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Running the Numbers on the Spill

BEGIN TRANSCRIPT

RUSH: "White House spokesman Robert Gibbs billed the speech as an 'inflection point,' where the President's initial response would be replaced by more decisive action. But this is now day 57. Where has the decisive action been up to this point? The Obama [regime] has not been working in a coordinated fashion. The Environmental Protection Agency (EPA), the Department of the Interior, the Department of Homeland Security, and the White House, as well as the Coast Guard, have been putting out confusing and contradictory statements since the disaster began. Federal regulatory red tape has gotten in the way of the cleanup, including: 1) missed opportunities to burn off more of the oil because of overblown air pollution concerns; 2) holdups in the use of dispersants;

"3) permit delays in allowing the state of Louisiana to create artificial barriers against the encroaching oil slick; 4) failure to waive regulatory prohibitions against foreign assistance;" we told you about that yesterday; that would be the Jones Act "and 5) failure to approve barges and booms in time to block oil from reaching Alabama's Magnolia River." I don't want to hear anybody say "they care" and they "move fast" and they've been on this "from day one," because there's no evidence to support it. "Instead of providing leadership and properly coordinating the response, the Obama administration has chosen to shift blame and politicize the disaster, including: 1) 'not-at-all veiled shot[s] at the Bush Administration' for the state of the Minerals and Management Service; 2) vague threats of criminal prosecution from Attorney General Eric Holder; 3) a moratorium on offshore oil drilling" here and in Alaska "which could kill 120,000 jobs in the Gulf alone..."

Let me tell you what's going to happen. If this moratorium on drilling is serious and he doesn't repeal it, these rigs with going to be abandoned and these companies will set 'em up somewhere else. They'll go make a deal with Hugo Chavez. They'll make a deal with whoever is over in Nigeria, wherever they can go. They're not going to let Obama put 'em out of business. One hundred and twenty thousand jobs in the Gulf are at risk here because of a policy, a policy as inane as grounding all airliners after a crash. A policy as inane as suggesting no more airplanes are going to be built when one crashes. And this is not the worst oil spill ever. I still have it. I'm reluctant to use it. There is a great story that puts the size of this spill in amazing perspective. I'm hesitant to use it because people will say, "Oh, so you're saying it's no big deal?"

Well, no, I'm not saying it's no big deal, because it's very real to the people whose lives are being profoundly negatively affected by this. But in terms of oil spills, we're not even close to the largest one -- which is also in the Gulf, Mexico, Ixtoc 1, early eighties. We recovered from it. I've mentioned it countless times. But even that is not what I mean. The perspective on how much oil is in the Gulf compared to how much water is in the Gulf. I think I'll do it. I think I'll dig it out of the stack here and I'll show it to you. The reason for mentioning this is to show something positive about this because as is the case in every disaster we get an amplified. "Oh, it's worse than anything ever before! Oh, it's horrible! We're all going to die! Blah, blah, blah, blah, blah, and we lose perspective on this, and keeping perspective is part of fixing it. Keeping perspective is called remaining rational about it. Nobody does anything properly or productively in a panic. So I'll find that and I'll do it.

BREAK TRANSCRIPT

RUSH: To put this in layman's terms to simplify, most -- well, if not most, many of the delays in getting started on dealing with this gusher were caused by the very overregulation that they're saying we need more of. Paperwork, we had to get past the Jones Act, we had to get the paperwork filed by the Netherlands and so forth. Bobby Jindal wanted to build the sand berms, needed paperwork for this, all of these regulations. Right now there are 33 high-tech oil rigs in the Gulf of Mexico as we speak, and they will all go away if this moratorium is permanent. They are not going to sit there and take it in the shorts and go out of business, despite Mr. Obama's efforts. They will go elsewhere. And our prices for energy are gonna skyrocket.

