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Archive for June 22nd, 2010

Is the Deepwater Horizon accident similar enough to all other deepwater drilling operations to stop drilling offshore? One federal judge has said no.

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page olf of Judge Maetin Feldman's June 22 2010 decision

The full 22 page decision by New Orleans District Court Judge Martin Feldman can be viewed at whnuckolsconsulting.com/pdf/jf.pdf

Today in District Court in New Orleans Judge Martin Feldman overturned the Obama Administration’s moratorium on deepwater drilling, saying that the Administration’s decision was arbitrarily imposed. Hornbeck Offshore Services, while filed the case in court, argued that the Administration has provided no proof that other drilling operations posed the same threat as occurred when the Transocean Deepwater Horizon rig exploded, resulting in the ongoing spill that has caught the attention of the public and the media in the U.S.

The 22-page written ruling issues by Judge Martin brings attention away from tar balls on beaches and focuses attention on the regulation and legal aspects of the aftermath of the disaster.

While Robert Gibbs has stated that the Obama Administration will immediately appeal to the Circuit Court, it is likely that the back and forth in the appeals process is likely to escalate beyond the 5th Circuit before the litigation comes to a final conclusion.

Judge Feldman noted that the Administration has failed to document irreparable harm that warrants suspension of operations, nor how long it would take to implement new recommendations regarding safety. While the 24/7 news cycle does make one wonder if it really was necessary for the Administration to carefully document in written form that a major oil spill of epic proportions can occur when drilling deep offshore wells, I suspect it was the open ended timeline of the moratorium that has moved the oil services industry to push back this hard.

On the surface, the Administration’s decision to put a stop to an entire section of an industry for what was beginning to look to some like an ever lengthening period of time, is not in the tradition of government’s reaction to safety issues. When a plane crashes, a common reaction is to pull all planes of that design, or ones that use a suspected particular part, out of service until the defect is better understood and fixed. The same applies with recalls in the auto industry – a particular model of car is taken off of the market. But the analogy in the car business would be to say that because a Toyota Prius pedal became stuck on the highway, all cars who can go highway speeds would be taken off of the streets irrespective of who made the car. If you start looking at the oil drilling moratorium in this way one would be lead to think that the reaction to stop offshore deepwater drilling is way out of line.

Page 19 of the findings today show Judge Feldman questioning “If some drilling equipment parts are flawed, is it rational to say all are? Are all airplanes a danger because one was? All oil tankers like Exxon Valdez? All trains? All mines?” He then concludes “That sort of thinking seems heavyhanded, and rather overbearing.”

 The judge cited the Administrative Procedure Act (APA) and noted that the APA cautions that an agency action may only be set aside if it is “arbitrary, capricious, an abuse of discretion, or not otherwise not in accordance with law.” 5 U.S.C. §706(2)(A). Accordingly Judge Feldman needed to find a “clear error of judgment” by the federal government to decide in favor of the oil services companies who brought their case before the court. What the Judge had to see in the federal government’s case was a “rational connection between the facts found and the choice made” to shut down deepwater drilling.

 Judge Feldman wrote “After reviewing the Secretary’s Report, the Moratorium Memorandum, and the Notice to Lessees, the Court is unable to divine or fathom a relationship between the findings and the immense scope of the moratorium.”

 Further in the findings, Judge Feldman identifies holes in the definition of “deepwater drilling” and the back and forth of whether it means 500 or 1000 feet – a topic that has also been questioned in the media for the past few weeks.

 The judgment concludes by issuing a preliminary injunction against the government because the “defendants have failed to cogently reflect the decision to issue a blanket, generic, indeed punitive, moratorium with the facts developed during the thirty-day review. The plaintiffs have established a likelihood of successfully showing that the Administration acted arbitrarily and capriciously in issuing the moratorium.”

 Today’s findings state that the federal mandate for a suspension of drilling over 500 feet “cannot justify the immeasurable effect on the plaintiffs, the local economy, the Gulf region, and the critical present-day aspect of the availability of domestic energy in this country.”

 There do appear to be multiple options for the federal regulators to control deepwater drilling from this point forward.  As Press Secretary Robert Gibbs has stated, the Administration will take the case up on appeal at the Circuit court level, and a second review of the Administration’s procedures that resulted in the moratorium might result in a decision in the government’s favor.

 But the Department of the Interior does not need to hang its hat solely on the battles between attorneys. Flaws, be they overstated or real, identified by Judge Feldman, give DOI a roadmap to craft a second decision that could also result in a suspension of overly dangerous drilling procedures until improvements in the risk/reward balance are improved.

 It is important to note that no investigation will result in a set of recommendations that make drilling at any depth risk free. What is desired is a better balance between risk and the capabilities to manage the risk, and that is something that everyone can get behind.

The full 22 page decision by New Orleans District Court Judge Martin Feldman can be viewed at www.whnuckolsconsulting.com/documents/judgefeldman22June10.pdf

The author is a scientist by training and the owner of W.H. Nuckols Consulting, an environmental policy firm.

Written by Will Nuckols

June 22, 2010 at 3:10 pm

Our Transportation Future is Linked to our Plans for Offshore Energy Development

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Senator Dorgan at the Energy Committee

Today’s Senate Energy and Natural Resources Committee hearing reviewed policies to reduce oil consumption through the promotion of accelerated deployment of electric-drive vehicles, as proposed in S. 3495, the Promoting Electric Vehicles Act of 2010. Senator Dorgan, pictured above, is the bill’s author.

