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Last week BP released it's Energy Outlook 2030 giving it's view of energy resources and demands and trends up to the year 2030. By it's analysis, OPEC is about to regain dominance over the market.
BP's forecast shows that over the next 20 years OPEC will become as powerful as it was in 1970s – the decade when the cartel presided over a series of oil shocks and shortages. The OPEC nations' share of global production is likely to rise from 40pc to 46pc over the period covered.
In fact, 75pc of all growth in oil reserves over the next two decades is expected to come from OPEC nations, which include Kuwait, Iran, Angola, Libya, Saudi Arabia, Iraq and Nigeria.
On Wednesday, Bob Dudley, BP's chief executive, was upfront about the fact that oil majors from BP and Royal Dutch Shell to Chevron and ExxonMobil will have to change their model. He advocates striking new deals with state-backed oil companies as the best way of taking advantage of the shifting balance of power.
Sounds like he is defending BP's recent partnerships with Russia,and ties to Iraq and Angola. BP provides the capital and technical expertise in order to gain access to large reserves. More of the oil demands are increasing argument in order to justify risky drilling.
The Energy Outlook showed that the world will need to explore in remote regions like the Arctic and deeper water than ever before if it is to keep pace with a 1.7pc annual rise in consumption – a 39pc increase over 20 years.
It predicts that demand will rise to about 102m barrels of oil per day by 2030, an increase of 16.5m barrels from today's level.
Wouldn't it be nice to see them proven wrong. While oil is the dominant source of energy in the world,it is the slowest growing. Coal is a close second and the cleaner alternative of gas is destined to take an equal share of the market, according to BP analysis.
Clean renewable energy and nuclear will supply at most 21 percent of the world's energy needs by 2030. Not good news for the environment.
To the concern of environmentalists, BP's chief economist Christof Ruehl predicted "to the best of our knowledge" carbon dioxide emissions would rise by 27pc over the next two decades.
If his prediction comes true, it would mean the world missing its targets on keeping down carbon emissions by a mile. World leaders are trying to limit the extra emissions to 24bn tonnes by 2030 through international agreements on climate change.
However, BP forecasts an increase of about 33bn tonnes - in what scientists claim would put the environment on a course to climate chaos.
"We are not as optimistic as others about progress in reducing carbon emissions," Mr Dudley said. "But that doesn't mean that we oppose such progress."
Of course not , Mr. Dudley. The entire BP Energy Outlook 2030 can be found here.
With more regulations and oversight being called for in off shore drilling, who should bear the added costs? a battle looming between industry and their Republican backers and Interior and the Oil Spill Commission. Better trained and a greater number of inspectors are just one of many proposals out of the 380 page spill commission report that Michael Bromwich, the new head of the Bureau of Ocean Energy Management, Regulation and Enforcement has to find the funds for. The commission has proposed raising fees on oil and gas operators to cover the regulatory costs.
"These are public resources, and it makes sense for the companies that are benefiting from exploiting the resource to pay for the cost of regulation," Bromwich said at a conference this week on ocean science. "I think it makes good sense."
While raising fees would help pay for new rig inspectors, scientific research and a planned reorganization of the former Minerals Management Service, Bromwich said he would look to Congress to determine the appropriate balance between fees, direct appropriations and other sources.
The proposal has drawn a hostile response from industry and Republican lawmakers who warn that raising fees could drive more operations overseas at a time when companies are already coping with new drilling regulations and a slowdown in permits.
Industry spokespersons claim that they pay out enough in fees already and that instead of that money going into the Treasury's general fund, it should be earmarked for the BOEMRE.
"Rather than simply funnel these extraordinary payments from industry into the federal Treasury's general fund and then go back to the companies to pay again for the cost of being regulated, the government should figure out a way to pay for its own regulatory activities out of the existing revenue stream," said Nicolette Nye, a spokeswoman for the National Ocean Industries Association.
