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Politics : Sioux Nation -- Ignore unavailable to you. Want to Upgrade?


To: Wharf Rat who wrote (190666)5/1/2010 1:23:31 AM
From: SiouxPal  Read Replies (2) | Respond to of 361731
 
Marginal political hero?
I can go with that.
Bought angle grinder at pawn shop yesterday for granite edging.
Stuff mostly is heavy, fragile, and a bear to work on.
Mostly beautiful stuff that nature made over ions.
Or of course maybe 6,000 years old as some may say.



To: Wharf Rat who wrote (190666)5/1/2010 3:11:45 AM
From: stockman_scott  Respond to of 361731
 
Documents: BP didn't plan for major spill

msnbc.msn.com

Oil company said chance of catastrophic accident 'unlikely'
The Associated Press
updated 8:33 p.m. CT, Fri., April 30, 2010

MOUTH OF THE MISSISSIPPI RIVER - British Petroleum downplayed the possibility of a catastrophic accident at an offshore rig that exploded, causing the worst U.S. spill in decades along the Gulf coast and endangering shoreline habitat, documents suggest.

In the 52-page exploration plan and environmental impact analysis, BP repeatedly suggested it was unlikely, or virtually impossible, for an accident to occur that would lead to a giant crude oil spill and serious damage to beaches, fish, mammals and fisheries.

BP's plan filed with the federal Minerals Management Service for the Deepwater Horizon well, dated February 2009, says repeatedly that it was "unlikely that an accidental surface or subsurface oil spill would occur from the proposed activities."

And while the company conceded that a spill would "cause impacts" to beaches, wildlife refuges and wilderness areas, it argued that "due to the distance to shore (48 miles) and the response capabilities that would be implemented, no significant adverse impacts are expected."

At least 1.6 million gallons of oil have spilled so far, according to Coast Guard estimates, making it one of the worst U.S. oil spills in decades.

"Clearly, the sort of occurrence that we've seen on the Deepwater Horizon is clearly unprecedented," BP spokesman David Nicholas told The Associated Press on Friday. "It's something that we have not experienced before ... a blowout at this depth."

No control plan?
Robert Wiygul, an Ocean Springs, Miss.-based environmental lawyer and board member for the Gulf Restoration Network, said he doesn't see anything in the document that suggests BP addressed the kind of technology needed to control a spill at that depth of water.

"The point is, if you're going to be drilling in 5,000 feet of water for oil, you should have the ability to control what you're doing," he said.

Amid increased fingerpointing Friday, high winds and choppy seas frustrated efforts to hold back the oil spill seeping into Louisiana's rich fishing grounds and nesting areas, while the government desperately cast about for new ideas for dealing with the growing environmental crisis.

President Barack Obama halted any new offshore drilling projects unless rigs have new safeguards to prevent a repeat of such a disaster.

The seas were too rough and the winds too strong Friday to burn off the oil, suck it up effectively with skimmer vessels, or hold it in check with the miles of orange and yellow inflatable booms strung along the coast.

The floating barriers broke loose in the choppy water, and waves sent oily water lapping over them.

"It just can't take the wave action," said Billy Nungesser, president of Louisiana's Plaquemines Parish.

Wildlife at risk
The spill — a slick more than 130 miles long and 70 miles wide — threatens hundreds of species of wildlife, including birds, dolphins and the fish, shrimp, oysters and crabs that make the Gulf Coast one of the nation's most abundant sources of seafood. Louisiana closed some fishing grounds and oyster beds because of the risk of oil contamination.

Many of the more than two dozen lawsuits filed in the wake of the explosion claim it was caused when workers for oil services contractor Halliburton Inc. improperly capped the well. Halliburton denied it.

According to a 2007 study by the federal Minerals Management Service, which examined the 39 rig blowouts in the Gulf of Mexico between 1992 and 2006, cementing was a contributing factor in 18 of the incidents. In all the cases, gas seepage occurred during or after cementing of the well casing, the MMS said.

