Sunday, June 27, 2010

Progressive Regression II | Financial Regulation Crisis


- By: Larry Walker, Jr. -

Government Regulation vs. Self-Regulation

Once again, the Progressive Obama Administration’s magical solution, for all problems American, is more government regulation. But is government regulation really any better than self-regulation? Progressive government regulation is even worse. (A Progressive regulator is pictured to the left.)

I contend that banks and financial services companies have a direct interest in the safe, efficient, and profitable business of making loans, investments, and protecting assets. Would it benefit a bank to carelessly make loans to unqualified borrowers, taking the risk of never being repaid? No. Would it benefit a financial services company to recommend investments in financial instruments that continually lose money? No. Every private sector company has a direct interest in self-regulation.

Surely there will be incidents of fraud, theft, and abuse, but when such incidents occur, private companies will pay stiff fines under applicable Federal and State laws. When it is discovered that laws have been violated, corporate employees, and executives often face stiff fines and/or prison time. But what happens when government regulators screw up?

On August 9, 2007, former SEC Commissioner, Roel C. Campos officially announced his resignation.

On October 2, 2007, former SEC Commissioner, Annette L. Nazareth, a nine-year SEC veteran, officially announced her resignation.

On August 13, 2008, Florida’s top financial regulator, Don B. Saxon resigned before he could be fired. He was blamed for lax enforcement of state laws which allowed convicted felons to be licensed as mortgage brokers, including individuals who took part in mortgage fraud.

On January 26, 2009, Timothy Geithner, former President of the Federal Reserve Bank of New York, was sworn in as Secretary of the Treasury.

On May 7, 2009, Stephen Friedman, the former chairman of the Federal Reserve Bank of New York, abruptly resigned; days after questions arose about his ties to Goldman Sachs.

When regulators make costly mistakes most of them simply resign, disappearing into the shadows with taxpayer funded golden-parachutes. However, in some cases (Geithner) they get promoted. So there is no accountability when it comes to government regulation.

The case against more government regulation:

Raymond Richmond, in his latest article, Geithner and Summers Make Their Economic Mistakes Transparent, reminds us that the last major governmental intrusion into the private financial sector is what created our current recession. Instead of learning the valuable lesson that ‘government regulation equals no regulation’, the Progressive Obama Administration’s solution, like a junkie in relapse, is more of the same. “This time it will be different.”

“Here at home, we are on the verge of completing the most sweeping financial reform in more than 70 years.”

They failed to mention that the last major intervention in bank regulation caused this recession. Beginning in 1977 with the Community Reinvestment Act, every administration pressured the banks to make loans on easy terms, turning their eyes away from the housing bubble they were causing and the dangerous lack of collateral backing most mortgages. Government created two Government Sponsored Enterprises, Fannie Mae and Freddie Mac to create a secondary market for such ill-fated loans. Wall Street got into the act and created derivatives which brokers sold all over the world. When the housing bubble burst, the U.S. and Europe’s largest banks and insurance companies faced bankruptcy, and stock markets round the world collapsed. The U.S. does not need new bank regulations; it needs to keep the politicians from making decisions that should be left to the shareholders of private firms who have the major stake in the firm’s success. This is the lesson that should be learned around the world.

The past year and a half has seen unemployment grow in the U.S. to double digits, factories disappear, witnessed a worsening in the distribution of income, saw soaring government budget deficits, saw the U.S. dollar, the world’s standard, lose more than a third of its value in foreign exchange.

Prospects have never been worse. And all of these are the product of government intervention in the private economy. This is the lesson the G-20 ought to learn, government intervention in the economy usually does more harm than good. That would include intervention in the economy by the G-20, should it become an institution that makes and enforces decisions.

Michael Pomerleano in a Financial Times article entitled, The Failure of Financial Regulation, explains how government regulation failed. This is more proof that all of the time, effort, and money spent on government financial regulation has been for naught.

The regulation and supervision of the banking system rest on three pillars: disclosure to ensure market discipline, adequate capital and effective supervision.

Did the regulatory philosophy governing our financial markets withstand the test of the recent crisis? My conclusion is that all three regulatory pillars failed.

Was adequate information available before the crisis erupted? The information on the subprime exposure was out there for anyone who had the determination to collect and [analyze] the (sometimes patchy) data from quarterly 10Q reports filed with the Securities and Exchange Commission for US banks, supplemented by rating agencies’ and investment banks’ research reports.

A final question we need to ask is how effective was the supervisory apparatus in this crisis?

It is reasonable therefore to infer that the regulatory agencies would have taken notice of those estimates as early as the autumn of 2007. For a long time the regulatory and supervisory apparatus was silent.

We need to question why didn’t any regulator add up the potential size of the losses on the sub prime exposure, based on publicly available information, and verify them with on-site examinations?

Why wasn’t there a far more forceful response from the supervisory agencies? Equally, we should have expected credit rating agencies, investment research and investors to respond more forcefully. In this context, one can only express puzzlement and disappointment at the tepid regulatory reaction. Only after the monumental policy mistake of allowing Lehman Brothers to fail, did the authorities grasp the full significance of the problems and we witnessed a systematic effort to manage and contain the crisis.