Offshore revenues in the Gulf of Mexico totaled about $5 billion in the last fiscal year but reached as high as $18 billion in 2008 -- several times BOEMRE's current budget of about $350 million.
Republicans and industry apologists in Congress are opposed to adding more fees, and it is not entirely clear what fees can be increased by the administration without congressional approval.
House Natural Resources Chairman Doc Hastings (R-Wash.) yesterday said he would oppose any proposal to increase taxes or fees during a fragile economy in which drillers face regulatory uncertainty in the wake of the BP PLC oil spill last April in the Gulf.
But Rep. Ed Markey (D-Mass.) the committee's top Democrat, said agencies like the Securities and Exchange Commission are already funded largely by the companies they regulate. The same should be true for oil and gas firms.
"It's wise to pursue that line of thought if the industry wants to have a regulatory scheme in place that allows for drilling in a timely fashion," Markey said.
Rep. George Miller (D-Calif.) said the costs of monitoring and environmental enforcement should be considered part of a company's overhead.
An omnibus funding bill that died last month in the Senate sought to raise an additional $50 million for offshore safety by raising inspection fees to between $12,000 to $36,000 depending on the type of platform and number of operating wells (E&E Daily, Dec. 15, 2010).
The measure would have partially fulfilled a $100 million supplemental request from the Obama administration earlier this year as part of its response to the BP oil spill.
Under existing law, inspection fees paid by oil and gas operators amount to about $10 million per year, or about 3 percent of BOEMRE's annual budget, the commission report found.
An Interior source claimed that inspection fees could not be increased without congressional approval. A source speaking for the commission says that might not be true.
"Existing statutory authority at DOI includes fees for specific services like inspections and permits that the agency charges," the source said.
The commission's 380-page report cited language from the Outer Continental Shelf Lands Act that states offshore leases shall contain "such rental and other provisions as the [Interior] secretary may prescribe at the time of offering the area for lease."
"There may be some services that are not covered that should be" the source added. "The recommendation is clear that if adequate authority does not exist already, it should be given by Congress to cover an assessment for the regulatory costs."
Bromwich also agrees with the commissions call for a longer period to review exploration plans.
"We would like as much time as possible so that we do an adequate job," Bromwich said. "I'm hopeful we can do a lot of the work in the 30 days that is the statutory prescription. Sixty days would be better, 90 days would be even better."
Language to lengthen the permitting window to 90 days was included in the Senate's failed omnibus appropriations package last month, drawing loud opposition from several Republican lawmakers and Democratic Sen. Mary Landrieu of Louisiana (E&ENews PM, Dec. 7, 2010).
Bromwich fired back at critics who charged that the administration's proposal to allow 90 days for such reviews would give the agency an excuse to take a lax approach to permitting.
"That's just not true," he said. "It's extraordinarily difficult to do those within 30 days, and in some cases will be very difficult to do within 60 days. ... We really do need more time."
Gulf residents continue to suffer spill related health issues and financial woes due to denial of claims by the GCCF. Riki Ott, marine toxicologist and Exxon Valdez supporter, has been a presence on the Gulf Coast, supporting the "little people" ever since the spill began. She has traveled along the coast meeting with fishermen and their families, and attending meetings with GCCF's William Feinberg with them.
As a plaintiff in the Exxon Valdez case, I experienced first-hand this same treatment by Exxon and the U.S. "justice" system. For twenty years, Exxon, then ExxonMobil, used its billions to manipulate the legal system to ultimately deny justice for 22,000 claimants -- and thousands of others whose legitimate spill losses had been discarded on legal technicalities before trial. Instead of making us "whole," ExxonMobil had made us "hole," leaving a trail of broken marriages, suicides, lost livelihoods, foreclosures, bankruptcies, and insurmountable debt. In the process, ExxonMobil had saved its shareholders billions of dollars. Since the process had worked so well for ExxonMobil, BP was now repeating it -- including using a U.S. government-sanctioned process as cover for legitimacy.
Feinberg continues to assure that the compensation is fair.
