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Location, location, location; please ignore the death and destruction...   Federal mandate to remove idle oil rigs should be reconsidered. Half of Alaska Petroleum Reserve off limits. Survey says? Drill, baby, drill!  Another excuse to hike gas prices, since we're not having enough hurricanes... New claims administrator is said to be different. Alabama representative does not like Mr. Feinberg at all.

You are in the current Gulf Watchers BP Catastrophe - AUV #594. AUV #593 is here.



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Please buy our refinery...please?

It's all about location when you're trying to sell real estate. Property in the worst part of town wouldn't be in high demand, right? Would you like to buy property that is prone to emitting noxious gasses, leaking nasty substances, or exploding without any warning whatsoever, and has (so far) killed nineteen people?

Well, BP is touting the prime Gulf Coast location close to shipping (you can see the beach from the top of the burn-off stacks...) the newly-renovated infrastructure (see, it won't explode as often...maybe...) as wonderful reasons to take this fine piece of property off their hands. They say they will sell before the end of the year. But so far, they haven't gotten many nibbles...

The company has had the Texas City refinery and one in Carson, Calif., on the block as part of a plan to divest $38 billion in assets by the end of 2012. On Monday, it announced that San Antonio-based Tesoro Corp. is buying the Los Angeles-area refinery along with some other BP assets including Arco-branded gas stations.

BP gave no update on the status of its efforts to sell the Texas City property, but analysts said that the $1.2 billion price tag for the one in California is lower than predicted, and may reflect a buyer’s market.

Jason Gammel, an analyst with Macquarie Capital, estimated that the Texas City refinery, which has almost twice the refining capacity of Carson, could be worth $2 billion.

The refinery is spread over a 1,200-acre campus and can process 475,000 barrels of oil per day.

Speculation has focused on a wide range of prospective buyers, including Valero, Marathon Petroleum, Brazil’s Petrobras or Chinese investors.

Prospective purchasers aren’t talking specifically about whether they’re eyeing the Texas City plant, but San Antonio-based Valero has described what it looks for in a refinery, listing many of Texas City’s characteristics.

“We like large refineries, we like complex refineries, we like refineries with water access, to bring feedstock in, and send product out by ship,” Valero spokesman Bill Day said. “We believe that a refinery along the Gulf Coast is more advantageous than other parts of the country, because of advantages of water access, the availability of crude oil, access to export markets and low cost of doing business relative to the rest of the U.S.”

A Valero spokesman says the location is a plus, but stopped short of saying they might be purchasing. Valero already owns another plant in Texas City, along with one in Port Arthur.
“We like large refineries, we like complex refineries, we like refineries with water access, to bring feedstock in, and send product out by ship,” Valero spokesman Bill Day said. “We believe that a refinery along the Gulf Coast is more advantageous than other parts of the country, because of advantages of water access, the availability of crude oil, access to export markets and low cost of doing business relative to the rest of the U.S.”

“The competitive advantage in refining will be in buying the cheapest crude and using the refining advantage for the export markets,” said Roger Ihne, a partner at Deloitte& Touche.

The Texas City refinery’s size, complexity and proximity to the U.S. market also could appeal to an overseas company, Raymond James analyst Pavel Molchanov said.

“A refinery like Texas City doesn’t come on the market every day,” Molchanov said.

Its size and capacity will limit the list of potential buyers, analysts said, because of the purchase price and the costs of running the facility.

“A large refining company or a company with a large balance sheet is going to be better positioned to acquire this asset,” said Jeff Dietert, an analyst with Simmons & Company International. “For a smaller company, Texas City would overwhelm the portfolio and there would be more difficulty raising capital.”

The prospective buyers will have to decide if the nearly one billion dollar renovation and upgrade has helped minimize the safety problems at the plant. In 2005 an explosion killed fifteen workers, with four more employees dying in separate accidents since then. In addition to explosions, the plant also emitted an estimated 500,000 pounds of chemicals into the atmosphere in 2010. Lawsuits over the emissions are still in the legal system.

BP acquired the Texas City refinery as part of its purchase of Amoco in 1998.

Scott Dean, a spokesman for BP, has said that the company wants to concentrate on its refining capabilities closer to the Canadian border...

BP has decided to focus its refining on the northern U.S., where it has three refineries – all with better access to heavy crudes coming from Canada and the Bakken Shale and the capability of processing it.

“We really do believe there are some natural buyers that can unlock this refinery’s full potential,” said Scott Dean, a spokesman for BP. “Our expectation is to identify a buyer, and we are making very good progress.