At least 1.6 million gallons of oil have spilled, according to Coast Guard estimates.

'Critical' days ahead
As of Friday, only a sheen of oil from the edges of the slick was washing up at Venice, La., and other extreme southeastern portions of Louisiana. But several miles out, the normally blue-green gulf waters were dotted with sticky, pea- to quarter-sized brown beads with the consistency of tar.

High seas were in the forecast through Sunday and could push oil deep into the inlets, ponds, creeks and lakes that line the boot of southeastern Louisiana. With the wind blowing from the south, the mess could reach the Mississippi, Alabama and Florida coasts by Monday.

In Louisiana, officials opened gates in the Mississippi River hoping a flood of fresh water would drive oil away from the coast. But winds thwarted that plan, too.

For days, crews have struggled without success to activate the well's underwater shutoff valve using remotely operated vehicles. They are also drilling a relief well in hopes of injecting mud and concrete to seal off the leak, but that could take three months.

At the rate the oil is pouring from the sea floor, the leak could eclipse the worst oil accident in U.S. history — the 11 million gallons that spilled from the supertanker Exxon Valdez off Alaska in 1989 — in just two months.

U.S. Interior Secretary Ken Salazar said he has pressed BP to work more efficiently to clean the spill and has pledged that "those responsible will be held accountable." President Barack Obama has ordered Salazar to report to him within 30 days on what new technology is needed to tighten safeguards against deepwater drilling spills.

With the government and BP running out of options, Salazar has invited other companies to bring their expertise to the table.

BP likewise sought ideas from some of its rivals and planned to use at least one of them Friday — applying chemicals underwater to break up the oil before it reaches the surface. That has never been attempted at such depths.

Animal rescue operations have ramped up, including the one at Fort Jackson, about 70 miles southeast of New Orleans. That rescue crew had its first patient Friday, a bird covered in thick, black oil. The bird, a young northern gannet found offshore, is normally white with a yellow head.

And volunteers have converged on the coast to offer help.

Valerie Gonsoulin, a 51-year-old kayaker from Lafayette who wore an "America's Wetlands" hat, said she hoped to help spread containment booms.

"I go out in the marshes three times a week. It's my peace and serenity," she said. "I'm horrified. I've been sitting here watching that NASA image grow, and it grows. I knew it would hit every place I fish and love."

Along a canal in St. Bernard Parish, Hal Cyprian tied string on a piece of chicken, tossed it into the water and quickly pulled out a half-dozen crabs. He planned to cook them up as a Mother's Day treat for his wife.

"If the oil comes, then the crabs are through," he said. "That's why I come today."

President Obama, who recently announced plans to open large swaths of the U.S. coast to offshore oil exploration, ordered Salazar to report within 30 days on what new technology is needed to tighten safeguards against spills from deepwater drilling.

"Let me be clear: I continue to believe that domestic oil production is an important part of our overall strategy for energy security," Obama said. "But I've always said that it must be done responsibly for the safety of our workers and our environment."

The oil slick could become the nation's worst environmental disaster in decades, threatening to eclipse even the Exxon Valdez in scope.

Government officials said the well 40 miles offshore is spewing an estimated 5,000 barrels, or 200,000 gallons, a day into the gulf.

At that rate, the spill could eclipse the worst oil spill in U.S. history — the 11 million gallons that leaked from the grounded tanker Exxon Valdez in Alaska's Prince William Sound in 1989 — in the three months it could take to drill a relief well and plug the gushing well 5,000 feet underwater on the sea floor.

The leak imperils hundreds of species of fish, birds and other wildlife along the Gulf Coast, one of the world's richest seafood grounds, teeming with shrimp, oysters and other marine life.

"It is of grave concern," said David Kennedy of the National Oceanic and Atmospheric Administration. "I am frightened. This is a very, very big thing. And the efforts that are going to be required to do anything about it, especially if it continues on, are just mind-boggling."

