http://abcnews.go.com/GMA/video/diving-gulfs-toxic-soup-10735329

http://money.cnn.com/2010/05/24/news/economy/offshore_drilling/index.htm 
By Steve Hargreaves, senior writerMay 24, 2010: 2:19 PM ET
NEW YORK (CNNMoney.com) — Despite the massive oil leak in the Gulf of Mexico, the government is under pressure to issue new permits for offshore drilling as early as next week.

Permits to drill offshore were suspended last month pending an Interior Department safety review after the explosion of the Deepwater Horizon drill rig that left 11 workers dead and an uncapped oil well spewing millions of gallons of crude into the Gulf.

The safety review is due this Friday, and the Obama administration will use it to help decide when and how drilling should resume.

Many argue there should be no new drilling until the Deepwater Horizon investigation is complete. But that investigation will take months. In the meantime, there are thousands of workers who are literally running out of wells to drill unless new permits are issued.

“They’re already starting layoffs in some cases,” said Lee Hunt, president of the International Association of Drilling Contractors.

Oil spill: How much is a pelican worth?
Nearly 30,000 jobs are at stake by midsummer if new permits are not issued soon, said Hunt. Those include jobs on the drill rigs themselves and support positions such as crews on supply boats, caterers and construction yards.

The vast majority of those jobs are not on drill rigs operating in mile-deep water, like the BP (BP)-contracted rig was. The rigs are in 1,000 feet of water of less, and as such are much safer, he said.

Oil in the shallower water is under less pressure, and therefore easier to control, according to Hunt. In addition, the equipment used to cap the well in the event of an emergency is mounted on the drill rig bottom, not the bottom of the ocean as in the case of the Deepwater Horizon, meaning it can be better maintained.

“Please, don’t make it a blanket ban,” said Hunt. “There’s nothing to be gained.”

Hunt has support from many lawmakers.

In a letter sent out last week, 10 senators, including both from heavily impacted Louisiana, urged the Interior Department to begin issuing new permits as soon as possible.

“We are very concerned that the moratorium is far too broad and unnecessarily covers shallow-water drilling activities,” the senators wrote. “If the moratorium is continued through June, lost revenue from shallow water drilling is estimated at $135 million.”

If the moratorium is lifted, one of the first new permits in line for approval could be a Shell plan to drill in shallow water off the north coast of Alaska, in the Arctic Circle.

It would be one of the first offshore Arctic wells in U.S. waters, and Shell is confident it can drill there safely.

“We have put in place an unprecedented three-tier system consisting of an on-site oil spill response fleet, near-shore barges and oil spill response vessels, and onshore oil spill response teams staged across the North Slope,” a company spokeswoman said in an e-mail.

Shell wants to start exploratory drilling this summer, noting that it has hundreds of millions of dollars on the line, and that the nation needs the oil.

“Every year we don’t drill in Alaska delays the creation of tens of thousands of jobs, energy security and much-needed new oil for the Trans-Alaska Pipeline,” said the spokeswoman.

Opposition
Naturally, many people are against this idea.

“The idea of drilling in the Arctic is unconscionable,” said John Hocevar, oceans campaign director for the environmental activist group Greenpeace. “We’ve never dealt with an oil spill in these conditions. We don’t know how.”

Hocevar said Shell’s emergency plan is inadequate, noting the nearest Coast Guard base is 1,000 miles from their proposed drill site and there are no roads along the surrounding shoreline.
He also said drilling in any shallow water – be it in the Arctic or the Gulf of Mexico- is just as dangerous as deepwater drilling. Hocevar wants no Arctic drilling at all, and no new permits anywhere until a more through investigation is complete and the government agencies that oversee drilling are reformed.

“There have actually been more blowouts recently in shallow water than deep water,” Hocevar said. “The depth is less of a problem than the broken system of assessing, permitting and inspecting wells.”

At least one analyst thinks Hovecar will get his wish, noting that Interior Secretary Ken Salazar said there will be a delay in permits until the causes of the Gulf accident are understood.

“Although many investors have concluded that drilling will resume at the end of thirty days, it unlikely that Interior will resume approvals for drilling permits,” Kevin Book, a managing director at the research firm ClearView Energy Partners, wrote in a recent research note.

But the drilling association’s Hunt remains optimistic.

He said the group has lined up a delegation of at least 20 senators who support the resumption of drilling shortly after Friday’s report.

“We have a lot of support on the economic front,” he said. “There’s no reason to subject these shallow water rigs to the pause.”

