Just try to keep the focus on the economics of it, you could write up an Instapopulist or even a blog post on the Gulf Oil Spill.
Environmental disaster is economic. But we're going to see oil shoot through the roof, the oil will decimate the regional economies of the gulf. Never mind the absolute tragedy and crime of all of the life this will kill.
You're clearly deep into tracking what's happening so I'm sure EP readers would appreciate a post overviewing the latest if you are off a mind.
Dylan Ratigan is doing a piece on it today. If you want to use video, it should be simply copy and paste the embed code into the body box, rich text editor off.
I haven't looked at the latest but last I checked they are still claiming a "V" recovery and that train left the station a long time ago. It's ridiculous and frankly, I would suggest reading the Chicago Fed national activity index. It's 83 different indicators, so I think it's fairly accurate. I'd have to go look at Fed leading, coincident, lagging indicators (which I didn't write up because the CFNAI is so detailed), but bottom line,
I mean come on, the data is what it is, there is clearly no "V" and frankly I trust the Federal Reserve (underlings! the ones doing the business cycle data, the geeky ones! Not the high level Bernanke politics thing) and their analysis, which plain says it's not there.
Anywho, that mind boggling graph, ya got it, when I wrote that post basically it blew my mind, went looking for changing in accounting, or something coming onto the books that was hidden and so on. I never could find anything so I'll assume MC/VISA plain upped the credit limits on cards, almost across the board.
Ya know what else? Almost no one caught that event. i.e. if a gov. data release isn't in the MSM, it's clear Journalists are not looking at raw data else they would have written that one up.
But I noticed Zero Hedge claims government transfers are 70% of the total increase in PI. I don't think that's quite right because gov. transfers are not having FICA removed, transferred to the gov. so I had to add back in the FICA to W-2 income (wages and salaries) and then divide by gov. transfers.
I mean gov. transfers is huge, no doubt about it and that clearly bumped up PI. I noted that the total increase equaled in private industries income was exactly equal to unemployment benefit checks!
Hey, how about reading EP posts on these metrics and don't link to those "other guys" first? They don't graph like I do on these posts. They also do not explain their calculations and this particular one means a skew.
But it took 9 months to do the same thing in the Gulf in 1979. This incident is eerily similar to todays predicament.
On June 3, 1979, the 2 mile deep exploratory well, IXTOC I, blew out in the Bahia de Campeche, 600 miles south of Texas in the Gulf of Mexico. The IXTOC I was being drilled by the SEDCO 135, a semi-submersible platform on lease to Petroleos Mexicanos (PEMEX). A loss of drilling mud circulation caused the blowout to occur. The oil and gas blowing out of the well ignited, causing the platform to catch fire. The burning platform collapsed into the wellhead area hindering any immediate attempts to control the blowout. PEMEX hired blowout control experts and other spill control experts including Red Adair, Martech International of Houston, and the Mexican diving company, Daivaz. The Martech response included 50 personnel on site, the remotely operated vehicle TREC, and the submersible Pioneer I. The TREC attempted to find a safe approach to the Blowout Preventer (BOP). The approach was complicated by poor visibility and debris on the seafloor including derrick wreckage and 3000 meters of drilling pipe. Divers were eventually able to reach and activate the BOP, but the pressure of the oil and gas caused the valves to begin rupturing. The BOP was reopened to prevent destroying it. Two relief wells were drilled to relieve pressure from the well to allow response personnel to cap it. Norwegian experts were contracted to bring in skimming equipment and containment booms, and to begin cleanup of the spilled oil. The IXTOC I well continued to spill oil at a rate of 10,000 - 30,000 barrels per day until it was finally capped on March 23, 1980.
Despite the gain, the personal saving rate continued to move down in March, to 2.7% of disposable income.
It looks like the American consumer is a compulsive shopper. The least sign of a recovery and they are spending with abandon again.
The problem is that the America balance sheet is still a mess and loaded with debt. Another downturn could be extremely destructive.
