"The end justifies the means.” —Machiavelli
Fact: Deep water oil platforms don’t just blow up. As the centerpieces of projects that cost billions of dollars, they are designed not to.
Fact: Just before 10 a.m. on April 20 a Transocean rig called the Deepwater Horizon 40 miles south of Venice, La., exploded and caught fire as it was working a well for BP.
Fact: Two weeks later as much as 300,000 barrels of crude oil have spread into the Gulf of Mexico, the bulk of it hitting the shores of Louisiana. More than 2 million barrels could spill out before the well is finally capped making this disaster worse than the Exxon Valdez catastrophe which spilled 400,000 barrels of oil into Alaska’s Prince William Sound in 1989.
Fact: This giant gulf oil spill happened less than three weeks after President Barack Obama announced he would allow offshore drilling.
Fact: Few in the mainstream media or in the federal government are putting a spotlight on to what caused the explosion that killed 11 men. Rather, their focus has been on what it will do to the environment.
Fact: The Greens have all the ammunition they need to permanently suspend future offshore oil production as well as drilling in environmentally sensitive areas, such as the oil-rich Arctic National Wildlife Refuge.
On April 30 Obama suspended plans to expand offshore oil drilling. That same day, during the PBS talk show, The McLaughlin Group, Eleanor Clift made this prediction: “The catastrophic oil spill in the gulf will silence Sarah Palin’s, ‘Drill, Baby, Drill.’”
That’s the aim of the Greens. Michael Brune, executive director of the Sierra Club,said on Saturday: “Taking a temporary break from offshore drilling is an important step, but it’s not enough. We need to stop new offshore drilling for good, now. And then we need an aggressive plan to wean America from dirty fossil fuels in the next two decades.”
What My Deep Throat Says About This Deep Disaster
While I have been around plenty of oil rigs in my life I am hardly an expert. But I have friends who are. One of them is Ryan who is an oil field technician for one of the original Seven Sisters here in Calgary. I met with him last Friday to talk about the Transocean accident and what might have triggered the explosion.
“It probably comes down to one of two things,” said Ryan. “The blowout preventer failed to operate and seal the well. With the computers they have on deep ocean wells that shouldn’t happen; there is always the possibility of human error.” He looked around the room and then confided: “And of course it could be sabotage.”
The blowout preventer is a set of valves that connects the pipe from underground to the surface and it is used to control excessive pressure that might go further up the line. Valves can burst from either high-pressure oil, or oil mixed with gas which travels to the surface unexpectedly. That can start a catastrophic fire if sparked by the electrical gear on the platform. It should be noted that oil services contractor Halliburton is denying that its workers might have caused the accident.
It has already been alleged that Halliburton improperly cemented the well. Cementing is a process used to fill the gap between the drilled hole and the casing that brings oil and gas up out of the ground.
There has been speculation on whether the sealing process had been completed before the blast occurred. Yet the company insists that its workers had finished the cementing operation 20 hours before the rig went up in flames.
Perhaps It Was Just A Coincidence
The Wall Street Journal wrote on Friday: “Concerns about the cementing process—and about whether rigs have enough safeguards to prevent blowouts—raise questions about whether the industry can safely drill in deep water and whether regulators are up to the task of monitoring them.” To its credit, the WSJ is one of the few to report on the question of what caused the explosion.
While the Exxon Valdez accident immediately focused on the cause of the spill and the role that ship’s captain Joseph Jeffrey Hazelwood played, there is so far scant information and inquiry into what triggered the explosion on board the Deepwater Horizon.
The Greens were furious with Obama for allowing offshore drilling. It may be a happenstance that the Deepwater Horizon blew up three weeks later. But given the history of the Green movement I think it is worth considering that environmental extremists could have had a hand in this accident.
I had been thinking along these lines this past Friday when I got an email from my editor asking if I thought something was fishy and would I like to write about it.
I said yes, even though I was a bit apprehensive that you folks might consider me a reactionary or even a nut. And while I am not a big listener of Rush Limbaugh, I was encouraged when I read he was thinking along the same lines.
"Obviously the regime (the Obama Administration) is open to the idea that this is not an accident,” said Limbaugh. "The original Earth Day 40 years ago was inspired by the river in Cleveland catching fire. Forty years later, the day before Earth Day this year, the gulf is on fire. Coincidence? The jury is still out."
Love him or loathe him, what Limbaugh says is backed up by the actions of the White House which sent Homeland Security Secretary Janet Napolitano to the site. Napolitano has declared this is “an incident of national significance." Then on Sunday Obama visited the Gulf Coast to bolster efforts to control the spill.
The Dark Side Of The Greens
Of course I don’t know that eco-terrorists sparked this catastrophe. But I do know you don’t call a cop unless you think there might have been a crime. And some extremists in the Green movement are most certainly criminals.
The Federal government considers eco-terrorism a greater threat to America than Osama bin Laden and his organization al Qaida. According to the Federal Bureau of Investigation (FBI): “Eco-terrorism is the use or threatened use of violence of a criminal nature against innocent victims or property by an environmentally oriented, sub-national group for environmental-political reasons, or aimed at an audience beyond the target, often of a symbolic nature."
Guilty or not I have no doubt that the extremists in the environmental movement must be celebrating the Gulf Coast crisis. A recent poll by the WSJ asked: “Have your views on offshore drilling changed after the oil spill off the Louisiana coast?” The response by its conservative readership was a resounding, yes.
We may never know what caused the explosion that sunk the Deepwater Horizon. What we do know is that 11 men lost their lives and there is going to be untold suffering to the wildlife and on the people of America’s Gulf Coast. We can also expect this catastrophe will do to deep water oil exploration what Chernobyl did to nuclear energy. I expect new offshore drilling to cease for years, perhaps even decades. That sets up a future of greater dependence on Arab oil imports and higher energy prices.
Action To Take: Expect plenty of blame to go around and three companies are going to get hammered: BP (NYSE: BP, $52.15), Transocean Ltd. (NYSE: RIG, $72.32) and Halliburton Co. (NYSE: HAL, $30.65). If you own shares in these stocks liquidate them immediately. If you own energy mutual funds make sure that part of your fund does not own these three stocks. If they do, sell the fund. What is ironic is that over the past few years BP has bragged that its name no longer stands for British Petroleum but rather Beyond Petroleum. It looks as if they might turn out to be right.
Yours for real wealth and good health,
Myers’ Energy and Gold Report