I hate these people.

And one more goes on the sale table...

Tesoro will buy BP’s Los Angeles-area refinery for $2.5 billion.

BP is selling its Carson, Calif. refinery to San Antonio-based Tesoro for $2.5 billion, as part of BP’s strategy to focus on its refineries in the norther United States.

Tesoro, an independent refiner and marketer of petroleum products, will purchase the refinery and related assets for $1.175 billion, plus the value at closing of inventory now worth about $1.3 billion. The deal, which the companies expect to close in mid-2013, will be financed through cash and debt, according to a Tesoro statement.

“This transaction is a unique opportunity for Tesoro to combine the best aspects of two West Coast refining and marketing businesses resulting in a more efficient integrated refining, marketing and logistics system,” CEO Greg Goff said in a written statement. ”Given Tesoro’s existing operations on the West Coast and our understanding of the complexities and challenges of operating in California, we are well positioned to generate significant operational efficiencies, increase our ability to satisfy market demand and reduce stationary source air emissions.”

Okay. At least this one is in California, where - I think - the regulations are a little bit tighter. For now.

Please...it is better to leave the underwater part of the rigs in place than remove them. This helps the Gulf to heal.

States and fishing groups push back against federal mandate to remove idle oil and gas platforms.

As BP oil swirled on the Gulf’s surface in May of 2010, the Press-Register visited an oil platform due south of the Alabama/Mississippi line and dove underwater.

Tunicates, anemones, sponges and corals clung to the giant metal legs, a wild kaleidoscope of orange, red, yellow and purple against the aquamarine sea. Shimmering whorls of leatherjackets, sardines, blue runners and mackerel flashed in and around the platform’s superstructure. An octopus curled up in the nook where two struts came together, one tentacle creeping out and feeling around for a meal.

Returning six months later, the giant platform and all the creatures living on and around it were gone, removed by order of the Department of Interior. Since then, two more platforms off Alabama have been removed, and several more are scheduled to come down.

A total of 265 idle oil platforms were removed in 2011, along with the oases of marine life that had clustered around and grown on the structures over twenty-five years that the rigs have been standing. As many as 600 more rigs are slated for removal by 2015.
Marine scientists say removal of the platforms will take a toll on the Gulf. Indeed, the platforms literally crawl with life. For years, a Department of Interior website has described them as “oases for marine life.”

Each platform represents about three acres of surface area for corals and other creatures to attach and grow. Collectively, the Gulf’s rig fields represent the largest artificial reef on the planet, and have turned the Gulf, which was essentially a featureless desert of sand, into a place dotted with hard structure and coral.

Bob Shipp, head of marine sciences at the University of South Alabama, said the ecosystem benefits of the new reef habitat was unquestioned, and he worried that removing more platforms so soon after the Gulf oil spill would have unforeseen consequences.

“Of course they shouldn’t be doing it. I don’t have any experience in the legal part of it, the liability of the oil companies, but as far as the biology and the fish benefits, there is no question. It is some of the best habitat we have for some of our most valuable species,” Shipp said. “When you remove that habitat, you remove those fish. It has created an ecosystem in the northern Gulf that has never existed before and it is a very, very valuable ecosystem.”

A program called "Rigs to Reefs" allows for structures to remain, but the artificial reefs must be 65 feet below the surface to allow for navigation without danger.
    “It's hard. Its very, very complicated. When we first started this, we thought all we would have to do was point out that there was really rare coral on them and noboby would let them take them down,” said Ted Venker, with the Coastal Conservation Association, a recreational fishing lobbying group, which has pushed for a moratorium on the removals.

“The companies have all kinds of liabilty issues. There are navigational issues. There are 1,000 barbs to this problem. That's why we decided we need a moratorium. We need to figure out what’s living on them, and we need the marine scientists to figure out what it will mean if we remove them.”

Chris Blankenship, director of the Alabama Division of Marine Resources, said he understands the costs associated with maintaining a giant steel tower in the sea, and the other issues the industry faces in terms of upkeep costs. Given enough time, he said, the state of Alabama could likely find a way to take over management of platforms along the coast.

“We could possibly pay for the upkeep of some of those structures. But that couldn’t happen fast enough to stop the removals right now,” Blankenship said. “That’s why we need a change in the policy or at least a moratorium on the removal of the platforms while we study the issue.”

The Interior Department will “actively measure the merits of each decommissioning proposal considering all aspects of the project,” read a statement from the agency. “We will make determinations regarding decommissioning based on what is proven to be best for the Outer Continental Shelf.”