© 2010 The Associated Press



To: Wharf Rat who wrote (190666)5/1/2010 3:21:29 AM
From: stockman_scott  Respond to of 361731
 
U.S. report found failure of offshore rigs' blowout preventers common

kansascity.com



To: Wharf Rat who wrote (190666)5/1/2010 12:56:30 PM
From: Broken_Clock  Respond to of 361731
 
Financial "reform" on the cheap. -g-
Seriously, "Countrywide" Dodd is leading financial reform? lol!

===

Why Do Senators Corker And Dodd Really Think We Need Big Banks?
with 26 comments

By Simon Johnson

On Friday, Senator Bob Corker (R, TN) took to the Senate floor to rebut critics of big banks. His language was not entirely senatorial: “I hope we’ll all come to our senses”, while listing the reasons we need big banks. And Senator Chris Dodd (D, CT) rose to agree that (in Corker’s words) reducing the size of our largest banks would be “cutting our nose off to spite our face” and that by taking on Wall Street, “we may be taking on the heartland.”

Unfortunately, all of their arguments in favor of our largest banks remaining at or near (or above) their current scale are completely at odds with the facts (e.g., as documented in our book, 13 Bankers).

The senators led with the idea that our nonfinancial sector needs huge, complex, global banks in order to remain competitive internationally. But this is completely untrue – in fact, Senator Dodd conceded as much to Ezra Klein recently when he said that he had heard the arguments of 13 Bankers against big banks also from “CEOs” (presumably of nonfinancial companies).

Even the biggest nonfinancial companies do not, under any circumstances, want to buy all their financial services from one megabank. They like to spread the business around, to use different banks that are good at different things in different places – in part to prevent any one bank from having a hold over them. Playing your suppliers off against each other to some degree is always a good idea.

Senator Corker also argued that entrepreneurs need today’s megabanks. Please find me a single entrepreneur who would agree with that statement – keeping in mind that I work with a lot of entrepreneurs in my day job (professor of entrepreneurship, among other things, at MIT, with a particular focus on entrepreneurs working globally). Of course entrepreneurs need access to capital and they need investors who are willing to back risk-takers in the nonfinancial sector, but if you can find a link between that productive activity and what Goldman Sachs is accused of doing by the SEC, write it up.

Senator Corker also stressed that businesses need to be able to hedge risks, e.g., regarding their input prices. This is a fair point but it is completely unrelated to how large our biggest banks should be. This is instead an argument for allowing the existence of derivatives market – like Gary Gensler of the CFTC, we take the view that requiring all derivatives to be traded on exchanges would not only reduce system risk, it would also be completely consistent with all legitimate and productive derivative-related transactions, and it would reduce the size of the largest broker-dealers (who currently have a great deal of market power when so much of derivatives trading is over-the-counter).

Both Senator Corker and Senator Dodd stressed that the biggest US banks are not the biggest banks in the world. But what does that have to do with anything? The largest European banks are again in seriously trouble this weekend – because they piled on exposure to the eurozone periphery in an irresponsible and frankly dumb manner. The largest Chinese banks are a complete mess in terms of governance and ability to make a sensible loan. And the biggest Canadian banks are underwritten by government guarantees of a nature and scale that make Fannie Mae and Freddie Mac look respectable during the go-go years (which they were not) – we have taken these points up at the highest levels within the Bank of Canada and they get this. So why would anyone think that any of these global banks is an appealing model for the United States to follow?