Special thanks to Richard Charter

Greenpeace says it used oil from the Gulf spill to write messages on a vessel that will help drill in the Arctic.

http://bignews.biz/?id=875794&keys=Senator-Robert-Menendez-OilCompanies

Bill Nelson and Merkley co-sponsor legislation announced today; estimated to save taxpayers more than $20 billion over ten years
May 24, 2010
 
WASHINGTON – U.S. Senator Robert Menendez (D-NJ) today announced legislation that will close a number of corporate tax loopholes that allow oil companies to avoid paying billions of dollars in taxes. The Close Big Oil Tax Loopholes Act, co-sponsored by Senators Bill Nelson (D-FL) and Jeff Merkley (D-OR), targets a series of tax breaks related to drilling activities and revenues, as well as  foreign tax schemes. Menendez estimates that closing these loopholes will amount to more than $20 billion over ten years for the taxpayers.
 
“The flow of revenues to oil companies is like the gusher at the bottom of the Gulf of Mexico: heavy and constant,” said Menendez. “There is no reason for these corporations to shortchange the American taxpayer. They certainly aren’t using the extra money they get from exploiting these loopholes to help bring down the price of gas for our families. Unlike the underwater geyser in the Gulf, we can shut down these loopholes quickly and permanently when we pass this legislation.”
 
“I’d like to see us pay for an accelerated alternative-fuels program by ending the billions of dollars in giveaways to Big Oil,” said Nelson.  “Previous attempts to close these loopholes were dead-on-arrival, because of the industry’s clout.  Maybe that won’t be the case this time.”
 
“At a time when millions of Americans are struggling to find work, oil companies that are making billions in profit are still receiving billions more in government subsidies,” Merkley said.  “It’s time that we stop handing over cash to the big oil companies and start investing in clean energy solutions that will strengthen our national security and create American jobs.”
 
Among its provisions, the legislation would accomplish the following:
 
·        Recoup royalties that oil companies avoided paying for oil and gas production on public lands
·        Prevent oil companies from manipulating the rules on foreign taxes to avoid paying full corporate taxes in the U.S.
·        End a number of tax deductions and relief afforded to the oil industry, such as the deductions for classifying oil production as manufacturing, for the depletion of oil and gas through drilling and for costs associated with preparing to drill.
 
Oil companies make up four of the top ten spots on the Fortune 100 list of largest corporations. In the first three months of this year alone, the top 5 oil companies made over $23 billion in profits.
 
The Close Big Oil Tax Loopholes Act is based upon provisions in President Obama’s Budget in which he signaled the need to stop subsidizing polluting industries. The bill does contain important safeguards to allow refineries and oil companies with yearly revenues of less than $100 million to retain certain tax credits and deductions.
 
Background on legislation:
 
·        Recoup Royalty Revenue Lost to Contract Loopholes: This proposal would create an excise tax on oil and gas produced on federal lands on the Outer Continental Shelf (OCS) in order to pay back American taxpayers for contract loopholes whereby oil and gas companies avoided paying royalties on certain oil and gas produced in the Gulf of Mexico.  This would save an estimated $5.3 billion.
 
·        End Oil Companies Abuse of Foreign Tax Credits: Would require that a dual capacity taxpayer establish that the foreign country generally impose an income tax to be able to claim a foreign levy as a creditable tax, saving $8.2 billion.
 
·        Repeal Expensing of Intangible Drilling Costs: Would repeal the deduction for IDCs and require such costs be capitalized as a cost of the well or tangible property and recovered through depreciation or depletion, as applicable.  Oil companies with yearly revenues of less than $100 million would retain the use of this deduction. In the President’s Budget this provision saved $10.9 billion, but the grandfathering of smaller companies will lower that score.
 
·        Repeal Percentage Depletion for Oil and Gas Wells: This proposal would repeal percentage depletion for oil and gas properties. Oil companies with yearly revenues of less than $100 million would retain the use of this deduction. In the President’s Budget this provision saved $9.6 billion, but the grandfathering of smaller companies will lower that score.
 
·        Repeal Deduction for Tertiary Injectants: The proposal would repeal the current deduction and instead allow oil companies to capitalize and depreciate or deplete costs for tertiary injectants.  For example, supply costs would be capitalized and deducted when consumed or as part of cost of goods sold. Oil companies with yearly revenues of less than $100 million would retain the use of this deduction.  In the President’s Budget this provision saved $57 million, but the grandfathering of smaller companies will lower that score.
 
·        Repeal Exemption of Passive Loss Limitations for Interests in Oil and Gas Properties:  The proposal would end the exemption from passive loss rules for oil companies so they must operate under the same tax rules as other corporations.  Oil companies with yearly revenues of less than $100 million would retain the use of this exemption. In the President’s Budget this provision saved $217 million, but the grandfathering of smaller companies will lower that score.
 
