Fmr. President, Shell Oil; Founder and CEO, Citizens for Affordable Energy, Inc.
Friday, June 11, 2010; 11:00 AM
John Hofmeister, former president of Shell Oil, founder and CEO of Citizens for Affordable Energy, Inc. and author of "Why We Hate the Oil Companies: Straight Talk from an Energy Insider," was online Friday, June 11, at 11 a.m. ET to discuss the latest news and information about the oil spill, including new estimates of the amount of oil that has spewed from the Deeepwater Horizon well, damage claims by those whose lives have been affected by the disaster, federal regulation and the future of offshore drilling.
John Hofmeister: Hi, I'm John Hofmeister here to discuss energy and environment with you. I look forward to comments, questions and conversation.
Arlington, Va.: I heard you basically say on a news show that the reason we are drilling in deep and ultradeep water is because we don't allow drilling on the beaches and some federal lands. Do you believe this? That we could ban forever all deep and ultra deepwater drilling and supply all our needs (20+ million barrels/day) with unrestricted drilling on beaches and Federal lands?
John Hofmeister: It is critical to drill where it is safe, reasonable risk and where there is oil and gas to drill. This could include shallow water off both coasts and Alaska, onshore Federal lands in addition to the private land drilling we do now. However we use more oil per day that the US can reasonably produce, so we'll be importers of oil until we can change technology to lower demand. We could import half as much oil however according to my calculations than we do today by opening up more domestic drilling, making use of biofuels and higher mileage autos.
Sun Prairie, Wisc.: Good morning, Mr. Hofmeister. Could you comment on the involvement of oil companies other than BP in the attempts to stop the runaway well spewing more money into the Gulf of Mexico, and in the effort to clean up oil already in the Gulf and monitor its effects?
Are Exxon and other oil companies involved at all, or are they bystanders? Do they possess expertise BP does not, or resources that might help if put to use?
John Hofmeister: BP early on invited the major oil companies and experts from universities, consulting firms and think tanks to get inovled. They assembled in the crisis center in Houston and have been working on the technical aspects of this since then. Although they have yet to succeed in stopping the flow the engineering and ideas are the best we have in the world.
Keep in mind the contingency plans for worldwide drilling is the blow out protector. Some 30,000+ have been built and installed. This is the one that did not work. There is also evidence emerging that its design was compromised and that it was damaged several weeks before the blowout during a test and was not repaired. This needs to be fully investigated and understood before we draw final conclusions about what other contingencies are possibly needed.
Newport News, Va.: Mr. Hofmeister: President Obama, according to many, can't seem to do anything right re: the spill. In your mind, what could the administration have done differently and better that would have had a marked effect on the recovery effort so far?
John Hofmeister: In my opinion the White House and the President should have gotten up close to the tragedy from day one and been a part of the team at the outset. Instead they held back and jumped in when things weren't going well, as if they had better ideas. Then it all got politicized very quickly when the rhetoric and bullying started in earnest in response to increasingly loud complaints.
Quiet and intense conversation between the key parties is preferable to shouting out loud and "kicking ass." The White House went public to embarass BP and went over the top by shutting down perfectly safe drilling rigs across the deepwater. It chose to not even talk with the BP CEO. You have to talk to people to solve problems.
It's not too late but it does no good to go down the bully path and the criminal path rightaway. It freezes people in place and builds disrespect and mistrust.
Washington, D.C.: I don't understand why we should drill more in the U.S.
Eventually, the world is going to start to run out and it is better to not have depleted all our reserves in the meantime.
John Hofmeister: We have more energy in this world than we will ever use. We need to develop all types of energy from oil, gas and coal to nuclear, biofuels, hydrogen, hydropower, geothermal, wind, solar. We also need new technology to replace the internal combustion engine with batteries or hydrogen fuel cells. That will wean us off our oil dependency. Let's use dirty energy in clean ways and clean energy in efficient ways. That way energy will always be available and affordable.
Peaks Island, Maine: Do you agree with members of the Flow Rate Technical Group that BP stonewalled the group's request for the likes of high resolution video data?
John Hofmeister: It's my understanding from talking with top BP officials that from day one the job of estimating the flow from the well belonged to the National Oceanic and Atmospheric Administration NOAA. It's tricky to try to estimate how much is flowing when you can only watch it. You can't really tell how much flow is gas and how much is oil. You also can't really tell the velocity without measuring instruments. So it's all a rough call, informed by as much math as can reasonably be applied. There will be uncertainty on this throughout.
Washington, D.C.: No offense but don't you think the reason people are not listening to your ideas about a flotilla of supertankers sucking up oil is because, like Tony Hayward, they presume you have some financial motivation to say what you are saying? BTW, do you?
