Tuesday, August 31, 2010

Oil Spew Commission and the Moratorium

Bloomberg reported:

Louisiana Gov. Bobby Jindal again sought an end to President Barack Obama's moratorium on deepwater oil drilling as he met Monday with two members of the president's commission investigating the BP oil spill: former Florida Sen. Bob Graham and National Geographic Society executive Terry Garcia.

"The moratorium is not in our sweet spot of assignment," Graham said.
Not in the sweet spot? Then which of the seven investigative panel's has it? It turns out the Oil Spew Commission subcontracted the job:

A report last week by the Washington-based Bipartisan Policy Center said the drilling ban, scheduled to expire Nov. 30, may no longer be needed.

The moratorium allowed time for both industry and government to make offshore drilling safer, the report said. The oil spill commission had asked the center to look into the wisdom of using a moratorium to prevent spills in the aftermath of the BP disaster.

So the Commission co-chaired by William K. Reilly, sought out the Bipartisan Policy Center, founded by Tom Daschle, BPAmerica External Advisory Commission member?

Reilly co-chairs the policy center's energy panel, in addition to sitting on the ConocoPhillips board of directors, a joint venture partner with BP. To resolve this conflict, Reilly took a leave from the Conoco board. Yet his stock holdings remain. Frances Townsend sits on Bipartisan Policy Center's board. She works for Baker Botts, a longtime BP law firm.

If the moratorium isn't within the purview of Obama's Oil Spew Commission, why did they ask for help from the Bipartisan Policy Center? While none of the conflicted names mentioned appear on the report, it has a malodorous air.

Uncle Sam to Dole Out $5 Billion for Retiree Health

Health reform provided $5 billion for early retiree health care and it announced recipients of this aid. They include a mix of corporations, unions, municipalities, health insurers, hospitals and foundations.

Fourteen BlueCross/BlueShield plans made the list.

  • "Blue Cross & Blue Shield of MA, Inc."
  • Blue Cross & Blue Shield of Mississippi
  • Blue Cross & Blue Shield of Rhode lsland
  • Blue Cross and Blue Shield of Kansas City
  • "Blue Cross and Blue Shield of Kansas, Inc."
  • Blue Cross and Blue Shield of Minnesota
  • Blue Cross Blue Shield of Florida
  • Blue Cross Blue Shield of Michigan
  • Blue Cross Blue Shield of South Carolina
  • Blue Cross Blue Shield of Wyoming
  • "Blue Cross of Idaho Health Service, Inc.
  • BlueCross BlueShield of Tennessee
  • CareFirst Inc.--BlueCross BlueShield of Maryland
  • Premera BlueCross

Healthcare organizations getting assistance include:

Abbott Labs
Boston Scientific
Christiana Care Health Systems (Delaware)
CHS Inc.
Cleveland Clinic Foundation
Eli Lilly
Kaiser Foundation Health Plan
Medco Health Solutions
Permanente Medical Group
Siemens Corp
Varian Medical Systems

Other recognizable names include:

A.T. Massey Coal
CBS Corporation
Dow Jones & Company
Duke Energy
Exelon Corporation
Federal Express
General Dynamics
General Electric
General Motors
H.J. Heinz Company
Harris Corporation
Hewitt Associates
Jim Beam Brands
Kellogg Company
Koch Industries
Lear Corporation
L'Oreal USA
Lorillard Tobacco
Marathon Oil
Marsh & McLennan
Mercedes Benz
Mutual of Omaha Insurance
New York Times Company
Northrop Gruman
NYSE Group
President and Fellows of Harvard College
Putnam Investments
Rio Tinto America
Sara Lee
Shell Oil
Southwest Airlines
Sprint Nextel
Sun Life
Texas Instruments
The Boeing Company
The Coca Cola Company
The Dow Chemical Company
The Dun & Bradstreet Corporation
The Hartford Fire Insurance Company
The Hershey Company
The Hertz Corporation
The North American Coal Corporation
The PNC Financial Services Group
The Proctor & Gamble Company
The Prudential Insurance Company
The Travelers Companies
The Turner Corporation
The Walt Disney Company
The Washington Post Company
The Williams Companies
Thomson Reuters
Tiffany & Company
Tribune Company
Tupperware Brands
Tyson Foods
U.S. Bancorp
Union Bank
United Airlines
US Airways
Valero Energy
Volvo Group
W.R. Grace
Wells Fargo
YUM Brands
Zachry Holdings

I didn't list the plethora of unions on the approved list. While the amount funded was half the original bill's $10 billion, I stand by my former comments:

Why the giveaway to those currently providing coverage? Corporations and unions provide huge campaign donations. Corporations want to dump that pesky health insurance benefit, while unions want to pick it up (become the negotiator for employee paid health insurance).

I thought health care reform was to cover the uninsured and bend the cost curve. This subsidy is another federal giveaway, benefiting the usual suspects.

That's quite a list of suspects. Signs point to help for those who have, while major assistance for the have not's will arrive in 2014.

Update: Workers continue to bear more of their health care and insurance coverage costs.

San Angelo Gets Federal Subsidy for Early Retiree Healthcare

The City of San Angelo has been accepted into the Early Retirement Reinsurance Program (ERRP). The program was established by the health reform bill, abbreviated as PPACA. ERRP will provide "reimbursement for medical claims for early retirees and their spouses, surviving spouses, and dependents. Savings can be used to reduce employer health care costs, provide premium relief to workers and families, or both." The City will receive reinsurance for the claims of high-cost retirees and their families (80 percent of the costs from $15,000 to $90,000)."

