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Or oil companies policing themselves.

Assertion: Oil companies self regulate.

This is false statement. The US federal government was regulating the ‘Deep Water Horizon’ http://www.gomr.mms.gov/. If they performed their duties adequately, then the disaster in the gulf would not have happened. Point of fact, the US has a regulated market, not a free market. The false choice you raise is the following: A society picks either (Government Regulation) or (Corporations behaving the way they wish). In a free market BP would be responsible for every drop of oil which damages private property, as they would not have limited liability. That’s some hefty risk, which is why they’d need to purchase insurance. Their insurer would recognize the risk, and would need some way to evaluate it and ensure large scale quality control.

This is where private firms step in, such as UL: http://www.ul.com/global/eng/pages/

A government regulator is not sufficiently accountable. If disaster strikes, they lose their jobs and the next round of bureaucrats step in. On the other hand, UL’s entire future is dependant solely on the accuracy of their ratings and recommendations. If half of the electrical appliances UL approved caught fire, their competitors would be more trust worthy in the eyes of insurers, and UL would lose business.

They do exist, and Macondo isn't unique as an oil field either. There is ample evidence for natural plumes of oil and gas seeping from the sea floor at many locations world-wide, including the Gulf of Mexico and offshore California where they have been well-studied. There are some details at this site, which includes a number of publications about California seeps. This site has more information, including a nice aerial photo of the natural oil slick produced by the seeps off the coast of California. This paper [PDF] is a good summary of the best known California locations.

here and here [PDF] are some examples [PDF] of seeps, gas plumes [PDF], and seep-related life [PDF] in the Gulf of Mexico [PDF]. The tube worms growing on asphalt [PDF] or "ice worms" in burrows in gas hydrate (!) [PDF] are particularly cool. Some life *likes* oil and gas leaking into the ocean.

The bottom line is, seeps of gas and liquid hydrocarbons into the water column happen all the time, and the ocean deals with them by bacteria eating the oil. On the sea floor there are flourishing biological communities associated with the release of hydrocarbons, like a little "oasis" of life in the deep sea, supported by creatures eating the bacteria that are in turn eating the hydrocarbons that are expelled. However, the rate of release at the BP well is several times the total output of natural seeps across the entire Gulf of Mexico, so the scale of the release is much bigger and concentrated in one gigantic point source. It would be like trying to feed on a volcano. There certainly won't be any seep communities setting up at the BP well any time soon :-) Anyway, the life in the ocean will consume this stuff as it spreads out, whether it is in a plume or on the surface, but it will take a while. Also, the plume they are talking about in the water column is extremely low concentration (ppb average). 99%+ of the oil is making it to the surface, and most of the gas is either dissolving in or venting to the atmosphere. The plume is interesting from a scientific perspective and probably will have some kind of environmental effect that could be important, but it's not the main part of the environmental problem. People are hyped about it because they are obsessed with the idea that the disaster could be 10x worse than the oil that is obvious on the surface. These studies show that simply isn't the case because of the low concentrations. A significant fraction of the oil is not lurking below, only a tiny, instrument-detectable amount is.

BTW, in case it's not obvious, I meant to say "random and unpreventable"

I agreed more with your first version. "Black Swan Events" are random and unpredictable, but not unpreventable or unmitigable. BP's overly optimistic and/or delusional views about the risks involved and their abilities to respond to a massive spill created unnecessary exposure to a calamitous event. Cf. BP's own exploration plan. or download the entire PDF direct from the Minerals Management Service. Note sections 2.7, 7.1 and 7.2 in particular.

It boils down to risk vs. reward (or profit and loss if you prefer,) and unfortunately for the people, flora and fauna in and around the Gulf of Mexico we ended up on the wrong side of the equation. And if nothing can be truly done to prevent accidents of this scale, is it worth uncorking the genie from the bottle given the amount of destruction it unleashes?

Yes. I've said the following in my petroleum geology class many times (or something like this): "The ultimate destiny of >90% of the oil and gas generated in the subsurface is to leak to the surface and be destroyed by biological degradation processes. Our goal as petroleum geologists is to find the rare exceptions that haven't yet leaked completely away."