Of the Markets that will self-police because all participants are rational and act in their self-interest? Of course, we only measure what is obvious -- any variable we don't measure (like corporate dishonesty or calculated risk-taking at someone else's expense) are of no interest. As Kurt Vonnegut used to say, "So it goes."
Here in Florida, our unemployment rate is about 12.5% -- so much for the recovery as we wait for the impact of oil on tourism and fishing. We may be forced to implement a WPA type of program just to reduce the disruption.
Frank T.
The relief well will ease the outward pressure from existing release points allowing them to be sealed with cement apparently.
However if the wellhead blows (because the metal pipe is being eaten away right now by flowrates it was not designed to handle)the path of least resistence may remain where it is making it difficult to cap.
The three caps will be ineffective in the event of a wellhead blowing also since they are going to be used over three leaks or release points. Once that opens up those will be near useless.
This is why the time they take to start drilling a relief well is imperative. They should be shutting down the nearest rigs and moving them there right now. These things are not the fastest moving vessels in the ocean and then setup and actually drilling takes some time also.
They have a real problem on their hands here.
The worst ecological disaster in US history. Louisiana certainly did not need this.
From what I have read, three of these huge, heavy steel "boxes" are being fabricated at a Mississippi shipyard. Only one has been completed so far. As I understand it, these boxes will lowered somewhere over the leaks on the seabed and will trap most of the leaking oil which will allow it to be pumped up to processing ships on the surface. This is proven technology for shallow water wells, but they have never been tried at these depths. Whether or not it can be made to work, at least as I understand it, the drilling of the relief well is the ultimate solution.
I can read about the details, understand them but when it comes to engineering underwater deep sea drilling rigs, uh, I'll wait for the commission (they should have hearings on this one!) before the House Science committee.
All I'm getting out of this is they didn't have enough safety features, doing cost cutting. Which I find amazing since that's Hurricane alley.
Why these cap structures are just being fabricated now rather than something that is already built and standing by.
There does not appear to be any prep down ahead of time for this type of disaster at all.
My own take is that the relief well and cementing process is probably the only real hope they have here and that will take 3-4 months apparently. I would think that if the well head does blow (the oil flow is eating away at the pipes by the minute) that the hole may just be so large that capping it will be a problem also with cement even with the pressure reduced by drilling in elsewhere.
It's even more reason to hire the fisherman for clean up. It will take decades, that's what happened in Prince William Sound and this is bigger, and a more fragile ecosystem.
I'm not sure what the Forbes article even means in terms of "the engineers wouldn't want to make that call", but the technical aspects on this make me sweat. I would hate to be one of those working on trying to fix/cap the pipes for the pressure might be intense.
but that sure doesn't sound "fail safe" to have a cutter which every 30 ft cannot cut due to the joints. That's one of those "odds" where the error rate may come down to 1/1000, i.e. the places where it cannot cut through the pipe....but thinking that would never happen is obvious...
uh, you probably need to design a cutter that can cut through any part of the pipe, or two of them which also reposition below the last joint.
Anywho, I wish they would deploy like this is a nuclear bomb on the sea floor waiting to go off (because that's what this is).
The "containment" boxes sound practical, or something.
who are really reading the report and looking at the details would agree with you. I do not know how much "Stimulus" is in this, I do know "Stimulus" is deployed extensively through Q1 2010. That said, a real Stimulus, an direct jobs/infrastructure/manufacturing/trade reform, would have made the unemployment rate go down, no doubt about it.
I don't see much in here to sustain a recovery. About the only good news I see consistently is manufacturing output increasing, but it collapsed on the twin towers (sorry, that's what it reminds me of) so a long, long way to build up even to pre-recession levels and we know that manufacturing has been decimated by bad trade deals before this meltdown.
People that work in that industry and those that own boats will have to relocate to continue working.
I have some friends that fish commercially out of New Bedford MA and for them it will be a bit of a boom because prices will rise somewhat but its shrimp that comes from the Gulf and they aren't everywhere.
If enough oil is spilled the Gulf could take decades to recover.
“Absolutely, it’s a possibility that every day the efforts we’re making will stop the flow today,” Salvin said. “But we don’t know that. So what we’re doing is making sure we work the containment system. That will be ready to be deployed in about six to 10 days. That’s our backup position.”