Not long ago the City changed its retiree health plan, much to the consternation of those covered. How does federal money change things? I asked city representatives, Ty Meighan and Veronica Sanchez, for the projected impact.

Veronica said the city got notice today of their acceptance. She shared projections from Holmes Murphy, the city's consultant. Holmes Murphy projected a low, expected and high number for the federal contribution. For the first year the expected assistance is $307,484, however it could be as low as $91,217 or as high as $383,915. The second year's expected amount is $345,920, but it could range from $102,619 to $431,904. Given the list of recipients, the $5 billion amount may not last to year 2.

Monday, August 30, 2010

American Petroleum Institute to Conduct Citizen Rallies

FT reported:

API is organising a series of “citizen rallies” beginning on September 1 in Texas as part of a broader effort to fight the Obama administration’s temporary moratorium on deepwater offshore drilling and industry-targeted tax proposals that have been proposed in Congress.

“We believe the public is on our side. When you survey the public today, about two-thirds of the public opposes increased taxes on the oil and natural gas industry. Now is not the time to advance those proposals and we will aggressively oppose them,” he said.

API will pay most of the cost of the rallies. The lobbying group is running an ad campaign. It shows citizens opposing higher taxes on energy.

API also agreed with the Bipartisan Policy Center on the need to lift the drilling moratorium:

"The Bipartisan Policy Center report is another indication of what we've been saying for some time: We need to lift this deepwater moratorium, which is having the effect of further harming an already-struggling Gulf community.
Tom Daschle is a founder of the Bipartisan Policy Center and member of BP America's External Advisory Council.

The Center's National Commission on Energy Policy is co-chaired by William K. Reilly. Reilly also co-chairs Obama's Oil Spew Commission, which will decide the future of deepwater drilling. It seems Tom Daschle and William Reilly already have too many jobs, many with deep conflicts of interest. Both should be shared.

WSJ on Community Hospital Sellouts

The Wall Street Journal's "Cash-Poor Governments Ditching Public Hospitals" hit on a theme on this blog, hospital sellouts. This post is an index for the wonkish:

--Main reason community hospitals have to sell out, help is a long way away.

--Even three years of Massachusetts reform couldn't save Caritas Christie, the largest community hospital system in New England, from the jaws of hellhound Cerberus Capital.

--Chip Kahn, the creator of Harry & Louise ads in the 90's, heads the Federation of American Hospitals (FAH). FAH is the for-profit hospital lobby. Chip joined hands with Bill Clinton to push PPACA.

--White House health reformer Nancy-Ann Deparle played key roles for LHP Hospital Group, prior to her political appointment. She has a history of converting community hospitals to for-profit. LHP is mentioned in the WSJ in relation to an Alaska hospital deal.

--The Senate rebranded "nonprofit community hospitals" as "private tax-exempt facilities" in the health reform bill. Elected officials already knew most hospitals were struggling.

-For deals not in the WSJ article.

Faced with mounting debt, huge burdens of uninsureds and years away from significant help from PPACA, state and local governments sellout their community hospitals. They do so the cheap. Community hospital sales used to fund large community foundations. No more.

Sunday, August 29, 2010

BP Blames Engineers for Misreading Results

In a yet to be released internal report BP blamed engineers for misreading pressure data. This was the cause of the blowout. While it is proximate in time, it ignores design and execution problems throughout the life of the well. Did BP's root cause analysis stop after the first "why"?

Three BP engineers refused to testify in last week's hearings. Two did show, one of whom had been promoted by BP into a higher position.

While I didn't catch every word of the testimony, I don't recall any engineer admitting they misread data. BP's attorneys, Wilmer Hale, dug up the Pentagon's Abu Ghraib defense. A few employees messed up, there's nothing systemic about what happened.

The seventh "why" points much higher than a few engineers. It points to leadership focused on cost cutting, regardless of safety or quality. I'll wait for the other seven investigations to run their course, but the first one is weak.

If a CEO truly believed the cause was "engineer misreading," would he say this:

Speaking to reporters today at the Southern Governors’ Association’s 2010 Annual Meeting, Bob Dudley said the extent of the disaster has been a "shock" that will force BP and the oil industry as a whole to re-evaluate their practices.

"What we need to do now as a company is go back and fundamentally look at deepwater drilling …and assure that we can drill safely again. I believe we can, but we need to rethink many, many things."
That sounds like more than hiring better engineers. Governors get the inside story, while the public is offered swill.

Remembering Katrina's Nightmare

Before Hurricane Katrina made landfall on the Gulf Coast, I worried for caregivers and patients in harm's way. I helped evacuate a Texas Gulf Coast hospital before Hurricane Gilbert, a record storm predicted to strike our community. Four days before projected landfall, I had great difficulty getting inland administrators to accept a few of our 100 or so patients. For this reason I knew New Orleans, with nearly 5,000 licensed hospital beds, could not evacuate all the acutely ill.

Five years ago I noted New Orleans filling with toxic gumbo. This caused me great concern. As a hospital administrator in Roanoke, Virginia in the 1980's, I endured in a river flooded 700 bed teaching hospital. As half the electrical switching equipment was in the basement, the hospital had no power. I know how life giving facilities quickly become death traps without electricity, water or sewage.