John Hofmeister: People might assume that I have a financial interest, except I don't. In my conversations with BP and the Coast Guard the first thing I said was that I have no monetary or financial interest direct or indirect in whether they choose to go this route or not. I simply want to see oil taken out of the ocean and destroyed not wash up on beaches and into marshes.
Fort Myers, Flka.: Can you explain why deep water drilling is allowed without proven safety measures in place? I understand the difficulty in capping the leak at that depth, but didn't one of our brilliant scientific minds point this out before these rigs were built?
John Hofmeister: For forty years and for over 35000 wells in the Gulf of Mexico the proven safety measure has been the blow out protector. It is also the device used around the world.
Something went wrong with the blow out protector and we need to get to the bottom of it and hold people accountable. It should have worked.
It's my belief that the root cause issues in this spill will come down to human factors. Not unlike a pilot who unknowingly flies his plane into the ground by making judgment errors, I believe we lost these lives, the rig and experienced the blow out due to wrong human judgments. We'll find out in due course. The systems and equipment and safe and reliable. Unfortunately people make mistakes.
Tucson, Ariz.: Assuming that much of the oil tainting delicate marshlands or mangroves cannot be cleaned up, do we know how long it will take these ecosystems to recover on their own? or, are they perhaps changed forever?
John Hofmeister: It will take years, several growing seasons, for the biosphere to adapt and adjust, provided it is not further damaged in the meantime. The warm climate and warm water actually will help restoration, unlike cold water and cold weather in Alaska.
In the ocean itself microbes will finally eat/consume the oil over time. Thus the water will clean itself and re-ozygenate. In the meantime however it is a living tragedy that doesn't disappear soon.
Aberdeen, S.D.: Would it be possible to equip fishing, larger cargo type ships and or naval ships with portable oil water separtion devices to start remediating the slicks in-situ?
John Hofmeister: Yes. Some of us have been proposing barges to serve as barrier walls with suction pumps and separators on board as well as supertankers to suck the oil off the water and dispose of it in refineries along the coast.
New York, N.Y.: What should the federal government's role be in the current gulf oil spill? They seem to be inflaming and delaying rather than doing anything useful.
John Hofmeister: The federal government does a good job of analyzing and regulating. It does a consistently poor job of operating and executing.
It should oversee and BP and other companies should operate.
Laurel, Md.: How much easier would the spill have been to cap if the rig hadn't been in such deep water? Is there any compelling reason that deep-water drilling is preferable to shallow?
John Hofmeister: Deep water drilling is inherently more risky and costly than shallow water drilling. In the western Gulf of Mexico more than 35000 wells have been safely drilled, including over 2200 deep water wells.
Getting more access or more shallow water drilling however has been prohibited to companies by federal policy, both legislative and executive branches. The government instead has leased deepwater permits and the industry has followed the govenrment's lead on this developing the technology and risk mitigation necessary to proceed, up to this blow out. We need to find out the root causes of the blow out before we draw conclusions about how much more regulation and redundancy we actually need.
Peaks Island, Maine: What grade would you give Adm. Allen on his descriptions of the process for stopping the flow?
For his explanations of the leak rate determinations and the importance thereof?
John Hofmeister: The Admiral has done a consistently good job of telling it like it is in language that most people can follow. That's a tough task. Fortunately he is a direct, no-nonsense speaker who cares deeply about doing the right thing. My only disagreement with him to date is the refusal to use the such and salvage method of oil recovery. He preferes burning, dispersing, booming and skimming. I don't think it does a good enough job by themselves. We need more to get more oil off the ocean.
Fairfax, Va.: What changes do you envision for the Minerals Management Service in the coming months and years? Obviously, Sec. Salazar has recommended an agency shake-up, but it appears that MMS needs more -- not less -- staff power and funding.
John Hofmeister: It's still too soon to say. I disagree with the characterization that the industry and MMS were "too cozy." That was not my experience. Perhaps some people tried to get friendly with the government. I never saw it that way. They have a job to do; so does the industry. Their job is to regulate and govern; the industry is to produce. Between the two parties it promotes reliability and accountability.
We'll see what comes. If the industry becomes too regulated to do business in the US, the losers will be American consumers. Industry could move away and we could produce less domestic resources. That would not be good for our economy or way of life.
Yuma, Ariz.: What are the chances that the well casing below the sea floor has been compromised, and that gas and oil are coming up the outside of the well casing, eroding the surrounding soft rock. Could this lead to a catastrophic geological failure, unstoppable even by the relief wells?
John Hofmeister: This is what some people fear has occurred. It is also why the "top kill" process was halted. If the casing is compromised the well is that much more difficult to shut down, including the risk that the relief wells may not be enough. If the relief wells do not result in stopping the flow, the next and drastic step is to implode the well on top of itself, which carries other risks as well.
