Monday, May 31, 2010

Reflections on growing up and Memorial Day

I grew up in the small community of Liberty, Indiana. It was (and remains today) a small town but the center of a much larger surrounding rural community in Union County. Memorial Day was a communal event. Small red paper poppies with green wire, handmade by veterans in veterans’ hospitals, were a common sight on the lapels of people a day or two leading up to Memorial Day.

My father was a WWII veteran and a member of the local American Legion and VFW posts. One or both organizations had lists of all the veterans buried in all the cemeteries in the county. Members were assigned a cemetery and given bundles of small American flags to decorate graves. For a few years my father was assigned a small cemetery on the east side of town. It was small and not particularly attractive. There were no indications of recent burials. It was largely a forgotten cemetery of forgotten people. My father’s assignment was a family affair for us. We would hunt for the graves of the men who had served. I would find the unkempt site of a buried veteran who died decades ago and who was then honored those few seconds by a small boy with a small flag.

Memorial Day in Liberty those days was a time when the entire community came together. On Memorial Day morning people would gather downtown in preparation for a march to the large town cemetery on the west side of town. Veterans, whose old uniforms obliviously had shrunk around the waists, led the parade. I marched with the Boy Scouts and my sister with the Girl Scouts. Those with no formal grouping would bring up the rear. There was no music – only the drums – as we marched. People would watch us from their front porches or the sidewalks.

The ceremony at the cemetery was always solemn. A speaker would make a short presentation about the men who had served in the armed services followed by a three-volley salute with rifles by the veterans at exactly noon and ending with taps by a bugle hidden from our view. We marched back downtown in silence. At the end of the march everyone would rush to their cars and turn on the radios to hear the latest about the Indy 500 that had already started.

(Note: I first published this in 2006.)

Saturday, May 29, 2010

Passing the costs of extracting oil onto the developing world

The disaster for the oil industry resulting from the Deepwater Horizon oil spill in the Gulf of Mexico has less to do with the oil spill itself than the fact it occurred so close to the shores of the United States. Americans are dependent on cheap oil and prices do not reflect the real costs of extracting crude from the earth. Prices are not only kept artificially low but do not reflect the costs for people in non-Western nations who suffer the consequences of oil spills with some frequency but lack the leverage to force the oil industry to clean up its messes.

John Vidal, the Guardian’s environmental editor explains:
If this accident had occurred in a developing country, say off the west coast of Africa or Indonesia, BP could probably have avoided all publicity and escaped starting a clean-up for many months. It would not have had to employ booms or dispersants, and it could have ignored the health effects on people and the damage done to fishing. It might have eventually been taken to court and could have been fined a few million dollars, but it would probably have appealed and delayed a court decision for a decade or more.

Big Oil is usually a poor country's most powerful industry, and is generally allowed to act like a parallel government. In many countries it simply pays off the judges, the community leaders, the lawmakers and the ministers, and it expects environmentalists and local people to be powerless. Mostly it gets away with it.

What the industry dreads more than anything else is being made fully accountable to developing countries for the mess it has made and the oil it has spilt in the forests, creeks, seas and deserts of the world.

There are more than 2,000 major spillage sites in the Niger delta that have never been cleaned up; there are vast areas of the Colombian, Ecuadorian and Peruvian Amazon that have been devastated by spillages, the dumping of toxic materials and blowouts. Rivers and wells in Venezuela, Angola, Chad, Gabon, Equatorial Guinea, Uganda and Sudan have been badly polluted. Occidental, BP, Chevron, Shell and most other oil companies together face hundreds of outstanding lawsuits. Ecuador alone is seeking $30bn from Texaco.

The only reason oil costs $70-$100 a barrel today, and not $200, is because the industry has managed to pass on the real costs of extracting the oil. If the developing world applied the same pressure on the companies as Obama and the US senators are now doing, and if the industry were forced to really clean up the myriad messes it causes, the price would jump and the switch to clean energy would be swift.

If the billions of dollars of annual subsidies and the many tax breaks the industry gets were withdrawn, and the cost of protecting oil companies in developing countries were added, then most of the world's oil would almost certainly be left in the ground.