America's failed response to New Orleans doctors, nurses and patients enduring in dead facilities caused needless suffering and death. The line of responsible parties is long, George W. Bush, Michael Chertoff, Michael Brown, Donald Rumsfeld, Frances Townsend, Andy Card, Condi Rice, Joe Hagin and many more.

They eventually responded, evacuating those not moved out by privately hired helicopters. Patients were completely evacuated six days after landfall. Yet, Katrina raised red flags regarding evacuation responsibility and triage methods. The White House Lessons Learned report failed to address these concerns.

Frances Townsend's report omitted any mention of Memorial Medical Center, the hospital with the highest patient death toll. Thirty five people perished in Memorial's hellish halls. Twenty five died in the LifeCare unit, which rented a floor in the Tenet Healthcare owned facility. Relatives await justice.

This national nightmare has been addressed in plans. Yet, America had plans in 2005. They'd been rehearsed the prior year on fictional Hurricane Pam. The BP oil spew adds complexity to any major Gulf Coast hurricane strike. May America do better next time.

Saturday, August 28, 2010

Recession Yet to Hit Campaign Ads

The AP reported:

As of this week, candidates for state and federal office had spent $395 million on ads for the November elections, compared with $286 million at this point in the 2006 midterms. More than half the ads have been negative.
Ad spending is up 38% since the last election. Funny, that's close to 30%, targeted annual returns for private equity underwriters (PEU's). Now who's underwriting these political campaigns?

Don't forget Blue Max Baucus' ad implying his opponent was gay, like Red Ken Mehlman. How about Blue Robert Gibbs' submarining Howard Dean in 2004?

Enough with the sordid trip down America's campaign memory lane. How does spending increase dramatically in difficult financial times? Apparently, their sponsors have plenty of funds to invest.

Friday, August 27, 2010

BP to Give 80,000 lb Tug to BOP

After an unsuccessful fishing expedition, BP will proceed to remove the damaged blowout preventer (BOP). The three sections of pipe will be pulled with the BOP. Oil & Gas Journal reported:

The Helix Q4000 multiservice vessel will attempt to lift the Deepwater Horizon BOP, Allen said.

If necessary, crews are prepared to use what Allen calls “a gentle tug” involving 80,000 lb of force to free the BOP. Remotely operated vehicles then will be used to cut off the drill pipe below it.

If the gentle tug fails, then BP plans to open rams in the BOP’s lower marine riser package before it cuts off the pipe. Allen said BP is prepared to use tools to force open the rams.

So the tug will occur with closed rams? How will the 80,000 lb force impact the 3,500 foot long drilling pipe, potentially stuck in the concrete plug?

Assuming no tropical weather delays or problems with opening the rams, Allen estimates the DDIII could resume drilling the relief well on Sept. 7-8.
As for the assumptions, Thad has been all over the place on the BOP's functioning. He said on 8-25:

In the last 24 hours we have flushed the capping stack and the blow out preventer with methanol that actually opened and closed those rams so they are functionally properly right now as a result.

Tropical systems are lined up between the coast of Africa and the U.S.
The puzzling management of what's been sold as "the final kill" continues. Meanwhile, BP employees continue to plead "the fifth."

Employer-Sponsored Health Insurance Expected to Plummet

The Census Bureau will release projections for the number of Americans without health insurance. Data came out in August under the Bush administration. It now comes out in mid-September.

The report is expected to show a sharp rise in the uninsured population in 2009. The 2008 increase in the number of uninsured was solely attributable to the decline in employment-based coverage, which continued its free fall.

Employer coverage is expected to fall further. The numbers with workplace health insurance are:

2008 176.3 million
2010 150 million (CBO projections)

How far will the uninsured rise from 46.3 million? Will it go up 13.1 million, roughly half the projected decline in employer coverage? We'll find out September 16.

Ken Mehlman is Connected, Which Beats Gay

The power elite are fine with gay people. They courted San Angelo Mayor J.W. Lown, before he left public service to be with his undocumented gay lover. While lobbying on behalf of our local Air Force base, Lown learned Washington D.C. is run by gays. In a Biblical like moment, a Satanic lobbyist dangled John Cornyn's Senate seat before J.W.'s eyes. Lown turned him down.

The business sector is similarly supportive. After British tabloids revealed Lord John Browne's gay lover, The Carlyle Group’s energy joint venture hired the BP CEO, fresh off the Texas City refinery explosion. Ken Mehlman works for Kohlberg Kravis Roberts (KKR), a private equity underwriter (PEU). KKR won’t miss a greed inspired beat over Ken’s gay status.

Connections matter to the power elite, not sexual orientation.

Thursday, August 26, 2010

DOJ Funds California Prison's Skin-Burning Ray Gun

A Department of Justice technology grant will pay $750,000 for a California prison to acquire a directed energy weapon to use on recalcitrant prisoners. The LA County Sheriff's Department will install the weapon by Labor Day. It's a less powerful version of Raytheon's combat crowd controller, known as Silent Guardian. Silent Guardian has a range of 800 feet, while the prison unit covers 65 feet.

The second post on this blog was about Eisenhower's Military Industrial Complex, engorged from years on federal budget steroids. While my piece is a scatter shot, it does address directed energy weapons.