The thing is, most natural seeps (e.g., the La Brea in Los Angeles) don't flow as quickly as a blowout -- not even close -- although there can sometimes be intermittent "eruptions" that flow faster for a little while. There is fairly good information on seeps in the natural environment on land and sea because they are often a clue that additional oil and gas lays buried beneath the surface somewhere. Seep surveys are a pretty common exploration tool [PDF] and say a lot about the nature of a petroleum system. Read the PDF file for loads of technical details on the seeps in the offshore of California. They're pretty impressive. In a way, all humans are doing is short-circuiting the natural process to extract oil and gas that otherwise would have taken many millions of years to leak out, and converting most of it into CO2 by burning it, but that doesn't make it natural even though it emulates the natural process. We are doing it at rates far in excess of the natural process for a given area. For example, natural seeps in the Gulf of Mexico are on the order of 2000 barrels/day of oil. By contrast the artificial production from the Gulf of Mexico averages over a million barrels per day collected from thousands of wells.

Yes. I've said the following in my petroleum geology class many times (or something like this): "The ultimate destiny of >90% of the oil and gas generated in the subsurface is to leak to the surface and be destroyed by biological degradation processes. Our goal as petroleum geologists is to find the rare exceptions that haven't yet leaked completely away."

The thing is, most natural seeps (e.g., the La Brea in Los Angeles) don't flow as quickly as a blowout -- not even close -- although there can sometimes be intermittent "eruptions" that flow faster for a little while. There is fairly good information on seeps in the natural environment on land and sea because they are often a clue that additional oil and gas lays buried beneath the surface somewhere. Seep surveys are a pretty common exploration tool [PDF] and say a lot about the nature of a petroleum system. Read the PDF file for loads of technical details on the seeps in the offshore of California. They're pretty impressive. In a way, all humans are doing is short-circuiting the natural process to extract oil and gas that otherwise would have taken many millions of years to leak out, and converting most of it into CO2 by burning it, but that doesn't make it natural even though it emulates the natural process. We are doing it at rates far in excess of the natural process for a given area. For example, natural seeps in the Gulf of Mexico are on the order of 2000 barrels/day of oil. By contrast the artificial production from the Gulf of Mexico averages over a million barrels per day collected from thousands of wells.

Are you sure?

This part:

There is a clear relationship between known hydrocarbon discoveries at great depth in the Gulf slope and chemosynthetic communities, hydrocarbon seepage, and authigenic minerals including carbonates at the seafloor (Sassen et al., 1993a and b).[2] While the hydrocarbon reservoirs are broad areas several kilometers beneath the Gulf, chemosynthetic communities occur in isolated areas with thin veneers of sediment only a few meters thick.[2]

The cite points here.

They did. They had a blowout valve in place that was supposed to kill the oil flow. It failed. Not something that has ever happened before and not something that could have been predicted.

We could conduct offshore drilling for the next hundred years and probably not see another failure via this route.

See:

"The blowout preventer failing is unheard of in the oil industry."

A 1999 government report found at least 117 failures. Amazing what you can do with a simple google search.

http://www.mms.gov/tarprojects/319/319AA.pdf

Anyone who says otherwise is clueless or lying or both.

Now, my question to you is why did you claim that it was "Not something that has ever happened before and not something that could have been predicted. "?

Did you get that from a source somewhere, do did you just plain make shit up?

"The blowout preventer failing is unheard of in the oil industry."

A 1999 government report found at least 117 failures. Amazing what you can do with a simple google search.

http://www.mms.gov/tarprojects/319/319AA.pdf

Anyone who says otherwise is clueless or lying or both.

This particular oil rig could very likely have been built/operated more safely than it was. But who'll make BP do that?

The Interior Department's Mineral Management Service perhaps? (http://www.mms.gov/)

WASHINGTON, DC - In a joint statement issued today Secretary of the Interior (DOI), Ken Salazar and Acting Chairman of the Federal Energy Regulatory Commission (FERC) Jon Wellinghoff announced that the two agencies have confirmed their intent to work together to facilitate the permitting of renewable energy in offshore waters.

"Our renewable energy is too important for bureaucratic turf battles to slow down our progress. I am proud that we have reached an agreement with the Federal Energy Regulatory Commission regarding our respective roles in approving offshore renewable energy projects. This agreement will help sweep aside red tape so that our country can capture the great power of wave, tidal, wind and solar power off our coasts," Secretary Salazar said.

