Oil Drilling On Trial In the World’s Oceans Who Really Profits?

Published Saturday, 6th April, 2013 | By Susan AKA Peacefull

I was just overviewing my blog to be reminded of the blog I put together on the BP oil spill. We live in a world where there is so many distractions that we forget the important issues. In my previous blog issues are raised about the oil spill affecting the functioning of the Gulf Stream. Why is this important? The Gulf Stream distributes cool and warm waters around the world and is like a temperature regulator of the oceans, if it stops the UK and Europe temperatures could drop by 5 degrees Celcius. This is significant in environmental terms as the ecosystems are so sensitive that they respond to slight changes in temperature. Temperature is like switches and signals saying turn on or off etc. I wonder at how many other spills or environmental disasters go unreported. For these cases are in the public interest definitely.

I have posted a few articles the one below is looking at oil profits and the one beneath that is to investigate the situation with BP Oil and the trial over the spill in the Gulf.

My first thought of course naturally opens to Nikola Tesla and his invention of free energy early in the 20th century. The notion that energy can be tapped from the ionisphere and his working for JP Morgan, the wealthy industrialist, whom on learning about free energy immediately sacked Tesla; he was a smart business man he saw the loss of profits. Thus profit was the key reason and it is easy to see how this can run against the best interest of citizens and nature. Business see themselves as individual enterprises who have no vested interest in social wellbeing, they are simply there to make profits, and with that, comes power. The latter issue of course is not democratic as special interests have the ear of government (not one vote one value) and on it goes. According to the Union of Concerned Scientists the average US driver spends $22,000 on the life of a vehicle purchased in 2011 (see http://www.ucsusa.org/clean_vehicles/smart-transportation-solutions/better-fuel-efficiency/where-your-gas-money-goes.html). That is the opportunity cost of using oil is the extra money citizens could have had by using free energy. Had Tesla’s idea been taken up we would be living in a different world today. I think of the opportunity cost of conflict would be a world that is no longer fighting over energy (middle east, US conflicts). In the latter case we are looking at a conservative estimate (in my opinion) of 6 trillion (refer http://articles.washingtonpost.com/2013-03-28/world/38097452_1_iraq-price-tag-first-gulf-war-veterans. To learn more about the alternative free energy visit http://www.free-energy-info.co.uk/Chapt11.html

It seems to me that humankind must learn about itself through the economic system which is a learned disconnect from the natural world. Through schools, business schools and universities people have been trained to think in certain ways and it is reinforced and rewarded with degrees etc. I was trained in economics and it was seen as important for society to have a healthy functioning economy. I was taught how wealth generates jobs, trickle down effects and stabilises social order. However, what I was not taught about was the impacts of economic behaviour on natural systems, tipping points, real social needs and what makes us happy. Economic growth was touted as the purpose of an economy and indeed work. If you work hard you will get what you want and the outcome will be happiness. These notions in the mainstream are not questioned, if they are, those differing are seen in a negative light or opposition rather than diverse views in a democracy that serves all. Psychologically we feel our survival is undermined by any ideas that may pull the rug under the feet of economic rationalism. The central flaw in economics is profit maximisation and the greed it inspires in many lovely people. They are accountable to Boards, Councils and shareholders and greed is indeed good for business, profit is a sign of success. It is the desire for more profits which drives and rewards energy companies in exploiting oil, gas and coal reserves. When I reflect on this extraction intuitively I reflect on the weight displacement across the earth, you have to remember that these resources are extracted in a mass volume form and then when burned they become gas, so that is a huge weight displacement. No-one talks about that. I think of the earths axis and rotation.

Back to profits. The mulinational energy companies typically make superordinate profits (see article below) and our global society is educated to believe that profits is economic wellbeing, security, jobs and personal survival. We are increasingly connected to an economic system, like an addiction, that we believe we cannot live without. That is why we go to work. We have to pay the bills otherwise we will be vulnerable, on the street and ostracised that is the fear that dictates our behaviour. That is how we unconsciously support the energy system, we demand the energy and do not typically seek out alternatives. The fear is, without energy, our world becomes chaos, we all watch t.v. and see how scary it all is. This is the marketing of economic growth that depends on consumers to consume and business to generate profits. Thus profits and personal security/wealth are the nerve centres, yet in truth, profiteering (unless it is social business where society benefits) does not respond to real human needs (life supports) it responds to profits and that is the parallel universe that exists between the economic system and reality of nature. Even when you study economics it is demand and supply models; nature is not factored in. I did discuss with my professor the notion of unlimited growth in a finite world and social costs (externalities) and he did agree economics was limited. The current system rewards greed/profits and self interest (corporate, individual) not best interests (survival of species and balance with nature).