My third post dealt with the abysmal White House Lessons Learned report on Hurricane Katrina. Both are as timely today as they were in 2006. What change?

Does anyone else see a future where officials use a skin-burning ray to herd people suffering in the aftermath of a devastating storm? It zaps them away from shuttered stores with scarce food and water. That's zero tolerance.

Two Tony's Won't Testify on Lockerbie Bomber's Release

BP CEO Tony Hayward inked a deal in 2007 with Libyan officials for oil and gas exploration. British Prime Minister Tony Blair looked over Hayward's shoulder at the signing. Colonel Gadhafi's son confessed that any energy deals were contingent upon the release of the Lockerbie bomber. The younger Gadhafi made his comment during homecoming celebrations for the bomber, freed by British authorities in August 2009.

Once BP spewed millions of barrels of oils into the Gulf of Mexico, the U.S. Senate took interest in the foul smell emanating from the bomber's release. They asked the reviled Tony Hayward to testify before a Senate panel. Hayward refused twice, first through FT and second by letter to Senator Menendez. Pimping Tony Blair was never asked to testify, despite the U.S. paying part of his salary as Quartet Middle East Special Envoy.

For months a foreign company controlled the Gulf of Mexico, U.S. sovereign territory. BP's CEO followed that up by snubbing a Senate investigation. BP is currently hedging on the final solution, relief wells. Corporate interests appear to have the upper hand. A bit of balance will return when the two Tony's testify.

BP's Kent Wells Hedges on Relief Well

BP's Vice President Kent Wells lost his technical luster in testimony at the Deepwater Horizon investigation hearing. When he wasn't claiming ignorance, Wells hedged on National Incident Commander Thad Allen's longtime assertion that relief wells are the final solution for the spill.

Wells stated there are other technical options for shuttering the well. Might those be temporary, enabling the well to be produced at some point in the future?

Wednesday, August 25, 2010

Tom Green County's Cash Cow: Indigent Health

With two months left in the fiscal year the Tom Green County Indigent Healthcare Program spent $22,098 out of a $2 million budget. On the plus side, the County makes quarterly Upper Payment Limit (UPL) contributions, which leverage state and federal money for local hospitals. Payments in 2010 are below:

January 26- first quarter UPL, up to $250,000
May 18- second quarter UPL, "continue as in the past"
August 17- third quarter UPL of $250,000

Shannon Medical Center receives 81% of UPL payments and San Angelo Community Medical Center 19%. A letter states Tom Green County "did not fund the non-federal share of supplemental payments to these providers in the listed programs prior to October 1, 2008." Minutes indicate Commissioners Court approved UPL agreements with area hospitals in March 2009.

August 2009 minutes show the TGC Indigent Health program spent nearly $1.1 million vs. $22,000 in 2010. It seems hospitals aren't billing the county for indigent care that fits within their UPL contribution.

UPL leverages state and federal money for area providers. That is a positive. However, the Tom Green County Indigent Health Program served as a cash kitty, boosting county reserves by over $6.3 million the last nine years. The tenth boost seems likely, given the implausible spending of $1.98 million in three short months. Consider the program's history:

1998-2000-- $1.71 million in annual expenditures (average)
2001-2009-- $1.04 million in annual expenditures (average)
The latest budget information/projections for Indigent Health shows:

2009 actual--$1,357,000
2010 budget--$500,500
2010 revised--$500,900
2011 budget--$465,300

The County wasn't the only entity to do less in the health care arena. Long before the City eliminated its pharmacy and planned to shift social services to a community agency, they quit providing primary care to the public. However, the City did start a clinic for employees. The City Health Clinic also cares for Tom Green County employees.

Every individual, business and government entity is struggling to deal with rising health care costs. The County made a change in this regard, budgeting $1.6 million less for indigent care in 2010 than the statutory requirement. UPL contributions will offset this decrease and given local hospital silence, it must be to their advantage.

The impact on area citizens remains an open question. I look forward to reading the first Community Indigent Health Care Needs Assessment, as required in the UPL contract. Given the difficult financial environment, I can't imagine there are fewer folks in need.

Update 8-27: Judge Brown stated UPL contributions in 2009 were $450,000. This money was leveraged 2.55 times by the federal government. The County will contribute $1 million to UPL in 2010 and 2011. These are a separate line item in the County budget. The Feds bumped up the match to 3.55 times to 1. The county continues to qualify and enroll people into the program. Income qualifications remain at 21% (or less) of federal poverty level. Despite the County's nine year positive cash experience with Indigent Care, there is no consideration of increasing the income qualification. Hospitals agree to care for all IHP enrollees in exchange for UPL funds. They do not bill the program for care. The Indigent Health budget (referenced above) pays for care provided by Esperanza and independent physicians.

Tuesday, August 24, 2010

Thad Allen Knows?

It's getting harder to listen to Than Allen and take him seriously. Consider what he said in his August 23 press confab:

Thad Allen: I don't have privy to exactly what was subpoenaed by the joint investigation team.

The National Incident Commander does not know what evidence at the bottom of the sea was subpoenaed? Misplacing pressure readings was bad enough.