"FERC is pleased to be working with the Department of the Interior and Secretary Salazar on a procedure that will help get renewable energy projects off the drawing board and onto the Outer Continental Shelf," Acting FERC Chairman Jon Wellinghoff said.

Below is the joint Statement between DOI and FERC signed by Secretary Salazar and Acting Chairman Wellinghoff: JOINT STATEMENT BY THE SECRETARY OF THE INTERIOR AND THE ACTING CHAIRMAN OF THE FEDERAL ENERGY REGULATORY COMMISSION ON THE DEVELOPMENT OF RENEWABLE ENERGY RESOURCES ON THE OUTER CONTINENTAL SHELF The United States has significant renewable energy resources in offshore waters, including wind energy, solar energy, and wave and ocean current energy.

Under the Outer Continental Shelf Lands Act, the Secretary of the Interior, acting through the Minerals Management Service, has the authority to grant leases, easements, and rights-of-way on the outer continental shelf for the development of oil and gas resources. The Energy Policy Act of 2005 amended the Outer Continental Shelf Lands Act to provide the Interior Department with parallel permitting authority with regard to the production, transportation, or transmission of energy from additional sources of energy on the outer continental shelf, including renewable energy sources.

The Interior Department's responsibility for the permitting and development of renewable energy resources on the outer continental shelf is broad. In particular, the Department of the Interior has permitting and development authority over wind power projects that use offshore resources beyond state waters.
Interior's authority does not diminish existing responsibilities that other agencies have with regard to the outer continental shelf. In that regard, under the Federal Power Act, the Federal Energy Regulatory Commission has the statutory responsibility to oversee the development of hydropower resources in navigable waters of the United States. "Hydrokinetic" power potentially can be developed offshore through new technologies that seek to convert wave, tidal and ocean current energy to electricity. FERC will have the primary responsibility to manage the licensing of such projects in offshore waters pursuant to the Federal Power Act, using procedures developed for hydropower licenses, and with the active involvement of relevant federal land and resource agencies, including the Department of the Interior.

We have requested our staffs to prepare a

The demarcation line for international waters is
the imaginary line between the two points of
land at any port. Taxes can be collected on
anything that is delivered within 3 nautical
miles of land. People who buy yachts and
other sailing vessels(non trailerable)
almost always take delivery outside of
the 3nm rule. I live in and have done
over 100 yacht deliveries off the coast of
California. The people making the purchase
always take the craft to Ensenada, Mexico for
31 days then bring it back on day 31 to
avoid the luxury and other associated taxes.

The demarcation line for international waters is
the imaginary line between the two points of
land at any port. Taxes can be collected on
anything that is delivered within 3 nautical
miles of land. People who buy yachts and
other sailing vessels(non trailerable)
almost always take delivery outside of
the 3nm rule. I live in and have done
over 100 yacht deliveries off the coast of
California. The people making the purchase
always take the craft to Ensenada, Mexico for
31 days then bring it back on day 31 to
avoid the luxury and other associated taxes.

The MMS maintains a list of all platforms in Federal Waters. http://www.mms.gov/ Some platforms are very close to the coastline (~8 miles or less). The MMS does not allow oil companies to "abandon" oil rigs as they sit in the water. They have to remove the structure and topple it to form an artificial reef or bring it to shore for dismantling. To answer some of the other comments All platforms have a boat dock and a +12 (deck that is around 12 feet above mean sea level) with access to the upper decks. This provides alternate means for evacuation in the event of an emergency. You can get close to platforms in a boat if you wish but you can not leagally board the platform. Many platforms, those with a throughput greater than 100,000 barrels of oil per day, are regulated by both the MMS and the Coast Guard. So you are not just trespassing on private property but you are in violation of the Coast Guard as well. Platforms around the US are in US waters. None that I know of, are far enough out to be called International Waters. Some are far enough out that you have to file a flight plan with the FAA or a F-15 will pay you a visit on your way back in. While it is a nice idea, I do not see the idea of an offshore resort working because of a couple reasons -Companies do not spend the money to maintain a platform they are about to abandon -The cost to retrofit an offshore platform would be astronomical. (Offshore construction boat required to lift quarters or other large structures would cost over $100k a day) -Would be costly to maintain an offshore resort. Offshore is one of the most corrosive environments there is.

