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Politics : Stockman Scott's Political Debate Porch -- Ignore unavailable to you. Want to Upgrade?

To: cirrus who wrote (81308)	6/14/2010 6:58:23 PM
From: stockman_scott	Respond to of 89467

Chevron Tells Feds, “We’re Not BP ” online.wsj.com June 14, 2010 Chevron Corp. has come out swinging in its fight to continue drilling in the deep waters of the Gulf of Mexico, arguing that not all oil firms should be tarred with the brush of BP PLC's Deepwater Horizon disaster. In an interview with The Wall Street Journal, Chevron chairman and CEO John Watson said he accepts the need for tighter drilling regulations in the wake of the spill, which since April has fouled the waters and coastline of the Gulf. But Mr. Watson, 52, called unnecessary the six-month moratorium on deep-water drilling imposed by the Obama administration. The second-biggest U.S. oil firm by market capitalization after Exxon Mobil Corp., San Ramon, Calif.-based Chevron owns more Gulf of Mexico drilling leases than any other company and is the third-biggest oil producer there, after BP and Royal Dutch Shell PLC. It was considered a growth area for Chevron. Now, access to deep water may be in jeopardy. In addition to the six-month moratorium on drilling in more than 500 feet of water in the Gulf, President Obama has put on hold plans to expand drilling off the coast of Alaska. Norway, too, has put a temporary halt to new deep-water exploration. While Mr. Watson wouldn't directly criticize BP, he said that even before the current disaster, Chevron had in place policies and procedures that might have avoided the oil-well blowout that caused the spill. "This incident was preventable," Mr. Watson said. In the early days of the Gulf disaster, the oil industry mostly presented a united front. But as the crisis has dragged on, companies have begun to distance themselves from BP. Mr. Watson and the CEOs of several other big oil companies are almost certain to try to draw distinctions when they face questions from a congressional panel on Tuesday. Chevron shares have fallen nearly 10% since the Deepwater Horizon drilling rig caught fire April 20; though that drop is small compared with the drop in BP's market valuation has declined 46%. Mr. Watson said he understood the decision to halt drilling in the immediate aftermath of the disaster, which he called a "humbling experience for the industry." But he said the industry's overall safety record is strong, and that both industry and government panels have drawn up new safety recommendations in light of the spill. "We favor rapid adoption of those recommendations," Mr. Watson said. Environmental groups, however, oppose a quick return to drilling. David Goldston, director of government affairs for the Natural Resources Defense Council, said drilling shouldn't resume until a presidential commission appointed to investigate the disaster completes its work. "We don't really understand a lot about what happened here," Mr. Goldston said. "We don't really understand how endemic the problems are, and that all needs to be sorted out before drilling is resumed." BP has been criticized by some industry experts for using a risky well design that could have made it easier for natural gas to get into the well and eventually cause the explosion. Chevron uses a safer well design, said Gary Luquette, who heads North American exploration and production for Chevron. "I think that if we'd have had best practices employed on this well, we wouldn't have this situation that we have today," Mr. Luquette said. BP has said its well design wasn't unusual and that its engineers evaluate many different factors in deciding how to drill. BP spokesman David Nicholas said, "there are detailed investigations ongoing and these will determine the causes of the tragic Deepwater Horizon disaster." Many Gulf coast residents and politicians have also accused BP of being unprepared for the spill. Chevron has a "robust" system in place to deal with major spills, Mr. Watson and Mr. Luquette said, but they acknowledged that it, too, would have had difficulty dealing with a disaster of this magnitude. Congress and President Obama have criticized BP for seeking to shift blame for the Deepwater Horizon disaster onto contractors. Mr. Watson pledged that Chevron wouldn't do the same in a similar situation. "These are our wells," he said. The Deepwater Horizon disaster has brought attention to industry's safety record onshore, too. In recent weeks, there have been several accidents at oil and gas sites on shore, including natural-gas wells that blew out in Pennsylvania and West Virginia and two deadly pipeline explosions in Texas. A recent incident involved a Chevron pipeline in Utah that leaked what officials estimated was hundreds of barrels of crude oil into a Salt Lake City creek and threatened to contaminate the Great Salt Lake. Chevron said Sunday that the leak from a pipeline that ruptured two nights earlier has stopped, but clean-up operations continue. "The leak has been stopped," Chevron spokesman Sean Comey said in an email." We're planning to excavate the area of the pipeline were we believe the leak began." The company said it "takes full responsibility for the incident."

