The Final Frontier?

Given the extreme environmental risks and high cost of drilling in deep water  made apparent by the disaster in the Gulf, why are oil companies like British Petroleum looking to deep water wells as the "final frontier" of oil exploration? Increasing world demand for oil faces diminishing supplies of easily extracted oil and gas. World demand is forecast to increase at about 2% per year. The Second Great Depression has caused oil consumption to pause. During 2008-2009 there was a net contraction of 3.5%, but demand will outstrip total world capacity between now and 2030. Current world capacity is 88Mbd whilst demand forecasts project demand growing to as much as 115Mbd or three times Saudi Arabia's current export.  As the graphic shows this frontier now extends up to 3.5 kilometers deep. Petrobras' Perdido platform on the Tupi field is the deepest. ;The costs of such wells are extreme. The Tupi exploratory well and related seismic data collections cost $220 million, but oil prices over $50-80/barrel justify the costs involved according to analyst Andrew McKillop writing at Market Oracle.com.

The dire straits outlined, one would think the industry would do more to control the huge amount of wasted resource associated with its operations.  Perhaps 60,000 barrels a day is being lost at the Macondo blowout. Wells with rated capacities of 60,000 barrels/day can attain loss rates of 1200-1300 barrels/day just in normal operations.  Methane, a powerful greenhouse gas, is usually found with oil, but it is flagrantly flared worldwide as a waste product. The World Bank estimates the lost of associated gas in offshore operations to be about 150bcm a year.

If Forty-four considers the OCS deep water deposits to be America's security blanket, he should think again. BP owns a 62% share of the Tiber field on the same Mississippi Canyon formation that the Deepwater Horizonwas drilling before it blew up. Exploiting this resource will be hugely expensive, environmentally dangerous, and supply only 10 days of US consumption, if expected volumes are recovered (200-250M barrels over 10 years). BP says the Tiber deposit could hold 5 billion barrels, but the median figure for recoverable oil is only 5%. Brazil's deep water Tupi field, also considered to be a bonanza, could require as much as $240 billion to develop. Operations in depths of 5,000 feet where sea floor temperatures are near 2℃ are environmentally perilous. Crude does not dissolve easily in seawater under these conditions, and the effects of deep blankets of undissolved oil on marine life are almost entirely unknown.

Eastern Chimpanzees Get Conservation Plan

Conservationists working with African countries in the range of eastern chimpanzees, (Pan troglodytes schweinfurthii) have developed a ten year conservation plan to save the remaining endangered eastern chimpanzees. The International Union for the Conservation of Nature (IUCN) and the Wildlife Conservation Society released the plan last week according to ENS. Preservation of 16 areas could conserve 96% of the estimated number of chimpanzees-- put at 50,000 primates. Little is known of some chimps living in the still vast Congo basin, so the number could be as high as 200,000. The plan calls for surveys to be conducted to obtain a more accurate population count. It is thought that human encroachment and poaching has resulted in significant population reduction. The causes of chimpanzee population declines are well known, but not easily reversed. The plan envisions 30 to 40 more years of losses, but through international cooperation among the 16 range states it hopes to minimize threats to their survival and ensure viable populations. Saving chimpanzees is proper in its own right, but the morality of the issue becomes even clearer when one considers their obvious intelligence, social and emotional lives, and their rudimentary cultures. Chimpanzees make their own tools, including weapons, and prefer their food cooked. Given time they may even find a use for fire.

image credit:  sciencenews.org

Chart of the Week: Worth their Salt?

Just as the Roman Empire spent larger and larger amounts on its army, driving up the public debt and devaluing the currency, so the United States finds itself at a similar crossroads of history.  At the end of the Republic, Rome made the mistake of opting for military hegemony over what was then a global empire.  The unsustainable financial burden* of this path (among other possible contributory causes) eventually weakened the state to the point that even professional legions could not hold back the barbarian hordes.  Maintaining the stalemate with the Parthian/Sassanid Empire (Persia) was particularly draining of Roman resources.  Today, one will be interested to know what the conservative reaction will be to the proposed trillion dollar cutin the US defense budget, far and away the world's largest, partly because of two wars on the current Middle East border.

