Paul Rubin: Why Is The Gulf Cleanup So Slow?

Deepwater Horizon Gulf of Mexico Oil Spill

DESTIN (Dow Jones Newswires), July 2, 2010

As the oil spill continues and the cleanup lags, we must begin to ask difficult and uncomfortable questions. There does not seem to be much that anyone can do to stop the spill except dig a relief well, not due until August. But the cleanup is a different story. The press and Internet are full of straightforward suggestions for easy ways of improving the cleanup, but the federal government is resisting these remedies.

First, the Environmental Protection Agency can relax restrictions on the amount of oil in discharged water, currently limited to 15 parts per million. In normal times, this rule sensibly controls the amount of pollution that can be added to relatively clean ocean water. But this is not a normal time.

Various skimmers and tankers (some of them very large) are available that could eliminate most of the oil from seawater, discharging the mostly clean water while storing the oil onboard. While this would clean vast amounts of water efficiently, the EPA is unwilling to grant a temporary waiver of its regulations.

Next, the Obama administration can waive the Jones Act, which restricts foreign ships from operating in U.S. coastal waters. Many foreign countries (such as the Netherlands and Belgium) have ships and technologies that would greatly advance the cleanup. So far, the U.S. has refused to waive the restrictions of this law and allow these ships to participate in the effort.

The combination of these two regulations is delaying and may even prevent the world's largest skimmer, the Taiwanese owned "A Whale," from deploying. This 10-story high ship can remove almost as much oil in a day as has been removed in total -- roughly 500,000 barrels of oily water per day. The tanker is steaming towards the Gulf, hoping it will receive Coast Guard and EPA approval before it arrives.

In addition, the federal government can free American-based skimmers. Of the 2,000 skimmers in the U.S. (not subject to the Jones Act or other restrictions), only 400 have been sent to the Gulf. Federal barriers have kept the others on stations elsewhere in case of other oil spills, despite the magnitude of the current crisis. The Coast Guard and the EPA issued a joint temporary rule suspending the regulation on June 29 -- more than 70 days after the spill.

The Obama administration can also permit more state and local initiatives. The media endlessly report stories of county and state officials applying federal permits to perform various actions, such as building sand berms around the Louisiana coast. In some cases, they were forbidden from acting. In others there have been extensive delays in obtaining permission.

As the government fails to implement such simple and straightforward remedies, one must ask why.

One possibility is sheer incompetence. Many critics of the president are fond of pointing out that he had no administrative or executive experience before taking office. But the government is full of competent people, and the military and Coast Guard can accomplish an assigned mission. In any case, several remedies require nothing more than getting out of the way.

Another possibility is that the administration places a higher priority on interests other than the fate of the Gulf, such as placating organized labor, which vigorously defends the Jones Act.

Finally there is the most pessimistic explanation -- that the oil spill may be viewed as an opportunity, the way White House Chief of Staff Rahm Emanuel said back in February 2009, "You never want a serious crisis to go to waste." Many administration supporters are opposed to offshore oil drilling and are already employing the spill as a tool for achieving other goals. The websites of the Sierra Club, Friends of the Earth and Greenpeace, for example, all feature the oil spill as an argument for forbidding any further offshore drilling or for any use of fossil fuels at all. None mention the Jones Act.

To these organizations and perhaps to some in the administration, the oil spill may be a strategic justification in a larger battle. President Obama has already tried to severely limit drilling in the Gulf, using his Oval Office address on June 16 to demand that we "embrace a clean energy future." In the meantime, how about a cleaner Gulf?

Mr. Rubin, a professor of economics at Emory University, held several senior positions in the federal government in the 1980s. Since 1991 he has spent his summers on the Gulf.

Copyright (c) 2010 Dow Jones & Company, Inc.