They're pulling the blowout preventer for pressures concerns, ones ignored in four prior operations. As for the 3,500 foot long drilling pipe stuck in the BOP, Thad spoke to its retrieval:

the drill pipe, if it is part of that cement plug, will be part of the plan that BP will give to us in how to extract it, but they can remove the pipe from the cement if it's in contact with it.
How will they remove a 3,500 long drill pipe embedded in the cement plug without disturbing the integrity of the plug while there is no BOP? Is Thad conducting theater here? What's he setting up? Did the Macondo well blow out the side or fracture at the base and oil is gushing toward the surface?

Consider this Allen statement:

The relief well was designed to intersect the wellbore below the last casing. In other words, there's a metal liner that is on the outside of the – the wellbore actually has a liner attached to it down to a certain depth. And after that, it's just pure rock or whatever the formation is there.
Thad doesn't know the formation below the last casing? BP knows what they drilled through. Why didn't they inform the National Incident Commander?

As for ways to collect any subsequent oil spew:
I think we've demonstrated the supertankers aren't an effective way to recover the oil. Thank you. Next question.

The Saudi Supertanker solution involved pumping. Pumping recovered over 800,000 barrels of oil from the well head. Thad can brand the A Whale's failure to collect dispersed and degraded oil a failure, but skimming was never a priority. It was the source of temporary employment for some fishermen and good public theater. Despite Thad's discount, pumping oil into ships on the surface was a success.

The sad part is Thad's turning the Coast Guard into BP's security team. What sovereign country cedes airspace over the Gulf of Mexico to a foreign corporation? What sovereign turns their EPA into a corporate protection agency?

While BP will get their blowout preventer back, BP drilling engineers won't testify before the joint investigative panel.

The Deepwater Horizon response, despite all its questionable dimensions, is the new black gold standard. Thad's the public bag man. He frequently reminds me of someone who said "I know nothink, nothink!"

Monday, August 23, 2010

Mysterious 3,541 Feet of Pipe in Blowout Preventer

BP found three pipes in its fishing expedition in the failed blowout preventer. One is 3,500 feet long, another 40 feet and the last a 1 foot section. How do they know one is 3,500 feet long? What imaging techniques did BP use to ascertain this.

Another question is where the drill pipe came from? The Times-Picayune reported:

Allen has said the pipe may have fallen from above when the Deepwater Horizon rig exploded April 20.
Could it have fallen prior to blowout? If it came after the blowout, could it have come from below, pushed up by the force of well flow?

The source of this 3,500 feet of drill pipe and location prior to the blowout seems critically important. BP cited difficulties in retrieving the 3,500 feet of drill pipe.

Because one of the pipes is so long, leaving it in place would require lifting the blowout preventer at least 3,500 feet vertically to take it off well. Technicians would have difficulty handling the apparatus with such limited mobility, BP Senior Vice President Kent Wells has said.
On or about August 26, BP will get their blowout preventer back. While it will remain in federal hands, Transocean wants access to the BOP for its investigation. BP clearly wants to use the BOP to negate charges of gross negligence.

BP also wants to drill into the Macondo formation in the future. Will they continue to get their way?

Sunday, August 22, 2010

Unprecedented: Thad Allen Joins Fran Townsend

It's fitting National Incident Commander Thad Allen put out his op-ed near the five year anniversary of Hurricane Katrina. It has much in common with Frances Townsend's whitewash, also know as the White House Lessons Learned Report.

Both cite the unprecendented nature of the disasters, despite government and private corporations drilling on the very events prior to their occurrence.

In both cases, key safety systems, levees and a blowout preventer (BOP) failed.

A "fail-safe" system had failed.

Data on blowout preventer failure shows such systems to be anything but "fail safe." Even the two relief well BOP's had problems requiring intervention.

Despite the mobilization of countless resources from the start
Resources were anything but countless the first two weeks. BP had few of the defense mechanisms it outlined in emergency plans.

We now know that 53,000 barrels were likely escaping each day from the well
When did Allen know this? He's told two different stories. Thad said he knew this number in June when he sent a letter to BP on designing a system to capture the oil spew. Yet he wasn't telling the public this fact in July.

We employed 7,000 vessels of opportunity, a waterborne militia

That's the first time I've heard the 7,000 number relative to VOO. News reports haven't been that high. Is Allen counting the Coast Guard that acted like a militia, keeping people away from dead and dying sea creatures?

We mobilized the largest number of oil skimmers

Those skimmers didn't capture one day's worth of BP's promised (revised lower) skimming capacity in three months time. Dispersants sank the oil, making it unskimmable. A strategic decision was made early on to use dispersants.

The science team also got us a precise flow rate and an oil budget that estimates where the oil went.

Both of which have been challenged by scientists and industry experts. The precise flow rate revision process was patently laughable. The crack team won't share their Oil Budget methodology for peer review purposes. Allen promised well pressure readings, but they're as scarce as fish kill test results.

Yes, alot has been done and thankfully the oil spew is stopped. However, this well blew out concrete plugs before. Given the lack of well integrity, it could do so again. Macondo has at least three ways to blow, out the side, out the top, through the relief well or through a combination of these methods.

Thad Allen has not been honest with the American people. His op-ed drives that point home. Fran Townsend whitewashed a rescue response that led to the death of 35 patients in Memorial Medical Center. Her Lessons Learned report omitted this key fact. I trust the plethora of Deepwater Horizon investigations to do better than Ms. Townsend. However, we're off to a rough start.