Stansberry & Associates, an investment research outfit -- and they put out last week close to when I was coming back, this was June 14th, the following piece: "Let's talk about BP... Some of the world's top value investors have begun to buy shares of BP based on their estimates of what the Gulf cleanup will cost compared to the enormous cash flows of the company (roughly $30 billion annually, pre-tax). Our friend Whitney Tilson, one of the most respected value-oriented hedge fund managers in New York, even says that BP won't have to cut its dividend. We doubt Tilson is correct about the dividend, but he makes a few excellent points about the scope of the disaster in contrast to the media hype about the spill."

Now, I want you to clearly understand what I'm doing here. This is not to minimize it. This is once again to provide you evidence that the media reporting this and this administration dealing with it is hyping this to a crisis way beyond its proportion. If we lose rationality on this, we are not going to properly deal with this. Panic never leads to an effective result. "It is a horrible accident ... but you don't really have to clean up the entire Gulf of Mexico. 'The Gulf of Mexico is huge, covering 615,000 square miles and containing 660 quadrillion gallons of water.'" There's no way of conceiving that amount of anything: 660 quadrillion gallons of water.

"Let's compare this to the amount of oil Deepwater Horizon has been leaking. Most estimates are in the 12,000-20,000 barrels per day range, so let's take the high end and also assume that this continues until mid-August, meaning four months since the accident. Let's also assume that the cap captures no oil (the latest reports are that it may be capturing most of the oil, but let's be conservative). 20,000 barrels/day x 120 days x 42 gallons/barrel = 100.8 million gallons of oil released," by August. Are you with me on this? "100.8 million divided by 660 quadrillion is one gallon of oil for every 6.6 billion gallons of water in the Gulf. That's the equivalent of roughly one-millionth of an ounce of oil in a typical bathtub full of water." I'm going to run through it again. We're going to assume here that no oil is collected and the spill is 20,000 barrels a day, and it may be more than that, but use the numbers that we've been given, 20,000 barrels a day, none of it collected through August.

There are 660 quadrillion gallons of water in the Gulf of Mexico. So 20,000 barrels of oil a day times 120 days -- that's four months since the spill -- times 42 gallons -- that's how many gallons are in a barrel -- that equals 100.8 million gallons of oil released. And that's not good, don't misunderstand. Wherever it ends up, on the Gulf, onshore, it ain't good, it's not good, don't misunderstand me. 108 million gallons of oil divided by 660 quadrillion gallons of water is one gallon of oil for every 6.6 billion gallons of water in the Gulf. One gallon of oil, not barrel, one gallon of oil for every 6.6 billion gallons of water in the Gulf. To bring this down to a size that everybody can understand, that is the equivalent of roughly one millionth of an ounce of oil in a typical bathtub full of water. The perspective here is people are saying it's going to take forever to clean up the Gulf of Mexico. It will not. Most of the Gulf of Mexico, the water volume, will not be affected. In fact, a lot of the oil, these plumes that they're talking about beneath the surface, a hundred miles away and 24 miles long, at some point is going to be dissipated, it's going to be eaten alive. And they're going to cap this by August anyway with these relief wells.

Now, I only mention this because we see the Gulf of Mexico on a flat map and we see in relation to the country a relatively small body of water. We don't see the depth. We have no concept of the amount of water in the Gulf. But we see the video of all the oil spewing out of that rig, out of that blown hole. We see that all the time. And in that TV frame 90% of what we see is oil and 10% is water. And all of this creates a mental image that the total destruction of the Gulf of Mexico and every life form in it is either imminent or has already happened. It is the equivalent -- through August, not today -- through August at 20,000 barrels a day of having one millionth of an ounce of oil in your full bathtub. I would say you get in the bathtub with a millionth of an ounce of oil in there, by the time you soap yourself up and do all you do in the water the oil is going to be taken care of, along with the oils on your body that will wash off as well.