To: cirrus who wrote (81308)	6/15/2010 1:52:31 AM
From: stockman_scott	Respond to of 89467

The Larger Struggle _______________________________________________________________ By DAVID BROOKS Op-Ed Columnist The New York Times June 14, 2010 These days we are transfixed by the struggle between BP and the U.S. government. This is a familiar conflict — between a multinational company trying to make a profit and the government trying to regulate the company and hold it accountable. But this conflict is really a family squabble. It takes place amid a much larger conflict, and in this larger conflict both BP and the U.S. government are on the same team. The larger conflict began with the end of the cold war. That ideological dispute settled the argument over whether capitalism was the best economic system. But it did not settle the argument over whether democratic capitalism was the best political-social-economic system. Instead, it left the world divided into two general camps. On the one side are those who believe in democratic capitalism — ranging from the United States to Denmark to Japan. People in this camp generally believe that businesses are there to create wealth and raise living standards while governments are there to regulate when necessary and enforce a level playing field. Both government officials like President Obama and the private sector workers like the BP executives fall neatly into this camp. On the other side are those that reject democratic capitalism, believing it leads to chaos, bubbles, exploitations and crashes. Instead, they embrace state capitalism. People in this camp run Russia, China, Saudi Arabia, Iran, Venezuela and many other countries. Many scholars have begun to analyze state capitalism. One of the clearest and most comprehensive treatments is “The End of the Free Market” by Ian Bremmer. Bremmer points out that under state capitalism, authoritarian governments use markets “to create wealth that can be directed as political officials see fit.” The ultimate motive, he continues, “is not economic (maximizing growth) but political (maximizing the state’s power and the leadership’s chances of survival).” Under state capitalism, market enterprises exist to earn money to finance the ruling class. The contrast is clearest in the energy sector. In the democratic capitalist world we have oil companies, like Exxon Mobil, BP and Royal Dutch Shell, that make money for shareholders. In the state capitalist world there are government-run enterprises like Gazprom, Petrobras, Saudi Aramco, Petronas, Petróleos de Venezuela, China National Petroleum Corporation and the National Iranian Oil Company. These companies create wealth for the political cliques, and they, in turn, have the power of the state behind them. With this advantage, state energy companies have been absolutely crushing the private-sector energy companies. In America, we use the phrase Big Oil to describe Exxon Mobil, BP, Royal Dutch Shell and others. But that just shows how parochial we are. In fact, none of these private companies make it on a list of the world’s top 13 energy companies. A generation ago, the biggest multinationals produced well more than half of the world’s oil and gas. But now, according to Bremmer, they produce just 10 percent of the world’s oil and gas and hold only about 3 percent of the world’s reserves. The rivalry between democratic capitalism and state capitalism is not like the rivalry between capitalism and communism. It is an interdependent rivalry. State capitalist enterprises invest heavily in democratic capitalist enterprises (but they tend not to invest in each other). Both sides rely on each other in interlocking trade networks. Nonetheless, there is rivalry. There is a rivalry over prestige. What system works better to produce security and growth? What system should emerging and struggling democratic nations aim for? There is also rivalry over what rules should govern the world order. Should countries like Russia be able to withhold gas from Western Europe to make a political point? Should governments be able to tilt the playing field to benefit well-connected national champions? Should authoritarian governments like Iran be allowed to nuclearize? We in the democratic world tend to assume state capitalism can’t prosper forever. Innovative companies can’t thrive unless there’s also a free exchange of ideas. A high-tech economy requires more creative destruction than an authoritarian government can tolerate. Cronyism will inevitably undermine efficiency. That’s all true. But state capitalism may be the only viable system in low-trust societies, in places where decentralized power devolves into gangsterism. Moreover, democratic regimes have shown their vulnerabilities of late: a tendency to make unaffordable promises to the elderly and other politically powerful groups; a tendency toward polarization, which immobilizes governments even in the face of devastating problems. We in the democratic world have no right to be sanguine. State capitalism taps into deep nationalist passions and offers psychic security for people who detest the hurly-burly of modern capitalism. So I hope that as they squabble, Obama and BP keep at least one eye on the larger picture. We need healthy private energy companies. We also need to gradually move away from oil and gas — the products that have financed the rise of aggressive state capitalism.