Friday, May 14, 2010

Starve the beast, feed the deficit

Paul Krugman looks at comparisons between the debt problems in Greece and in the United States. (This is a follow-up to his blog post on the same subject yesterday.) While both nations are running large budget deficits the future prospects for each differ significantly. The American economy is finally growing due to fiscal stimulus and expansionary policies by the Federal Reserve. That growth, in turn, will boost revenues. Relatively low interest rates on U.S. bonds give the Americans time to deal with their deficit. Greece, on the other hand, faces zero economic growth and interest rates on bond twice that of American bonds. Importantly also is the fact Greek currency is now the Euro and they cannot devalue it as they could with their own currency.

While we in much better shape that Greece we could have been still yet in far better shape. So why aren’t we? Krugman explains:
In short, we’re not Greece. We may currently be running deficits of comparable size, but our economic position — and, as a result, our fiscal outlook — is vastly better.

That said, we do have a long-run budget problem. But what’s the root of that problem? “We demand more than we’re willing to pay for,” is the usual line. Yet that line is deeply misleading.

First of all, who is this “we” of whom people speak? Bear in mind that the drive to cut taxes largely benefited a small minority of Americans: 39 percent of the benefits of making the Bush tax cuts permanent would go to the richest 1 percent of the population.

And bear in mind, also, that taxes have lagged behind spending partly thanks to a deliberate political strategy, that of “starve the beast”: conservatives have deliberately deprived the government of revenue in an attempt to force the spending cuts they now insist are necessary.

Meanwhile, when you look under the hood of those troubling long-run budget projections, you discover that they’re not driven by some generalized problem of overspending. Instead, they largely reflect just one thing: the assumption that health care costs will rise in the future as they have in the past. This tells us that the key to our fiscal future is improving the efficiency of our health care system — which is, you may recall, something the Obama administration has been trying to do, even as many of the same people now warning about the evils of deficits cried “Death panels!”

So here’s the reality: America’s fiscal outlook over the next few years isn’t bad. We do have a serious long-run budget problem, which will have to be resolved with a combination of health care reform and other measures, probably including a moderate rise in taxes. But we should ignore those who pretend to be concerned with fiscal responsibility, but whose real goal is to dismantle the welfare state — and are trying to use crises elsewhere to frighten us into giving them what they want.
You can read Krugman’s entire article here.

For those concerned that Americans are being taxed to death the taxes Americans paid in 2009 were the lowest since the Truman administration in 1950 according to this story in USA Today.

Thursday, May 13, 2010

Oil rig owner presents survivors of rig with form to waive rights

Survivors from the oil rig explosion in the Gulf of Mexico were presented with forms to sign hours after the incident to waive their rights to seek any compensation for their injuries. The accident killed 11 of their co-workers and continues to spill oil into the Gulf.

The forms presented by Transocean officials were not statements of what the rig workers may have witnessed or experienced but that they were not a witness to the incident and were not injured. So much for trying to get to the bottom of what happened and taking care of the people whose lives were on the line.

Transocean LTD is the world’s largest offshore drilling contractor and owned the Deepwater Horizon oil rig that exploded on April 21.

TPM has this:

When rescued workers were brought ashore following the explosion on the Deepwater Horizon rig last month, officials with drilling giant Transocean presented them with forms stating they had not been injured and that they had no first-hand knowledge of what happened. Lawyers for the workers are now crying foul about what they say is an all too common industry practice to impeach workers' credibility in future legal proceedings.

Some workers are saying they were coerced into signing the form, a charge Transocean denies. But the episode is reminiscent of reports that BP presented Alabama fishermen with contracts that included a no-sue clause in exchange for $5,000.

The rig exploded April 20, killing 11 members of the 126-person crew. When the survivors finally came ashore on a rescue boat at Port Fourchon, Louisiana -- 27 hours after the accident, according to Transocean -- they were brought to the Crowne Plaza Hotel outside the New Orleans airport.

There, they were presented with this one-page form (obtained and posted by NPR), with two sections for workers to initial:

I was not a witness to the incident requiring the evacuation and have no first hand or personal knowledge regarding the incident.

I was not injured as a result of the incident of evacuation.

Rig worker Chris Choy, 23, told the PBS NewsHour: "It shouldn't count, because I had been up for almost 40 hours, and just gone through hell. And they want to throw papers in my face for me to sign to take them, you know, out of their responsibility."