Finally, Glenn Hubbard in his Harvard Business Review Article, Financial Regulation: It's Not About More, reminds us that over-regulation by the government can do more harm than good.

…the economic concern that over-regulation of financial instruments and institutions in the name of safety can lead to aggregate harm — most obviously by raising the cost of funds to household and business borrowers. The key is to design regulation to insure proper pricing of risk and information about risk — such an approach (not that really taken in the bill winding its way through Congress) offers the right balance between protection of the individual and society.

The end result of the Progressive Obama Administration’s magical plan of more government regulation will lead directly to higher costs for American consumers and businesses. Businesses will pass their costs on to customers. Consumers will be hurt. Those who get hurt the most will be those on the lowest end of the economic food chain. Thus, the end result of Barack Obama’s cowardly, status quo, regressive, regulation policies will be to harm those that he claims to be helping.

Smaller government and less governmental regulation will lead to lower taxes, lower consumer prices, greater accountability, more freedom, and more opportunities for wealth creation. What exactly have we gotten in return for all of our money that has been squandered on regulating the financial industry? What will we get with Obama's 'more of the same' approach?

Saturday, June 26, 2010

Progressive Regression | Gulf Oil Disaster


Government Regulation vs. Self-Regulation

- By: Larry Walker, Jr. -

The Progressive Obama Administration’s magical solution for all problems American is more government regulation. But is government regulation really better than self-regulation?

Companies like BP have a direct interest in the safe, efficient drilling and harvesting of oil. Would it benefit a private oil company like BP to carelessly blow up its own oil well and lose millions of gallons of the precious black gold into the sea? No. Did it benefit Exxon to crash the Valdez and leak millions of gallons of oil off the coast of Alaska? No. So every company has a direct interest in self-regulation.

Sure, accidents will happen. And when accidents happen, private companies will pay the price under applicable Federal and State laws. Many private sector executives have even found themselves behind bars when laws were violated. But what happens when government regulators screw up?

On May 27, 2010, Elizabeth Birnbaum, the former head of the Minerals Management Service (MMS), which is charged with monitoring and regulating offshore drilling, simply resigned.

On May 17, 2010, Chris Oynes, the associate director of Offshore Energy and Minerals Management at the Minerals Management Service simply announced that he was moving up the date of his retirement to May 31, 2010.

On May 11, 2010, Frank Patton, an unlicensed Minerals Management Service (MMS) engineer, who approved the plans for the Deepwater Horizon's blowout preventer just four days before the blowout, admitted that he did so without ever seeing the blowout preventer plans. He further admitted that he has never seen any such documents on the more than 100 approvals his office issues each year. MMS regulation 250.416(e) requires would-be drillers to submit proof that the blowout preventer they are using to shut off the well will have enough power to shear a drill pipe in case of an emergency, but Patton was apparently unaware of this particular regulation. As far as we know, Patton will keep his job, and will probably get a promotion.

In September of 2006, Interior Department Inspector General, Earl Devaney told a House panel that the Minerals Management Service failed to include price triggers in leases signed with oil companies in 1998 and 1999. The Government Accountability Office estimated that the total cost to taxpayers during the two year period was over $10 billion, yet government officials once again were able to pass the buck.

The point is that U.S. taxpayers have been paying billions of dollars (that we don't have) annually, for more and more government regulation, yet when it comes time to hold the government accountable we find that they are not.

Barack Obama, and his Progressive minion’s solution to every problem American is more government regulation. I see this cowardly pat answer as just another way of passing the buck. Should we feel confident when Obama, who’s on his way to going down as the worst president in American history, boldly declares that ‘the buck stops with him’? Obama, like his predecessor’s, will be long gone when it is discovered just how badly he screwed up.

In reality, and in general, all that government regulation does is to increase taxes in many forms (income, excise, fees, fines), which in turn makes products and services more expensive for all American consumers; and it creates a layer of unaccountable bureaucrats, who ultimately make us all less safe, secure and prosperous.

Progressive Obama worshippers say that we need more government regulation. I say we need less. It would benefit all Americans to begin dismantling our huge governmental bureaucracy. Increasing the size and scope of government regulation has not historically benefited a single soul, and it never will.

Less Government regulation leads to lower taxes, lower consumer prices, greater accountability, more freedom, and more wealth creation opportunities. What exactly did we get for all the money spent on regulating oil drilling in the Gulf of Mexico?

Wednesday, June 23, 2010

Patton's Folly: Is MMS Indictable for Gulf Disaster?

Frank Patton - the unlicensed MMS engineer who approved Deepwater Horizon Plans on Apr 16, 2010

By: Larry Walker, Jr.

Frank Patton (left), the unlicensed Minerals Management Service (MMS) engineer, who approved the plans for the Deepwater Horizon's blowout preventer, actually never saw the plans. Yet, Patton issued his approval on April 16, 2010, just four days before the blowout.