To: cirrus who wrote (81308)	6/16/2010 5:14:35 AM
From: stockman_scott	Respond to of 89467

An excellent interview about the ecological impacts of the BP Gulf oil spill: e360.yale.edu

To: cirrus who wrote (81308)	6/16/2010 12:38:58 PM
From: stockman_scott	Respond to of 89467

Oil and gas industry insider Matt Simmons thinks BP will have to file for Chapter 11 imminently, but the Texas-based investment bank he founded has distanced itself from the oil guru and taken a starkly different position... money.cnn.com

To: cirrus who wrote (81308)	6/16/2010 7:43:14 PM
From: stockman_scott	Respond to of 89467

How Much Does a Gallon of Gas Cost? A whole lot more than you think. services.newsweek.com By Ezra Klein \| NEWSWEEK From the magazine issue dated Jun 21, 2010 It seems like an easy question. You might ask if I mean premium or regular, and where in the country I'm buying. Beyond that, though, the price is displayed in giant numbers on most thoroughfares. It's such common knowledge that we ask politicians to rattle it off to show that they retain some awareness of the world they claim to represent. But as the sludge choking the Gulf of Mexico shows, nothing is easy when it comes to oil—especially the price. Most of us would call the BP spill a tragedy. Ask an economist what it is, however, and you'll hear a different word: "externality." An externality is a cost that's not paid by the people using the good that creates the cost. The spill is going to cost fishermen, it's going to cost the ecosystem, and it's going to cost the area's tourism industry. But that cost won't be paid by the people who wanted that oil for their cars. It'll fall on taxpayers, on Gulf Coast residents who need a new job, on the poisoned wildlife. That means that the gasoline you're buying at the pump is—stick with me here—too cheap. The price you pay is less than the product's true cost. And it's not just catastrophic spills and dramatic disruptions in the Middle East that add to the price. Gasoline has so many hidden costs that there's a cottage industry devoted to tallying them up. At least the ones that can be tallied up. Topping that list is air pollution, which we breathe whether or not we drive. Then there's climate change, which is difficult to give a price tag because it involves calculations like how much your great-grandchild's climate is worth; traffic congestion and accidents, which harm drivers and nondrivers alike; and the cost of basing our transportation economy atop a resource that undergoes wild price swings. Some of the best work on this subject has been done by Ian Parry, a senior fellow at Resources for the Future. His calculations suggest that adding all the quantifiable costs into the price of oil would increase the cost of each gallon by about $1.23. If you're very worried about global warming, kick that up to $1.88. According to the U.S. Energy Information Administration, the average price of a gallon of gas is $2.72 right now. If Parry is right, it should be as high as $4.60. That's almost certainly an underestimation. There are plenty of costs we don't know how to price. How much of our military policy is dictated by our need for secure oil resources? How much instability is created by our need to treat oil-producing monarchies with kid gloves? How much is the environment worth in a poor country that prefers oil investment to air quality? Or take the gulf spill. What's the economic value of a pelican? The nation is horrified by the photos of oil-soaked wildlife, but how much is not being horrified worth? And what's it worth to not have to see the problem at all? One of the reasons we drill wells far offshore and in countries with poor safety and environmental records is that we don't want oil companies mucking about in shallow waters near us. But as Maureen Cropper, an environmental economist at the University of Maryland notes, importing oil means exporting the damages associated with drilling for oil. When trying to put a price on those damages, do they vary country by country? For all the complexity of calculating the true cost of oil, however, it's unclear that it matters as much as some might think. I assumed that a world in which gasoline's total costs were present at the pump would be a world in which our consumption was radically different. But almost all of the experts I spoke to said that wasn't true. If an energy source as dirty as coal had to pay its true cost, we'd likely stop using it. But, disasters aside, that's not the case with oil. Years of regulation and innovation have made us better at finding, extracting, refining, and using oil. Oil might be cheap compared to its true costs, but adding those costs in wouldn't make it unaffordable. That gets to the bigger issue, which is that energy sources are only cheap or expensive relative to one another. And the anchor beneath our reliance on oil is that, at this point, there's nothing to replace it. "We're pretty much stuck with our dependency on oil," says Parry. "People need to drive and get to work." Increasing the cost of oil could make other energy sources cheaper by comparison and, if the mechanism was a tax, fund development of alternatives. But it is the speed with which we can discover and refine those alternatives—more than the price of oil—that will decide our energy future. The question, in other words, isn't just what a gallon of gas costs. It's what a gallon of anything that replaces gas costs. Maybe that's what we should start asking politicians.

