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American politics

Democracy in America

The oil spill

Leakonomics

Jun 7th 2010, 20:26 by S.B. | WASHINGTON, DC

IS THE BP oil leak in the Gulf of Mexico the Three Mile Island of our time? It was, oddly enough, BP's own board chairman, Carl-Henric Svanberg, who was one of the first to make the comparison (1:05 mark of the video).

Here in Washington, the comparison is drawn in the context of the expected policy fallout, as opposed to environmental damage—the oil spill is already much worse than the partial reactor meltdown on the banks of the Susquehanna river in Pennsylvania 30 years ago. No one died in Three Mile Island, and damage to the environment was considered minimal.

As bad as the BP leak is environmentally, though, it is unlikely to do to the oil industry what Three Mile Island did to the nuclear industry in America, John Cranford writes in CQ Weekly this week.

Public opinion turned against nuclear power after Three Mile Island. But it was the economics of nuclear power that changed fundamentally. New safety rules issued by Washington after the accident drove the cost of reactors up and up, and no new plants were ordered for 30 years.

Electric utilities could not take the risk that financial regulators at the state level would allow them to recoup their investments in nuclear power. In fact, for many plants in the works, the cost to retrofit them became too great, and the industry was left holding the bag. In some cases, investor-owned utilities were on the verge of bankruptcy, and taxpayers had to come to the rescue. This is why the nuclear rebirth now being discussed in Washington is so dependent on the prospect of federal loan guarantees—no company wants to go through that again without some sort of government support.

But in the context of oil, it's hard to imagine one event undermining the entire industry, even one this big. As Mr Cranford writes, oil is just too valuable, and we're just too dependent on the stuff to take a break from it, much less a 30-year hiatus. For context, he gives this statistic: $100 billion in damages would add only pennies to the price of a gallon of gasoline.

So whatever damage this episode does to BP as a company, it will be a drop in the proverbial bucket (or barrel), as opposed to some sort of industry game-changer like Three Mile Island.

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What portion of the damage done by the Deepwater Horizon is metaphor pollution, do you suppose?

I love you Doug Pascover.

The oil industry would survive if government and industry would cooperate in establishing a drilling safety office that would act with absolute authority and with decisive capability to shut off any future out of control situations in the offshore world.

I compare the powers of this office with that of the range safety officer in the unmanned space program, who had absolute authority to blow up a rocket that could pose a danger. Another comparison that people might be more familiar with would be the community fire department. They take no notice of possible property damage when victims are yet to be rescued.

The actions of BP appear more like the actions of a slum landlord who stands in the way of the fire department and insists that beams be carefully handled as they are removed from dying victims.

I never knew the oil industry branded their rigs. This one sounds like the title to a B horror movie where everyone gets eaten by mutant sharks. IMHO

There is something absolutely wrong when these folks accept that BP has done all they can to stop this leak. And even more wrong is the idea put forward by our government that we have to accept three more months of gushing oil.

Actions by BP to portray open and honest actions, seem more like a smoke screen front on the real decision making process that has repeatedly opted for tinkering fixes rather than large scale terminating actions.

Perhaps the leaders of industry actually have no idea what solutions are possible. Why, probably none have technical experience and probably most companies have carried out cost cutting programs that purged the experienced folks who might have accumulated this knowledge. After all, it was completely wasteful to have such people on the payroll.

Pascover and Wellington,

If you have a modern computer, have a look at:

http://www.bp.com/liveassets/bp_internet/globalbp/globalbp_uk_english/ho...

Then come back and offer your idea of an appropriate metaphor.

I have to recommend this panel discussion as a way to see how future thinking is likely to be in the world.

Curiously, the BP CEO and others on the panel seem pleased with the way BP has opened themselves to suggestions from everyone on how to fix the spill. That seems to me to be the ultimate phony game.

The 'suggestions' from the public, mostly people that are highly uninformed but over encouraged about their value, have been an onslaught of gibberish. If any meaningful suggestion was buried in the gibberish, it would have no chance of being heard.

Although I have some experience in oceanography with large equipment, and also long experience in solving big system problems, I have been fully aware that any suggestion I put forward would be ignored. But though I consider it to be something of a joke, I went ahead and blabbed widely, with the hope that this would give some weight to my critical view of what was being done.

The main thing about the Internet is that it may provide a small thud of influence beyond the faint click of a single vote.

But back to the panel of executives, which are all brilliant thinking people, none of these folks has any sense of engineering possibilities when it comes to fixing a problem that was not foreseen, such as the present oil disaster. Thus when they talk about giving people in their organization freedom to innovate, and they also assert the role of themselves as leaders as providers of the framework within which innovation must be done, they show that no real innovation is possible.

And the BP executive holds up that safety has to stand as an uncompromisable top priority, we know that he is not the real power at BP, where much evidence has been shown to the contrary.

Absolutely clear is that there was no preparedness for the unexpected, which is the heart of safety.

The fact that safety regulations were so excessive as to virtually end nuclear power development for thirty years is not to be taken lightly. When I say that a well safety office should be empowered, I envision that the rest of the safety issue be shouldered by the drilling companies. All that is required is the threat that a bad action will result in an immediate and very costly consequence of their well being terminated. That should be as far as government goes. That might be a futile hope on my part.

Sorry Mr. Carl-Henric Svanberg, you put a very nice face on BP and portray it as a great corporate citizen.

However, I just checked the video feeds and have to react with some anger. It appears that you, Mr. Svanberg, have no comprehension of the damage you are inflicting, now and for many years to come, both on the environment and likely on the energy backbone of the developed world.

Now it is time to turn this over to the military forces. Bungling fools have had their chance.

A crater is required, followed by filling by a steady stream of commandeered ore carriers filling the crater with rock, alternated with the laying down of layers of concrete.

It is time for government to think big.

So, is BP going to retroactively rename Deepwater Horizon the "Deeps**t Horizon"??

It's a dumb analogy. People are irrationally terrified of nuclear power plants, but everyone is familiar with oil products and unafraid.

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◎ ---------------------

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fr ee sh i pp ing

(jordan shoes) $32

(air max) $34

+++

wow

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Ooohhh, no. I'm not helping BP rebrand anything.

And if I see an online survey from BP, I'm going to lie on it.

Hint, hint.

The long-term environmental damage (as opposed to short term problems with fishing and the like) will probably be minimal, and the clean-up effort will quite likely be found to have done more harm than good.

In this there is an analogy to 3 mile island - the public and political reaction in both cases is both depressingly ill-informed and likely to make everything worse. The penalisation and thus avoidance of nuclear power, for largely PR/political reasons, has done vast environmental and economic damage and made us all more dependent on oil. In doing so it may even have contributed to the recent oil spill. Will there be a similarly damaging political response to the spill? Well so far nothing helpful (such as raising the price of gas to limit oil depndence) has happened - so the potential is certainly there.

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