During the oil rig explosion hearings held in mid-May, Patton admitted that he has never asked for, nor reviewed, blowout preventer plans on any of more than 100 applications his office approves each year. In fact, Patton stated that he was never instructed that he needed to review such plans.

When asked whether this is standard MMS policy, or just Frank Patton's policy, Mr. Patton said, "I'm not sure."

What? You're not sure?

It's bad enough that Patton is not a licensed Professional Engineer (PE). (See An Unlicensed MMS Engineer and The Gulf Disaster). But his not knowing why he would need to ask to see the actual blowout preventer plans, before he approves them, is just plain ignorant. Without even looking at the plans, Patton has perhaps approved more than 100 blowout preventers each year. What happened to due diligence? What happened to common sense?

Has the Federal Government gotten so big that one hand doesn't know what the other is doing? It sure looks that way. Why are Federal employees exempted from being required to hold PE licenses? There's really no excuse.

It's time for the Federal government to stop placing all the blame for this disaster on BP, to man-up, and to take responsibility for its own failures. This message is for the House Oversight and Investigations Subcommittee. For God's sake, open up your eyes, and then start telling the truth for a change.

Following are some excerpts from the oil rig explosion hearings:

Under scrutiny from officials in his own agency, the local Minerals Management Service engineer who approved BP's application to drill under the Deepwater Horizon admitted that he approved the blowout preventer that failed to stop the Gulf of Mexico oil spill without assurances that its last-ditch mechanism would work on the drill pipe the company was using.

Jason Mathews, an MMS official who sits on the six-member joint Coast Guard and MMS investigative board, questioned Frank Patton, the agency's New Orleans District drilling engineer, about his approval of BP's drilling permit. Mathews noted that MMS regulation 250.416(e) requires would-be drillers to submit proof that the blowout preventer they are using to shut off the well will have enough power to shear a drill pipe in case of an emergency.

Those mechanisms on the 450-ton blowout preventer at the bottom of the seabed are called blind shear rams, a pair of high-pressure valves and blades that are supposed to slice through a gushing drill pipe and close off a well leak. But attempts to get those shear rams to operate on the well below the Deepwater Horizon have been unsuccessful since the April 20 disaster.

Patton testified he was not aware of any such requirement and never demands it from more than 100 applications his office reviews each year.

"I have never been told to look for this statement," Patton said. The BP application had "no information on blind shear rams' ability to shear the drill pipe used."

"If they didn't submit it, why did we approve it?" Mathews asked.

"That is one thing I don't look for in my approval process," Patton said. "I've never looked for that statement there."

"Is this just you, or is this MMS-wide? " Mathews persisted.

"I'm not sure," Patton said sheepishly.

Source: New Orleans Times-Picayune and An Unlicensed MMS Engineer and The Gulf Disaster

Obama's Jones-Act Massacre: Updated

Dutch Koseq Sweeping Arms vs. Obama's Jones-Act Disaster

Dutch Sweeping Arms vs. Obama's Jones Act Special

Koseq rigid sweeping arm systems - the best oil recovery equipment for offshore. The only tool for recovery of oil on open sea that works even under severe weather and sea conditions.


Updated: The Dutch offered to loan the U.S. four of these systems on day 3 of the Gulf disaster, but Obama said, "thanks but, no thanks." Now it's too late. How long did it take to waive the Jones-Act? Fifty some-odd days? How many lives, jobs, and businesses have been ruined unnecessarily? How much marine life could have been saved had Obama acted sooner? All Obama had to do was waive the Jones Act. All he needed to do was put America first.

Now he owns it. This is Obama's Jones-Act Massacre.

By the way, since we have several thousand active oil wells in the Gulf of Mexico, exactly how many modern day oil skimmers do we have, on standby, in the region?

I think we need a six-month moratorium on Obama's big mouth, and then some real change in 2010 and again in 2012.

Refer to: Illegal Dutch Oil Skimmers, the EPA and the Feckless POTUS and Keeping Up with the Jones Act Deroy Murdock

Sunday, June 20, 2010

An Unlicensed MMS Engineer and The Gulf Disaster

We Don't Need No Stinking License

By: Larry Walker, Jr.

Frank Patton is the name of the unlicensed Minerals Management Service (MMS) Engineer who approved the Deepwater Horizon Disaster. No, that's not his picture to the left. That's another matter for another day.

Funny, but I can't find Tony Hayward's name on any of those, smoking gun, internal emails being touted around by the House Oversight and Investigations Subcommittee, but I do see Frank Patton's name. Yep, on April 16, 2010 - 'Approved By' - Frank Patton.

From the trial (or hearing) the other day, you would think it was Congress' job to oversee and investigate private businesses. I somehow don't think that was part of the original plan. What I would like to see is a subcommittee investigating why federal workers are not required to maintain credentials equal to, or greater than, those whom they regulate.

Who's regulating the regulators? Unlicensed engineers are approving plans submitted by licensed engineers. When are we going to have a trial about stuff that really matters?