To: cirrus who wrote (81308)	6/16/2010 10:54:30 PM
From: stockman_scott	Read Replies (1) \| Respond to of 89467

More than 90 banks miss May TARP Payments portfolio.com

To: cirrus who wrote (81308)	6/17/2010 12:03:56 AM
From: stockman_scott	Respond to of 89467

Oversight Hearing on “Ocean Science and Data Limits in a Time of Crisis: Do NOAA and the Fish and Wildlife Service (FWS) have the Resources to Respond?" whoi.edu

To: cirrus who wrote (81308)	6/17/2010 1:10:43 AM
From: stockman_scott	Read Replies (1) \| Respond to of 89467

<...Oil industry experts say it remains to be seen whether any amount of money can fully compensate victims and restore the Gulf Coast to conditions that prevailed before the massive spill. “We seem to be a bit intoxicated by this idea that BP will pay for everything,” said Frank Glaviano, former vice president of Shell Exploration and Production. “Maybe they will, and maybe they won't. Even if they do we're doing so much destruction to the land, the environment and the culture and the jobs and the economy here, that money won't be able to repair all of this.” BP has deep financial resources to draw from. The company reported profits of $16.8 billion last year on revenue of nearly $250 billion. By suspending its $2.6 billion quarterly dividend, the company frees up additional cash flow for the escrow account, which will be funded gradually over the next several quarters. BP also will significantly reduce its investment program and sell $10 billion of assets to help defray the costs of the escrow fund. BP will pay $3 billion into the fund in the third quarter of this year and another $2 billion in the fourth quarter. That will be followed by quarterly payments of $1.25 billion until the full $20 billion has been paid. The company said the fund will be backed by the assets of its U.S. subsidiary...>> msnbc.msn.com

To: cirrus who wrote (81308)	6/17/2010 4:22:06 PM
From: stockman_scott	Respond to of 89467

Relief Well Ahead Of Schedule In Gulf wkrg.com June 17 - A rig drilling a relief well meant to stanch a gushing flow of oil into the Gulf of Mexico is ahead of schedule and could reach its target over the next three to four weeks. That's according to Coast Guard Adm. Thad Allen. He said Thursday that a drill from a rig near the ruptured well is nearly 10,000 feet below the seafloor. He says it should come within 10 feet of the existing well within the next few weeks. Afterward, the drill bit will bore down about 1,000 feet and then intersect with the damaged well farther underground. Allen says the final push of drilling is the most difficult. The drilling was originally slated for completion in mid-August. Once the drill reaches its target, BP will pump heavy mud down the relief well in an attempt to stop the flow.