The challenge with drilling a relief well, Salvin said, is that the process could take up to three months. But if they can contain the oil with their three containment systems – 40-feet tall “small buildings,” as Salvin described them, that would stand over the three oil release points – that at least that would prevent more oil from reaching the surface of the sea.
Powerful hydraulic rams inside the BOP should automatically have shut off the oil flow up a mile-long, 21in “riser” pipe at the flick of a switch in a control room on the rig. Not only did every failsafe system malfunction, but efforts to reactivate the BOP since then have been hugely complicated because a bundle of power and communication cables between the rig and the BOP, known as the “mudline”, was severed when the rig sank.
The result is a desperate race to jump-start the BOP without the use of the umbilical cord that once connected it to the surface. “We have nine remotely operated submersibles on the scene. The BOP was not designed to be operated by them, but we are trying to intervene,” Mr Chapman said.
Something else to consider: it's been said that the workers were in the final stages of casing and cementing the hole and that within a couple days the Deepwater Horizon was to leave that spot to go drill a new prospect. My deepwater engineer source explains that the closer a rig gets to the end of a job like this, the more pressure there would be (from supervisors, etc) to not take a drastic step like engaging the BOP's shear ram. If they had suddenly disconnected the rig from the well at that point in the cementing process, "they might have lost the whole thing." On a well that cost BP and its partners $100 million to drill, none of the nine ill-fated Transocean and two Smith International employees on the rig floor would want to make that call.
and how it's worse than TARP ever was. This is completely out of the press and the blogs. I also don't think most people, including financial/economics bloggers, understand it or even realize how much gov. bail out is going to these two entities or how the U.S. government now is responsible and subsidizing the entire residential mortgage/housing market.
How much did BP spend running commercials and other media on how green they are and especially on how deep sea offshore oil drilling was now safe due to advances in technology? (or was that Exxon?)
Man, $500k. Unbelievable. What's the latest with the cap attempts. If they cannot get this capped, we're looking at a global disaster of epic proportions.
Also, I have thought an economic double dip, that's a second recession, or a continuing of this one, the probability has increased dramatically due to this oil spill.
I'll try to dig out more on this but, just like Katrina, this will depress the economies of the entire gulf coast most likely.
The cost $500,000. Thats from the link you provided. My God the freking BP exec says it might not have worked anyway. So I guess the important thing is BP saved half a million. Bunch of fools.
Just try to keep the focus on the economics of it, you could write up an Instapopulist or even a blog post on the Gulf Oil Spill.
Environmental disaster is economic. But we're going to see oil shoot through the roof, the oil will decimate the regional economies of the gulf. Never mind the absolute tragedy and crime of all of the life this will kill.
You're clearly deep into tracking what's happening so I'm sure EP readers would appreciate a post overviewing the latest if you are off a mind.
Dylan Ratigan is doing a piece on it today. If you want to use video, it should be simply copy and paste the embed code into the body box, rich text editor off.
I haven't looked at the latest but last I checked they are still claiming a "V" recovery and that train left the station a long time ago. It's ridiculous and frankly, I would suggest reading the Chicago Fed national activity index. It's 83 different indicators, so I think it's fairly accurate. I'd have to go look at Fed leading, coincident, lagging indicators (which I didn't write up because the CFNAI is so detailed), but bottom line,
I mean come on, the data is what it is, there is clearly no "V" and frankly I trust the Federal Reserve (underlings! the ones doing the business cycle data, the geeky ones! Not the high level Bernanke politics thing) and their analysis, which plain says it's not there.
Anywho, that mind boggling graph, ya got it, when I wrote that post basically it blew my mind, went looking for changing in accounting, or something coming onto the books that was hidden and so on. I never could find anything so I'll assume MC/VISA plain upped the credit limits on cards, almost across the board.
Ya know what else? Almost no one caught that event. i.e. if a gov. data release isn't in the MSM, it's clear Journalists are not looking at raw data else they would have written that one up.