According to licensed Professional Engineer (PE), and whistleblower, Joe Carlson, the Minerals Management Service (MMS), just as other federal agencies, does not require their Engineers to be professionally licensed. Instead, federal agencies have invoked a special 'exemption' whereby unlicensed federal workers are above reproach. In other words, "We don't need no stinking license." You've got to be kidding me!

As one who holds two professional licenses (not in engineering), each with its own rigorous set of ongoing requirements, I have nothing but contempt for the federal government, the Congress, and our feckless POTUS, in this matter. There are no excuses. How is an unlicensed 'engineer' supposed to have the ability, training, and the professional integrity to review and approve plans designed by professionally licensed engineers?

What's worse is the fact that Frank Patton can't be blamed, fired, reprimanded or fined. Why not, you say? Because, remember, Frank Patton is not even licensed. But Congress can go around blaming Tony Hayward, who is also not licensed, and whose name is curiously not found on any of those damning internal emails. I do however see the names: Brian Morel, Mark Hafle, and Richard Miller. Perhaps they are licensed and should be brought up on charges by the appropriate engineering licensing board. And as for Frank Patton, I just wonder how many safety awards are hanging in his office?

Following are a few excerpts from Joe Carlson:

Frank Patton is the unlicensed MMS engineer who approved the BP drilling plan. During his May 11, 2010 testimony (see pages 252-314) to the Deepwater Horizon Joint Investigation, he admitted, (see pages 274-76), that he failed to ensure the BP Drilling Plan complied with federal regulation at 30 C.F.R. §250.416(e), because it did not contain the required information about the design and performance adequacy of the blow-out preventer. The New Orleans Times-Picayune, which live-blogged the hearing, described his testimony here.

If MMS required its engineers to be PE’s, then Mr. Patton would have been required to “blow whistles,” publicly if necessary, to prevent BP’s inadequate drilling plan from being approved. This could well has resulted in his being fired or otherwise discriminated against at MMS, given widespread, longstanding, MMS corruption. However, had MMS required Mr. Patton to be a PE, then anyone could now file a professional misconduct complaint against him with the Louisiana Professional Engineering Licensing Board, for his professional negligence/incompetence in approving a plan that failed to comply with federal regulation. If he lost his PE license as a result, then MMS could fire him. If he had been a PE, Frank Patton would have made sure the BP drilling plan contained the required information about its blowout preventer and perhaps this unprecedented disaster is averted....

The federal government has a duty to protect American health and safety, at work and elsewhere, including our environment. PE’s, by law, must “hold paramount the health, safety and welfare of the public in the performance of professional duty.” That federal agencies exempt their engineers from having the legal obligations of PE’s is nonsensical and a contributing cause to the disaster the Gulf and many other accidents and disasters, such as the recent Upper Big Branch mine disaster which killed 29 in West Virginia.

Here is a formula we can all live with:

Federal PE licensure + reformed federal whistleblower protection = much improved workplace and public health and safety in America.


Read More at the Source: Whistleblowers Protection Blog

Saturday, June 19, 2010

Keeping Up with the Jones Act | Deroy Murdock

National Review Online contributing editor Deroy Murdock is a nationally syndicated columnist with the Scripps Howard News Service. His column, “This Opinion Just In…,” frequently appears in the New York Post, Washington Times, and Orange County Register, among some 400 U.S. newspapers he reaches weekly.

This is a great article and I thought it to be worthy of referencing in full. Please read it and pass it on to your friends. It seems to me that Obama messed up, badly, and now it's too late for him to admit that by waiving the Jones Act, so now all the White House can do is keep their fingers crossed, and cover their asses. Well, that's just unacceptable. Heads are gonna roll, and by that, I mean heads in Washington, DC, not at BP.

Keeping Up with the Jones Act

An old, protectionist chestnut is devastating the Gulf Coast.

As a self-proclaimed “citizen of the world,” Pres. Barack Obama should have welcomed rather than spurned international assistance to prevent BP’s underwater oil geyser from wrecking the Gulf Coast. But spurn he did. Obama’s failure to waive the Jones Act still maintains a sea wall that blocks potentially helpful foreign ships from this tear-inducing mess.

The 1920 Jones Act requires that vessels operating in American waters be built, owned, and manned by Americans. Some U.S. ship owners love this protectionist measure. So do maritime labor unions. When it comes to confronting unions, Obama rarely crosses that line.

On April 20, the Deepwater Horizon exploded, killed eleven oil-rig workers, and began gushing perhaps 60,000 barrels of petroleum into the Gulf of Mexico daily. Three days later, the Dutch offered to sail to the rescue on ships bedecked with oil-skimming booms. They also had a plan for erecting protective sand barricades.

“The embassy got a nice letter from the administration that said, ‘Thanks, but no thanks,’” Dutch consul general Geert Visser told the Houston Chronicle’s Loren Steffy. “What’s wrong with accepting outside help?” Visser wondered. “If there’s a country that’s experienced with building dikes and managing water, it’s the Netherlands.”

