Bureaucracy, EPA & Napolitano stop US from “keeping up with the Joneses” on oil spill clean up

The story angles of the ongoing Horizon oil spill that demand my most intense focus are the capping/clean up efforts, followed by the investigation of the sequence of events leading to the tragedy. At this point, it seems someone needs to “clean up” the chaotic “clean up” coverage. I’m not talking about the political hype making the rounds, accusing BP of cover ups while ignoring our federal government’s equally active denial of access for very legitimate reasons. I’m talking about why available and offered resources aren’t out there in full force, sucking up that crude while at sea instead of waiting for it to hit the shores.

There is no explanable or sane motive for BP to willingly ignore fiscal realities – that it’s much less expensive to clean up at sea than onshore. The embattled oil company, third largest in the world, is hemorrhaging cash at a rate equal to, or greater than the spill itself.

To make it more politically dicey, BP (as it prefers to be known over British Petroleum), is also a mainstay of the British stock market, a favorite of both American and British pension funds, and international employer of 80,000 employees. Needless to say, while the Brits sympathize with the environmental quandary, they are rightfully livid at the powerful leader of the free world, trashing the company’s fiscal performance by counterproductive fingerpointing and daily threats of litigation.

What started me on this “what’s happening out there?” quest was a back and forth I had with commenter, jlfintx on one of Curt’s weekly open threads. The burning question was, what the heck happened to Kevin Costner and his donated CINC centrifuges that vacuum oil, and were standing by… ready to go? Did the media lose interest after he flashed his Hollywood smile? Did the centrifuges not work?

And for that matter, what about similar technology available from other countries? All trails had hit brick walls… until today. Now the answer is abundantly clear.

These resources aren’t being utilized primarily because of the ineptness of various federal agencies, regulations, bureaucracies; and a Homeland Security head who is a blithering idiot. (and that’s being kind, IMHO….) And not just this administration… but thru multiple administrations.

There’s plenty of blame to go around for the generations of Congressional elite as well. Too many over the decades have spent their terms loading us down with so much poorly written and disconnected legislation that the resulting regulations are nothing more than a wad of government red tape. We’re being strangled – boxed in by rules on technical progress, and too legally paralyzed to implement corrective action.

In the case of this oil spill, two current governmental responses… or would that be lack of response… are borderline downright criminal. Costner’s uphill battle with government agencies on the centrifuges; and the federal government’s refusal to pave the path for the most efficient international aid from Belgium and the Dutch.

First, Costner Industries and the centrifuges:

A bit of background from my cyber conversation with jlfintx… Costner showed up in Louisiana on May 13th, the media was enraptured while he demonstrated his centrifuge in a kiddie pool. We then learned BP was testing six machines, and the news fell off the edge of the earth from there. Not one media entity was curious to follow up.

At that time, all the media was reporting that Costner teamed up with local Louisiana lawyer, John Houghtaling… a local “SuperLawyer” who gained traction as a trial lawyer following Katrina. However the Louisiana SOS corporate filings indicate that Ocean Therapy Solutions, created after the spill on May 10th, is a separate entity that doesn’t name either of the Costner brothers as agents or officers. (altho we are not privvy to further details since the Articles of Organization are not available online). Rather, it’s a local firm that appears to be utilizing Costner’s centrifuges in some of the Louisiana parishes… if they are allowed to, that is. (wait for that one…). The media names Houghtaling as a head honcho, another notable name appears on that LLC… actor Steven Baldwin. Coincidently, the same law firm that filed that LLC filed a second one with some of the same players – The Will to Live LLC. The name of a documentary that Baldwin and Costner are producing on the oil spill.

So what’s the story with Costner, and what the heck are he and an enviro lawyer… with a penchant for Ferraris and exotic cars … doing? Their intent appears to be genuine, so why isn’t this news? Where’s the machines? Are they being used? Are they working? And where the heck is *any* press on this?

Costner’s testimony before the House Science and Technology Committee yesterday answered many of my questions… not only about the centrifuges and the speedbumps Costner, his centrifuges and OTS face, but about the actor’s very realistic approach to environmental politics.

The ugly reality is that CINC/Costner has been banging his head against federal bureaucracy for 17 years, and now thru three administrations, after he purchased a licensed patent for a centrifugal force oil-water separator from the Department of Energy’s Idaho National Laboratory. The story of the hoops his business has jumped, and the circles they ran is a fascinating read in the testimony on it’s own, but let me summarize. It came down to a few ugly realities…

1: The vicious circle of insanity – the feds refuse to issue approval of it’s use on a real life spill because it’s untested technology, but you need real life tests in order to get the approval…. WTF?

2: The inability to hurdle an EPA regulation on the amount of oil mixed with the water the centrifuge discharges in operation (15ppm as the top threshold).

The first point is simply insurmountable. There is no logic in requiring new technologies to be proven in a real life situation if you cannot get approval to use it when a real life situation arises.

The second is equally inane. The fact that the CINC centrifuge discharges water…where 0.1% of it contains oil… violating EPA regulations… is no reason to prohibit it’s use. I’d say all of us would trade 1.28oz of oil for every gallon sucked up out of the Gulf. This anal attitude could be surmounted by an emergency waiver by the EPA and administration. Certainly when the magnitude of the spill is so overwhelming, the 15ppm rule is a bizarre fixation.

BTW, the EPA’s regulations mirror the IMO (Int’l Maritime Organization) MEPC Resolutions that govern the mandated oil/water separators (OWS) installed on board ships since 1970 emit no more than that magic number of 15ppm when pumping bilge water.