Update: BP's Lessons Learned report says it had over 5,000 Vessels of Opportunity. They later stated it was nearly 3,500. Was that for one week or a shorter period? It also claims it went from skimming 450,000 bpd to over 1.2 million bpd. Given the final skimming numbers of 150,000 barrels, this claim is almost laughable.

Pressure Test Promises Hide Monster Well?

National Incident Commander Thad Allen stated the blowout preventer would be replaced out of concern the relief well's final cementing could blow a seal. This raises the question of pressure. How would final cementing put more pressure on the seal than other interventions to date, the top kill, stacking cap, injectivity test or static kill?

Recall success in the well integrity test was 7,500 psi or greater. That same psi is now the seal's breaking point. What would've been a resounding success in well integrity is now the reason to pull the blow out preventer.

Consider Thad Allen's words. On August 2 he said:

We had to pressure-test the Horizon blowout preventer, critical in this process.

There are going to be three different ways we're going to measure pressure, different gauges on the blowout preventer and the riser, and the capping stack itself.

The science team, working with the BP engineers, have decided that as we go through this procedure, that the pressure in the capping stack itself should not exceed 8,000 pounds per square inch.

Allen said on August 9:

Q: Is it possible to release the actual pressure that was obtained during the pressure test? As much data on the pressure to the BOP as we could get would be lovely.

Thad Allen: Yes, I actually had access to those pressure readings. I'm not sure why they can't be released. We will talk to the science team at BP and see if we can get those released later on today.

On August 14 the same reporter followed up on pressure readings:

Q: I understand that you said the 7,500 was the pressure limit on the capping – or the transition spool. Now we know you were going to go to 9,000, expected to go up to 9,000 in integrity test. Was that a differential or a absolute pressure difference, or limit? And also, we have – been reports that the LMRP has a 5,000 psi limit. Is that correct?

Thad Allen: Well, we will get the details and I'll provide you the information based on personal discussions I've had with the BP engineers in Houston, their indication is that the weakest point of the assembly are regarding pressure. Pressure is the – what we call the spooling tool – that was the device that was inserted into the lower marine riser package that allowed it to be able to be hooked up to the capping stack and the threshold there is 7,500 psi.

We had established, as you know, 8,000 psi is the limit for the well integrity test and how we actually bring those pressures up and how we monitor them are actually something to a procedure that is approved for each test. I can go back and give you the variance and whether or not there was a differential, I just don't happen to have the information in front of me right now and we'll provide that to you.

Why the mystery over pressure, when Allen set it as the gauge for success on August 2?

What you want is the pressure to slowly decrease until it becomes zero in the well. That means the amount of mud is equal to the pressure being pushed up. But if it stops somewhere short of that, that means we may have a problem with the integrity of the casing of the wellbore, so we really won't know until we do the final diagnostics. And, again, that will tell us what we need to do for the bottom kill.
Matt Simmons hammered the lack of integrity of the wellbore. Thad admitted as much. While Simmons passed away, a scientist offers a similar assessment:

The geology is fractured.
Bill Clinton called the BP well "a geologic monster."

When it's not expected, monsters attack.

Friday, August 20, 2010

Vessels of Opportunity Wind Down

The National Incident Command, which includes the government and BP, prioritized sinking over skimming oil. While dispersant made the oil virtually unskimmable, the Command orchestrated a "large skimming" response via the Vessels of Opportunity program.

NIC Commander Thad Allen said on July 8:

Oil skimming in the Gulf started slowly, in part, because (we) needed time to sort out the capabilities of the hundreds of boats being signed up for BP's Vessels of Opportunity program.
Horse hockey! The spill started April 20. BP's emergency plans said it had the capacity to skim over 400,000 barrels per day. The company reduced that to 171,000 bpd after the spill.

From almost the get go, the government and BP decided to use dispersants on the sea floor. Skimming theater ramped up with Thad Allen's skimming tutorial, where he failed to present data on the responses daily skimming capability.

A look at the Vessels of Opportunity program shows any opportunity was short lived.

2,500 (July 8)
3,200 boats (July 15)
2,400 boats (July 22)
1,400 boats (August 1)

400 boats (August 19)
BP and the government sank the oil, while hiding its deadly impact. The oil industry plans to institutionalize a dispersant heavy response until high tech collection methods can be designed and implemented. Will they include a chapter on skimming theater? How many of those, with their life's work at risk, get a few weeks of acting pay?

Thad's next scene has BP retrieving the well's blowout preventer. It's BP's weapon in avoiding gross negligence charges (which would bring even more crippling fines). Does Thad have any surprises as the story continues? Might the second relief well turn into a production well to relieve pressure within the unstable Macando formation?

Update 9-15-10
: BP says almost 3,500 boats participated in the program. It's ending VOP in Florida, Alabama and Mississippi. BP's Lessons Learned report cited nearly 5,000 boats in Vessels of Opportunity, while Thad Allen claimed 7,000. It turns out the government has problems with other numbers on the oil spew.

Thad Allen Shows His Lesser Side

In today's press briefing National Incident Commander Thad Allen said at the 41:40 mark:

When we finally realized we that had a flow rate that was somewhere around 53,000 barrels per day, actually before that we had a range of, if you remember, 35,000 to 60,000 bpd. We went to BP and we said here's what we want you to do and I actually I wrote them an order. This is around the middle of June. We said you need to build a system that can accommodate 53,000 bpd with no hydrocarbons going into the environment.

