Pelicans and Politicians

The lead story in the May 8th issue of The Economist is entitled Deep Trouble: Big Oil and America's Energy Policy. The issue has several articles that cover many issues and viewpoints associated with U.S. energy markets and cleanup efforts in the Gulf Coast. Highlights of the articles are listed below:

• Investors have wiped approximately $30 billion off BP's value.
• Moves are afoot to lift the cap on an oil firm's liability for economic damage done by oil spills form $75 million to $10 billion - - they are already on the hook for unlimited cleanup costs.
• There has not been a big leak from an offshore oil well for 40 years.
• Average annual spills from underwater pipelines declined from 2.5 million gallons in 1980-84 to just 12,000 gallons in 2000-04.
• Floating oil on surface waters comes from - - 1% offshore drilling, 4% tankers and pipelines, 33% from shipping, and 62% from natural seepage.
• For spills are hardly the most baleful consequence of America's oil addiction: global warming and the funding of foreign despots surely come higher up the list.
• Charlie Crist of Florida and Arnold Schwarzenegger of California both withdrew their support for drilling last week.
• Tony Hayward, CEO of BP, started his career with BP as a geologist working on a North Sea platform.
• The seafood industry in Louisiana is worth $2.4 billion.
• The light fractions of an oil spill, as much as 40% of the total, will evaporate quite quickly.
• Drilling off the coasts of the lower 48 states is estimated to account for just 7% of domestic production by 2030 and will have an insignificant impact on prices.
• Warmer and choppier waters and environments are less easily damaged than the Alaskan shores.
• Robert Bea, a professor of engineering with the University of California at Berkeley, appears to be the go-to-guy for the press regarding engineering risk and uncertainty.