When Louisiana fisherman Michelle Chauncy called the BP claim office (Kenneth Fineberg's Gulf Coast Claims Facility) last Friday to check on the status of her claim for Michelle's Crab Shack, the office couldn't find her claim. It had vanished.
Michelle had filed her claim in October along with bank statements and records to support the loss of her wholesale/retail crab business of eighteen years. BP/Fineberg denied her claim in November and, because it was under $250,000, she couldn't appeal.
According to BP/Fineberg's rules, the little claims that support thousands of little businesses across the Gulf are too bothersome to deal with; many are simply being dropped. The Fineberg claims process manifests BP's disregard of the "small people living in the Gulf," so-called by BP Chairman Carl-Henric Svanberg.
Michelle had appealed her claim anyway, because she had no other choice. After a night of stewing on her dilemma, she called the BP claim office again on Saturday as our car caravan prepared to move to Fort Walton to meet with the next group of community liaisons. Our small group was sharing information and coordinating efforts to deal BP's "Making It Right," or as it's known in the Gulf, "Making It Disappear" campaign.
Florida fisherman Kathy Birren's daughter, eight-year-old Mandy Birren, had tried to cheer the normally vivacious Michelle as we loaded the cars. Michelle apologized to the child, explaining that she was aggravated. "Everyone who talks to them gets aggravated," said Mandy, who had already seen and heard too much for being only eight.
Mandy's parents, Kathy and Ron, filed damage claims for their Hernando Beach Seafood business in November. BP/Fineberg denied their business claim and Ron's personal claim, but paid Kathy's claim, even though their personal claims were exactly identical. BP/Fineberg also denied the personal and business claims of Louisiana shrimp fishermen Tracy Kuhns, who was part of our caravan, and her husband. The blatant unfairness of the process, the helplessness of the situation, and the growing family debt, were sledgehammers of stress, pounding on both Tracy's and Kathy's marriages.
During the drive to Fort Walton, I rode with Michelle to spare the children. Southern gentility has its limits. "You don't understand," Michelle firmly told the claims person. "I have been on my own since I was sixteen. I would gladly have worked for this money. You are forcing me to beg for a handout. I can't pay my bills. I am losing my home; I am losing my business; and I am about to lost my mind!"
While financial issues were paramount, health and concerns of seafood safety, all related to the oil spill and unprecedented dispersant use
are on the minds of each group that she visits. Many don't even seek medical care since they have no money. They can't afford to relocate, and if the dispersants are making them sick, what about the seafood and how can fisheries reopen?
It turns out that dispersants are not -- and never were -- explicitly banned within three miles of the coast or in less than ten meters of water (the "nearshore environment") as federal officials with the USCG, EPA, NOAA, and others staunchly maintained. The Coast Guard and states can approve dispersant use in the nearshore environment on a case-by-case basis across the Gulf if the incident commander decides the toxic chemicals were "expected to prevent or minimize substantial threat to the public health or welfare, or to mitigate or prevent environmental damage" -- a statement that appears in both of the official Regional Response Team dispersant policies. In fact, neither of the policies for Region IV (Alabama, Mississippi, and Florida) or Region VI (Louisiana) have any areas where dispersant use is expressly banned. Louisiana even has an expedited process for requests to spray dispersants in the nearshore environment.
Residents have taken to videoing the planes flying low over their homes at night, believed to be spraying dispersant. The Louisiana Bayoukeeper has requested that the state provide documentation of spraying in nearshore areas under the Freedom of Information Act.
continues to be criticised by other lawyers as well as by local politicians.
"You've paid out 30 percent of the claims," Gulf Shores city councilman Jason Dyken told Feinberg at a recent meeting in Gulf Shores, Alabama. "Seventy percent of the claims have not been paid. Where I went to school that's an F".
Late last month, Feinberg told Bloomberg television that he anticipates that about half of the $20 billion fund should be enough to cover claims for economic losses.
Attorney Brian Donovan, from Tampa, Florida, believes that Feinberg is doing a good job...as BP's defense attorney.