Had those Dutch ships departed for the Gulf nearly two months ago, who knows how much oil they already would have absorbed and how many pelicans now would soar rather than soak in soapy water while wildlife experts clean their wings.

After initially refusing to name them, the State Department on May 5 declared that Canada, Croatia, France, Germany, Holland, Ireland, Mexico, Norway, Romania, South Korea, Spain, Sweden, the U.K., and the U.N. had offered skimmer boats and other assets and experts to prevent the oil from destroying dolphins, crabs, oysters, and this disaster’s other defenseless victims.

Alas, they were turned away.

“While there is no need right now that the U.S. cannot meet,” stated a State Department statement, “the U.S. Coast Guard is assessing these offers of assistance to see if there will be something which we will need in the near future.” Foreign Policy’s Josh Rogin translated this into plain English: “The current message to foreign governments is: Thanks but no thanks, we’ve got it covered.”

Had Obama instead waived the Jones Act via executive order — as did Pres. George W. Bush three days after Hurricane Katrina — that S.O.S. would have summoned a global armada of mercy. Who knows how many fishing, shrimping, and seafood-processing jobs this would have saved? Instead, thousands of Gulf Coast workers will endure a long march from dormant docks to bustling unemployment lines.

Even now, Obama could invite the world to send boats to clean the waters off Louisiana, Mississippi, Alabama, Florida, and (potentially) the Carolinas and points north, if this mass of oil (so far, roughly equal to 13 Exxon Valdez oil spills) seeps into the Loop Current, swerves around Key West, slips into the Gulf Stream, and slides up the Eastern Seaboard.“

If there is the need for any type of waiver, that would obviously be granted,” White House spokesman Robert Gibbs promised on June 10. “But, we’ve not had that problem thus far in the Gulf.

”Problem? What problem?

The Jones Act sometimes gets waived. As Fox News Channel’s Brian Wilson reported on June 11: “According to a news article in Tradewinds Magazine, a US Customs official ruled recently that the Jones Act does not apply to foreign owned vessels installing wind turbines off the coast of Delaware.”

Meanwhile, as Obama respected this old, protectionist chestnut and its Big Labor beneficiaries, he had lots on his mind. As a GOP Internet ad devastatingly details, between Day One and Day 58 of this catastrophe, Obama met with Bono, rocked out with Sir Paul McCartney, and played six rounds of golf, among many other diversions. Yet Obama did not speak directly with BP CEO Tony Hayward until June 16.

Watching Obama’s Tuesday night Oval Office address, BP brass must have been startled to hear the president say: “I will meet with the chairman of BP and inform him that he is to set aside whatever resources are required to compensate the workers and business owners who have been harmed as a result of his company’s recklessness.”

Should BP pay, and pay big? Yes.

Reckless? BP sure seems so.

But since when does the American president “inform” executives that they must devote billions to any cause, no matter how worthy? Isn’t this why Congress passes legislation and courts administer justice?

So, while a pro-labor trade barrier traps potentially helpful boats in overseas ports, due process withers under presidential diktat.

And the crude oil keeps on flowing.

Source: Deroy Murdock, National Review, June 18, 2010 12:00 A.M.

Thursday, June 17, 2010

BP Hearing | Time-Wasting Morons

Mostly Time-Wasting Morons

Oversight and Investigations?

by: Larry Walker, Jr.

Only one constructive question came out of the Congressional hearing with BP's CEO, Anthony Hayward. The question was, "Why aren't relief wells drilled at the same time as the main well, and would it make sense to drill one or two relief wells along with the main well in the future?" That was a valid and constructive question. It is, however, really a regulatory question and not so much the responsibility of BP. No other question posed during the rest of the hearing was even valid.

I can't believe that the present Congress is anywhere near the best that America has to offer. I am convinced more and more that we just need to clear the slate and start over. I am ashamed of the US Congress. Congress wants to act tough and bully people around, "who are you....who are you...who are you...," but it would be more effective if we had a Congress with brains, one which knew how to match wits with normal everyday human beings.

Hayward, was at one point compared to the captain of a ship that had crashed and killed 11 people. Come on! The fact is that Tony Hayward was not the captain of the Deep Water Horizon. Hayward was not aboard the rig when it blew, and probably had never set foot upon it during its short life. At worst, BP hired a contractor, who either cut corners, or followed the orders of some lower-level BP employee to cut corners. As a fellow CEO I have empathy for Mr. Hayward, and nothing but contempt for Congress.

For example, if a certain department head within a corporation cuts corners in order to improve his own personal bonus, and then covers up his dirty deed, which is later discovered and reported to the CEO, then is the CEO responsible for the corner cutting? No. The CEO is responsible for putting in place mechanisms for discovering the incident, and for taking action against the employee, but the CEO is not responsible for the infraction committed by one of his, or her employees. The employee who screwed up is responsible and should be held accountable.

