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Monday, June 28, 2010

Too Rolling Stoned -- Make That Three

The week of June 21, 2010 might have been most notable for a Rolling Stone article that resulted in a change of command in the war in Afghanistan after General Stanley McChrystal and his trash-talking staff shot themselves in the foot while complaining of the difficulties of fighting a counterinsurgency war. However, The Runaway General wasn't the only important piece to run in that issue of Rolling Stone. It wasn't even the most important piece to run in Rolling Stone in the month of June. All three of these articles should be must reads for every American:

The Spill, the Scandal and the President


BP's Next Disaster


The Runaway General


Here's why.

The Spill, the Scandal and the President

This story, written by Tim Dickinson, summarizes the gaps between the rhetoric of the 2008 Obama campaign and the policy actions taken by the Obama administration and it's not a pretty picture. Obama campaigned on the need to overhaul a completely corrupt and ineffective Minerals Management Service (MMS) agency. MMS had shown up on the political radar in 2007 after details of mistakes (or favors masquerading as mistakes) were reviewed by Congress regarding dozens of lease contracts awarded between 1998 and 1999 and approved by MMS.

In 1995, legislation entitled the Deep Water Royalty Relief Act (DWRRA) was enacted which waived royalty payments paid by oil producers to the government in the event that oil prices were lower than $28 / barrel. The goal was to provide long term predictability for profits from deep water rigs even if prices temporarily dipped below a point thought to make such wells financially impractical. Unfortunately, ALL leases issued between 1998 and 1999 EXCLUDED the $28 caveat, essentially exempting producers from ANY royalties from wells during that period. (see #1).

The man in charge of the group within MMS that oversaw those lease sales and approved the flawed royalty terms was Chris Oynes, who led the Gulf of Mexico unit within the MMS from 1994 to 2007. Did the mistake cost Oynes his job? Curiously, no. Oynes was promoted in February 2007, two months before the GAO published its findings on mistake. Three months after his promotion, his boss, Ms. Johnnie Burton, resigned over controversy related to her statements made to a House sub-committee found to conflict with the results of an audit conducted by the Department of the Interior itself about when the extent of the royalty mistake was first known. (see #2)

Estimates for the lost royalties vary widely since the value of the royalties depends upon market prices for crude oil and natural gas. For the leases issued between 1998 and 1999, estimates range from $6.4 billion to $9.8 billion. However, a lawsuit on a related issue could widen the range of leases affected by the elimination of the $28 ceiling to cover 1996 through 2000. Cost estimates published by the Government Accounting Office in April of 2007 for losses associated with the larger pool of leases range up to $60 billion if the government loses the lawsuit. (see #3)

The Obama transition team can't really claim they forgot about the campaign pledges about cleaning up the MMS agency in the hoopla between November and January. Dickinson spoke with Rick Steiner, who Dickinson cites as a major scientific contributor to the Exxon Valdez cleanup effort in Alaska.

Scientists like Steiner had urgently tried to alert Obama to the depth of the rot at MMS. "I talked to the transition team," Steiner says. "I told them that MMS was a disaster and needed to be seriously reformed." A top-to-bottom restructuring of MMS didn't require anything more than Ken Salazar's will: The agency only exists by order of the Interior secretary. "He had full authority to change anything he wanted," says Rep. Issa, a longtime critic of MMS. "He didn't use it."

Only the explosion onboard the Deepwater Horizon and the resulting eleven deaths triggered his resignation. But don't worry about Oynes. I'm sure his retirement will be as comfortable for him as it was for his former boss. Johnnie Burton is now on the staff of Wyoming Representative Cynthia Lummis. It will come as a shock to no one to learn Rep. Lummis is a member of the House Subcommittee on Energy and Mineral Resources.

Would firing Chris Hoynes in early 2009 after the Obama Administration took the wheel have prevented the Deepwater Horizon disaster? We'll never know. It is clear the Obama Administration failed to formulate any clear plan to address obvious BILLION DOLLAR weaknesses in a agency it had complete latitude to change that had provided fodder for the 2008 election.

A more damning point made in Dickinson's piece involves information provided by scientific teams within various federal agencies and official communications issued by the Obama Administration to the public about the scope of the oil leak. On March 9, 2009, the Obama Administration issued a memorandum (see #4) with a subject of "Scientific Integrity" that stated at the very top of the memorandum the following:

Science and the scientific process must inform and guide decisions of my Administration on a wide range of issues, including improvement of public health, protection of the environment, increased efficiency in the use of energy and other resources, mitigation of the threat of climate change, and protection of national security.

The public must be able to trust the science and scientific process informing public policy decisions. Political officials should not suppress or alter scientific or technological findings and conclusions. If scientific and technological information is developed and used by the Federal Government, it should ordinarily be made available to the public.


So how is the Obama Administration doing at meeting this seemingly simple goal?

In its first and possibly most obvious test that involves science, energy, the environment and public trust ALL AT THE SAME TIME, the answer has to be HORRIBLY. Dickinson's story describes information about a meeting held at a NOAA office in Seattle within hours of the blowout to review mitigation efforts and the possible volume of leaking oil. Dickinson writes:

Written on a whiteboard at the front of the room is the government's initial, worst-case estimate of the size of the spill. While the figure is dramatically higher than any official estimate issued by BP or the government, it is in line with the high-end calculations by scientists who have monitored the spill.