·        Repeal Domestic Manufacturing Deduction for Oil and Gas Production: This proposal would repeal the ability of oil and gas companies to claim oil and gas production as manufacturing, thus making the production activities ineligible for the domestic production activities deduction.  Oil companies with yearly revenues of less than $100 million would retain the use of this deduction.  The deduction would also be retained for oil refining and natural gas processing. This exact proposal has not been scored, but could easily save billions.
 
·        Match Geological and Geophysical Amortization Periods for All Oil and Gas Companies: This proposal would create more uniform amortization rules for geological and geophysical costs.  G&G costs are costs incurred in obtaining and accumulating data that serves as the basis for acquiring and retaining oil and gas properties.  Oil companies with yearly revenues of less than $100 million could amortize geological and geophysical costs over two years.  All others would amortize these costs over 7 years. In the President’s Budget this provision saved approximately $1 billion, but the grandfathering of smaller companies will lower that score.

Special thanks to Richard Charter

http://online.wsj.com/article/BT-CO-20100523-703884.html?mod=WSJ_latestheadlines
MAY 23, 2010, 3:28 P.M. ET
By Dan Molinski    Of DOW JONES NEWSWIRES
CARACAS (Dow Jones)–Oil-rich Venezuela’s President Hugo Chavez derided the U.S. Sunday over last month’s drilling rig accident in the U.S. Gulf of Mexico, and said he sent oil experts to help its ally Cuba as the spill moves toward the island’s northern coast.
“This is very, very bad,” Chavez said, regarding the oil spill and its environmental implications. “It’s now threatening the coast of Cuba, so yesterday I sent a team to Cuba.”
Speaking during his weekly “Hello, President” television show, Chavez said Eulogio Del Pino, the head of production and exploration at state-run Petroleos de Venezuela, is leading a team of Venezuelan oil experts that will advise Cuba on how to handle the oil spill.
The Venezuelan crew is already on the ground with the Cubans “doing some drills, because the Cubans don’t have experience in this,” Chavez said.
The oil spill, Chavez added, “is gushing, and they haven’t been able to stop it.”
A U.S. State Department official earlier this week said it was in contact with Cuba regarding the spill and the possibility that the oil would reach the island nation.
The comments Sunday by Chavez, a frequent critic of the U.S. government, were his first extended public statements about the spill.
The accident happened April 20, beginning with a deadly explosion on the Macondo deepwater well, which Transocean Ltd. (RIGN.EB, RIG) was drilling for London-based BP PLC (BP.LN, BP).
Chavez, a socialist and recently-declared Marxist, also said he thinks the accident will derail U.S. President Barack Obama’s plans to expand offshore oil exploration in the U.S.
“This is going to demolish those plans by Obama,” Chavez said.
Venezuela had its own rig accident earlier this month, when a natural gas exploration rig leased by PDVSA began taking in water on May 12. Within hours the rig, owned by India-based Aban Offshore Ltd., had completely sunk. The nearly 100 workers on the rig were safely evacuated and the Venezuelan government has said there is no environmental risks and say there have been no signs of any leaks.
-By Dan Molinski, Dow Jones Newswires; 58-414-120-5738; dan.molinski@dowjones.com

Special thanks to Richard Charter

http://www.nytimes.com/2010/05/25/science/earth/25spill.html?pagewanted=1

By ELISABETH ROSENTHAL and ANAHAD O’CONNOR

Published: May 24, 2010

The effort to stanch the vast oil spill in the Gulf of Mexico was mired by setbacks on Monday as state and federal officials feuded with BP over its failure to meet deadlines and its refusal to stop spraying a chemical dispersant.

The oil company had indicated that it could stem the flow of oil on Tuesday by trying a procedure known as a top kill, in which heavy fluid would be pumped into the well. But on Monday morning the company’s chief operating officer said the procedure would be delayed until Wednesday.At the same time, BP was locked in a tense standoff with the Environmental Protection Agency, which had ordered the company last week to find a “less toxic” chemical dispersant than the one it was using and to make the switch by Sunday evening. But BP continued spraying the chemical on Monday after informing the agency why it believed that the dispersant it has been using, called Corexit, was the safest available. 

At a news conference Monday in Louisiana, state and federal officials continued to hammer BP over its response to the spill. 

“BP in my mind no longer stands for British Petroleum — it stands for Beyond Patience,” said Sen. Richard J. Durbin of Illinois, the No. 2 Democrat in the Senate. “People have been waiting 34 days for British Petroleum to cap this well and stop the damage that’s happening across the Gulf of Mexico.” 

“What we need to tell BP,” he added, “is excuses don’t count anymore. You caused this mess, now stop the damage and clean up the mess. It’s your responsibility.” 

