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Thursday, August 13, 2020

Maritime Logistics Professional

Telling Environmental Tall Tales …

Posted to Global Maritime Analysis with Joseph Keefe (by on November 25, 2015

Or, a tale of two conventions.

  • Environmental Nervana

It has been a decidedly good year for the kyaktivists. Nevertheless, the parties are finally over. ‘High fives’ have been exchanged and the gleeful press releases trumpeting victory sent out far and wide. All that’s left are the heavy hangovers for the environmental lobby. Today, they are back at it again, having driven to work in their gas guzzling luxury SUV’s, smugly smiling all the way, sipping an $8 double shot cappuccino, all after filling up at the pump for the satisfying low price of about $2.02 per gallon. Mission accomplished.

And, there is plenty to celebrate, isn’t there? For example, Royal Dutch Shell’s withdrawal from the Alaskan Arctic was a welcome victory for the environmentalists, but the similar move that followed from Statoil was especially sweet. And then, who could forget the quashing of the controversial Keystone Pipeline project by the Obama administration in late November? It wasn’t an unexpected move, but the seven year battle should have been over years ago. Instead, the White House didn’t have the courage to do it until not one, but two midterm elections had passed.

For some so-called environmentalists, there’s no law too big to be broken, no safety rule too important to ignore and simply no limit to the number of lives they can endanger along the way. Whether its dangling off a bridge impeding the progress of a deep draft oil service vessel or perhaps from the girders of an offshore oil rig in the Arctic, or better yet, blocking the entrance of a major global port as a fully loaded oil tanker, constrained by draft, attempts to navigate its way in a narrow channel, there is (apparently) no act too silly to attempt in the name of “the environment.”

  • No Middle Ground: the cost of victory

Over the course of the past decade, oil companies and shippers who navigate the legal system with full transparency have finally realized that there is no middle ground anywhere to be found, especially when it comes to dealing with people that have little or no regard for the safety of others and indeed, the environment itself. In every situation described above, it wouldn’t have taken much for these activities to have created exponentially more damage to the environment than these ‘cowboys’ intended to stop – if only something had gone wrong. That it hasn’t happened yet is simply a miracle. That lives haven’t been lost in the oil patch, on board crude oil carriers or ashore in support missions? Quite simply, divine intervention...

With all of that said, it is way past time to take stock of the cost of these victories. That’s because the environmental lobby rarely stops to assess collateral damage. And, there’s plenty of it to go around. Globally, the oil industry has shed as many as 250,000 jobs in the past 18 months – with more pain to come. To be fair, that has little to do with the environmental lobby. As OPEC continues to pump out crude oil even in the face of a massive glut, the bottom line goal for our Middle Eastern friends is to put an end to the resurgence of North American energy independence. But $40 oil has other consequences, as well.

As our kyaktivist environmentalist friends top off their SUV’s with cheap gasoline – Reuters reports that U.S. road miles are nearing an all-time record – the perilously low price of carbon-based energy also puts a huge damper on the renewables sector. At these prices, it just isn’t economical to produce energy via wind or solar means, especially when you can see the hedge funds trending to bets on lower oil. No one wants to throw good money after bad. Ask yourself: would you pay substantially more for wind power if you could accomplish the same task with cheaper oil?

No, we’ll continue to burn fossil fuels – which we would have in any event – but just a lot longer than we would have, had renewables been able to better compete in the global market place. It is why, in part, that the United States has, to date, no offshore wind farms and the rest of the world – Europe in particular – has soared ahead in this market. Wouldn’t it have been nice to have had the lion’s share of that manufacturing right here at home? Think about the jobs. No, they never do.

Which brings me right back to the Keystone Pipeline. I get it: this is oil headed to U.S. Gulf Coast refineries that isn’t domestic output in the first place. But, for my money – and it’s not because my sister lives in Alberta – I’d rather buy energy from our Canadian friends than the folks in OPEC who are bent on taking down the domestic shale industry. Along the way, we’d create some pretty good jobs and we’ll be transporting energy via the most efficient and environmentally sound method possible (with sincere apologies to our inland barge folks who do a terrific job with their environmental footprint). What’s not to like?

  • A Tale of Two Conventions

Separately, I attended the Waterways Council (WCI) annual symposium in New Orleans earlier this month. It was an especially valuable trip since the event overlapped, to a certain extent, with the Clean Gulf convention. I jogged back and forth between both venues and, as a result, I’m not sure how well I covered either. That said; I was at the WCI event when Professor Will Happer of Princeton University participated in a panel on CO2 and the environment, in general. It turns out that CO2 is our friend. Stay with me here.