*"It's time to stop talking about fiscal discipline and national security threats as if they're separate topics: debt is a national security threat, one of the greatest we know of," House Majority Leader Steny Hoyer , D-MD, said in a speech at the Center for Strategic and International Studies. "Unsustainable debt has a long history of toppling world powers." www.thecable.foreignpolicy.com

Dead Zones No Joke

US Person used the term "dead zone" in discussing the possible effects of the unprecedented oil gusher now polluting the entire Gulf of Mexico. The term is appropriate, and not just idle hyperbole. Scientists who have surveyed the Gulf for methane levels have found levels of methane as much as 100,000 times normal within a five mile radius of the wellhead. Such high concentrations of methane below the surface can cause bacterial blooms that consume the natural gas and deplete oxygen dissolved in seawater. The survey team found areas were oxygen was depleted up to 30% of normal. If depletion of oxygen continues, "dead zones", where no other marine life can survive are created. An earlier scientific study found giant oil clouds beneath the surface in which methane levels were recorded at extremely high levels. (10,000 times background level). This study confirmed earlier findings by a third team from the University of South Florida. More studies are needed as the conditions do not appear to be uniform, and surface levels of methane are approximately normal.

'Toontime: Modern Slavery

[credit: Tom Toles, Washington Post]

Democrats managed to eek out a Wall Street regulatory bill after weeks of contentious negotiations, minus a truly tough prohibition against derivative trading by big banks.  They were not successful in passing an extenuation of jobless benefits.  The Repugnant filibuster held tight, and majority leader Reid gave up the fight on Thursday.  Once again, that arch hypocritical spy in the Democratic caucus Ben Nelson (?-NE) was at the epicenter of the defeat.  His refusal to commit left the Demos 2 votes short of 60. Despite trimming the bill down from $134 billion to $33 billion, not a single Repugnant was willing to support extending benefits to Americans unemployed for more than six months. Go fish...but not in the Gulf.

Florida Beaches Get Slimed

Seen those commercials from Florida tourism advertising miles of pristine beaches on which to play? Not so much. Pensacola Beach in Florida's panhandle got hit with the crude escaping from the blowout near the Mississippi River delta on Wednesday. Eight miles of goo stained the white sands. Local officials say the response so far has been inadequate. Perdido Key is particularly hard hit. Workers cleared 8 tons of oil waste from a barrier island. But the stuff is everywhere and the longer it sits in the sun and sinks into the sand, the harder it is to remove the contamination. Residents of Pensacola Beach said it took four hours to clean 60 feet of beach. Yesterday, a remote control submersible knocked into a venting system which caused oil workers to take the containment cap off the wellhead to prevent a buildup of pressure reaching a drillship collecting crude. The well spewed oil at full force for 11 hours.  Current containment capacity on site is 20,000 to 28,000 barrels per day.  The revised  figure used by the Coast Guard for the well flow rate ranges from 35,000 to 60,000 barrels per day.

Whales Face Momentous Vote

Update:Ah, there is good news today!  Whales have won a reprieve at the IWC meeting in Morocco. The international body has decided to postpone a vote  on whether to allow the resumption of commercial whaling. Apparently the buzz at the meeting was not whaling, but the secret effort by Japan to buy votes to end the moratorium. Public outcry against whaling also helped convince the Commission to table the issue for now in the face of a deadlock. ;The substitute chairman, Anthony Liverpool of Antiqua and Barbuda was implicated in the vote buying scandal. His hotel bill from June 13 to June 28 at the Atlas Amadil Beach Hotel was paid by Japan Tours & Travel linked to Japanese businessman Hideuki "Harry" Wakasa who lives in Houston, Texas. The proposal would have allowed commercial whaling in the Southern Ocean sanctuary for a period of ten years. It was in essence, an immoral endorsement of the idea that humans can only save the whales by killing them

{17.6.10}Japan will take its ethnocentric, decades long battle to resume commercial whaling to the IWC at a meeting in Morocco next week, where a final vote on ending the twenty-four year moratorium will be taken.  "Small people" around the world have been signing petitions against the resumption of commercial whaling, but pressure from the other side has been considerable too.  The Times of London reports an undercover journalist was able to interest an official from Guinea in financial aid in return for their vote at the IWC.  Ibrahima Sory Sylla told the reporter that Japan had already made a generous cash donation to his minister, and that they would make a good counteroffer.  According to the Times, Japan has gained the support of 38 of the IWC's 88 members.  It needs 75% of the vote to overturn the ban.  As part of the newspaper's undercover investigation, journalists posing as anti-whaling lobbyists approached six small countries with offers of financial aid in return for their votes at the IWC. The countries indicated they were willing to consider the offers of support, and revealed the extent of Japanese vote-buying during discussions.

Road to Cut the Serengeti in Two?

One of the main methods for developing a wild region is to run a trunk road through it for access.  That is what Tanzania is apparently proposing to do to the world famous Serengeti National Park according to WildlifeExtra.com.  The Tanzanian Parks Authority has not responded to requests for information about the proposal, if there is one.  Such a route would play havoc with the annual wildebeest migration, one of the world's last natural spectacles.  Besides giving poachers roadside access to meat on the hoof, vehicle traffic will certainly alter the normal behavior of animals.  Construction activity alone would be enough to disrupt their natural rhythms. If wildebeest and the carnivores that depend on them cannot move freely in response to seasonal availability of food, the entire ecosystem could conceivably collapse.