At a news conference on Monday afternoon, the E.P.A.’s administrator, Lisa P. Jackson, said that she was “dissatisfied with BP’s response” to her agency’s order to switch to a “less toxic” dispersant. She said she had responded by ordering BP to take “immediate steps to scale back the use of dispersants,” saying that the amount being used could probably be reduced by 50 to 75 percent. 

Since the Deepwater Horizon rig exploded a month ago and began spewing oil a mile under surface, BP has applied about 700,000 gallons of the dispersants on the gulf’s surface and in experimental undersea applications directly on the leaking well head. That is the largest quantity of dispersant deployed to date to break up an oil spill in United States waters. 

Ms. Jackson said that in theory, BP’s deployment of dispersant directly onto the leaking well head — a novel and experimental use of the chemicals — would reduce the amount of oil on the surface and lessen the need for application there. 

Calling BP’s safety data on dispersants “insufficient,” she said that government scientists would conduct their own scientific tests to decide which type was best to use. Ms. Jackson said the amount of dispersant applied to control the oil was “approaching a world record.” 

Rear Adm. Mary Landry of the Coast Guard said that while the government had pre-approved the use of dispersant, “no one anticipated that is would ever be used at this scale and this scope.” 

She said the preferred method of treating oil on the ocean was to burn it or to soak it up with devices like absorbent booms and that dispersant applications should be a second line defense for when the weather was too severe to rely on those other techniques. 

Rep. Edward J. Markey, Democrat of Massachusetts, praised the E.P.A.’s action, saying, “Just like many aspects of their spill response, BP gets an ‘F’ on its analysis of dispersants, and E.P.A. has rightly told it to redo its assignment and this time, show all its work.” 

He added, “Despite the assertions made by BP that dispersants can be safely used, we know almost nothing about the potential harm from the long-term use of any of these chemicals on the marine environment in the Gulf of Mexico, and even less about their potential to enter the food chain and ultimately harm humans.” 

At the morning news conference, Mr. Durbin was joined by Interior Secretary Ken Salazar and Homeland Security Secretary Janet Napolitano, who were sent to the region Monday by President Obama in response to increasing criticism that the White House was not acting aggressively enough on the spill. 

“BP is the responsible party, but we need the federal government to make sure they’re held accountable,” Gov. Bobby Jindal of Louisiana, a Republican, said Monday. 

Mr. Salazar insisted that the federal government was not “sitting on the sidelines and letting BP do what BP wants to do.” He pointed out that the government had deployed more than 1,000 vessels to the region and more than 20,000 workers, burned oil off the surface of the Gulf and deployed miles of protective boom to protect and clean up the shorelines.  

While the Corexit products, made by Nalco of Naperville, Ill., are the time-tested old faithfuls of oil spill treatment, developed in the 1980s and 1990s, critics say that less toxic and more effective products are now available.

The purpose of the chemicals is to break up the oil into tiny droplets that drop under the water and can be more readily dispersed by ocean currents so that the oil does not have so great an effect on sea life.

Complicating the standoff between the company and regulators, there are many methods for estimating the toxicity of chemical oil dispersants and no single standard prevails.

The original E.P.A. order instructed BP “to identify a less toxic alternative — to be used both on the surface and under the water at the source of the oil leak, but it also said that if BP were “unable to identify available alternative dispersant products,” it could instead provide the Coast Guard and the E.P.A. with a detailed description of the dispersants it had investigated and the reason it did not believe they met the required standards.” On Thursday night BP invoked that latter option.

The letter ticked off some of the alternative dispersants BP had considered, and outlined why the company felt each was problematic, often because of other toxicity issues.

An official with the environmental agency, speaking on condition of anonymity, said that the E.P.A. was “not satisfied with the response it received from BP” and had demanded several meetings with the company since then, including one at which BP scientists were instructed to brief their counterparts in the federal government about some of what was included in their letter.

Last week, after receiving the initial E.P.A. order, BP contacted a number of dispersant manufacturers, including the U.S. Polychemical Corporation — which makes a product called Dispersit SPC 1000 — asking about product composition and how quickly the mix could be produced. In the end, BP did not place an order, an official at U.S. Polychemical said.

The Corexit dispersants were removed from a list of approved dispersants in Britain a decade ago because one type of test used in that country found them to be dangerous to animals like limphets near rocky shores.

Corexit dispersants are still approved for use in the United States and Canada, which rely on different types of testing.

Brian Knowlton contributed reporting from Washington, Campbell Robertson from Venice, La., and Daisuke Nakai from New York.

Special thanks to Dave Curtis

A BP cleanup crew working Sunday to remove oil in Port Fourchon, La. State officials say the company and federal government have not acted quickly enough.