Here's another example. If an accountant embezzles $800K from his employer, stealing money that was meant to pay payroll taxes, and hides the delinquent tax notices, then is the CEO of the company responsible for the crime committed by one of his employees? No. The CEO is responsible for trying to recover the money from the embezzler, and for making sure the back taxes are paid, but the CEO is not guilty of committing the crime.

If Congress was at all interested in getting to the bottom of the Deep Water Horizon accident, then it would wait for the conclusion of the investigation, and allow the proper authorities to take any necessary legal action. It's clear to me that this Congress has no interest at all in getting to the bottom of the incident, nothing to offer in solving the current leak, and no ability to oversee the future of offshore drilling. With the exception of that brilliant question mentioned above, the hearing was a total waste of time.

Are you shocked? Am I suddenly supposed to trust the same people who lied about health care reform and the stimulus program? Instead of wasting valuable time, this subcommittee ought to be investigating the regulatory failures of the MMS, the EPA and the US DOE. It looks like the House Oversight and Investigations Subcommittee could use not only a few lessons in oversight and investigations, but a complete replacement of its members.

Wednesday, June 16, 2010

Illegal Dutch Oil Skimmers, the EPA and the Feckless POTUS

Dutch Skimmer with Koseq Rigid Sweeping Arms vs. Obama's Jones Act Special

Compiled by: Larry Walker, Jr.

Two Dutch companies were on stand-by, on May 4, 2010, to help Americans tackle the oil slick in the Gulf of Mexico. The two companies use huge booms to sweep and suck the oil from the surface of the sea. The U.S. Environmental Protection Agency (EPA), however, has difficulties with the method they use.

So it seems that according to the EPA, it's acceptable to burn millions of gallons of raw crude, sending the harmful waste into the atmosphere, or to dump millions of gallons of toxic dispersant's into the waters, but it's not acceptable to actually collect 75-80% of the oil for recycling?

So has Obama stepped in to waive the Jones Act yet? Not quite, but he did sleep at a Holiday Inn Express on the Gulf Coast. Then, like any good community organizer, he excogitated the extortion of $20 billion from BP.

What do the Dutch have that the Americans don’t when it comes to tackling oil spills at sea?

“Skimmers,” answers Wierd Koops, chairman of the Dutch organization for combating oil spills, Spill Response Group Holland.

The Americans don’t have spill response vessels with skimmers because their environment regulations do not allow it. With the Dutch method seawater is sucked up with the oil by the skimmer. The oil is stored in the tanker and the superfluous water is pumped overboard. But the water does contain some oil residue, and that is too much according to US environment regulations.

US regulations contradictory

Wierd Koops thinks the US approach is nonsense, because otherwise you would have to store the surplus seawater in the tanks as well.

“We say no, you have to get as much oil as possible into the storage tanks and as little water as possible. So we pump the water, which contains drops of oil, back overboard.”

US regulations are contradictory, Mr Koops stresses. Pumping water back into the sea with oil residue is not allowed. But you are allowed to combat the spill with chemicals so that the oil dissolves in the seawater. In both cases, the dissolved oil is naturally broken down quite quickly. It is possible the Americans will opt for the Dutch method as the damage the oil spill could cause to the mud flats and salt marshes along the coast is much worse, warns Wetland expert Hans Revier.

“You have to make sure you clear up the oil at sea. As soon as the oil reaches the mud flats and salt marshes, it is too late. The only thing you can do then is dig it up. But then the solution is worse than the problem.”

Senator convinced

On May 4, 2010, a team of around eight men were on stand-by and four skimmers and extra material were ready to be loaded. The local senator is already convinced and is trying to talk the admiral who is coordinating the operation into accepting help from the Netherlands. The answer may be given today (May 4, 2010).

But nothing is certain. In 1989, a Dutch team and equipment had already been flown in to tackle the Exxon Valdez oil tanker disaster off the coast of Alaska. But in the end the US authorities sent them home.

Source: Radio Netherlands


On day 58, I am just wondering exactly which environment the EPA is trying to protect?


Saturday, June 12, 2010

Obama's Conniption

Click to Enlarge

Time for Obama to Go

by: Larry Walker

Why are so many people trying to tell Barack Obama what to do? And why does he keep adapting his leadership stance toward what talking heads are saying? Well, If you'll step back for a minute and observe, you will see that the answer is simple. Obama doesn't know what to do. He doesn't know how to speak to people. He doesn't know how to be a leader. He doesn't know how to handle a crisis. And no matter how hard you try to prod this loser onto the right path, he will never get it. It's too late. School is over. Time to go.

The fact that the nation is polarized, confused and consumed with anger should tell you that something isn't right. A leader sets the tone in any organization. Obama has set a tone of confusion, deceit, misrepresentation, incrimination, talking at, shouting, and now cursing. So the tone of the nation has followed suit. It's coming right back at you.

The problem is that Obama is not a leader and should never have been elected to one of the most important leadership posts in the world. He's weak and unqualified. He's just plain incompetent. I'm not saying that he's a bad guy or anything. I mean, I wouldn't hang out with him or any or his friends, but my point is that he's not a leader.