It's even sadder than that.

Many people don't know this, but there was plenty of drilling historically on the Atlantic Coast of the United States. Of 47 wells drilled in the area, only 5 found any hint of hydrocarbons, the amounts were non-commercial, and they were natural gas (off the coast of New Jersey). Typical commercial success rates in frontier areas are about 1 in 10 wells, so the results from that earlier exploration round aren't exactly impressive. There may be something out there but it is pretty clear the East Coast is unlikely to become another Gulf Coast. Also, the geology is such that finding oil isn't particularly likely. Natural gas is the more likely discovery, assuming any commercial discoveries are made at all.

Which means the politicians are arguing over something that isn't likely to pay off anyway. People can *hope* that surprises will turn up and that previous exploration companies weren't looking properly or didn't have the tools we do now, but anyone expecting this area to save the domestic petroleum production of the country hasn't looked carefully at what was already done and discovered there. Oil companies are gamblers, so I'm sure they'll look it over anyway. They'll probably be hoping for oil but expecting to find natural gas (which is still a way to make money if the finds are big enough to justify building a pipeline, but it doesn't do much to solve gasoline prices).

A fair amount of the geological background on the Atlantic side is available from Minerals Management Service of the U.S. Dept. of the Interior and plenty of other published sources [PDF]. A summary of potential undiscovered resources is in this report [PDF]. The Atlantic and Pacific areas are drops in the bucket compared to the Gulf Coast and Alaska offshore areas. This is not news.

The story is a little different in western Florida, where the odds of finding oil are much better, because it is basically an extension of the rest of the prolific Gulf Coast area. The southern part of California also has oil, but many of the areas are already explored and in production, and you'd have to convince the State of California to allow it. There's not much potential northwards, and what could be there is likely natural gas.

The petroleum companies are salivating at the prospect of new areas to explore, and possibly to make money. But "solve energy problems"? Not likely any time soon if ever.

It's even sadder than that.

Many people don't know this, but there was plenty of drilling historically on the Atlantic Coast of the United States. Of 47 wells drilled in the area, only 5 found any hint of hydrocarbons, the amounts were non-commercial, and they were natural gas (off the coast of New Jersey). Typical commercial success rates in frontier areas are about 1 in 10 wells, so the results from that earlier exploration round aren't exactly impressive. There may be something out there but it is pretty clear the East Coast is unlikely to become another Gulf Coast. Also, the geology is such that finding oil isn't particularly likely. Natural gas is the more likely discovery, assuming any commercial discoveries are made at all.

Which means the politicians are arguing over something that isn't likely to pay off anyway. People can *hope* that surprises will turn up and that previous exploration companies weren't looking properly or didn't have the tools we do now, but anyone expecting this area to save the domestic petroleum production of the country hasn't looked carefully at what was already done and discovered there. Oil companies are gamblers, so I'm sure they'll look it over anyway. They'll probably be hoping for oil but expecting to find natural gas (which is still a way to make money if the finds are big enough to justify building a pipeline, but it doesn't do much to solve gasoline prices).

A fair amount of the geological background on the Atlantic side is available from Minerals Management Service of the U.S. Dept. of the Interior and plenty of other published sources [PDF]. A summary of potential undiscovered resources is in this report [PDF]. The Atlantic and Pacific areas are drops in the bucket compared to the Gulf Coast and Alaska offshore areas. This is not news.

The story is a little different in western Florida, where the odds of finding oil are much better, because it is basically an extension of the rest of the prolific Gulf Coast area. The southern part of California also has oil, but many of the areas are already explored and in production, and you'd have to convince the State of California to allow it. There's not much potential northwards, and what could be there is likely natural gas.

The petroleum companies are salivating at the prospect of new areas to explore, and possibly to make money. But "solve energy problems"? Not likely any time soon if ever.

Ok for more figures try 2006 data at a mean of 86 billion barrels of oil in reserve. http://www.mms.gov/revaldiv/PDFs/2006NationalAssessmentBrochure.pdf The final amount will likely be far far higher than that, once drilling actually starts. Can't be too soon for me. Oh and natural gass reserves keep expanding exponentially as well. The largest fields haven't even been tapped yet.