We really need to find out what went wrong from the beginning so that we don't have this happen again.
Harrisburg, Pa.: Scientific research can shown that algae produces far more energy resources than does cane sugar, corn, or drilled oil. What is being done about researching the creation of algae to energy plants? Why does the Federal government not allow grants for new energy resources for algae? I read one company is looking into this. Why aren't the other companies looking into this, and what is taking so long to duplicate what underfinanced scientists are able to do in small laboratories? Algae could be the safest and most productive energy source available.
John Hofmeister: Algae has considerable promise because the carbon molecules are abundant in the molecular structure of the organism. We need to learn how to grow them in large scale operations without them getting sick from overcrowding so we can process them for biofuels. There are funds for algae research and many of the oil companies are also research it. However there remains a political bias towards ethanol from bio mass. I see it as less promising than algae.
Bethesda, Md.: Would you say the best minds are occupied with finding a way to cap the oil, but no one is minding the business of the execution such as making sure the booms are well placed, and frequently replaced when they have satured? One can obviously see the booms method of cleaning is not working.
John Hofmeister: You characterize it as I do. The scientists and engineers are primarily focused on the well.
The clean up is not getting enough attention or original thinking. We should be able to collect far more oil with pumps and storage systems than we are.
Arlington, Va.: You say something went wrong with the BOP, which may be true -- but isn't it also likely that the well casing was compromised within 1000' of the seabed and that even if the BOP sealed the head shut, the hydrocarbons would be spewing out down well and migrating to the surface?
John Hofmeister: It is indeed possible. We don't really know. If the relief wells don't work as they are supposed to, then we'll know. At such time it may become necessary to take the drastic step of imploding the well.
New Orleans, La.: Why is shallower drilling safer?
I have followed the BP inquest and story closely. It appears that a bad job of cementing, poorly tested, combined with a very poor design for casing and cutting corners on time resulted in this disaster.
I can see the exact same problems happening in 400' of water. And with a probable fractured casing, the only solution is a successful relief well, on land, in 12' or water or 5,000' of water.
So why is shallow drilling safer?
John Hofmeister: It's less risky because you have closer access, less pressure and less current to affect your operations. You can actually use divers if needed to a certain depth. They can do more than robots because of their versatility.
Bethesda, Md.: You mean is the government's decision to use burning, dispersing, booming and skimming? It is not BP's decision?
John Hofmeister: Anything affecting the sea and land is the government's responsibility. They decide and BP provides the resources to execute the tasks.
Leesburg, Fla.: Can the U.S. demand an escrow fund from BP to ensure all damaged get paid before BP goes broke...get some/a lot of that cash now? If not why not?
John Hofmeister: Chances of BP going broke, in my opinion are slim and none, unless the government pushes them into bankruptcy, which means no one gets paid until a court decides everything. This company produces over 3,000,000 barrels of oil per day at the current crude price. It is financially secure. We are all better off for BP to continue to do what it does, produce oil, so that the bills will be paid.
Springfield, Va.: How often has a blowout preventer been called into use? And how many times has it worked? The BOP in the Ixtoc spill from decades ago did not work, hence the massive spill then.
John Hofmeister: That accident was worse than this one. It led to much improvement in the design and effectiveness of blow out preventors. The one at this well seems to have been re-designed and then damaged. Not good. We need to find out the whole story before we declare the prodct insufficient for our purposes.
There are few blow outs, although they do happen. Generally we don't hear about them because they are quickly controlled by the blow out preventor.
Anonymous: I have heard that The Jones act is preventing us accepting help in skimming the oil up. Could you please tell us about that
John Hofmeister: The Jones Act requires American made vessels be used in US waters. Since we hardly build any ships anymore, there are few qualifed vessels. Our own law is prohibiting more resources from being applied. Sounds silly and it is. Sad but true.
Arlington, Va.: You have complained that the administration is showing "anti hydrocarbon tendencies". Why is this a bad thing?
John Hofmeister: Hydrocarbons are now and will remain a critical part of our energy system. We've been developing and producing them for over a century. We can't turn them off with a switch and move to something different. In my book "Why We Hate the Oil Companies: Straight Talk from an Energy Insider" I describe a fifty year road map that essentially takes us off most hydrocarbons. Current politicians talks like we can do this in ten or so years. Impossible and impractical, as well as unnecessary. We'll bankrupt the nation if we did because none of the new alternative forms of energy is commercial yet, meaning we have to subsidize it to buid it.
John Hofmeister: So sorry everyone. I have to go now to another commitment.
Thank you for your questions and comments. I hope we can continue this in the future.
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