What has Obama ever accomplished in his life? He sucked as a community organizer, a State senator, and as a US Senator. The only thing that he ever accomplished in his life, before being pushed into a presidential campaign, was that he wrote an autobiography. That's it! He wrote a book, or at least put his name on one. And it was a book of half-truths regarding his search for an identity. It is apparent today, that he still has a way to go on that search.

For the good of the country, Obama's reign of confusion needs to be shattered; trampled, by any means necessary, and sooner rather than later. Subjugate him. Bankrupt him. Impeach him. Whatever it takes to get our nation back on the right track. Else, the path that we're on, as influenced by Obama, will lead to disaster upon disaster.

I'm sorry to say it, but that's what happens to weak, unqualified impostors. They get undermined, double-crossed, compacted, squelched, spoiled, impeached or otherwise stripped-down. That's what will happen to Obama. Obama doesn't belong in that office. He has disgraced the office of the President of the United States. He has disgraced the United States of America. He has disgraced Black Americans.

It's his choice. He can either resign, or be resigned, but Obama must go.

Go back to Kenya....Go back to Indonesia....Go to Sheol.

....My Passion.

Tuesday, June 1, 2010

The Secret, 700-Million-Gallon Oil Fix That Worked — and Might Save the Gulf


Workers on the Arabian Gulf overlook a supertanker owned by Saudi Aramco, the oil company that used a suck-and-salvage American technology to recover 85 percent of its previously unreported spill in 1993 and '94.

There's a potential solution to the Gulf oil spill that neither BP, nor the federal government, nor anyone — save a couple intuitive engineers — seems willing to try. As The Politics Blog reported on Tuesday in an interview with former Shell Oil president John Hofmeister, the untapped solution involves using empty supertankers to suck the spill off the surface, treat and discharge the contaminated water, and either salvage or destroy the slick.

Hofmeister had been briefed on the strategy by a Houston-based environmental disaster expert named Nick Pozzi, who has used the same solution on several large spills during almost two decades of experience in the Middle East — who says that it could be deployed easily and should be, immediately, to protect the Gulf Coast. That it hasn't even been considered yet is, Pozzi thinks, owing to cost considerations, or because there's no clear chain of authority by which to get valuable ideas in the right hands. But with BP's latest four-pronged plan remaining unproven, and estimates of company liability already reaching the tens of billions of dollars (and counting), supertankers start to look like a bargain.

The suck-and-salvage technique was developed in desperation across the Arabian Gulf following a spill of mammoth proportions — 700 million gallons — that has until now gone unreported, as Saudi Arabia is a closed society, and its oil company, Saudi Aramco, remains owned by the House of Saud. But in 1993 and into '94, with four leaking tankers and two gushing wells, the royal family had an environmental disaster nearly sixty-five times the size of Exxon Valdez on its hands, and it desperately needed a solution.

Pozzi, an American engineer then in charge of Saudi Aramco's east-west pipeline in the technical support and maintenance services division, was part of a team given cart blanche to control the blowout. Pozzi had dealt with numerous spills over the years without using chemicals, and had tried dumping flour into the oil, then scooping the resulting tar balls from the surface. "You ever cooked with flour? Absorbent, right?" Pozzi says. Next, he'd dumped straw into the spills; also highly absorbent, but then you've got a lot of straw to clean up. This spill was going to require a much larger, more sustained solution. And fast.

That's when Pozzi and his team came up with the idea of having empty ships park near the Saudi spill and pull the oil off the water. This part of the operation went on for six months, with the mop-up operations lasting for several years more. Pozzi says that 85 percent of the spilled oil was recovered, and it is precisely this strategy that he wants to see deployed in the Gulf of Mexico.

Yesterday, I spoke to Pozzi and his business partner, longtime Houston lawyer Jon King, about their proposed solution, and the difficulties they've encountered trying to assist in the disaster, with both BP and the government. While BP is attempting its very difficult maneuvers to contain the gusher at the source, they say, nothing is being done to adequately address the slick itself. Dispersant is being used by the ton, some of the oil is being burned, and there have been other efforts, which taken together, Pozzi likens to "a flea on an elephant's ass." The two men have been trying to rally support since just after the rig blew up, without much success. This has been typical of their experience:

"Daddy, did you remember to send out the supertankers?"

Read more: http://www.esquire.com/blogs/politics/gulf-oil-spill-supertankers-051310?click=main_sr

Solving the Gulf Blowout and Preventing the Next Crisis

Leaders vs. Casual Observers

Relief Wells and Reality: An Ounce of Prevention

Compiled by: Larry M. Walker, Jr.

There's more to 'Going Green' than what naïve Progressive, so called working family party, criminals would have you to believe. In reality, going green should consider an 'all of the above' approach. An 'all of the above' approach entails using our current natural resources more effectively, efficiently, responsibly and safely. The Progressive Obama Administration has failed in that it has not governed in the present. The Progressive Obama Administration has attempted to govern in the future (i.e. 20 to 40 years out), while neglecting to govern today. One of my favorite quotes is, "Keep it in the day". Progressives believe that we can somehow skip over today and jump ahead with policies designed for 20 to 40 years from now.