Below is an article which highlights business thinking and the psychological and physical reward for profit by peers and how profit outcomes affects beliefs and behaviour, such as drilling in this case. The damage it creates is not mentioned and the real opportunity cost to gulf stream (slowing), CO2 warming, seabeds, ecosystems, pollution is not mentioned in business monologues as their mindset is focussed on profit signals as success. The language is really interesting, earnings profit is innately seen as good, lagging returns is not. I love the words like boosting, propel, lag, drag, urged, divest, 5 year high, worlds biggest, vindicated, integrated model, capture, highest value, every molecule etc. You can feel approval/disapproval through language and of course underneath that is competition (winners/losers). It is a good exercise to deeply read words and really feel for the philosophy beyond the words, that tells us a lot about how people are perceiving the world, whether they are narrow or holistic. Much of it is unconscious agreement or designed to capture interest in the article in line with prevailing beliefs of the day and the target audience. The next article beneath critiques the oil industry, it is worth examining the words there. How do you feel? Perhaps look at new questions – How do we raise consciousness about our oneness with nature? How do we communicate with people with diverse mindsets for the ultimate best interest of all? How do we redistribute resources (nature bounty) in a way that is sustainable? How do we reward good corporate citizenship working for the social good? How do we shift the paradigm from self interest to best interest? How do we work together with respect and authenticity moving away from traditional adversarial approaches and spin?

The challenge is that people in industry identify very strongly their sense of self worth/success with the success in their chosen organisation or industry. How do we help them to see their self worth in truthfulness, integrity, shared interests, empathy and responsibility? How do we expand responsibility (the ability to respond) to the natural world and real social impacts? I mean this in the sense of making personal decisions. I, for example, was asked by a scientific organisation here in Australia to commercialise scientific technology. It was a prestigious job had I taken it, would have boosted my career (good word boost). Anyway, I had $20 in my account and my dilemma was genetic engineering. I felt intuitively I don’t want to lend my energy (no pun intended) to promoting human interference with the genetic code of plants and animals. My primary reason was corporate decision making based on profit maximisation not the ecological balance. I questioned my potential employer and he could not guarantee the balance of nature. I couldn’t take the job. That is how personal responsibility works in reality, as it turns out money did come and I didn’t starve. I have to tell you my partner received a metal sculpture of plants like prongs with twists on the end. Can you believe he received a model of plants with DNA on the end that very week of my decision. That is the magic of life that gives you cues, that is actually a metaphysical discussion that I won’t raise here as it is out of the box (in truth it expands it). However, the point here is to help people see that their actions directly affect the planet, and given that, we are all responsible. We are indeed integrated into the natural system of the planet, presently we are not in harmony given how we think and feel.

So have a look over the articles and you decide what you think, you have your own wisdom. I am just sharing my thoughts with you, perhaps I am wrong (you will never read that in the media). Being wrong is wisdom because it opens your mind to all possibilities. That is how we change the world in truth. Enjoy. /p>

Bloomberg posted this article (refer http://www.bloomberg.com/news/2013-02-01/exxon-profit-rises-as-cheap-u-s-oil-lifts-refining.html)

Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX), the largest U.S. energy producers, are boosting profits with oil refineries that some analysts and investors urged them to divest as recently as last year.

Earnings from processing crude into fuels such as gasoline and diesel more than made up for lagging returns from oil and natural gas exploration during the final three months of 2012, Exxon and Chevron reported today. Fuel refining helped propel fourth-quarter net income to a five-year high of almost $9.95 billion for Exxon and a record $7.25 billion for Chevron.

Enlarge image Exxon Profit Rises as Cheap U.S. Oil Lifts Refining Margins

The logo for Exxon Mobil is displayed at a gas station in Tokyo. Photographer: Tomohiro Ohsumi/Bloomberg

Exxon, the world’s biggest refiner, and Chevron, operator of fuel plants from South Korea to Mississippi, have resisted the trend among peers such as Marathon Oil Corp. (MRO) and ConocoPhillips of spinning off refineries to focus on oil drilling. The persistence is paying off: Exxon posted the second-highest annual profit in U.S. history last year, surpassed only by its own all-time high from 2008, according to data compiled by Bloomberg.