Today’s Senate Energy and Natural Resources Committee hearing centered on the future of electric vehicles and Senator Dorgan’s bill S. 3495. The mood in the room indicated that we are definitely moving toward the electrification of our transportation system, and the questions centered around how to get there and how fast to move in that direction.

If this is indeed our future, there will be a need for electricity to power the coming fleet of vehicles, and those in the green energy sector have been saying for some time that offshore electricity production is an area ripe for exploitation.

But like the development of electric vehicles themselves, there is a delay in the development of offshore electricity generation systems, be they wind or hydrokinetic, based on the simple construction of these systems. But it isn’t the engineering constraints that have left the U.S. behind other countries thus far in offshore green energy development – it is the regulatory process. Yes, we are all celebrating the approval of the Cape Wind project in New England, but while we also congratulate ourselves for allowing that project to move forward we need to also be mindful to be critical of the time it took to get to this point.

Some have cited the necessity of slow, often times painfully slow, processes that need to occur when we cite green energy infrastructure, as it is the very slow building of consensus in communities that results in the best outcome of a public policy process. While I agree that some siting processes, particularly the locating of restricted use zones – a.k.a. marine protected areas, must proceed at a measured rate. Indeed, a wide public buy-in is crucial for several of the goals which are often included in marine protected area management plans.

However when looking at the catastrophic petroleum spills off of Louisiana, Australia and Mexico that occurred during the development of deep water oilfields, or at the seemingly endless series of climate change studies that indicate that older models have yet again underestimated just how bad climate change may affect the developed and undeveloped world, it becomes quickly clear that we do not have the luxury of time on our side.

To save our economy, to protect our national security and to save the very planet we rely on for our very existence, we need to move faster – even when faster will mean a more contentious process. We are at a time when we need to look at these issues not on a monthly basis when groups gather for meetings, or even weekly. The discussion needs to be a daily dialogue, bolstered by a bold national energy policy which would dovetail with a national ocean policy and a timeline containing milestones set for progress.

This video shows the Cape Wind project approval announcement by Secretary Salazar April 28, 2010

How fast we can react and how thoroughly we evaluate various proposals for various offshore energy generation projects from this point forward will be a key component of policies that will ultimately promote or push back on green energy development in the United States. The electrification of our transportation system could become a major driver for electricity generation in portions of the U.S.

The author is a scientist by training and the owner of W.H. Nuckols Consulting, an environmental policy firm.

Past delays in a unified energy policy mean: 1) continued offshore petroleum development 2) a need to immediately move forward with alternative transportation technologies as a catalyst for change

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Saldalow testifies at the Senate Energy Hearing

David Sandalow, Assistant Secretary for Policy and International Affairs, U.S. Department of Energy, clearly stated that “electric vehicles are the future. The only question is how soon.”

This morning the Senate Energy and Natural Resources Committee held a hearing centering around the future of electric vehicles.  David Sandalow, Assistant Secretary for Policy and International Affairs, U.S. Department of Energy, clearly stated that “electric vehicles are the future. The only question is how soon.” The morning’s hearing was in part to examine provisions in Senator Dorgan’s bill S. 3495, the Promoting Electric Vehicles Act of 2010, which proposes a variety of mechanisms to stimulate the development of electric vehicles in the United States. Senator Dorgan reminded the Committee that 70% of the oil we consume is used in the transportation sector, and that the electrification of the transportation fleet is important for our economy and our national security.

When will we begin to move in the direction of the electrification of our vehicle fleets, and how fast we move, is of crucial importance to the overall U.S. energy development plans, and accordingly, how we plan to utilize our oceans.

The BP oil spill resulting from the Transocean Deepwater Horizon accident continues to highlight just one of the dangers of a dependence on an oil based transportation system – the warming of our planet is a less immediately visible, but likely more devastating impact.

Although Dorgan’s bill proposed large funds to stimulate research and development of emerging electric technologies, Senator Murkowski was quick to note that a) this is a large amount of money and b) the bill, if passed, would only allow for an authorization for funding. The process of providing appropriations to align with the goals in the bill would need to come even later.

Let’s assume that Durban’s bill S. 3495 passes, and that the Department of Energy builds a funding request into its next budget proposal– the federal fiscal year 2012 budget request from the President. At best speed, if the Congress reacts positively and supports an Administration funding request funds to jump start the development of the electrification of transportation would hit the street in calendar year 2012. Resulting research and incentives will result in a yet undetermined further lag until on the ground results begin to be seen.

Two fairly obvious conclusions result: 1. We are stuck in the existing oil dominated economy in the short run – especially if we see the short run as election cycles, and 2. We need to move forward with alternative technologies for our transportation systems immediately, as the delay will be there whether we start now or years from now. The fact that we did not move more robustly in this direction years ago should be a part of the motivation now.

A further conclusion that results from the realities of delays in changes in our transportation system is that we must still find ways to locate and develop petroleum in safe and also economically viable ways. And while we do this, particularly if we do seriously commit to the electrification of our transportation system, we need to address the regulatory reform and siting considerations for offshore energy technologies that directly produce electricity. We must multitask.

The author is a scientist by training and the owner of W.H. Nuckols Consulting, an environmental policy firm.