Merged Judge blocks moratorium on off-shore drilling

[JoeTheJuggler]

I think he'll ban every kind of drilling he can, yes. And, yes, I think he wants to sabotage the economy. Crippling the private sector has always been a big part of his M.O.


I really don't.

Wow. I'm pretty cynical, but I would never suspect that a POTUS is actively trying to sabotage the U.S. economy. That doesn't make the least bit of sense.

Do you think maybe Obama is doing what he can to avoid the political consequences of another big oil accident? I'll grant you his concerns for the environment might not necessarily be genuine (but then again, they might well be), but I think his motives are at least to avoid having this thing become his "Katrina".

I don't for a second believe he has any interest or desire in sabotaging the economy. That sounds like a NWO CT or some such.

 

[Lurker]

I think he'll ban every kind of drilling he can, yes. And, yes, I think he wants to sabotage the economy. Crippling the private sector has always been a big part of his M.O.

You know, you are descending into conspiracy theory here. I am not sure what the payback would be for sabotaging teh economy. I mean, what is in it for the Democrats? Teh economy is going to send them to deffeat in 2010 and if it continues to do poorly, as you think Obama wants it to, the GOP will be swept into power in 2012.

And that is looking at just the political side of it. What purpose is there in wanting Americans to suffer?

AXQ, I think you have been listening to too much talk radio. I hear that sort of talk regularly on talk radio (or Fox). The rationale cited often is that Obama is a closet socialist/muslim/Kenyan. Do you subscribe to any of those ideas?

 

[JoeTheJuggler]

The US is sfaik the only major oil producing country that doesn't have a National Oil Co which employs technical experts and explores, evaluates by drilling, and produces crude as Operator (most often with partners usually major oil companies). Note that as Operator is bears it's share of risk, like the risk BP-Anadarco-Mitsui now face 100% as private companies.


Likely all areas below, say, 1000' water depth. How to un-entangle existing leases would pay a lot of lawyers.


Federal lands, yes. The govt collects lease bonus payments upfront, and collects royalties on production.


I'd say those considerations are both irrelevant and erroneous. What it would do is entice Majors -- partnered with the new National Oil Co -- to conduct operations in the deepwater GOM rather than leave as those with any sense will be doing ASAP. The 100% risk of another deepwater spill is too enormous; drilling and producing will always have opportunities for something to go wrong.

In this regard the Moratorium is a godsend that will allow Operators to cite force majeure to break existing deepwater GOM rig contracts.

I'm sorry, I still don't understand what you're suggesting. You ARE suggesting the US should nationalize some oil companies? Or at least it should take ownership of deep water wells?

(I'm not disagreeing with you. I can't agree or disagree until I can ascertain what you're proposing. But I think what you're saying is very interesting.)

At any rate, I'd be in favor of the U.S. taking ownership of this oil (which, as I mentioned, the public at large already thinks is the case somehow).

I lived a couple of years in Ecuador, and unfortunately, the national oil company wasn't always a boon for the country. For a while, the more oil they exported the deeper into foreign debt the country fell. (There was a LOT of corruption.) I understand things have changed since then, and they've been pretty flush with the increased crude prices the last several years.

But I doubt any oil companies will be nationalized in the US. Heck--people keep referring to health insurance reform as "the government takeover of healthcare" and "socialized medicine"! Can you imagine what Palin and the Tea-Party people would say about actually nationalizing a private company or its assets?

I also don't think the oil companies will desert the Gulf of Mexico. I think moving some heavy equipment elsewhere so it doesn't stand idle is not the same thing as leaving.

I didn't know the U.S. got royalties on oil production. I'm glad to hear it. (And thanks for once again putting the E in JREF!)

 

[JoeTheJuggler]

You know, you are descending into conspiracy theory here.

Yeah. It's one thing to have a disagreement on economic policy and claim that your opponent's policies would hurt the economy, and it's something else again to claim that your opponent's goal is to hurt the economy. That's pretty loony.

ETA: Avalon, do you have any idea why Obama would want to sabotage the economy?

Is it because he owes allegience to Kenya because he's not really a US Citizen?


Sorry, I couldn't resist.

 

[Lurker]

...and it's something else again to claim that your opponent's goal is to hurt the economy. That's pretty loony.

Megadittos!

 

[AlBell]

I'm sorry, I still don't understand what you're suggesting. You ARE suggesting the US should nationalize some oil companies? Or at least it should take ownership of deep water wells?

