TPT July 2010

G lobal M arketplace

gas companies have been outsourcing critical, high-risk operations for several decades, sacrificing control to save money. The potential for mixed signals is just too great on platforms like the Deepwater Horizon, home to distinct chains of command from various subcontractors. “Workers for different companies may hardly know one another despite working side by side,” he said. “They often answer to different bosses.” › Terry Hazen, microbial ecologist at Lawrence Berkeley National Laboratory (a US Department of Energy unit at the University of California): Mr Hazen favours soaking up the oil in the Gulf by seeding the affected waters with such absorbent materials as cellulose fibres or animal hair. He points out that these are cheap and readily available, and there is a fleet of commercial fishing vessels already in place for dispersing them. Once they’ve done the job, he said, “These materials can be retrieved and either compressed into blocks for burning or, better still, fed to microbes in quarantined spaces.” › Kevin M Yeager, assistant professor of marine sciences at the University of Southern Mississippi: Do nothing, is the terse advice of this geologist. Mr Yeager urges recognition that nature can do many things far better than we can, and with less collateral damage. Oil is a natural byproduct of biological and geological processes. He noted that – if left alone in coastal environments – hydrocarbons will be broken down, naturally, by wave action, sunlight, and microbes in the sediment. Meanwhile, he said, “Money saved can go to helping local economies deal with the loss of income, improving safety regulations and enforcement, and developing a clean energy policy.” Jon Bowermaster of the blog Take Part is not among the experts who spoke to the Times . But on 15 May he made an interesting contribution to the discussion: “The Deepwater Horizon was a sophisticated drilling rig that cost nearly $600mn to construct and $500,000 a day to lease. Is anyone insulted by the fact that BP’s next best shot at stopping the leak is something called a ‘junk shot,’ which involves cramming a bunch of old tires, carpet, and golf balls into the well?” Metals World Steel Association: quarterly iron ore pricing will compel steel makers to pass on their higher costs Chairman Paolo Rocca of the World Steel Association (WSA) considers the abandonment by iron ore exporters this year of the 40-year custom of annual (“benchmark”) pricing in favour of quarterly contracts “a very negative trend.” In a 9 May interview with Bloomberg News in Beijing, Mr Rocca said that the higher materials costs entailed by the change would compel steel makers – now paying much more for iron ore – to raise their prices to their own customers. The 180-member WSA comprises 19 of the 20 leading steel makers, which together account for 85% of global output. It had previously called on authorities worldwide to examine the iron ore market after the Brazilian mining multinational Vale SA (formerly Companhia Vale do Rio Doce, or CVRD) won a 90% price increase from Japanese mills for quarterly contracts taking effect in April. Posco, Asia’s #3 steel maker, cited escalating costs when it raised May prices for its products by as much as 25%.

The oil spill As plumes of hydrocarbons pollute the Gulf of Mexico, experts discuss alternatives to responses – detergents, bioremediation, burning – that can do more harm than good At this writing , the only certainties about the leak from the Deepwater Horizon seabed oil well are that it continues, and that it is very bad. A 13 May announcement from President Hugo Chávez, of Venezuela – via his account on the social networking site Twitter – suggests the near-certainty that more of the same must be expected. Mr Chávez reported that an offshore natural gas exploration rig leased to the national oil company Petroleos de Venezuela, SA (PDVSA) had sunk off the country’s northeastern coast. The platform is owned by a subsidiary of India’s largest oil rig company, Aban Offshore. Given the high probability that such events will recur, and the consequences for nations and corporations when they do, it may be worthwhile to canvass informed opinion on ways to offset the effects of these disasters. Here, in summary, are the views of five experts consulted by the New York Times as oil and gas still streamed from the riser of the Deepwater Horizon, the estimates of the leak’s extent went higher, and the oil slick moved ashore in Louisiana. (“Plan B in the Gulf,” 10 May) › Riki Ott, author of Not One Drop: Betrayal and Courage in the Wake of the Exxon Valdez Oil Spill : Citing the high school chemistry maxim “Like dissolves like,” this marine toxicologist argues against the use of dispersants in oil spills on grounds that crude oil responds only to oil-based solvents, which are extremely toxic. Drums of Corexit 9527, a dispersant used to clean up the Exxon Valdez spill in 1989, came with the warning label: “Prevent liquid from entering sewers, watercourses, or low areas.” Little has changed in 20 years, according to Ms Ott, whose interview took place when over 300,000 gallons of dispersants had already been used in the Gulf. She warned, “They can linger in the water for decades, especially when used in deep water, where low temperatures can inhibit biodegradation.” › Ken Arnold, energy industry consultant and former Royal Dutch Shell engineering manager: In Norway and Brazil, offshore oil rigs are required to have switches that close valves whenever they sense an acoustic pulse in the water, signalling a possible blowout. The Gulf spill has prompted calls for these acoustic sensors on American rigs. But Mr Arnold noted that the Deepwater Horizon had manual switches at several different stations and two backups. Either these all failed, he said, or they worked and the valve still failed to close. Moreover Mr Arnold considers these switches dangerous in their own right. He said: “When a safety switch is thrown, a device cuts the drill pipe, letting it fall into the hole. Fishing it out, and even testing it regularly, is a dangerous proposition, putting worker safety at risk – precisely what such systems are designed to avoid.” › John Hofmeister, former president of Shell and author of Why We Hate the Oil Companies: Straight Talk from an Energy Insider : This source would concentrate on prevention, with a recommendation that the trend toward outsourcing in the oil and gas industry be slowed or even reversed. Mr Hofmeister observed that many American oil and

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J uly 2010

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