them to change their practices. BP made $4bn in profit last year, and current cleanup costs have yet to hit $1bn. They can get a lot, lot higher before they outweigh the profits of years of risky drilling.
They've just lost all the money they spent on those full-page "BP does lots for the environment" adverts.
Between the bad PR, increased risk of regulation and chance of being shut out of the market, this is absolutely more expensive than running a few extra tests.
There is new information about the risk- new to the regulators, new to the companies. We don't even know what the best mitigation approach is. The regulatory structure will follow what works and is cost effective. If the risk is too high, wells of this type will not be built until a better approach is found.
Regulatory decisions are not political- not about power. They are ultimately bureaucratic.
Richard Feynman showed an excellent example of this after the Challenger disaster. He was on the Presidential task force after that disaster, and he asked NASA management and engineers, separately, to quantify what they felt the odds of a catastrophic failure resulting in crew loss were prior to the disaster. The risk values quoted by engineers and by management were something like 2-3 orders of magnitude different (with the engineers quoting the much more likely value)...
— Personal observations on the reliability of the Shuttle by R.P. Feynman http://science.ksc.nasa.gov/shuttle/missions/51-l/docs/roger...
Empirical post script (as of STS-132 2010-05-26)
Total launches 131
Failures 2
Successes 129
Failure rate: 1.5%
If you read the report, you will find that NASA declared a reliability number that the shuttle was to meet (1/100,000), and then backed into the calculations that justified that reliability number. In other words, it was top-down, rather than bottom-up. IMHO, bottom-up tends to be pessimistic, but top-down tends to be be a figment of management's imagination. In his report, Dr. Feynman pointed out that many of the calculations had reliability figures that, while not necessarily wrong, were so small as to be impossible to validate... but that was the number necessary to generate the 1/100,000 roll-up (actually, rolled-down) number.http://online.wsj.com/article/SB1000142405274870402620457526...
In summary: they were doing it cheaply, and in a hurry, and skipped standard safety precautions, and ignored several warning signs.
I'm inclined to call to question the caliber of the engineer s working to resolve the leak. Maybe I'm being too harsh?
EDIT: To clarify point (a), I would have assumed that oil rigs would be required to build-in some sort of kill-switch in the event that even the smallest part of the process didn't go as planned.
All of the remedies they've tried are ones already tested and modelled like you mention - but at the end of the day this happens so infrequently and under such varying circumstances it's hard to cover every eventuality.
One of my friends pointed out that it's much akin to running one of the mars landers - it takes a long time to sort out what to do, send down the ROV's and give it a shot.
For example, simple elevators are typically designed to be able to safely carry 7-10 times their normal operating weight, including the cabin. I find it hard to believe that "many of their safety systems" just failed - I think it's a lot more likely that a series of really stupid human mistakes are behind this as well as management that is unable or unwilling to enforce (sometimes costly) safety procedures and practices.
It's actually a pretty good safety record.
And when I wrote "Many many" I meant "How many". :(
The one safety measure of note is the relief well. They're not required to drill them along with the primary well. I read somewhere that it's not this way in Canada, and that BP had been lobbying them to let them drill without a relief well. Good luck with that now, BP. Hopefully we'll see a law that requires relief wells here in the US.
Of course, they're scrambling to drill a relief well now, which they predict will be done in early August.
That's from Reddit, and it looks like it wasn't exactly correct: http://www.reddit.com/r/politics/comments/c8t30/in_canada_it...
If you read it on reddit you know it's not true. This is a general rule.
It spilled for 10 months! At that spill was 2 to 6 times worse in terms of barrels per day.
The only difference was that it took 2 months to reach the US coast, so we were a bit more prepared for it.
I have not yet read about the long term effects. But my quick skimming did not come up with anything major. (Just short term effects.)
And no, it won't run out anytime soon.
the only thing that worked was drilling the relief well
I bet the reason they are doing these retarded ideas while they drill the relief well is to make people think that something is being done
A few of these per century will really destroy the environment, and who knows how much worse this is going to get with just one hurricane in the next few months.
Yesterday I sat and read up on the past examples of this happening. It's hardly a big field of literature but the overriding result seems to be it takes a long time to fix these things.
The one thing that hacks me off is the way the us govt is jumping up and down banning this and questioning that. Clearly at some point we need to assess what occured and set out blame where appropriate - but it seems to me right now we should quit the politcal posturing and focus solely on stopping the leak.
2011 is totally unreasonable?
Anybody know why digging a hole say 500 feet deep, 50 feet side by side with the gushing well and putting some c4 in there wouldn't work?
At any rate, I read this:
http://www.wnd.com/?pageId=158297
Particularly, the non-nuclear option. I think they should run models and truly consider it. Perhaps they need to run models and then f-ing blow that up (if the models say that the resulting rubble will sufficiently re-cover the well).
http://www.youtube.com/watch?v=4KkhbbX4AcU
They could assemble a massive amount of dirt around the well. Create a large circular mound, and then just collapse it from underneath. That's what I would do. And I didn't even stay a Holiday Inn last night. Jk. I'm sure everyone has an opinion. I couldn't find a place to really say anything here:
http://www.deepwaterhorizonresponse.com/go/doc/2931/546759/
So I posted this. Anyway...
2. The well has a measured depth of +10,000m, the pressure acting on the reservoir is ejecting the hydrocarbons with a very large force.
Insert a drill pipe into the well with some sort of expandable yet sturdy bag tucked into the end. Once the pipe is fairly deep inside the well, pump a dense liquid into the pipe expanding the bag similar to an angioplasty procedure. Then cap the well from the top once the flow is stopped or reduced significantly.
Another similar solution would be to attach high explosives to the drill pipe and collapse the well from deep inside.
Have these approaches been considered?
We're all waiting to see which "hack" is going to finally work.