What a 'real' government would do is regulate proactively in the present. Perhaps we need another Presidential Commission to do the job, I mean since we have an inexperienced executive in the White House? Beyond the current budget disaster, we need a government who is actively engaged in implementing better safety measures in the areas of mine safety, onshore and offshore drilling, nuclear energy, and hydroelectric energy. Caulking and insulating houses, inflating tires, building solar power plants, and putting up windmills are not the responsibility of the Federal government. The Federal government's job is to protect us and our freedoms. Do you feel safe?

We don't necessarily need more laws and regulations, what we need is a government that can enforce our current laws and regulations, something that the Progressive Obama Administration obviously lacks.

Today, I am sifting through excerpts from industry experts regarding the capping of the Deep Water Horizon's - Macondo well from a historical perspective, alternative capping methods, and finally, how to prevent such disasters from occurring in the future.

Capping With Relief Wells

Capping with relief wells may not be as simple nor timely as implied.

"You have to hit something the size of a dinner plate miles into the earth," said Richard Charter, a senior policy adviser at the nonprofit Defenders of Wildlife, who follows spills around the world. "Even in a shallow-water blowout, the drilling of a relief well can be complicated and problematic."

The world's worst offshore well blowout and oil spill, the IXTOC I well in Mexico's Bay of Campeche was ultimately stopped with a relief well, after a containment dome, junk shot and top kill failed, but it took nearly 10 months.

05/30/2010 - "There could be oil coming up until August, when the relief wells are dug, " White House energy and climate change adviser Carol Browner said on NBC's "Meet the Press" Sunday morning. "We are prepared for the worst. ... We will continue to assume that we move into the worst-case scenario."

I don't think Ms. Browner has a clue about the worst-case scenario. The worst case scenario is that the relief wells are not completed for another 8 or 9 month's.

PEMEX: IXTOC I

Fact: When IXTOC I blew in 1979, it was also believed that a relief well could be drilled within three months, however, it took ten months. In fact, it took BP several weeks longer than expected to drill the original Macondo well due to complications. Might the same complications occur in drilling a relief well, or two?

08/06/1979 - Tyler Priest, a historian at University of Houston who has written a book about the history of offshore drilling, said Pemex thought it would go a lot faster. He cited a headline in the Aug. 6, 1979, issue of Oil & Gas Journal that reads, "Pemex: Ixtoc may flow until Oct. 3."

"They initially estimated three months. It took them almost 10, " Priest said.

According to a 1981 report from the Society of Petroleum Engineers detailing how Pemex, the Mexican state oil company, stopped the well, engineers decided to start drilling two relief wells at the end of June.

Progress was slow. It took one well until Nov. 20 to reach the original well, and the second took until Feb. 5, 1980.

Shutting down the main well took multiple attempts in February and March 1980 as Pemex shot drilling mud through both wells and gradually decreased the flow of oil.

PTT Exploration: Montara Well

Drilling a relief well could just as well cause a second explosion. At least that's what happened last year with the Montara well off the coast of Australia. Thus, there is no guarantee that BP's 'Plan Z' will work.

Last August, the Thai company PTT Exploration and Production Co. was drilling the Montara well in 260 feet of water in the Timor Sea off of Australia when it well blew up and began leaking oil into the ocean.

It took 10 weeks and five tries for the drilling rig brought in to drill the relief well to hit its target about 8,600 feet below the sea floor. On the last try, there was another rig explosion, which burned for two days.

The oil was finally stopped on Nov. 3, and it took until mid-January to cap the well, according to news reports.

A final report from the Australian government on the Montara incident is due June 18.

Capping with Nukes

Now this is one way to get the job done. This is how a nuke can be used to plug a well? Following is a detailed video of how the USSR used a nuclear bomb to plug a gas well that was burning and leaking out of control. It may finally come to this sometime in September, as BP would still need to drill to just above the depth of the original well in order to insert a bomb. Although the Russian well was on dry land, the principle is the same, "plug the hole". The Federal Government may want to look into this option.



An Ounce of Prevention

Once the Macondo well has been capped, and the Gulf Coast has been restored, the question will be: How can we minimize the fallout from offshore drilling blowouts in the future?

How about requiring that oil and gas exploration companies, like BP, drill a minimum of two relief wells in the same season as the primary well? That way, relief wells are already in place ready to cap or blow the main well in the even of disaster. Even Canada is now considering such a measure. So will the U.S. now take the lead or stumble?

"... shortly before the U.S. disaster, BP and other oil companies urged Canadian regulators to drop a requirement stipulating that companies operating in the Arctic had to drill relief wells in the same season as the primary well."

Why wait until there is another disaster to begin drilling relief wells? An ounce of prevention is worth a pound of cure.

References:

http://www.nola.com/news/gulf-oil-spill/index.ssf/2010/05/challenges_involved_in_drillin.html

http://www.reuters.com/article/idUSN1326556220100513?type=marketsNews