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"BP, The Gulf, And Fools

Published:

I was going to link to this but it contain sane sound reasoning in plain terms, so here it is in full.

_________

Wednesday, June 9. 2010

Posted by Karl Denninger in Oil The World at 23:08

Source The Market Ticker

"BP, The Gulf, And Fools

"Just so nobody gets the wrong idea about my position on gulf oil drilling(or drilling anywhere), or anything else, here it is in a nice succinctposting.

I don't believe this is materially different than anything I've posted upuntil now, and I am intentionally not going back and readingeverything to "drill baby drill" - so if you "catch" me in some hypocriticalact, feel free to call me on it.

Ok, here we go:

  • There are lots of questions and few answers surrounding theDeepwater Horizon explosion and sinking.  We're owed answers. Specifically:

    • Was, as alleged on 60 Minutes, the blowout preventerdamaged a month earlier?  If so, who knew it was damaged and decided torun pipe anyway?

    • Were the hydraulic and control box problems with the blowoutpreventer known and if so, who knew about them and when?  Why was piperun if these were known inoperative or otherwise not at 100%, and who made thosecalls?

    • Who made the decision to displace the well despite apparentanomalous pressure readings?  And by the way, who thought you couldtake an accurate pressure reading without being able to close the blowoutpreventer fully (if the above allegation is correct)?

    • Why did the generator(s) explode?  This was the proximate cause ofthe fire and sinking.  Specifically, diesel gensets used where theatmosphere could entrain combustible materials(including the gensets own lube oil, such as through a turbocharger seal)absolutely need to have air doors on their intakes and systems to close thosedoors if the unit goes out of spec on RPM and the normal cut-off of fuel throughthe injection system fails to immediately establish control.  Thereclearly were either no air doors on those gensets or they wereinoperative.  This is wildly dangerous in an environment thatmight contain an explosive atmosphere and is the proximate cause of ignition andthe sinking of the Deepwater Horizon.  Who either knew there were no airdoors orthat they were inoperative on those generator engines and yet was operatingthose generators anyway?

  • The people who made the decisions above are responsible for thedeaths of 11 men and the catastrophe in the gulf.  They need tobe held personally to account as a matter of criminal liabilityfor manslaughter (e.g. negligent homicide.)  Each and every person withknowledge of any of the above who failed to "stop work", and is still alive, isculpable.  If any of the first three above points hadnot occurred, the rig would not have caught fire.  The 4th, had it not been thecase, likely would have prevented the ignition of the methane and thus theexplosion and sinking as well.

  • The persons in emergency response who are <snip>ing aroundinstead of physically closing bays and estuaries where possible until the threatof oil ingress has passed must be identified and strung up by their<snip>.  We cannot stop the oil from coming.  We also can'trealistically keep it off the beaches.  We can keep itout of some, but not all, bays and estuaries.  Where we can, we must - period. Those who claim "process" or other impediments must be run out of town on arail.

  • Those who are running a "doomsday" line on this mess, includingclaims that there is a hole (or second hole) sans casing that is spewing oil,thus leading to a situation that is impossible to control even with reliefwells, need to put up their evidence or STFU.  Wild conjecture isunacceptable.  This is a time for serious men and women and seriousresponse actions.  Nothing is accomplished by fear-mongering and makingunsupported and wild claims, any more than there is anything accomplished bysticking one's fingers in their ears and claiming that nothing is in factwrong.  There is nothing wrong with going short the companies you thinkmight have culpability but if you are running crap in the media and elsewhereyou need to be held to account for it, and if you're shorting things and thenrunning crap in the media related to them that's illegal and the peopleresponsible need to be prosecuted.

  • The moratorium in drilling needs to be lifted NOW.  Weaccomplish exactly nothing by having it in place.  If MMS and agents in MMS werecomplicit in allowing BP to continue to run pipe in the above state of the rigas noted they need to be named, held to account and fired - now.  We alsoneed to immediately change the law so that willful malfeasance of this sort byso-called "regulators" is a life-imprisonment PERSONAL felony offense.  Thesame thing happened with the banks a couple of years ago where a federalexaminer with OTS was fingered for conspiring with bank management to backdatedeposits - a clear act of fraud - and an act he allegedly committed duringthe S&L crisis as well!  A short "ground stop" is appropriate toexamine procedures and see if anyone else has beencutting corners.  Six months is not short or appropriate.  Yes, I said "drillbaby drill" and I mean it - we accomplish exactly nothing by refusing toexploit our energy resources and we have no right to demand that those in othernations accept risk we will not.
  • BP is responsible for the spill and cleanup.  They are NOTresponsible for a single lost job as a consequence of the moratorium - end ofdiscussion.  Government idiocy and outrightcorruption, which appears to have been involved here, is notBP's responsibility.  It is Washington's - specifically, it is both PresidentBush's (who is no longer in office) and President Obama's (who is.)  This sortof claptrap needs to be met forcefully by every industry in this nation,including if necessary immediate refusals to deal with the feral government andstrikes.  Individuals and companies are responsible for what they do,but never for what government does, especially when corruption ingovernment necessitates theresponse.

  • Those who ran the BS story the other day about a secondspill now have a problem on their hands.  It'sfalse (and again I get to say "I told you so".)  This sort ofmalicious attack on various companies must stop andthose who promulgated this garbage must have the SEC crawl up every one of theirorifices to see if they were shorting the firms involved and then spreadingmalicious lies.
    • As reported by Taylor Energy, the wells were covered by more than 100feet of mud and sediment and only four wells were capable of production withoutpressure assistance. The associated surface sheen was minimal and nevermade landfall. As a result of deploying three subsurface containment domes andperforming six successful well interventions, the initial averageobserved sheen volume of nine gallons per day has been substantiallyreduced.

      Unidentified aircraft took photos this weekend that incorrectlyreported an oil leak coming from the drilling rig Ocean Saratoga. At thetime of these photos, Taylor Energy was actually conducting marine operations onsite with a 180 foot dynamically positioned workboat for regularly scheduledsubsea containment system drainage. The tanks mistakenly characterized ascontaining dispersants on the boat's deck, were actually tanks to store andtransport the collected oil as it was pumped from the underwater storagesystem.

      "The effort is continuing as directed by the Unified Command," said WillPecue, President of Taylor Energy. "We have been working consistently andsuccessfully with MMS and the U.S. Coast Guard to address the resultingenvironmental impacts of one of the ten most intense hurricanes ever recorded bythe National Weather Service."

That should about wrap it up for today, but I'm sure there will be moretomorrow."

http://market-ticker.org/archives/2390-BP,-The-Gulf,-And-Fools.html

Entry #1,923

Comments

1.
sully16Comment by sully16 - June 12, 2010, 9:26 am
Great post Konane, Everybody needs to read this. We as humans fear what we don't know and we need to have our questions answered by persons without motive or agenda. The oil doesn't care who is republican or democrat or religion or skin color, it's just oil , and it's destoying the gulf.
2.
konaneComment by konane - June 12, 2010, 10:05 am
Thanks Sully! All too typically Nero fiddles while Rome burns. You might want to do an RSS feed for Denninger's articles .... he has a recent 'plain talk' one about government which I can't post.

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