Donovan has written: "In lieu of ensuring that BP oil spill victims are made whole, the primary goal of GCCF and Feinberg is the limitation of BP's liability via the systematic postponement, reduction and denial of claims against BP. Victims of the BP oil spill must understand that 'Administrator' Feinberg is merely a defence attorney zealously advocating on behalf of his client BP."
Contrary to what Feinberg is telling claim applicants, according to Donovan, under the Oil Pollution Act (OPA) of 1990, a victim of the BP oil spill must first present a claim for damages to BP/GCCF and wait 90 days. If he or she is not paid, or accepts a lesser amount, that does not preclude the victim from pursuing future compensation. In addition, the GCCF/Feinberg requirement that a claimant sign a general release of all rights and claims is contrary to the OPA.
The National Pollution Funds Centre is responsible for administering the Oil Spill Liability Trust Fund (OSTLF). The US Coast Guard manages the OSTLF and is the implementing agency of the Oil Pollution Act.
"If the OSLTF was used as it was intended by OPA, when BP/GCCF does not pay a claim, the victim presents the claim to OSLTF," explains Donavan. "At that point, OSLTF pays the victim and then the US attorney general, at the request of the secretary of the department of homeland security, shall commence an action on behalf of OSLTF against BP and collect the amount from BP. That's how it is written."
Donovan believes that these laws are being ignored for political reasons.
BP created the Deepwater Horizon Oil Spill Trust (DHOST) on August 6, 2010.
"The fact that, pursuant to the DHOST agreement, future production payments pertaining to BP's US oil and natural gas production, rather than hard US assets, are being used as collateral by BP, guarantees BP's continued long-term operation in the offshore Gulf of Mexico," Donovan says. "Ironically, the federal government has acquired a vested interest in ensuring the financial well-being of BP."
While Donovan's firm has been largely successful in assisting its clients in obtaining their settlements, he says: "I'm sure down the road we're going to have to file suit. I don't doubt that."
Again, more and more stories of illness and despair that things will ever be made right.
"Most of the people I care about are hungry, they've lost their house, they're losing their cars," says Cherri Foytlin, the co-founder of Gulf Change, a community organisation in Louisiana.
"I've met so many people over the last three days who've had red beans and rice for Christmas while this man's firm is getting $850,000 a month for this. I saw people on their knees in these meetings begging this man. I don't know how he sleeps at night. He takes money from BP and claims to represent and care about people in the Gulf."
Lorrie Williams fishes crab from Ocean Springs, Mississippi. Her 11-year-old son has been sick for months with symptoms she blames on toxic chemicals related to the oil spill. Her son's blood tested positive for several of the chemicals in BP's crude oil.
"My concern is not a claim, or money, but finding somebody who is going to treat my son, and other sick people," she says. "For Feinberg to tell me to file a claim, what am I filing for? To get $5,000 since I'm sick? My fear is that in five years my child is going to have cancer. Or my husband or I will pass away and not be here to care for my child."
PLEASE visit Pam LaPier's diary to find out how you can help the Gulf now and in the future. We don't have to be idle! And thanks to Crashing Vor and Pam LaPier for working on this!
Previous Gulf Watcher diaries:
|1-23-11 09:30:06||Gulf Watchers - Legality of Claims Process Challenged - BP Catastrophe AUV #461||Yasuragi|
|1-21-11 18:31:17||GW Friday Block Party--Is Your Day special?||Phil S 33|
|1-21-11 08:15:29||Gulf Watchers Friday - Attack of the MMS Zombies - BP Catastrophe AUV #460||Lorinda Pike|
|1-19-11 06:00:48||Gulf Watchers - New Wikileaks Embassy BP/Russia Cable - BP Catastrophe AUV #459||peraspera|
|1-17-11 17:26:50||Gulf Watchers - BP To Drill Off Australian Coast - BP Catastrophe AUV #458||shanesnana|
Previous motherships and ROV's from this extensive live blog effort may be found here.
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