Risk Rap

Rapping About a World at Risk

Drill Baby Drill: The Bill Comes Due

Louisiana has declared an emergency shrimping season for the off shore beds at the mouth of the Mississippi River. The emergency harvest of shrimp, oysters and stone crabs is a desperate attempt to grab a final yield from a once bountiful aquaculture that sustained and defined the regional Cajun identity for many generations. The spreading oil slick gushing from a toppled offshore oil platform threatens to bury that life as it covers the delicate ecology with a toxic cloak that may spell a death blow to a regions way of life.

It is estimated that 210,000 gallons of crude oil are gushing into the Gulf of Mexico every day following the explosion and collapse of British Petroleum’s Deepwater Horizon offshore drilling platform that killed 11 workers. The Transocean rig was reportedly not equipped with a special safety devise that should have capped the well with the collapse of the oil platform. This assertion is being denied by Transocean stating that the well was equipped with the devise but unfortunately it failed to work. The use of the safety devise is a regulatory requirement for any offshore drill platforms in Europe but in the United States this safety devise is not required and is considered an optional operational risk devise. Like the recent coal miner disaster at Massey Mines, and word today that two more miners have died in Kentucky, occupational wages sometimes result in death. We need to understand that preservation of life and environmental safety are critical components of a cost of doing business that must be factored into ROI calculations and risk assessment scenarios.

The Coast Guard is in charge of emergency response to this growing disaster. The Coast Guard is skimming surface oil and using containment booms to control the growing oil slick. The Coast Guard is also considering igniting controlled burns of the surface oil which would release toxicity into the air. Another strategy being considered is the injection of chemicals into the spill to coagulate the oil. This strategy has never been attempted at such an extreme 5,000 foot depth and would also release additional toxins into the water. Technological solutions like the drilling of a relief well or the construction of a containment vessel would take months to accomplish. Man made solutions to cap the environmental disasters of their making always seem to pale in comparison to the scale and fury unleashed by the unrestrained power of nature.

This event marks yet another example of making an honest assessment of the true costs of our behavior and choices. Like the global economic meltdown that was the result of the unfettered credit orgy the bill for risky behavior always comes due. The continued focus on the exploitation and extraction of fossil fuels at the expense of alternative sources of energy comes at a great cost. This disaster may indeed be the death blow to an aqua industry that nurtured a region for many generations and informed a cuisine and culture respected and treasured by throughout  the world.   And like any excursion to a fine NOLA restaurant, someones always got to pick up the tab.

The bill always comes due. We want to gorge ourselves at the well of cheap energy only to discover how dear the price of this devil’s bargain really is. Environmental degradation is the most obvious tip of a precarious iceberg that threatens to tip as it melts into an ocean of unsustainability. A destroyed eco-culture of marshlands and animals, abandoned hamlets and townships no longer able to extract a living from the land are the immediate visible signs of the cost of this deal with the devil gone bad. We must begin to realize that the cost of cheap energy also requires our nation to continually engage in wars and military actions to protect this vital resource.

Cheap oil has badly skewed our economic infrastructure. It has encouraged our businesses to produce inefficient cars that led to the decline of a strategic industry and destruction of cities like Detroit and Gary Indiana. It caused the terrible moniker of rust belt cities to be pinned on a region of our country that was once the source of our nations wealth. Cheap energy help turn our prized manufacturing centers into economic anachronisms. Cheap oil has forestalled commitment to developing innovative green technologies that continues us to cede our position as a global manufacturing power. As we watch China and Brazil march forward with massive commitments to the development of energy innovation industries that will serve future needs of an energy dependent global economy, America is engaged in a bloody rear guard action to defend the ways of an old dying world too protect depleting trickles of oil.

Tonight as Americans go to sleep in their energy inefficient homes it is hoped that they may pause to consider that drill baby drill is a rallying cry for an unsustainable dying future. Think of the villages along the Louisiana bayous and how their way of life is coming to an end. Its time to consider the real costs of a Drill Baby Drill economy and begin to chart a course to a sustainable future.

You tube Music Video: Cajun Music: DL Menard and Louisiana Aces, Out My Backdoor

Risk: economic, environmental, culture

Advertisements

April 30, 2010 Posted by | culture, disaster planning, ecological, environment, politics, regulatory | , , , , , , , , , , , , , , , , , , , , , , , , | Leave a comment

Tallying the Cost of the Iowa Flood

Thomas Hart Benton

As the flood waters in Iowa drain southward to its destination in the Mississippi River, new sites and new cities are threatened by levee systems that cannot cope with the extraordinary scope and power of nature’s wrath.

Insurance companies will give estimates about the extent of the dollar damage the flood has claimed. The number I have seen for Cedar Rapids is $700 million. I don’t know how they derive that number. I believe it to be replacement value of insured property and assets of insurance in force. That’s a big number but it does not account for uninsured property, loss of potential income from jobs and small business revenue, loss of municipal tax revenue and the intangible but very real cost of lost opportunities due to the allocation of time and treasure to rebuild and repair damaged and lost assets.

CNN this morning was reporting that The University of Iowa assembled a rescue party to recover $400 million worth of art from its famous museum located in one of its flood ravaged buildings. For all intents and purposes the Hawkeyes campus is shut down and some believe that a number of buildings cannot be salvaged. How do you put a price on learning? How will this effect the decision of prospective students to choose the University of Iowa for their college education? What impacts will this have on the precarious economics of state funded college institutions?

Though we can easily see how Iowa is burdened with the extraordinary financial cost of this terrible event, all Americans will be impacted as a result of this flood. For example, railroads have scaled back schedules due to flooded lines. This will impact commerce of businesses waiting for deliveries and sellers looking to complete the book to bill cycle.

Something that will become more apparent as the summer progresses is the toll the flood will have on rising corn prices. Due to crop destruction it is estimated that the price of corn will rise by 9%. This is a cost that all American’s will unfortunately share equally and will only exacerbate the problem of rising inflation.

When the levee breaks you got no place to stay and escape the harm of this costly flood.

Risk: agricultural futures, municipal finance, transportation, infrastructure, University of Iowa, inflation, opportunity cost, fine art

June 16, 2008 Posted by | commodities, community, economics, environment, folk, infrastructure | , , , , , , , , , , , | Leave a comment