"Estm: 64k - 110k bbls/Day." The equivalent of up to three Exxon Valdez spills gushing into the Gulf of Mexico every week.

Damningly, the whiteboard also documents the disconnect between what the government suspected to be the magnitude of the disaster and the far lower estimates it was feeding to the public. Written below the federal estimate are the words, "300,000 gal/day reported on CNN." Appearing on the network that same day on a video feed from the Gulf, Coast Guard Rear Adm. Mary Landry insisted that the government had no figure. "We do not have an estimate of the amount of crude emanating from the wellhead," she said.


This is within HOURS of the spill yet for WEEKS after, a figure of 5000 barrels per day was continually fed by the Obama Administration and BP to the public.

BP's Next Disaster

The July 8 edition of Rolling Stone includes a second article by Tim Dickinson that looks forward to the next high-tech / high-risk drilling effort being pushed by BP -- a drill site in the Arctic and other Arctic sites being targeted by Shell. The story outlines numerous challenges unique to Arctic drilling such as season access limitations and horizontal drilling extending further than any current wells anywhere in the world. It also highlights numerous question marks about the validity of technical plans by BP and Shell for addressing the unique Arctic challenges, their disaster plans for possible blowouts and the rubber stamp approval provided by MMS to those plans.

In bullet form, the key concerns raised in the article are:

* BP's claim to be able to handle blowout discharges up to 20,000 barrels per day
* use of a man-made gravel island three miles offshore so "off-shore" regulations don't apply
* drilling 2 miles down then 6 to 8 miles horizontally to reach the oil formation
* permits granted to Shell for other Arctic wells specifically exclude any worst-case scenario such as a blowout
* disaster plans filed by Shell for those permits state a limit of 5,500 barrels per day for response capacity, an amount obviously inadequate in light of current experience
* well sites would redefine the word "remote" -- the nearest Coast Guard facility is 1,000 miles away
* the nearest boom supplies to contain spilled oil are in Seattle, 2,000 miles away
* the ocean in these areas is frozen half the year, making access virtually impossible
* Shell claims its operation would be safer than BP's gulf well since the Arctic wells would only be in 150 feet of water but government data shows blowouts are equally likely in shallow water

In light of the Obama Administration's interaction with the scientific community on the Deepwater Horizon disaster, the concerns raised about Arctic drilling are -- pardon the pun -- chilling.

The Runaway General

Michael Hastings' story on General McChrystal and his inner dialog thoughts about his chain of command and diplomatic teammates certainly produced an immediate impact on the public and the war effort in Afghanistan. However, after reading the entire article, one can mask all the comments about individual players (Obama, Biden, Holbrooke, Eikenberry) that triggered McChrystal's demise and STILL come away with a damning picture of the effort in Afghanistan, the strategy behind it and likely outcomes. In the larger scheme of things, that bigger picture is the only picture that should matter, to both the Commander-in-Chief and the American public.

After five pages serving much of the red meat content of inflammatory comments from McChrystal and his staff and some background on McChrystal's career, the final three pages of the story provide the more important part of the story -- the problem McChrystal was experiencing explaining the counter-insurgency (COIN) war plan to troops in the field. Everyone up and down the chain "gets it" in words, but in reality, the implementation of the strategy isn't clicking. From the story, here's one reaction:

"Bottom line?" says a former Special Forces operator who has spent years in Iraq and Afghanistan. "I would love to kick McChrystal in the nuts. His rules of engagement put soldiers' lives in even greater danger. Every real soldier will tell you the same thing."

McChrystal clearly understood the frustration felt by troops in the field and made field visits to personally explain the 'rubber meets the road" implications of the strategy a top priority. He also understood those visits were crucial for morale by giving troops a chance to vent -- directly to the man issuing the rules. Here's how one visit was described:

Then he spends 20 minutes talking about counterinsurgency, diagramming his concepts and principles on a whiteboard. He makes COIN seem like common sense, but he's careful not to bull**** the men. "We are knee-deep in the decisive year," he tells them. The Taliban, he insists, no longer has the initiative – "but I don't think we do, either." It's similar to the talk he gave in Paris, but it's not winning any hearts and minds among the soldiers. "This is the philosophical part that works with think tanks," McChrystal tries to joke. "But it doesn't get the same reception from infantry companies."

In short, the McChrystal story should have been a game-changer even if McChrystal and his staff kept their mouths shut about their likes and dislikes in the Obama Administration. Comments from troops in the field reflect the complete disconnect between stated policies and timelines versus reality. The reality is

* our political partner in COIN (the Karzai government) is hopelessly corrupt
* our military is financially and physically exhausted from nine years of war
* our economy is past the breaking point to be able to afford three to five more years of war, even at COIN intensity rather than all-out war
* all of this was understood two years ago
* no President believes it is possible to officially announce a policy of "cut losses and widthdraw"

In other words, we have an irresistible force (a collapsing economy needed to pay for a war) meeting an immovable object (a political unwillingness to withdraw from an unwinnable, uncontrollable, unaffordable military mistake).

Of course, that's not nearly as easy a story to grasp as "top general calls CIC not very engaged."


#1) http://www.gao.gov/products/GAO-08-792R

#2) http://issa.house.gov/index.php?option=com_content&task=view&id=321&Itemid=28&tmpl=component

#3) http://www.gao.gov/products/GAO-08-792R

#4) http://www.whitehouse.gov/the_press_office/Memorandum-for-the-Heads-of-Executive-Departments-and-Agencies-3-9-09/