In an interview with TPMmuckraker, Tony Buzbee, a Houston attorney representing 10 of the rig workers, who has also sued BP and Transocean after previous accidents, said that such forms are quite common after "mass casualty" accidents on land or at sea. He said the statements can come back to haunt workers during a deposition or at trial.

"It not only protects them against that individual worker, but it might protect them against that worker being a witness for someone else," Buzbee says.

"It's used in several ways: number one, if the worker later is called as a witness to say, 'Yes, I saw Joe Blow fall down the stairs.' Then this statement is thrown in his face," says Buzbee. "Later if the guy's neck begins to hurt and he seeks treatment, they stick the statement in his face and say, 'Well you told us on the day of the incident you weren't hurt.'"
You can read the entire piece here.

Monday, May 03, 2010

The oil spill in the Gulf and the underlying problem of American energy consumption

There are two things we don’t know about the current massive oil spill in the Gulf of Mexico and there are two things we do know.

What we don’t know: 1. No one yet knows the reasons for the explosion at and collapse of the Deepwater Horizon rig in the Gulf of Mexico almost two weeks ago. 2. And no one yet knows the reasons why the safeguard system to shut off the well failed to work.

What we do know: 1. The current and unfolding disaster in the Gulf of Mexico from oil spewing out of an underwater well will prove to be one of the worse environmental catastrophes to impact this nation and our neighbors to the south. 2. And this is yet again one more symptom, or result, of this nation’s addiction to cheap petroleum.

The United States surpassed self-sufficiency in oil production over forty years ago and now consumes approximately 25% of the oil produced from around the world. The real costs of oil are largely hidden from American businesses and consumers. Taxes are kept low and do not reflect the costs taxpayers pay for elsewhere for military defending the nonstop flow of oil from the Middle East, the regulatory infrastructure set up to protect consumers, and the costs of cleaning up the messes left behind from oil production and consumption whether, for example, air pollution or oil spills like the one we are witnessing in Gulf.

A quick fix to the Gulf oil spill would be to restrict these types of rigs and drilling in and around the shores of the United States. The problem is that doesn’t address the consumption end of the production/consumption equation. It only pushes the dangers of production to someone else’s backyard. Lisa Margonelli explains in the New York Times:
… Whether this spill turns out to be the result of a freakish accident or a cascade of negligence, the likely political outcome will be a moratorium on offshore drilling. Emotionally, I love this idea. Who wants an oil drill in his park or on his coastline? Who doesn’t want to punish Big Oil on behalf of the birds?

Moratoriums have a moral problem, though. All oil comes from someone’s backyard, and when we don’t reduce the amount of oil we consume, and refuse to drill at home, we end up getting people to drill for us in Kazakhstan, Angola and Nigeria — places without America’s strong environmental safeguards or the resources to enforce them.

Kazakhstan, for one, had no comprehensive environmental laws until 2007, and Nigeria has suffered spills equivalent to that of the Exxon Valdez every year since 1969. (As of last year, Nigeria had 2,000 active spills.) Since the Santa Barbara spill of 1969, and the more than 40 Earth Days that have followed, Americans have increased by two-thirds the amount of petroleum we consume in our cars, while nearly quadrupling the quantity we import. Effectively, we’ve been importing oil and exporting spills to villages and waterways all over the world.

The Deepwater Horizon spill illustrates that every gallon of gas is a gallon of risks — risks of spills in production and transport, of worker deaths, of asthma-inducing air pollution and of climate change, to name a few. We should print these risks on every gasoline receipt, just as we label smoking’s risks on cigarette packs. And we should throw our newfound political will behind a sweeping commitment to use less gas — build cars that use less oil (or none at all) and figure out better ways to transport Americans.

Simply pushing oil production away from us does not solve the underlying problem. …
The problem isn’t our dependence on foreign oil; the underlying problem is our dependence on oil. (I would argue there is no such thing as domestic oil – it all is on the world market.) As our population grows and as we become more dependent on technology in various forms – all of which requires some form of energy to function – then we need to seriously explore energy-efficient technologies and alternative forms of energy.

We have to do better.