Neither. I'm thinking of the US forming the, say, US National Oil Company that hires geophysicists, geologists, petroleum engineers, etc to compete with other oil companies in (deepwater) lease evaulation, bidding for lease blocks, and if warranted drilling and production activities as a stand alone Operator.

The US govt continues to be the landholder who leases rights to explore and produce oil to an Operator (who now might be the USNOC), who pays lease bonuses and royalties to the US govt as does any Operator.

I also don't think the oil companies will desert the Gulf of Mexico. I think moving some heavy equipment elsewhere so it doesn't stand idle is not the same thing as leaving.

No rational Board of Directors should allow their oil company to assume the spill risk costs that are now on the table for any private company Operator in the deepwater GOM.

In hindsight, from a BP shareholder viewpoint, BP should never have agreed its' liability exceeded the $75 million cap which was provided by Congress to entice companies to engage in deepwater US exploration and production.

 

[rwguinn]

Wow. I'm pretty cynical, but I would never suspect that a POTUS is actively trying to sabotage the U.S. economy. That doesn't make the least bit of sense.

Do you think maybe Obama is doing what he can to avoid the political consequences of another big oil accident? I'll grant you his concerns for the environment might not necessarily be genuine (but then again, they might well be), but I think his motives are at least to avoid having this thing become his "Katrina".

I don't for a second believe he has any interest or desire in sabotaging the economy. That sounds like a NWO CT or some such.

2012? Ha. The world WILL END today.
JTJ and I agree on something in politics.

 

[The Mutha]

In hindsight, from a BP shareholder viewpoint, BP should never have agreed its' liability exceeded the $75 million cap which was provided by Congress to entice companies to engage in deepwater US exploration and production.

My point exactly! Legally they were only on the hook for $75 million in damages to the people and businesses affected. (They're fully responsible for all the cleanup.) They choose to put $20 billion on the table (whether that was influenced by politicans or not). Granted it wouldn't have gone over well with the American people and politicians, but legally they certainly had the right to say "there's your $75 million, leave us alone so we can cap this well.")

Any oil company thinking about deep water drilling from now on (after the lifting of the bans, of course) will have to make sure they could withstand a $20 billion + hit before putting in for the permits.

 

[JoeTheJuggler]

Legally they were only on the hook for $75 million in damages to the people and businesses affected.

Unless it's determined that they were negligent. I think they were hoping to avoid having to answer that question by not insisting on the $75 million limit.

Is there any moral or ethical justification for that $75 million limit anyway? I think it's really bad law that should be done away with.

 

[JoeTheJuggler]

Any oil company thinking about deep water drilling from now on (after the lifting of the bans, of course) will have to make sure they could withstand a $20 billion + hit before putting in for the permits.

See above. Their potential liability has always been way beyond the $75 million limit. (Correct me if I'm wrong, but I think that limit was only put in place AFTER the Valdez spill, so it's a relatively recent thing in the history of oil extraction. And investors have never shied away from the oil industry.) According to defenders of the industry, if you follow SOP's oil extraction is very safe and risks of spills or leaks are very small, especially compared to the potential profits.

And I still haven't heard anyone talking about BP going bankrupt. When it first became obvious that this leak was pretty big (like about the time they shut down significant areas of the Gulf to fishing), I automatically assumed this would mean the end of BP. But so far the most drastic thing has been the announcement that they wouldn't be paying out dividends for the rest of this year. Apparently, the potential profits in oil extraction are really really really big--big enough to stand up to some pretty high risks.

Furthermore, where are they going to go to? Are there places that have similar or lower limits on liability?

I heard something on NPR the other day about an American company drilling in British waters that had an accident that resulted in the UK's tightening up their regulation of the industry. According to the guest, the U.S. still doesn't have government required annual safety assessments on drilling platforms. IIRC, the guest said that oil companies were going TO the U.S. for this very reason.

 

[AvalonXQ]

Yeah. It's one thing to have a disagreement on economic policy and claim that your opponent's policies would hurt the economy, and it's something else again to claim that your opponent's goal is to hurt the economy. That's pretty loony.

Every time something fails in our economy, the Democrats talk about the "failure of the market" and use it as an excuse to exert massive government control and regulation over the process. Failure gives them a foothold to greater government influence.
I believe that Obama would be thrilled if the government was responsible for all major business decisions in this country. I think that does mean I'm accusing him of being a "soclialist". It also means that when he initiates actions that attack business (which, it seems, most of his actions are designed to do), I see this motivation.
I probably hold these views from the few times I've listened to talk radio.

 

[JoeTheJuggler]

Interesting--are you abandoning your claim that Obama is trying to sabotage the economy?

