Sunday, May 16, 2010

BP Gulf Gusher: The End of Oil Patch Socialism?


It's been a grand old time in recent months to hear people who call themselves conservatives rail against the advancing "socialism" they see taking over the United States. Healthcare reform was the trip wire, but, really, any excuse would have done after Barack Obama got elected president.

But, there is a more virulent form of socialism loose in America, in fact right here in Louisiana. It is the socialism that shifts the costs of the destruction of our environment, our economy, and our way of life onto taxpayers and working families, while the profits from the exercise generating the harm are privatized and hauled off into the corporate coffers of companies like BP, Shell, Exxon, and Chevron.

As the surge from every tropical storm or hurricane traveling westward across the Gulf of Mexico demonstrates, Louisiana stands defenseless against storm surge these days. Our coastal marshes are disappearing at an astonishing clip that accelerates with the passage of each storm.

The oil and gas industry bears significant but not sole responsibility for this situation. Still, their drilling activities and their pipelines, combined with the cut off of fresh water flows from the Mississippi, have decimated our wetlands.

Yet, we continue to subsidize the very activities that undermine our future. We pay to raise roads that industry activities caused to sink so that companies can pursue oil and gas in ways that further threaten to ruin our marshlands and fisheries. We give massive tax breaks to the industry to build new plants to that will pollute our air and water and stand idly by as they try to smack down anyone who tries to stand up for the health and well-being of the general public.

In Louisiana, energy is still king. The job of the rest of us is defined as being to shut up, suck it up, and clean it up.

This is oil patch socialism. It is a hybrid of the worst of capitalism and socialism. Under this system, profits are the sole domain of the energy companies while the environmental, ecological and economic downsides of their activities are the sole responsibility of the general population.

Louisiana Has Been Expendable

Louisiana has always had a love/hate relationship with the oil and gas industry.

We loved the jobs and the tax revenue. Working in the oil patch was hard but you did not need much of an education to make pretty good money out there.

The energy companies hated us. They hated our land, our marshes and our people — or, at least, that's what one could conclude judging by the way they've treated us. If something broke, they dumped it off of the rig site. Oilfield waste? If they were merely borderline irresponsible, they left the wastes in man-made pits around the drilling sites. If they had less of a conscience, they dumped the stuff into ditches, bayous and streams.

The energy companies have been the anti-stewards in Louisiana. Taken as a whole, they acted as if no one would use the land or water they needed to pursue their work. It was damned near a self-fulfilling prophesy.

Louisiana's land, water, wild life, and people were all expendable in the eyes of the industry.

As long as the costs were hidden, this was considered a fair deal by those who led the state. But, viewed in the long term, this was always a one-sided deal. The money made in the short term by individuals and government by allowing unfettered access to oil and gas in the marshes and off the coast was gone by the time the cost of that activity became clear.

It took a former oil industry engineer to figure it out:
The oil industry has been good to Louisiana, providing low taxes and high-paying jobs. But such largesse hasn't come without a cost, largely exacted from coastal wetlands. The most startling impact has only recently come to light—the effect of oil and gas withdrawal on subsidence rates. For decades geologists believed that the petroleum deposits were too deep and the geology of the coast too complex for drilling to have any impact on the surface. But two years ago former petroleum geologist Bob Morton, now with the U.S. Geological Survey, noticed that the highest rates of wetland loss occurred during or just after the period of peak oil and gas production in the 1970s and early 1980s. After much study, Morton concluded that the removal of millions of barrels of oil, trillions of cubic feet of natural gas, and tens of millions of barrels of saline formation water lying with the petroleum deposits caused a drop in subsurface pressure—a theory known as regional depressurization. That led nearby underground faults to slip and the land above them to slump.