U.S. Rep. Steven Palazzo, R-Biloxi, has pushed the Interior Department to halt the removal of platforms and recently sponsored a bill in Congress, H.R. 3429, the Rigs to Reefs Habitat Protection Act.

"We’re merely asking the Interior Department to pause long enough to study the environmental effects,” Palazzo said Friday. “There are a lot of unanswered questions surrounding this policy, and I intend to get answers from Secretary Salazar,” he said, referring to Interior Secretary Ken Salazar.

Okay. I'm going to contact Rep. Palazzo. Even though he's a Republican, I think we can agree on this. I am also a diver, and I have been diving on artificial rig/reefs in the Gulf. The diversity of life is amazing. This could help heal the Gulf.

Please tell Secretary Salazar to keep as many reefs as possible.

(Please click on the link in the story...the underwater video is cool. It's not a tropical reef, it's a Gulf reef!)


And speaking of Secretary Salazar... I guess half a loaf is better than none at all.

Salazar plan puts half of Alaska petroleum reserve off-limits to drilling.

Interior Secretary Ken Salazar on Monday announced the first comprehensive plan to manage the National Petroleum Reserve in Alaska, allowing for new drilling on half of the nearly 23 million-acre reserve while putting the rest off-limits to oil and gas exploration.

The move — which leaves open the possibility of constructing a pipeline to transport oil and gas extracted from the Chukchi Sea onshore — drew praise from environmentalists but sharp criticism from oil and gas proponents who said it would restrict the industry’s ability to tap the nation’s hydrocarbon resources.

“This will provide a road map to help facilitate the transition from leasing and cautious exploration to production and smart development,” Salazar said at a news conference in Anchorage, adding that he worked to balance protecting “an iconic place on our Earth” with the need for “a plan that will allow the industry to bring energy safely to market from a remote area.”

Companies have conducted exploratory activities on the North Slope reserve during the 1980s and in recent years. Nearly 3 million acres of the reserve is under lease, but production has not begun; under the proposal, 11.8 million acres will be opened for development.

Many subsistence hunters and environmentalists lobbied to protect habitat for two of the nation’s largest caribou herds, as well as endangered spectacled eider ducks and other Arctic species; the plan released Monday was the most protective of four alternatives the Interior Department had put out for public comment.


How quickly they forget something they never understood in the first place. And crappy polling is still crappy polling...

Survey says voters back offshore drilling.

Roughly seven out of 10 voters support changing U.S. policy to allow more oil and natural gas development along the nation’s coastline, according to a new Harris Interactive poll released today.

That matches the level of support for offshore drilling that was documented by other polls conducted before the Deepwater Horizon disaster two years ago briefly turned some Americans off to the idea.

In the wake of the 2010 oil spill, support for offshore drilling declined slightly, according to some surveys. For instance, Rasmussen Reports found that 56 percent of U.S. voters it surveyed in July 2010 backed offshore oil drilling.

The new survey of 1,016 registered voters, conducted Aug. 9-12, was commissioned by the American Petroleum Institute to broadly assess views about energy policy less than three months before the presidential election.

Okay...three things here.

1.) Harris Interactive
2.) Rasmussen
3.) American Petroleum Institute

...broadly assess views about energy policy...
"Broadly assess"? My ass. Anything API does is structured to benefit API.

However, having said that, the sad truth is that many have no problem with the idea that we should "use our American oil and gas supplies for America".

I actually don't have a huge problem with that, if it were anything other than pure fantasy. "Our own oil and gas" is glittery unicorn shit...

Yo, Bubba! The simple fact is this... oil and gas is sold on the global market, for the highest price, by the people who own it. And that's not you, Bubba. And it never will be you.

If you want to read this shit, here it is; have at it.


This year's lack of hurricanes is sending gasoline producers into a tizzy... so a refinery fire is a perfect excuse for a little price hike, isn't it?

Refinery fire site too dangerous for investigators.

A failed pipe was blamed for the fire at a Chevron facility in California last week, but the area has been deemed to unsafe even for investigators to survey the damage.

Structural engineers on Monday determined the damaged crude unit that was the site of the fire in the facility was too hazardous to enter. The eight-inch pipe leaked and its contents ignited, sending black smoke into the sky above Richmond, Calif., and thousands of nearby residents to hospitals with complaints of eye irritation and breathing difficulty.

Investigators were discussing plans on how to make the unit safe so the faulty pipe could be removed for testing, said Hillary Cohen, a spokeswoman for the U.S. Chemical Safety Board.