Here are the actual "subsidies" that US oil companies get:

Domestic manufacturing tax deduction: business engaged in a qualifying
production activity are eligible to take a tax deduction of 6% of net
income in 2007. The "loophole" is that domestic oil and gas production
was made qualifying in 2004. Obviously plenty of other companies take
this mildly trade protectionist deduction as well.

Five-year amortization of geological and geophysical expenditures:
This amortization period was made available starting in 2006 only to
"major oil companies" that have daily worldwide production of over
500,000 barrels. Evidently there is talk of making this a seven-year
amortization period.

(source)

Royalties "not paid" for drilling on public land: It is a bit
unclear, but there is some evidence that the federal government is not
always properly collecting royalties for gas and oil production on
public land. (FYI, for offshore extraction, the royalty rate varies
between 12%-16%, and total government royalty revenue is ~$11
billion/yr.)

source 1
source 2
source 3

Of course, the Feds just made $3.7 billion on new offshore leases.

Here are the actual "subsidies" that US oil companies get:

Domestic manufacturing tax deduction: business engaged in a qualifying
production activity are eligible to take a tax deduction of 6% of net
income in 2007. The "loophole" is that domestic oil and gas production
was made qualifying in 2004. Obviously plenty of other companies take
this mildly trade protectionist deduction as well.

Five-year amortization of geological and geophysical expenditures:
This amortization period was made available starting in 2006 only to
"major oil companies" that have daily worldwide production of over
500,000 barrels. Evidently there is talk of making this a seven-year
amortization period.

(source)

Royalties "not paid" for drilling on public land: It is a bit
unclear, but there is some evidence that the federal government is not
always properly collecting royalties for gas and oil production on
public land. (FYI, for offshore extraction, the royalty rate varies
between 12%-16%, and total government royalty revenue is ~$11
billion/yr.)

source 1
source 2
source 3

Of course, the Feds just made $3.7 billion on new offshore leases.

Uh... I've heard of one too many cell phones smoking. I don't want to see another one....

:-)

So you want to fix price oil? Never happen, it's directly anti-capitalist. The MARKET sets the prices, the oil companies spent lots of money to get efficient at $30/bbl oil. They had NOTHING to do with the prices going up, that was part increased demand, part Hurricanes (60%+ of oil and 30%+ of Gulf of Mexico production is still off line..see http://www.mms.gov/ they updated the offline figures daily), part specualtion by traders. If ANYONE is to be blamed it is the traders and their panic that drove prices high. Now they have to keep it high long enough to cover the options they bought so they don't lose money. Oil is a commodity just like OJ, and it's an open market, subject to some manipulation. The oil companies just benefit from the price increase, and when prices ease in the Market they will suffer decreased earning and lower stock prices.

We also have lots of crude avaulable but a supply bottleneck with old, not so efficient refineries that are located in harm's way on the Coasts. We have plenty of oil, just not enough refeneries. If we had surplus refining capacity Gas prices would go down a LOT. Also, it's NOT just USA oil companies that are making money, the ones in Eurpore (BP, Elf, Total) are doing well too. FYI, at $3/gal our prices are still less than the EU.

Here is a good link for information about the drilling in the Gulf Of Mexico (GOM). It comes from the MMS which is the regulatory body that oversees drilling and production from federal waters in the United States. The pacific region has had all drilling suspended in the recent years if my memory serves me correctly. They do not say it on the website, but, the information in the pacific manager's message is substantially less information packed than the GOM director's message.

Here is a good link for information about the drilling in the Gulf Of Mexico (GOM). It comes from the MMS which is the regulatory body that oversees drilling and production from federal waters in the United States. The pacific region has had all drilling suspended in the recent years if my memory serves me correctly. They do not say it on the website, but, the information in the pacific manager's message is substantially less information packed than the GOM director's message.

Here is a good link for information about the drilling in the Gulf Of Mexico (GOM). It comes from the MMS which is the regulatory body that oversees drilling and production from federal waters in the United States. The pacific region has had all drilling suspended in the recent years if my memory serves me correctly. They do not say it on the website, but, the information in the pacific manager's message is substantially less information packed than the GOM director's message.

• Arctic National Wildlife Reserve
• Gulf of Mexico
• 
  
  When we finally realize that we (people) are incapable of harming the environment in a permanent manner, these resources would end all dependence on foriegn petroleum purchases.