"When you stick a straw in a soda and suck on it, everything goes down," Morton explains. "That's very simplified, but you get the idea." The phenomenon isn't new: It was first documented in Texas in 1926 and has been reported in other oil-producing areas such as the North Sea and Lake Maracaibo in Venezuela. Morton won't speculate on what percentage of wetland loss can be pinned on the oil industry. "What I can tell you is that much of the loss between Bayou Lafourche and Bayou Terrebonne was caused by induced subsidence from oil and gas withdrawal. The wetlands are still there, they're just underwater." The area Morton refers to, part of the Barataria-Terrebonne estuary, has one of the highest rates of wetland loss in the state.
The energy companies won't admit their contribution to the disappearance of Louisiana's coastal marshes. They agree it's a bad thing, but they want someone else to pay for it. Certainly not them. Shell Oil's decision to sign on as a lead sponsor of the America's Wetland

The Port Fourchon Perpetual Motion Machine

Port Fourchon, Louisiana, is the port from which deep water offshore drilling activities off our coast are serviced. It is a busy, extremely valuable port. It is located near Grand Isle. And it is in danger of being washed away by the very forces it was created to service.

The only way to get a truck to Port Fourchon is to drive down LA 1. That wasn't much of a problem back when the port was first built back in the 1960s. But, as coastal subsidence has picked up steam and as port activity picked up with the development of the deep water drilling industry, LA 1 began sinking right along with the houses and businesses along it. This jeopardized the future of the port.

That's correct. The disappearance of the marshes caused by drilling, canal cutting, pipeline laying threatened the road that is the only land line to and from the port whose sole reason for being is to serve the energy industry.

So, the State of Louisiana and the Federal government have undertaken a billion dollar-plus effort to raise the road to Port Fourchon so that the companies there can continue to drive the processes that sank the earlier version of the road. Part of the new road is complete. Work is continuing on the other segments.

The commission running Port Fourchon is also undertaking efforts to raise protections around the port itself, to protect the port against storm surge after waves from Hurricane Katrina damaged the facility. Ironically, the energy port sits on the front line of climate change where the impact of rising sea levels will evident first.

It is worth noting that one reason that Port Fourchon is so successful is because it sits on the tip of dry land at such a southern point. Having access to the port saves companies servicing deep water rigs and wells a trip of between 40 and 50 miles up to the Port of Morgan City for supplies. It is a convenience to the industry that the state and federal governments are increasingly being asked to support.

This is not a bad thing per se. But it is another example of how this very profitable industry gets to spread the costs of its activity across society while it gets to retain the profits.

A Gusher of Change?


With oil continuing to gush unabated out of the floor of the Gulf of Mexico, evidence mounts that the massive pollution is a result of Department of the Interior's Minerals Management Service (MMS) operation as an arm of the industry rather that of a protector of the public interest.

According to a May 10 story in McClatchy News Service,"The oil industry, not the federal agency that regulates it, plays a crucial role in writing the safety and environmental rules for offshore drilling, a role that critics say reflects cozy ties between an industry and its regulators that need to be snapped."

There was a 2008 Department of the Interior Inspector General report that detailed a corrupt relationship between MMS and the oil and gas industry it was supposed to regulate. Even with the change of administrations, MMS has retained its revolving door relationship with industry.

President Obama's decision to split the MMS into two sections — one to manage leasing and the other to regulate safety and compliance — will make a difference, but it comes too late for the Gulf of Mexico, where large plumes of oil have been discovered by scientists in recent days beneath the surface of the water.

That cozy relationship with industry should ring familiar in the Louisiana because state government has been nothing if not accommodating to the industry over the decades, regardless of the party affiliation of the governor in charge.

Senators Mary Landrieu and David Vitter have continued to be supportive of the industry even in the face of this potentially catastrophic event (so, too, has Congressman Charlie Melancon who is running against Vitter in November).

But, at what point do our leaders begin connecting the dots and recognize that the interests of the energy industry are not the same as the interests of the state of Louisiana and its people? How much more land do we have to lose? How long do our fisheries have to be closed? How many displaced fishermen and their families have to be permanently out of work?

Even if the gusher were capped today, the effects of this incident are going to be around for a long time. Business as usual — letting the industry have carte blanche to do what it pleases — is no longer an option.

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