Now, do not misunderstand, this is not to minimize all the damage that's being done to people who make their living offshore. That's real, and it's destructive, and this leak needs to get fixed as quickly as possible. But I always strive to have everybody try to keep rational, be rational in these circumstances. This is what's been missing in the global warming argument. If you take a look at the proportions I just gave you and transfer it to the whole global warming argument, the earth's climate, the atmosphere, including the oceans and landmass is so complex and so massive, we can't conceive of it, and yet they have people believing that driving around a General Motors Yukon SUV was gonna destroy it, or lighting a charcoal barbecue pit. They had people believing -- just as they have people believing that drilling for oil offshore is going to destroy the Gulf of Mexico. It will not. And we have a president who has put a moratorium on all drilling, which is obscene, it is insane, it is absurd. We have 33 rigs out there and he's going to effectively end up putting them all out of business, just as if an airplane crashed and we shut down the airline industry, all because of an imagined volume of destruction which will not happen. And this spill to this date smaller than the Mexican spill in 1979.

BREAK TRANSCRIPT

RUSH: Friend of mine, Lord Rosow, sends me a note with an interesting observation. "Now that British Petroleum..." It's actually "BP." British Petroleum is no longer the name of it. "Now that [BP] is going to turn over $20 billion to the regime in escrow money, why, that's great news because now the Obama regime can be blamed for all the delays and bureaucracy that will be inflicted on the people in the Gulf. It's this $20 billion in escrow money that is ostensibly to be used to help people who are losing their livelihoods because of the oil spill. But guess who's in charge of doling it out now? The regime." Ha!

So wait 'til you people in the Gulf start trying to get your share of the 20 bil. You gotta go through the regime to get it. That's... Actually, it's unfortunate. It is sad, 'cause it's just going to be more and more red tape. Now, I keep talking about the Mexican spill -- it's 1979, actually. It's spelled I-x-t-o-c. Now, depending on how you want to pronounce it, Ixtoc or Ish-toc. You know, in some Spanish words the X is an S-H. It's I-x-t-o-c. Pronounce it however you wish. The BP of the day in this oil spill was a company called Pemex. The Pemex Ixtoc oil well, 1979, was far worse than the Deepwater Horizon well: 140 million gallons of oil poured out of that well. After four months an oil slick had covered about half of Texas' 370-mile Gulf shoreline and devastated tourism, 1979. And, by the way, it infested sea turtle habitat, all kinds of bird habitat, and it's back to normal now. It was 1979.

It took ten months to stop that leak. It took ten months to stop that leak in 1979 -- and you want the piece de resistance? They never found out why. To this day, they don't know what caused it. From1979, to this day, they do not know what caused the Ixtoc 1 leak. Pemex, the company, the BP of the day (it was state owned) they never figured out what caused the leak. Now, what are we doing? Well, the president said that we're going to wait 'til we find out the cause of the BP leak before we ever allow exploration for new offshore drilling. Well, all right, fine and dandy. But they still don't know what happened to the Ixtoc leak. They stopped it, but they don't know what caused it.

If Obama had been running Mexico they would be out of the oil business to this day. Now, Snerdley said, "How much did Pemex pay?" Pemex, state owned, paid $100 million of the cleanup. They gave no money to the United States, no money to Texas, claiming "national sovereignty." Pemex paid nothing. The damage that that well rupture caused to Texas would be the equivalent now BP saying, "Hey, you people in Alabama and Louisiana Mississippi? (Raspberry) you. We're a British company. We're gonna invoke our sovereignty. We're not going to pay you anything. We'll give $20 billion to your regime and you can deal with them," which in effect is what's happened. But these two are nothing compared to Kuwait during the first Gulf War. Ten times -- ten times -- as much oil spilled into the Persian Gulf, which is one-sixth the size of the Gulf of Mexico. And what were the long-term consequences? Well, there was a 1993 UNESCO study (United Nations) that reported little long-term damage was done to the environment.

Half the oil evaporated, a million barrels were recovered, and two million to three million barrels washed ashore, mainly in Saudi Arabia. So, yeah, it's bad, and it's very unfortunate, and it's just terrible. It's terrible that it's doing this to the people of the Gulf of Mexico. It's even more terrible that we got panic and we got a regime using this instance to advance a political agenda rather than put the really best minds we have together to try to solve this. We've rejected people, nations who have offered to help who are experts at doing this. It's no different than if we had an earthquake here and they wanted to help us and we said, "Get outta here, we can handle it ourselves."

END TRANSCRIPT

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