Senator Corker is opposed to any “arbitrary limit” on bank size. Senator Dodd’s support for Senator Corker on Friday is striking and surprising because, at least nominally, the Dodd financial reform bill as it came out of committee does cap bank size – see Section 620, “Concentration Limits on Large Financial Firms”:

“Subject to recommendations from the Financial Stability Oversight Council, a financial company may not merge or consolidate with, acquire all or substantially all of the assets of, or otherwise acquire control of, another company, if the total consolidated liabilities of the acquiring financial company upon consummation of the transaction would exceed 10 percent of the aggregate consolidated liabilities of all financial companies at the end of the calendar year preceding the transaction. The Council recommendations will be included in a study of the extent to which the concentration limit under section 620 would affect financial stability, moral hazard in the financial system, the efficiency and competitiveness of United States financial firms and financial markets, and the cost and availability of credit and other financial services to households and businesses in the United States. The intent is to have the Council determine how to effectively implement the concentration limit, and not whether to do so. The Council will have six months to write the study, and the Board of Governors of the Federal Reserve will have nine months in which to issue regulations that reflect the recommendations and modifications of the Council.

This is obviously very weak, in part because at best it only applies to acquisitions. This is a significant watering down of the Second Volcker Rule, which read in January:

“2. Limit the Size- The President also announced a new proposal to limit the consolidation of our financial sector. The President’s proposal will place broader limits on the excessive growth of the market share of liabilities at the largest financial firms, to supplement existing caps on the market share of deposits.”

Unfortunately, for whatever reason, the White House appears to have completely folded on the substance. Larry Summers now claims (inaccurately) “most observers” think breaking up big banks would be a bad idea because,

“Most observers who study this believe that to try to break banks up into a lot of little pieces would hurt our ability to serve large companies, and hurt the competitiveness of the United States.”

“But that’s not the important issue, they believe that it would actually make us less stable. Because the individual banks would be less diversified, and therefore at greater risk of failing because they wouldn’t have profits in one area to turn to when a different area got in trouble.

“And most observers believe that dealing with the simultaneous failure of many small institutions would actually generate more need for bailouts and reliance on taxpayers than the current economic environment.”

The Brown-Kaufman SAFE banking act would cap banks, as a practical matter, between about $100 billion and $450 billion in total assets – depending on their exact risk profile. What exactly is the diversification that you can do at $2 trillion that cannot be done at $100 billion?

The Corker-Dodd-Summers view follows closely the line from Hal Scott, a Harvard law school professor (and a director of Lazard) who strongly favors the big banks – for example, he testified against any form of the Volcker Rules when we both appeared before the Senate Banking Committee in February. Scott runs the Committee on Capital Markets Regulation, which recently stated,

“As with the Volcker Rules, the Committee does not believe that size limitations will reduce systemic risk. An institution does not pose systemic risk because of its absolute size, but rather because of its debt, its derivatives positions, and the scope and complexity of its other financial relationships. Because the problem is not size but interconnectedness, reform should focus on reducing the interconnections so that firms can fail safely. Furthermore, even if size were the right issue, the Senate Banking bill would not require any existing bank to shrink; it would only prevent further growth by consolidation or acquisition. Assuming size is the source of systemic risk, we should presumably be concerned about it whether it is the result of acquisition or organic growth.”

Of course the issue is about system risk. Risk is about many things, including the ability of banks (at any size) to circumvent regulation. But risk is also partly a function of bank size – smaller banks are not too big to fail and this affects the incentives of management and directors (as well as traders, depending on the compensation system).

And if you don’t think our largest banks have completely captured the hearts and minds of their regulators – both prior to September 2008 and perhaps even more subsequently – read 13 Bankers and tell us where we got that part of the story wrong.

If you still really don’t want to cap bank size, take a long hard look at the UK, where RBS had a balance sheet of roughly 1.5 times the UK economy when it failed. When it failed in fall 2008, Citigroup had total liabilities around $2.5 trillion. Would our problems now be better or worse if Citi had had $5 trillion in assets – or if it had been the size of RBS relative to the UK economy, i.e., roughly $20 trillion?

As for why exactly Senators Corker and Dodd really support big banks, it seems increasingly likely that this is all about campaign contributions.

Written by Simon Johnson
May 1, 2010 at 7:48 am
baselinescenario.com