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Henrik Larsen | Jul. 8, 2010
Firstly, I agree with Mr. Rubin that the EPA 15 ppm discharge rules could be relaxed for this operation only. Secondly, no waiver to the Jones Act has been needed. The Jones Act requires goods carried between U.S. ports to be shipped aboard U.S.-flagged vessels built in the U.S. and owned by American citizens. The law doesn't apply to ships operating far from the U.S. coastline, skimming oil or performing other such chores and not hauling cargo from one American port to another. The "A Whale" has been testing since last weekend but has been hampered by rough waters and might not be perfectly suited for a thinly dispersed oil slick such as this incident. RigZone reported days before publishing this article that additional foreign help was being accepted. And yesterday RigZone published this commentary on the clean up efforts. It is interesting that Mr. Brooks, an investment banker, has a more informed opinion that Mr. Rubin who is a professor As for the state and local initiatives, then many of them smack of knee jerk reactions which will have long term effects. Hence they should require a good review before being employed to avoid a cure which is worse than the illness. It simply does not make sense to set aside good safety and environmental rules in order to "take action" Mr. Rubins sinister conspiracy theories about delayed response by the administration is simply outrageous. What possible realistic scenario would include shutting down the main contributor of domestic oil production? The report published in by the National Petroleum Council in 2007 clearly stated that ALL forms of energy will be needed to satisfy the demand and that hydrocarbon remains the largest energy source for decades to come. So the current administration is taking heed to this recommendation. I can envision better regulation and a proper industry-government response team that includes planning for worst case scenarios where the operator kills the well and the government manages the clean up efforts. Furthermore, operators in deep water is probably going to have to set aside a bond to finance any emergency situation and subsequent clean up. That might limit the number of operators who can afford to drill in deep waters, but it will protect the American tax payers from footing the bill.

Daniel Cianci | Jul. 7, 2010
I was really hoping the cleanup 10 story ship will encourage other idled ships of this size to be crafted for just this type of cleanup and possibly a few like 5 of these huge belly whale ships that could really take in a lot of oil; fouled waters at one time while the relief well is being drilled to stop the leak. This could have really prevented so much of the oil from reaching the shores if was already in place, but now can still be done as long as the oil is still on the sea surface.My real concern was hearing on Coast to Coast A.M. overnight radio show that a leak of oil was detected just 10 miles from this major leak site and that plugging the well could really put more pressure on other areas. Once this blows a huge gaping hole, there would be no way to plug such a hole and then we will really need more of these whale ship to keep gulping oil fouled waters for years until the oil runs completely out. Displacing huge ocean waters all at once when the methane gas pockets come out of the leak also would be so forceful that when the ocean replaces that when the pocket of methane gas pocket is out of the water will create as they said tidal waves that would hit all gulf coast states and kill at least 1 million people. The only thing preventing this from occurring now is the frozen ocean floor conditions will keep this in check. Once the relief well is done I am still confident that the well will be shut and will hold up. that we did not really do burn offs right away as we did not have the fire booms to perform such burns right after the oil started to gush oil.I hope they will retrofit more of these 10 story whale oil sucking ships in case the relief well fails,then we really will be there constantly sucking up oil fouled waters for years. In the meantime I guess we should keep cleaning the marshes or will have to burn them and it will take 2 years for the re-growth of the marshes and fly the birds to Mexico for new places for these birds I keep seeing with their long tall necks that really make everyone cry here daily seeing them in oil in online images. Oh this really makes all of us in the library wish they were at least prepared if we are all saying drill baby drill. I am for big oil but feel they were not prepared and hope they will now do this,and I mean all the even more safer drilling technologies. I worked for B.P. and Citgo and heard of a lot of no loyalty to B.P. even before this disaster in the gulf. A lot of us really liked working at Citgo and Exxon Mobil oil refineries. I learned a lot of safety thoe from B.P. training and thought they were really being very safety in operations as they really stressed that to all of us contractors and to be let down really has hurt all of us. Sincerely, Daniel Cianci Chicago Indiana area.

Richard Raffield | Jul. 5, 2010
I'm glad someone has the nerve to tell the truth.

Carl | Jul. 5, 2010
Once the American population are finally told the truth about Oil & Gas, many will revolt against the scaled back drilling in general. ONCE THE AMERICAN PEOPLE UNDERSTAND THAT THE OIL AND GAS PRODUCED ONLY HAS ABOUT TWO GALLONS FOR EACH 42 GALLON BARREL OF OIL PRODUCED GOING TO FUELS. Has anyone ever thought about the tires you ride on, the roads you drive on, all those plastic utensils you use all around the house? Anyone that thinks that by just going to "wind power, solar power, and such" will reduce the amount of oil & gas we consume a day is a complete IDIOT. In another case, just because one operator has one catastrophic event, doesnt mean that any others will. Here again, our "leaders" are trying to show how incompetent they are, and how very little they know about the world at their doorstep.

jay | Jul. 4, 2010
i think obama needs to get off his high horse, quit trying to make an example of the accident and fix the damn problem.

Max | Jul. 4, 2010
The Jones Act does not have to be waived because 90 percent of the vessels working at MC 252 are foreign. It wasnt waived for them.