See Personal Income and Outlays March 2010 for details on the savings rate (this is graph-o-rama)
But I noticed Zero Hedge claims government transfers are 70% of the total increase in PI. I don't think that's quite right because gov. transfers are not having FICA removed, transferred to the gov. so I had to add back in the FICA to W-2 income (wages and salaries) and then divide by gov. transfers.
I mean gov. transfers is huge, no doubt about it and that clearly bumped up PI. I noted that the total increase equaled in private industries income was exactly equal to unemployment benefit checks!
Hey, how about reading EP posts on these metrics and don't link to those "other guys" first? They don't graph like I do on these posts. They also do not explain their calculations and this particular one means a skew.
Relief wells for blowouts on two somewhat similar incidents.
This process went rather smoothly in Australia not that long ago.
Montara Relief Well
But it took 9 months to do the same thing in the Gulf in 1979. This incident is eerily similar to todays predicament.
On June 3, 1979, the 2 mile deep exploratory well, IXTOC I, blew out in the Bahia de Campeche, 600 miles south of Texas in the Gulf of Mexico. The IXTOC I was being drilled by the SEDCO 135, a semi-submersible platform on lease to Petroleos Mexicanos (PEMEX). A loss of drilling mud circulation caused the blowout to occur. The oil and gas blowing out of the well ignited, causing the platform to catch fire. The burning platform collapsed into the wellhead area hindering any immediate attempts to control the blowout. PEMEX hired blowout control experts and other spill control experts including Red Adair, Martech International of Houston, and the Mexican diving company, Daivaz. The Martech response included 50 personnel on site, the remotely operated vehicle TREC, and the submersible Pioneer I. The TREC attempted to find a safe approach to the Blowout Preventer (BOP). The approach was complicated by poor visibility and debris on the seafloor including derrick wreckage and 3000 meters of drilling pipe. Divers were eventually able to reach and activate the BOP, but the pressure of the oil and gas caused the valves to begin rupturing. The BOP was reopened to prevent destroying it. Two relief wells were drilled to relieve pressure from the well to allow response personnel to cap it. Norwegian experts were contracted to bring in skimming equipment and containment booms, and to begin cleanup of the spilled oil. The IXTOC I well continued to spill oil at a rate of 10,000 - 30,000 barrels per day until it was finally capped on March 23, 1980.
How is the consumer spending more if credit isn't expanding? a declining savings rate.
It looks like the American consumer is a compulsive shopper. The least sign of a recovery and they are spending with abandon again.
The problem is that the America balance sheet is still a mess and loaded with debt. Another downturn could be extremely destructive.
Of the Markets that will self-police because all participants are rational and act in their self-interest? Of course, we only measure what is obvious -- any variable we don't measure (like corporate dishonesty or calculated risk-taking at someone else's expense) are of no interest. As Kurt Vonnegut used to say, "So it goes."
Here in Florida, our unemployment rate is about 12.5% -- so much for the recovery as we wait for the impact of oil on tourism and fishing. We may be forced to implement a WPA type of program just to reduce the disruption.
Frank T.
Just applying what I know to what I am reading.
The relief well will ease the outward pressure from existing release points allowing them to be sealed with cement apparently.
However if the wellhead blows (because the metal pipe is being eaten away right now by flowrates it was not designed to handle)the path of least resistence may remain where it is making it difficult to cap.
The three caps will be ineffective in the event of a wellhead blowing also since they are going to be used over three leaks or release points. Once that opens up those will be near useless.
This is why the time they take to start drilling a relief well is imperative. They should be shutting down the nearest rigs and moving them there right now. These things are not the fastest moving vessels in the ocean and then setup and actually drilling takes some time also.
They have a real problem on their hands here.
The worst ecological disaster in US history. Louisiana certainly did not need this.
From what I have read, three of these huge, heavy steel "boxes" are being fabricated at a Mississippi shipyard. Only one has been completed so far. As I understand it, these boxes will lowered somewhere over the leaks on the seabed and will trap most of the leaking oil which will allow it to be pumped up to processing ships on the surface. This is proven technology for shallow water wells, but they have never been tried at these depths. Whether or not it can be made to work, at least as I understand it, the drilling of the relief well is the ultimate solution.