The War on Coal in fact was a focal point of Dr. Happer’s presentation. Happer calls the Obama and EPA war on coal, and I quote, “all pain and no gain.” The most telling part of the discussion revolved around a study performed by Happer’s father in the 1980s. In a nutshell, the growth of Eldarica Pine trees, grown at the former site of the ARS, US Water Conservation Laboratory, USDA, in Phoenix, AZ, virtually doubled as a function of increased CO2. Happer’s point? CO2 – as many environmentalists will claim – isn’t the culprit. And, we already have the answer when it comes to NOx, SOx, and particulate matter. That’s what scrubbers, aftertreatment and LNG are for. Happer insists: CO2 is a benefit; not a pollutant. But, hey, you make up your own mind.

Across town, the Clean Gulf convention beckoned and I dashed out and grabbed a cab to make it in time for the annual “State and Federal Updates” presentation. This can, of course, be a rather dry event. One after another, the state environmental coordinators get up, trudge to the podium and talk about what happened in their states over the course of the previous 12 months. Picture it: “In Mississippi, we responded to umpteen events, of which XX were characterized as major events, of which …” This went on for a bit until Senior Environmental Scientist Philip Woods from the great state of Alabama’s Department of Environmental Management got up to talk. It was a breath of fresh air.

Woods has a lot of opinions. But his take on current events really said it all. Post-event – and at my urging – Woods wrote to me and said, “When players perched higher along in the fiscal food chain, those in the Executive and Legislative seats, decided to make a change in the way money is allocated in the state, my agency discovered what it was like to be one of the less privileged. In fiscal year 2008, we received six million dollars for our yearly operating budget. In comparison with the budgets of other state environmental agencies, this was a very small amount. Yet, by 2013, that already low number was reduced by half. With each successive year, the state funding has continued to dwindle. This year, our full state appropriation is less than $300,000. $300,000! A number of words come, immediately, to mind. Ludicrous is near the top of the list. In past years, my agency was forced to make ends meet by taking from Peter to pay Paul, dipping into the funds of one program to supplant the financial needs of another. Through such sleight of hand, we have managed to stay afloat. This year, however, in addition to the ridiculously low allotment we shall receive, the state legislature has added insult to our injury by declaring that they will also be taking a portion of the agency’s in-house generated funds. This revelation is extremely tragic news for both Peter and Paul. How will the agency survive? That remains to be seen.”

So, it turns out that not all environmental miscues come on the side of the environmental lobby. Many are self-inflicted. Woods’ agency is not alone – the fiscal crisis plaguing all of the energy rich (and dependent states) is gutting all of the Gulf States. And, all that BP money? The folks trying to clean up the beaches and coastal waters have to fight every day from keeping it from going into the general coffers. Apparently, that’s where are all of the punitive damages have been sadly siphoned off to. Now, here’s the perfect issue for environmentalists to attack. But they won’t – there’s no sensationalist headline in it for them.

  • The Real Truth

Lost in all of this is the herculean job that the maritime industry and its cousins in the oil patch have done to clean up their environmental footprint over the course of past four decades. Oil pollution emanating from tankships and barges alone has decreased by more than 95% over that time frame. That’s a fact. But that will never be enough for kayaktivists. Separately, global shipping fights a proposed $26 billion a year CO2 tax (we learned earlier in this article that CO2 really doesn’t matter – we’re measuring the wrong metric), while the renewable energy that could take pressure off the fossil fuel part of the equation languishes because of low energy prices. Heck, it’s even dampened the lure of the white knight of LNG. What’s a mother to do?

I suppose the most telling harbinger of what is to come next emanated this week from oil major Statoil. Reuters reported that Norwegian Prime Minister Erna Solberg insisted that oil prices are currently too low to spur investments sufficient to meet future energy demands. Solberg continued, “It is difficult to predict future developments in the oil market, but it is evident that the current price level is too low to generate the investments needed.” I guess we can depend on solar and wind energy to take up the slack, right?

I’m all for saving the environment, being green and all the rest of it. My kids will tell you (dramatically rolling their eyes) about the family “meetings” that take place whenever Daddy finds aluminum cans in the wrong trash receptacle. That said; you can count me out when it comes to endangering people’s lives for ‘the cause.’ And, you can count me out when it comes to putting infrastructure, oil & gas and shipping assets in harm’s way to accomplish that noble goal. These aren’t environmentalists – they are criminals. It is way past time we started treating them as such. And, that’s no tall tale. MarPro

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Joseph Keefe is the lead commentator of MaritimeProfessional.com. Additionally, he is Editor of both Maritime Professional and MarineNews print magazines. This week, he wishes everyone on the global waterfront a Happy and Safe Thanksgiving weekend. He can be reached at jkeefe@maritimeprofessional.com or at Keefe@marinelink.com. MaritimeProfessional.com is the largest business networking site devoted to the marine industry. Each day thousands of industry professionals around the world log on to network, connect, and communicate.