Rotger Edwards | Jul. 3, 2010
BP have a help line which works in such a way that suggestions are asked for giving plans specifications etc but no mention of who owns the suggestion.In effect if you give BP an idea all you get is nothing as you cannot access and prove your response.Unlike other companies who if they use your suggestion give you the credit,Not being mercenary but I even offered to show them a fully working model skimmer that if built full size with a crew of one (at a cost of maybe 10 - 15000 $ could collect on a reasonable flat sea up to 8000 barrels a day.What reply do I get."No". I guess my name isnt Kevin or Joanna. Further they need help not political company bashing as it will happen again and again then be forgotten. Best Regards I do enjoy reading your site.

Gary Holden | Jul. 3, 2010
You have to remember the president is not an American, hates oil and big business.

Darall Snyder | Jul. 3, 2010
Of all the things that the US has done for the rest of the world, and how the world will scream if the US does not respond quickly enough. I think at this time it is time to call in a few favors.

Jay | Jul. 3, 2010
Option 3 sure seems plausible. This sounds a lot like Rahm Emanuels "Never let a crisis go to waste." Worse, the delays and impediments look like a strategy of deliberately making the crisis worse to advance a political and ideological agenda.

Captain Doug | Jul. 3, 2010
Down here in the Gulf of Mexico (which is pro offshore drilling) The clean up a joke the hole thing stinks of kick backs,unqualified supervision,substandard equipment.The government need to allow the big boys run the show and get out of there way and let them do there job. DAY 1 the experts knew what needed to be done ,so why not let them

mike | Jul. 2, 2010
Maybe have all the fisherman go fish for oil. Put empty barrels in their boats to a reasonable weight limit when full. After skimming come close to shore & exchange barrels or measure them drained into some tank cars. Or meet up with a standby tanker to dump it to.Then BP has to pay them in cash & be tax free for their efforts. The large ship skimmers including the foreign ones could either force BP to offload them & be paid cash right then or just keep the oil & take it home...unless home is so far its not worth it? Or sell it to a near shore refinery? Dont know how feasable a 30 mile long floating hose to shore would be.....but I would think we could create a large on shore oil /water separating facility that could separate oil & get it into tank cars to storage tanks anywhere in the US non stop day & night.

Sondra | Jul. 2, 2010
It was a very interesting article, but we do need to support offshore drilling. Our country does not need to be foreign oil dependent. Wake up White House! So many jobs will be lost.

fp | Jul. 2, 2010
Keeping Up With the Jones Act

One of the reasons that conservatives get away with mendacious memes like this one is because the media rarely calls them out directly on it. When it came up on Meet the Press last weekend, for example, David Gregorys response was "Mm-hmm," and it was left to Rep Ed Markey (D–Mass.) to explain why the charge was baseless. So three cheers to the heroic but anonymous copy editor at McClatchy who read William Douglass story and didnt try to fudge things. Its a false talking point, full stop, and its nice to see someone in a mainstream organization say so plainly.

Ricko44 | Jul. 2, 2010
The President and his clonnies are using this to get rid of fossil fuel, Lets get rid of them........ Let all transportation shut down and see what happens when there no gas or disiel to power them. With all the tech we have today Obama should have this under control but he letting this linger on . So at best he need to step down.

Jim Weitzel | Jul. 2, 2010
Look at the Cloward-Piven Strategy and note how the spill fulfillls Obamas and the Progressives agenda. If the Gulf spill manages to destroy fishing and tourist industries in the region, shut down drilling, raise the price of fuel and food across the country and bring Americans to a finanacil breaking point and become dependent on the government programs (food stamps, eyc) to save them, Obama and his cronies are happy. The desperate, demoralized and then more dependent on the government we become plays into their hands.

Harold Schmidt | Jul. 2, 2010
If Sarah Palin was in office the leak would be stopped and there would be a major cleanup going on. Obama believes what the oil company tells them. BP is like a car sells man if his lips move he properly lying to you. In the end you will see BP pack up and leave town or file Bankruptcy and reopen. any company that will gamble 35% of the time to save cost is not going to do the right thing. What i like about Sarah Palin, When BP had the biggest spill in history on the North Slope in Alaska. They pulled a crybaby fit because Palin spanked them. I know for a fact because i was there,They were going to shut down the whole field to show them they were in charge. Sarah told them OK but we will fine you a Million a day till its back open and then said you will still pay for the Oil tax on the OIL that is supposed to be going down the line because you was to cheap to keep the line up. There is still no doubt in my mind BP is behind all of the lawsuits against Palin that made her quit office because she could not be bought off and the scare tactics did not work. JMO


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