“Even though refining has long been seen by some as a drag on earnings, it has now been vindicated,” said Ernie Cecilia, who helps manage $6.7 billion as chief investment officer at Bryn Mawr Trust Co. in Bryn Mawr, Pennsylvania. “We like integration.”

The logo for Exxon Mobil is displayed at a gas station in Tokyo. Photographer: Tomohiro Ohsumi/Bloomberg

Arjun Murti at Goldman Sachs Group Inc. was among analysts who questioned Exxon’s dedication to the so-called integrated model during a presentation by Exxon Chief Executive Officer Rex Tillerson last March in New York. Tillerson defended the arrangement that joins refineries to chemical plants and oil production, saying it enables the company to capture the “highest value of each molecule.”

Incremental Value

“There’s no doubt in my mind that the integrated model adds incremental value to everything we do,” Tillerson said during the event.

Exxon’s full-year net income rose 9.3 percent to $44.88 billion, just $340 million shy of the U.S. profit record the company set in 2008 when it raked in $45.22 billion.

Chevron earned $26.2 billion in 2012, the second-highest result in company history, according to data compiled by Bloomberg. The year was 2.7 percent below Chevron’s biggest-ever profit of $26.9 billion, posted in 2011, according to data compiled by Bloomberg.

http://blog.skytruth.org/2013/02/bp-on-trial-finally.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Skytruth+%28SkyTruth%29

BP On Trial – Finally

At long last BP is finally standing trial (before a single judge, not a jury) for civil damages caused by their catastrophic blowout in the Gulf of Mexico nearly three years ago. That blowout caused an explosion and fire on the massive Deepwater Horizon drill rig that killed 11 workers, injured many others, and sent the rig to the ocean floor nearly a mile below. And the resulting oil spill was the nation’s worst to date, spewing some 172 million gallons of crude oil into the Gulf.

In-situ burning of oil slicks during spill response operations in the Gulf of Mexico, June 22, 2010. Photo courtesy Dr. Oscar Garcia, Florida State University.

Assuming BP and their partners don’t come to a settlement with the Justice Department, the trial is expected to last throughout most of 2013. But don’t hit the snooze button just yet: this could get very interesting. The trial will be conducted in two phases. The first phase, underway now, will assign the share of blame for this tragedy among the defendants (BP, Transocean and Halliburton; right now they’re all doing their level best to deflect as much of the blame as possible onto each other). It will also decide if, as government lawyers are arguing, BP acted with “gross negligence.” That’s a key ruling because it ramps up the fine BP will pay from the standard $1,100 per barrel spilled, to $4,300 per barrel. Under the RESTORE Act that Congress passed last year, 80% of that fine will go toward funding restoration projects in the Gulf region. As we wrote back in February 2012,

…federal prosecutors will attempt to paint BP as a “rogue” operator that took unusual risks, to convince the judge that the spill resulted from gross negligence. BP, to defend itself, will likely claim that their operations, well design, and decisionmaking were not so unusual, and were consistent with industry-wide practices. To make that case BP will have to present lots of information about the offshore drilling industry as a whole, including the safety record, accidents and near-misses experienced by other companies that we never hear about. None of the official investigations of the BP / Deepwater Horizon spill looked at the industrywide record, leaving many of us wondering:

Just how risky is modern offshore drilling?

Given Shell’s serial blundering during their Arctic drilling program last year — problems so severe they just announced today that they’ve scrapped the entire program for 2013 — we have to wonder if BP is truly a “rogue” or if their level of risk-taking is more or less the norm throughout the offshore oil industry.

By the way, I’m somewhat dismayed at this statement yesterday by the Chairman and President of BP America, Lamar McKay, that suggests BP has a long way to go when it comes to establishing an effective safety culture:

I think that’s a shared responsibility, to manage the safety and the risk. Sometimes contractors manage that risk. Sometimes we do. Most of the time it’s a team effort.

I’m not a risk-management expert but it’s my understanding that this diffusion of responsibility, and unclear definition of authority, is exactly the kind of management muddle that leads to major system failures. In other words, somebody has to clearly be in charge at all times.

The second phase of the trial will determine how much oil spilled into Gulf waters, the key to determining how big a fine BP will pay and how much money will go toward Gulf restoration. That will pit lawyers against scientists. Place your bets.

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Posted by John Amos at 5:38 PM Labels: Arctic, BP, Deepwater Horizon, Gulf of Mexico, Halliburton, Louisiana, offshore, Oil Spill, Shell, Transocean