“The crude unit is still off-limits because of safety concerns. Probably for another day or two,” said Peter Melton, a spokesman for the state division of occupational safety and health, or Cal-OSHA. That agency is also investigating the cause of the blaze.

The Aug. 6 conflagration destroyed an area of the refinery that produces a large amount of the gasoline that satisfies California’s clean-air regulations, which are the toughest in the nation. Other parts of the refinery, which supplies 16 percent of California’s daily gas consumption, are still producing fuels.

Forget the fact that this was a fire in a crude unit... and it takes about a year for crude oil to wind up as gasoline in your tank. So logic tells you that you need to immediately hike prices at the pump, right? Chevron might lose a penny or two...

Same principle applies to hurricanes shutting down rigs and coastal refineries for a week or two. It's going to take at least eighteen months or more for that stuff under the Gulf to become gasoline, so.... HURRICANE!! Oh noes, it's a Category 1!!!! Death and Destruction! RAISE PRICES at the pump IMMEDIATELY!!!!!

People believe a lot of silly shit, do they not?

Loren Steffy has a pretty well thought out piece on the subject of exporting petroleum products...or not. Here's the link if you're interested.


Well, considering that Feinberg proved to be a pure corporate tool, can we hope that his replacement might actually have a heart?                                    

Some seem to think so...

New BP claims boss is a stark contrast to Ken Feinberg.

In introducing the replacement to claims-process administrator Kenneth Feinberg, Alabama Rep. Jo Bonner (R-Mobile) said of Patrick Juneau... “This is not the Feinberg operation.”

Juneau, a Louisiana lawyer, joined Bonner at a news conference in Mobile to offer an update on his progress since launching the Deepwater Horizon Claims Center in June.

In a little less than two months, Juneau has issued more than 1,400 “determination letters” to claimants offering them a total of $62 million. That total includes $17 million to claimants in Mississippi and $20 million to claimants in Alabama, he said.

    Recipients can choose to accept the payment or negotiate for more. Juneau said his advice to anyone hurt by the April 20, 2010, catastrophe — even those previously denied by Feinberg — was to file a new claim.

“This is an entirely new program with much broader eligibility requirements,” he said. “I can tell you for a fact that there are thousands of people eligible for compensation, but they’ve got to file a claim to get it.”

Bonner said he was encouraged by Juneau’s work so far. The Mobile Republican feuded with Feinberg over the slow pace and tight-fisted style of his Gulf Coast Claims Facility, which operated for 18 months ending in March.

“I believe (Juneau) is here to correct the flaws of the earlier process,” said Bonner, flanked Wednesday by mayors and county officials from communities surrounding Mobile Bay. “He comes from our part of the world. He didn’t have to take a plane to get here. We have someone who, for the first time, understands us.”

I will believe it when I see happy regular people. Not before.

(h/t Yasuragi)


And Rep. Jo Bonner is no fan of Kenneth Feinberg, calling him a "colossal failure".  

Bonner, who has been vocal about Feinberg's performance as claims administrator,  states that Feinberg's book Who Gets What will definitely not be on his reading list.

And apparently Feinberg is happy to return the favor...

Feinberg pushes back in his book, writing that Bonner “led the way” among his critics and accusing him and other elected officials of political grandstanding.

Bonner said the book won’t change Feinberg’s bitter legacy on the Gulf Coast.

“I have not read Mr. Feinberg’s new book nor do I plan to,” Bonner said. “I’m told he called me one of his toughest critics. Had he kept his promises, he could have had a best seller on the Gulf Coast. Instead, he will be remembered in South Alabama for being the architect of a colossal failure.”

I have no idea what any of this means. Seems like a couple of high-schoolers writing nasty things in each other's yearbooks...

Yada, yada, yada.

Previous Gulf Watcher diaries:

7-31-12 04:00 PM Gulf Watchers Tuesday - BP Grantees Find Oil Contributed to Dolphin Deaths - BP Catastrophe AUV #593 peraspera
7-17-12 04:00 PM Gulf Watchers Tuesday - Nalco Says "It Wasn't Our Fault" - BP Catastrophe AUV #592 Lorinda Pike
7-03-12 04:00 PM Gulf Watchers Tuesday - BP Gas Facility Blast Kills 1, Injures 2 - BP Catastrophe AUV #591 peraspera
The last Mothership has links to reference material.

Previous motherships and ROV's from this extensive live blog effort may be found here.

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