BP responded that it would design the system to process 60,000 to 80,000 bpd. It never went into production.

Allen told the public on July 8:

I just want to remind everyone, that continues to be an estimated flow rate (35,000 to 60,000 bpd). Once we get this well bore completely sealed and producing, we'll have better empirical data by which to establish and refine our flow rate going forward.
Allen knew the rate was 53,000 bpd when he made this comment. Why didn't Admiral Allen level with the American people?

The well flow was never completely captured and verified, giving BP's lawyers wiggle room for negotiation. Allen's latest move, recovering the damaged blow out preventer (BOP), helps BP. From the beginning BP blamed BOP maker Cameron and driller Transocean. It's priority is to avoid a gross negligence finding and the blow out preventer is crucial to that defense.

What is theater for the masses vs. the truth? NOAA and the EPA look a bit shaky in their test and definition parsing. Thad looks duplicitous. The government is supposed to have the people's back.

Thursday, August 19, 2010

Transocean Says BP Is Withholding Data

BP's risk management machine continues churning. WSJ reported:

Transocean Ltd. is accusing BP PLC of withholding valuable information about the Deepwater Horizon oil spill, saying the U.K. oil giant is crippling Transocean's ability to conduct its own investigation into the disaster.

In an Aug. 18 letter to BP America lawyers, Transocean said BP has refused to hand over logs, operational reports and seismic data that will shed light on why and how the Deepwater Horizon rig caught fire and sank, leading to the worst offshore oil spill in U.S. history.

"It appears that BP is withholding evidence in an attempt to prevent any entity other than BP from investigating the cause of the April 20th incident and the resulting spill," Transocean attorney Steven Roberts said in the letter.

BPAmerica's lawyer is Jamie Gorelick of WilmerHale. She provided BP with numerous wins in negotiations with the White House.

Given BP's defensive behavior Cameron should be very worried about access to information. The blow out preventer (BOP) will be removed before the relief well conducts final cementing. The BOP will end up in the government's hands given the DOJ subpoena. Jamie's D.C. connections could help BP once again.

Highlights of Seafood Safety Testimony

Representative Ed Markey conducted a one man show as Chair of the House Commerce Subcommittee on Energy & Environment. His first BP Seafood Safety panel featured a number of scientists, his second scientists and shrimpers. A few highlights:

1. NOAA won't release their methodology for calculating their "Oil Budget."

2. FDA is testing fish tissues for dispersant ingredient DOS, a nontoxic component. It has no methodolgy for testing toxic components of dispersant.

3. FDA is testing fish from non-oiled areas of the Gulf. The major test is a smell test, conducted by trained workers.

4. EPA doesn't know if there is oil on the sea floor. Its studies show oil is toxic to Gulf fish and shrimp and dispersant/oil mix is equally toxic. It did cite the use of dispersants as wise, despite not understanding their wider or long term impact.

5. Fisherman/shrimpers tell of finding oil on the bottom and showing it to BP/government workers. BP says the oil is gone.

6. Fisherman note that their catch are bottom feeders. When they fish clean areas, shrimp aren't there.

7. Independent FSU scientist says total pollutant load is 1.5 times the Oil Budget, when omitted methane gas is taken into account. He said all core samples from the sea floor near Panama City found oil, indicating widespread presence.

8. FDA says the public has the same level of safety as it was before the spill. (This is the same FDA recalling 380 million eggs for salmonella.)

For other interesting tidbits in the testimony, CSPAN has more.

Thad Allen to Get BOP for BP

BP's Deepwater Horizon well is consistent. During drilling it lost mud into the surrounding rock formation. That's now oil. Reuters reported National Incident Commander Thad Allen said:

BP engineers and government scientists were concerned the cement may have trapped up to 1,000 barrels of oil in the space between the well pipe and the surrounding rock layers.
The trick is to cement the well bottom without another blowout. Reuters stated:

They want to make sure pumping in mud and cement through the relief well will not force that oil up, where it could leak into the sea.

The well has at least three ways to blow. One is up the relief well shaft. Two is out the side of the existing well. Three is at the cemented top. There could conceivably be a combination of the above possibilities.

Yesterday I noted how badly BP wants an unruptured blow out preventer. Thad Allen stated this at the end of today's press briefing.

They want to make sure pumping in mud and cement through the relief well will not force that oil up where it could.... damage a failed blowout preventer central to various investigations of the April 20 blowout.
BP's risk management response continues. Ken Feinberg and ExxonMobil came to BP's rescue.

Wednesday, August 18, 2010

Scientists Challenge Oil Spew Disposition

University scientists say up to 79% of the oil remains in the Gulf of Mexico. This is in contrast to the government, which suggests only 26% lingers. This is the same government that couldn't predict flow from the Deepwater Horizon. Neither report accounted for hydrocarbon gasses such as methane in their estimates.

USF results showed oil in marine sediment in the DeSoto Canyon, a critical spawning ground. Tests also indicated dispersed oil as highly toxic to phytoplankton and bacteria.

Who should the public give more credence to? Terminology points to university scientists, at least the ones who didn't call their estimate an "Oil Budget."