I can read about the details, understand them but when it comes to engineering underwater deep sea drilling rigs, uh, I'll wait for the commission (they should have hearings on this one!) before the House Science committee.
All I'm getting out of this is they didn't have enough safety features, doing cost cutting. Which I find amazing since that's Hurricane alley.
Why these cap structures are just being fabricated now rather than something that is already built and standing by.
There does not appear to be any prep down ahead of time for this type of disaster at all.
My own take is that the relief well and cementing process is probably the only real hope they have here and that will take 3-4 months apparently. I would think that if the well head does blow (the oil flow is eating away at the pipes by the minute) that the hole may just be so large that capping it will be a problem also with cement even with the pressure reduced by drilling in elsewhere.
It's even more reason to hire the fisherman for clean up. It will take decades, that's what happened in Prince William Sound and this is bigger, and a more fragile ecosystem.
Watch the cancer maps too after this frankly.
I'm not sure what the Forbes article even means in terms of "the engineers wouldn't want to make that call", but the technical aspects on this make me sweat. I would hate to be one of those working on trying to fix/cap the pipes for the pressure might be intense.
but that sure doesn't sound "fail safe" to have a cutter which every 30 ft cannot cut due to the joints. That's one of those "odds" where the error rate may come down to 1/1000, i.e. the places where it cannot cut through the pipe....but thinking that would never happen is obvious...
uh, you probably need to design a cutter that can cut through any part of the pipe, or two of them which also reposition below the last joint.
Anywho, I wish they would deploy like this is a nuclear bomb on the sea floor waiting to go off (because that's what this is).
The "containment" boxes sound practical, or something.
who are really reading the report and looking at the details would agree with you. I do not know how much "Stimulus" is in this, I do know "Stimulus" is deployed extensively through Q1 2010. That said, a real Stimulus, an direct jobs/infrastructure/manufacturing/trade reform, would have made the unemployment rate go down, no doubt about it.
I don't see much in here to sustain a recovery. About the only good news I see consistently is manufacturing output increasing, but it collapsed on the twin towers (sorry, that's what it reminds me of) so a long, long way to build up even to pre-recession levels and we know that manufacturing has been decimated by bad trade deals before this meltdown.
People that work in that industry and those that own boats will have to relocate to continue working.
I have some friends that fish commercially out of New Bedford MA and for them it will be a bit of a boom because prices will rise somewhat but its shrimp that comes from the Gulf and they aren't everywhere.
If enough oil is spilled the Gulf could take decades to recover.
The last article gives a pretty good explanation of what happened and why maybe this ended up being an economic decision by workers there at the time.
Apollo 13 Effort Underway
Repairig the Blowout Preventer
Containment Structures
What Happened & Why
This GDP number could have been followed by a lower unemployment rate had they pursued a real national infrastructure plan.
and how it's worse than TARP ever was. This is completely out of the press and the blogs. I also don't think most people, including financial/economics bloggers, understand it or even realize how much gov. bail out is going to these two entities or how the U.S. government now is responsible and subsidizing the entire residential mortgage/housing market.
How much did BP spend running commercials and other media on how green they are and especially on how deep sea offshore oil drilling was now safe due to advances in technology? (or was that Exxon?)
Man, $500k. Unbelievable. What's the latest with the cap attempts. If they cannot get this capped, we're looking at a global disaster of epic proportions.
Also, I have thought an economic double dip, that's a second recession, or a continuing of this one, the probability has increased dramatically due to this oil spill.
I'll try to dig out more on this but, just like Katrina, this will depress the economies of the entire gulf coast most likely.
NASA. It would really help if one bothered to understand the science and archeology actual findings.
Ok! We seem to be getting visits from the conspiracy theory crowd.
From now on these CT comments will be deleted.
While we're a Populist layman's economics blog, we just don't have enough tin foil for your hats here!
The cost $500,000. Thats from the link you provided. My God the freking BP exec says it might not have worked anyway. So I guess the important thing is BP saved half a million. Bunch of fools.
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