"HOUSTON, May 29 (Reuters) - BP Plc Chief Executive Tony Hayward said on Saturday the oil company's next step to try to corral a Gulf of Mexico oil leak was the 'most effective way to minimize' its impact."
"He said a lower marine riser package cap would take about four days to install. Hayward also said he was disappointed the company's three-day 'top kill' effort to smother the well failed, although BP 'executed the operation perfectly.'"
BP CEO says cap best way to minimize oil leak
http://www.lse.co.uk/FinanceNews.asp?Artic... Of course, BP was "perfect" in its effort. Nevermind the fact that it failed.
And if the next effort they plan to try is the "most effective way to minimize its impact," then why didn't they do this weeks ago instead of jerking around with lesser efforts that had higher probabilities of failure? That's because BP's first priority is limiting its exposure rather than stopping the leak.
The problem is BP has no incentive to do any more than it is doing now, which is not much, relatively speaking.
Consider the liabilities:
First there is the cost of this disaster to the people affected, like those that fish the Gulf for a living. It is projected that there could be at least 10 years before they will be able to fish there again. They have a claim.
Then there is the cost of cleaning up the ecosystem -- the waters, beaches, marshlands, etc., that support animal and human life in the area. Likely the government will organize and lead that effort. There is a cost for that.
Suffice it to say we're talking tens of billions of dollars in liability that BP should be on the hook for. If they were, they would be doing all they can to stop the leak to limit the damage and their liability. The exact figure cannot be known at this time as long as oil keeps spilling out into the ocean, causing wider spread damage, thus there is an invcentive to stop it ASAP.
But guess what? There is legislation in effect RIGHT NOW that limits liability for any off shore oil spill to $75 million dollars. So far there have been three attempts in congress to raise that to $10 billion, and each one has been shot down by a senator owned by the oil companies.
So given this, why should BP do any more than it has to to contain the spill? They don't have to worry abou tthe clock running as more and more oil spills out, increasing the damage because their liability is capped at $75 million. If that is all they have to pay, and the taxpayer has to make up the difference, then there is no motiviation for them to do any more than what they are doing now. Oil could leak for the rest of the year, and BP's cost is capped at $75 million. And this for a company that made $35 billion in PROFIT last year.
I heard 2 weeks ago that BP estimated that it could take until August for the spill to be contained. The media did not focus on this comment, as it wants to whitewash this disaster for BP. BP has done a masterful job at PR, getting most everyone to focus on what the government should be doing, even to the extent of getting it to accept responsibility for this disaster that BP caused.
The bottom line is this disaster is as bad as it is because BP is not being forced to do more to clean it up. Since it ignored safety procedures, lied about its disaster recovery studies and capabilities, An executive order should have been issued that fined BP $50 million dollars every day that the oil continues to leak out, from the outset. I guarantee you had the government done that, this leak would have been stopped weeks ago. Instead, we get the president going on a press conference accepting responsibility for the spill. Score one for corporations, the people, zero.
Obama should not be on the hook for this, and he should not be accepting responsibility for it either. Take charge yes, but get tough and bring the hammer down on BP. Maybe he wants to do that, but this brings up the question once again, who really is running things in this country?
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Sunday, May 30th 2010 at 12:49PM
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