Final Solution Delayed in BP Catastrophe

Finishing the relief well is on hold until late August. Scientists are concerned about 1,000 barrels of oil potentially trapped in the space between the well pipe and the well bore. Pumping cement into the well near the bottom will increase pressure, potentially pushing oil through a seal on the blow out preventer. LATimes reported on solutions:

One option would involve building a mechanism on the existing cap that could relieve the pressure. Allen said they hoped oil would not be released into the ocean under this plan.

The other option would involve removing the existing blowout preventer and cap and replacing it with a stronger one that could withstand any pressure increases when the relief well process starts.

While BP and the government talk about increased pressure at the blow out preventer seal, they leave out rising pressure in the well column. The Deepwater Horizon previously lost drilling mud into the formation around the well. Despite the static kill and cementing, the well still has pressures of 4200 psi.

In four other procedures BP and the government exceeded pressure ratings of the weakest components. From my chair it's not about 1,000 barrels of oil.

From day one BP's focus has been risk management. Notice they never produced from the stacking cap as planned. That would've given hard data on well flow, which the company does not want. What they do want is a whole blow out preventer, not one with ruptured seals. BP needs it to go after Cameron.

This renegade well blew bad cement jobs before. Might it do so again?

Tuesday, August 17, 2010

BP Buys Caspian Oil Field for $2 billion

In the midst of BP's divestiture to raise funds for the Deepwater Horizon oil spew, the company bought Devon Energy's Caspian Sea assets off Azerbaijan. It spent $2 billion to buy a field producing 17,000 bpd.

Last year BP's lawyer, James A. Baker, III of Baker Botts, went to Moscow for a conference on Caspian Sea oil and gas. The west is vying with Russia and Iran for Caspian Sea resources. Mr. Baker serves on the Honorary Council of Advisors of the U.S. Azerbaijan Chamber of Commerce. He serves alongside Henry Kissinger, Brent Scowcroft, John Sununu and Zbigniew Brzezinski.

BP recently made peace with Russia. CEO Tony Haywood faces looming banishment to BP's Russian joint venture.

Did James Baker, the elder or younger, help the latest accident prone BP CEO? He saved CEO Lord John Browne after BP's Texas City explosion killed 15 workers. Might "Turtle" Dudley need rescuing as well? The fabulous Baker's stand ready to help.

Mayo Clinic's Innovation Not in Health Reform

Harvard Business Review highlighted innovation at the Mayo Clinic. They cite three contributing factors, limited resources, connectedness and diversity. The three combine to form a passion for learning and providing high quality care.

The founding Mayo brothers placed doctors on salary, such that they could focus on the patient. It gave clinicians "space for creativity, education, and research."

While health reform promises a focus on paying for what works, it incentivizes doctors with pay for performance. Mayo Clinic went past what worked to find what worked better. They fostered intrinsic motivation and became the best in the world.

Health reform relies on extrinsic motivators, pay for performance. It will sub-optimize the system. Dr. W. Edwards Deming would ask, will they ever learn?

Monday, August 16, 2010

Oil Spill Investigations: Montara vs. Deepwater Horizon

The investigation into Australia's Montara oil spill is complete, but not public. Platts reported:

The report of the Australian government's Commission of Inquiry into the leak was handed to the country's Minister for Resources and Energy Martin Ferguson on June 18, but the findings of the inquiry have yet to be made public. The government is currently in caretaker mode ahead of a general election to be held on August 21.

BP's internal investigation was due in early August. It's one of many. Let's hope they're better than Ken Salazar's. He bailed on his charge.

Meanwhile, the people suffer. Fisherman in West Timor have turned to smuggling to support their families. What will fisherman on the Gulf Coast do?

Podesta Lightly Oils BP

I'd wondered why John Podesta's Center for American Progress (CAP) blogs went so light on the BP oil spew. I assumed it related to brother Tony Podesta's lobbying for BP or CAP Senior Fellow Tom Daschle's sitting on BPAmerica's External Advisory Council.

WSJ answered my question:

On May 21, CAP president, John Podesta, privately implored White House officials to name someone to be the public point person for the spill response. A week later, the White House announced that Coast Guard Adm. Thad Allen would hold daily briefings on the spill, wherever he would be on any given day.

If a Bush were in charge, CAP would be chock full of BP posts with compelling pictures of innocent animals.

Update: BP is back advertising on Podesta's website. BP spent $94 million on ads during the oil spew.

Sunday, August 15, 2010

Locked Blog: Recent Posts

Google locked Ari's Freedom Switch. It's my least active blog and focuses on international relations. I posted two pieces today:
  1. Ari's Freedom Switch: Six Days to Fueled Bushehr Nuclear Plant

    6 hours ago by PEU Report/State of the Division
    Six Days to Fueled Bushehr Nuclear Plant. Russia said it would load nuclear fuel into Iran's first nuclear plant on August 21. Assuming this is true and not a head fake, that's six days away. ...
  2. Ari's Freedom Switch: Israel Strikes Deal with U.S. on F-35's

    7 hours ago by PEU Report/State of the Division
    Israel to maintain its aerial superiority and its technological advantage in the region," Barak said. "The F-35 will give the IAF better capabilities, both near and far, to help strengthen Israel's national security." ...

There are many blog posts on these topics, so my first reaction is it's not content related.

However, I did ask how much of Israel's F-35 bill the American taxpayer would foot? I also pondered the world leaders stating they would not allow Iran to go nuclear. The media suggests they have six days.

Please don't lock this blog.