BP Deserves Contract Debarment

It is a severe penalty, but BP's past environmental record and corporate arrogance on display in the midst of the worst environmental disaster in US history make it appropriate.  Even the company's venture partner, Anadarko, says the Deepwater Horizon catastrophe was the result of "gross negligence or willful misconduct".  US Person stated before that the US government has the legal means to punish British Petroleum PLC for its reckless behavior.  That means is federal contract debarment. A criminal negligence conviction for the Gulf disaster would make the case for discretionary debarment stronger, but a difficult conviction is not necessary for federal officials at the Department of Interior or EPA to prohibit award of future federal contracts to BP. The company already has four strikes against it in ten years--three environmental crimes and a deferred prosecution for manipulating the gas market. The EPA has suspended further discussion with BP regarding disbarment cases in Alaska and Texas until the Deepwater Horizon disaster has been fully investigated. The Texas case involves the BP refinery explosion at Texas City that killed 15 workers. For that incident the company was fined $62 million, and convicted of a felony violation of the Clean Air Act. BP subsequently spilled 200,000 gallons of crude at its Prudhoe Bay pipeline, the largest spill on Alaska's North Slope. The company was convicted of a misdemeanor violation of the Clean Water Act. Both cases involved disregard for safety and environmental precautions in the interest of increasing profit. In both cases the company received statutory debarments that affected only the facilities involved.  In a discretionary disbarment an entire company is prohibited from doing federal business. FAR §9.406-1(b)

The key to discretionary contract debarment is a determination that the company has consistently displayed contempt of the regulatory process and carelessness in its operations that has not be addressed by corrective management action. The information coming from the disaster's aftermath so far shows a company more interested in making profit than safety, unprepared for a blowout in deep water, obsessed with controlling information to reduce potential liabilities, and one willing to take inappropriate risks in operations where other oil companies would desist. On the other end of the balance is the fact that BP is a huge company that did $4.6 billion in business just supplying the US war machine with petroleum. The company operates 22,000 wells across the US, many on federal lands or waters, that produce 39% of the company's profits. A federal contract disbarment would severely hurt the company's future viability.  But is it too severe a penalty for the permanent damage being done to an entire sea? Ask the "small people" who live and work along the Gulf Coast. Their lives will never be the same.

Chart of the Week: Will Work (a lot) for Food

The economy is generally in a deflationary mode, meaning prices for some commodities are falling--the May consumer price index fell 0.2%  But a new report from the UN says global food prices will rise due to an increasing standard of living in the developing world.  That means more meat and meat products will be consumed, and meat costs much more to produce.  The report says prices rises will be seen next year when animal-related products will increase 10-20%. It is not at all comforting to know that in 1991 Goldman Sachs inaugurated its Commodity Index Fund, which includes the price of cattle, coffee, cocoa, hogs and wheat. Other investment banks soon followed Goldman's successful new investment business. Speculative calls on the grain exchanges helped drive the spot price of wheat to historic highs in 2008 where it hit $11/bushel. The worldwide price of food rose 80% from 2005 to 2008. Forty-nine million Americans could not afford full meals*.

*Kaufman, Harper's Magazine 7.10

Don't Let the Door Hit You

Afghanistan's mineral wealth made the COM recently. The deposits of gold, iron, copper, cobalt, lithium and gold have been known to geologists for decades, but constant warfare has prevented their exploitation. The deposits are believed to be worth $1-3 trillion. After eight years of expending wealth and blood trying to stabilize and modernize Afghanistan, one would assume the United States would be first in line to develope the resources. But our so-called ally in the struggle, President Hamid Karzai, gave the nod to the Japanese on Sunday after a five day visit. Karzai said without a hint of recognizing the irony of his statement that, "Morally, Afghanistan should give access as a priority to those countries that have helped Afghanistan massively in the past few years." Quite a snub from a man who owes his very existence to American military power. Japan has been Afghanistan's No. 2 aid donor for reconstruction, education and health. It has pledged aid of $5 billion over five years. Only now are American officials coming to grip with the recognition that US troops are unwanted by all sides in the country. General McChyrstal has delayed the start of his 'critical' Kandahar operation due to lack of popular support in the region. The US has previously announced that its troops will be withdrawn in the summer of 2011.