Every time something fails in our economy, the Democrats talk about the "failure of the market" and use it as an excuse to exert massive government control and regulation over the process. Failure gives them a foothold to greater government influence.

Ignoring the hyperbolic "every time" part of this, do you think that it was wrong to re-examine the government's regulatory and oversight of oil drilling following the Deepwater Horizon disaster?

Following an disaster like this (one that many people said wasn't possible or at least was improbable in the extreme), do you think it's reasonable to just shrug our shoulders and NOT re-evaluate government oversight?

I believe that Obama would be thrilled if the government was responsible for all major business decisions in this country. I think that does mean I'm accusing him of being a "soclialist". It also means that when he initiates actions that attack business (which, it seems, most of his actions are designed to do), I see this motivation.

What motivation? "Being socialist"? First, Obama is not a socialist--not even close. Second, "being socialist" is not a motivation. . . for anything.

So again, why do you think Obama wants to sabotage the economy? Is it because he really hates his job and doesn't want a second term?

 

[AvalonXQ]

I think I already explained my position. The Democrats use market failure as an excuse to increase government control (read: "more socialist") and regulation. That's their goal -- increase government control and decrease business autonomy. If the economy does poorly, they have more opportunities to do this. Hence their motivation for sabotaging business.

 

[excaza]

The US is sfaik the only major oil producing country that doesn't have a National Oil Co which employs technical experts and explores, evaluates by drilling, and produces crude as Operator (most often with partners usually major oil companies). Note that as Operator is bears it's share of risk, like the risk BP-Anadarco-Mitsui now face 100% as private companies.

BP was free to keep violating regulations without any severe punishment from the government agency responsible for enforcing them. I don't see how a nationalized company would have been any different than BP in this scenario.

 

[Newtons Bit]

I think I already explained my position. The Democrats use market failure as an excuse to increase government control (read: "more socialist") and regulation. That's their goal -- increase government control and decrease business autonomy. If the economy does poorly, they have more opportunities to do this. Hence their motivation for sabotaging business.

I'm not really sure that socialism and command economies are really synonymous. Yes, most socialist countries do have a large amount of command over their economies, but so do fascist countries, etc.

I agree that Obama has a goal to increase government control, size and power. But that's not necessarily socialist.

 

[AlBell]

BP was free to keep violating regulations without any severe punishment from the government agency responsible for enforcing them. I don't see how a nationalized company would have been any different than BP in this scenario.

Nor do I. In fact most National Oil Companies are probably not top-tier in technical and drilling expertise. What the US National company would offer deepwater partners is risk sharing; as actual Operator they'd have to play by MMS regs as everyone else does.

Few National oil companies act as Operator per se; they more often form non-operating partnerships with a Major who is the actual Operator.

 

[AvalonXQ]

I'm not really sure that socialism and command economies are really synonymous. Yes, most socialist countries do have a large amount of command over their economies, but so do fascist countries, etc.

I agree that Obama has a goal to increase government control, size and power. But that's not necessarily socialist.

Yeah, the semantics don't really concern me. As I said, he wants more government control and regulation (whether or not that's "socialist"), and that's what motivates him to harm American business.

 

[lomiller]

Is there any moral or ethical justification for that $75 million limit anyway? I think it's really bad law that should be done away with.

The basis for it would be that there are spin off benefits to local state and federal governments from drilling for oil in the GoM. If these governments want to reap these benefits they need to create an environment where drilling is attractive to investors and capping the liability goes a long way towards doing this.

It does mean that government accepts some of that risk onto itself, and pretty much demands oversight to prevent abuse. $75 million is probably to low for the GoM, but it can’t be infinite without impacting the potential economic benefits from drilling.

 

[lomiller]

I think I already explained my position. The Democrats use market failure as an excuse to increase government control (read: "more socialist") and regulation. That's their goal -- increase government control and decrease business autonomy. If the economy does poorly, they have more opportunities to do this. Hence their motivation for sabotaging business.

No need to worry on that front. It’s only Republicans who view policy as an end in itself instead of a means to an end. Where Obama wants more regulation, it’s because he feels that more regulation will improve the functioning of the US economy. Any suggestion of some other motivations would seem to be projecting on the part of “conservatives”

 

[AvalonXQ]

No need to worry on that front. It’s only Republicans who view policy as an end in itself instead of a means to an end. Where Obama wants more regulation, it’s because he feels that more regulation will improve the functioning of the US economy.

And how do you arrive at the conclusion that "improving the functioning of the US economy" is the goal of Obama's policies?
It's not. Obama's goal is government control; economic prosperity or failure, either one, may be a means to that end.