So, not daunted, nine months ago Costner set to work to again tilt at windmills, and find a way to get his centrifuges to below the 15ppm threshold. He teamed up with UCLA engineer, Dr. Eric Hoek, to address the discharge problem. But do we have time to wait for more tests, more demonstrations and approvals from federal bureaucracies that never come?

This is where OTS came into play… Costner says the LLC will utilize his CINC centrifuge, and sees it as a way to incorporate the nanotechnology developed by UCLA, plus get the CINC centrifuges deployed in the Gulf. A way to test the untested, despite regulations. Whether they are getting somewhere yet, he doesn’t say.

Needless to say, these are emergency conditions, and 1.28 oz per gallon emissions are looking pretty appealing in contrast… especially since this clean up can be done at sea instead of onshore.

So the question is, why hasn’t the administration and EPA given a nod to move forward with this technology, giving it the proving grounds for testing for official approval in the future?

Or is our government at the mercy of the IMO?

Costner’s testimony wrap up may come as a surprise to many who have considered him to the far left on the environment. The actor pulled no punches when he pointed out that the moratorium was causing offshore rigs to move overseas, and cost jobs…. Contrary to Obama’s pledge to not put Americans out of work. But he did more… he chastised the administration’s present action plan of fingerpointing at BP.

We are all at fault here. It’s just too easy to blame BP. It took oil for me to fly here and it will take more oil to solve our problem. What we need to do now is come together. What I can provide it a technology that is available immediately, a technology that will allow rigs to resume operation and to put people back to work. Every day we wait to deploy we lose more wildlife, coral reefs and our way of life.

US Coast Guard has used terms such as “under assault” to describe conditions in the Gulf. He has it right that this is a war to be waged with all the tools, methods, and techniques we have at our disposal. Since the last great debacle (Exxon Valdez spill) there has been too little institutional effort devoted toward defining, identifying and qualifying the best “tool chest.”

I heard it stated that throughout the 19th and 20th Centuries, each time America
has been compelled into war, we begin fighting it with the methods, tactics, equipment and technologies used in the last war. I believe that statement to be not only poignant but also accurate to events unfolding in the Gulf.

We have the opportunity to provide the American public a solution to the Gulf oil
spill and to tell the story that demonstrates the power of combining government resources with private ingenuity. Thank you for this opportunity to speak today. As an entrepreneur, a pragmatist, and a US citizen I am committed to ensuring a positive environmental legacy for the Gulf and all waters around the world.

As Mike’sA posted last night, we also have the absurdity of a circa 1920 law on the books, the Jones Act. Mike suggests this may be an indication of Obama’s blind allegiance to unions. It seemed a legitimate point, but I couldn’t get around notion that the vast loss of political capital with the nation at large wasn’t exactly a shrewd tradeoff for longshoremen or union support. The sheer numbers simply do not jive. I needed further digging.

Business Insider’s Dian L. Chu’s article INRE the Jones Act effect points out there were thirteen entities that offered assistance in the days following the Horizon incident: (This differs from Jake Tapper’s count of 17 countries, plus four international organizations. The latter is the more common figure I’ve seen.)

The actual count is less important to me than perhaps those they chose to accept assistance from…. And according to the State Department, Canada, Mexico and Norway are the three who’s offers were accepted.

But the experts, and those with the equipment, are Belgium and the Dutch who, between the two of them, possess the 5-6 ships that exist on this planet, and set up for this purpose.

Per Chu’s article:

A Belgian group–DEME– contends it can clean up the oil in three to four months with specialty vessel and equipment, rather than an estimated nine months if done only by the U.S. The article noted there are no more than 5 or 6 of those ships in the world and the top specialist players are the two Belgian companies- DEME and De Nul – and their Dutch competitors.

The U.S. does not have the similar technology and vessel to accomplish the cleanup task because those ships would cost twice as much to build in the U.S. than in the Far East. The article further criticizes this “great technological delay” is a direct consequence of the Jones Act.

As discussed in my analysis of the oil service sector, the European companies typically possess the knowhow in offshore and subsea; whereas their North American counterparts excel in onshore drilling and production technologies.

Chu, like others, also calls for a waiver of Jones Act limitations.

But there’s a hitch in this debate… After Homeland Security’s Michael Chertoff waived Jones Act provisions following Katrina in Sept 2005, the Act was recodifed in 2006. And in Chapter 121, “§ 12117, we find exceptions for oil spill response vessels.

Ҥ 12117. Oil spill response vessels

“(a) REQUIREMENTS.–A coastwise endorsement may be issued for a vessel that—

“(1) satisfies the requirements for a coastwise endorsement, except for the ownership requirement otherwise applicable without regard to this section;

“(2) is owned by a not-for-profit oil spill response cooperative or by members of such a cooperative that dedicate the vessel to use by the cooperative;

“(3) is at least 50 percent owned by individuals or entities described in section 12103(b) of this title; and

“(4) is to be used only for—

“(i) deploying equipment, supplies, and personnel to recover, contain, or transport oil discharged into the navigable waters of the United States or the exclusive economic zone; or

“(ii) training exercises to prepare to respond to such a discharge.

It would seem that the Jones Act is not an obstacle in any fashion. It certainly can be waived by Homeland Security. But more importantly, it looks like it’s entirely unnecessary to get a waiver if you consider the codified version the following year. So unless the entities are somehow disqualified via ownership and for profit status, why just Canada, Mexico and Norway, unless the administration is stubbornly sticking to old interpretation of the law? And why aren’t we diving at the experts… Belgium and the Netherlands?

Or could it be that, just like Costner’s battle against the federal machine, they are just so bloated with regulations and thousand page legislation that the Obama administration officials are simply clueless to what they can do, should do and are mandated to do.

That’s my vote… it’s called too stupid to lead.