Hazing Stops for Now

US Person informed you of the annual hazing of bison and their calves from Horse Butte just outside the boundaries of Yellowstone National Park {4.27.10}. A federal judge has dismissed ranchers' request to drive the buffalo out of the calving and feeding grounds, but two more cases brought by ranchers remain to be heard. The rationalization offered by government agencies for the cruel harassment policy is that it protects livestock from brucellosis. The brucellosis threat is a cowboy myth since there has never been a documented transmission of the disease from buffalo to cattle in the wild. There are no cattle grazing on Horse Butte. If the ranchers and their government agents were interested in solving the potential conflict, rather than just killing buffalo, they would support expanding the contours of Yellowstone Park to include buffer areas like Horse Butte that are regularly used by the Yellowstone heard.

'Toontime': State Capture

[credit: Chuck Asay]

If the United States really were a socialist state as the modern day Know Nothings (aka the 'Tea Party') ardently believe instead of a decadent corporatist one, then the Gulf of Mexico could be spared permanent ruin. Because then the state would own or control the means of stopping the eruption of crude and cleaning the contamination. As it is, we are stuck with prodding a reluctant profit-only, private concern into acting against its own survival interests. A clearer demonstration of the total failure of the profit motive as a moral and ethical imperative could not be conjured. The response to the Deepwater Horizon catastrophe has been disorganized, conflicted, delayed and inadequate. The federal government shares the blame with its corporate sponsors for allowing the incident to compound through irresponsible management of  valuable resources in the public's domain.  The time for tough talk is gone.  The time for command action is rapidly running out.

The national government has had a symbiotic relationship with big oil since it began as an industry at the end of the nineteenth century. British Petroleum began virtual life as the Anglo-Persian Oil Company in 1909, a year after William Knox discovered commercial oil deposits in Persia. (the Zoroastrians only used oil to burn in their fire temples). When Churchill urged the conversion of the British fleet from coal to fuel oil, the British government bought a stake in the company. The company benefited mightily from more government intervention when the US installed its client despot, the Shaw of Iran, in the successful coup of 1953. All of BP's nationalized assets were returned, and production resumed. In the eighties, BP bought AMOCO making it truly anglo-american. Despite being fined twice for significant safety violations (2005 Texas refinery explosion; 2008 OSHA fines for failure to correct conditions) and spilling crude on Alaska's North Slope (2006: 200,000 gallons) BP owns the greatest number of federal leases in the Gulf of Mexico. Clearly, it is time for the federal government to end this dysfunctional relationship and start taking stewardship of the OCS seriously. Forty-four has the legal means to do so, but so far has not demonstrated the political will. A criminal conviction for negligence would make BP ineligible for future lease awards. G & T's by the pool anyone?

Eden Revisited

Americans watch in horror the slow destruction of the Gulf Coast's natural environment, the presidential impotence in the face of disaster, and the corporate perpetrator putting more effort into evading liability and controlling public information than ending the crisis.  It may help to know that on this beleaguered planet there are regions still unsullied by man. US Person journeyed to a river valley in central Africa caught in a gentle eddy of time. To go there is to see what our distant ancestors knew in the cradle of their birth. Thanks to the valley's remoteness, even in the age of intercontinental jets, and the tsetse fly's infectious bite, the Luangwa River flows as it did in the time of the hunter-gatherers. The rains still fall on the Muchinga escarpment to across a landscape of riverine deciduous forest, Mopani woodland, and flood plains all uncrossed by roads.

To the credit of colonial administration the valley was set aside as a game reserve in 1938 and later declared a national park, before the game was completely hunted out. Despite protection, hunting and poaching has taken a terrible toll on the wildlife. The black rhino population was wiped out in 1987. As late as the 1970's there were perhaps 100,000 elephants in and around South Luangwa National Park. Now there are only 18,000. But elephant families in Luangwa today often contain infants and adolescents. A visitor can still photograph lion and leopard hunting numerous antelope, encounter the formidable Cape buffalo on foot, or wonder at the physiology of the endemic Thorncroft's giraffe. Hippo pods dot the river at intervals like grey boulders in midstream. Eighteen foot crocodiles recharge on sandbanks in the strong African sun. The park's nocturnal inhabitants are a revelation of zoology. Animals rarely seen by first world humans can be found with the aid of a spotlight and competent guides: civets, genets, elephant shrews, eagle owls and bush babies. Luangwa is an enact ecosystem that is a rare marvel in the 21st century.

US Person was ably hosted by Norman Carr Safaris. Founder Norman Carr was a Northern Rhodesia park ranger who turned to the safari business after his retirement from civil service in the late fifties. Carr was determined to make tourism a business that paid dividends for local people and enhanced wildlife conservation. Today, the company he founded supports a local school, conservation efforts, and employs many Zambians living near South Luwanga National Park. His book, Return to the Wild, is a candid account of the adoption of two lion cubs, whom he successfully reared and returned to the wild. Stay tuned to this space for more photos of Zambia's  wildlife.

[female leopard feasts on impala--note the spotlight is not directed into the eyes of the predator]