Oil Spill

[DoingHomework]

Much of the tourism in MS has been decimated not by BP, but by the national media. Our beaches are as clean as they have ever been. Our casinos are still open. Our tourism is not really based on the Gulf. We don't have a lot of good beaches. Yet people think we are closed, because the national media paints the entire coast region as covered in oil. Our beaches are very shallow. You have to walk out several hundred yards before the water is above your knees and the water is dirty, from all of the rivers, including the Mississippi river, dumping their sediment. Our shimpers are still shrimping. Even Obama looked at the beaches and said they were safe and tried our seafood and said it was safe, although I'm still puzzled about those.

That's like shooting someone and saying much of the death came from the bleeding rather than the bullet impact.

I know several people with vacation rentals along the coast, mostly in Florida. Visitors are canceling not because they are directly worried about oil. But they have alternatives (Atlantic coast, Carolinas, etc.) so why risk it? Many of these owners are now going to have trouble paying their mortgages within a few months. As far as I know none of these owners has gotten a dime from BP yet because BP is demanding nonexistent proof - you can't produce 5 years of tax records for a 2 year old condo.

I've obviously been critical of BP, and I don't doubt what you are saying. But if you are a tourist you have choices. It is entirely reasonable to avoid an area that MIGHT have problems just so you don't have to deal with it on vacation. The bottom line is, were it not for BP there would be no media frenzy. That makes losses resulting from the media frenzy part of the effects of the spill.

 

[DoingHomework]

From what I read there were a lot of recommendations, not requirements, so I agree on the judgement call.

Exercising poor judgment is negligence.

 

[REWahoo]

Just saw a NYT report saying BP had agreed to put $20B in escrow to pay for damage claims...

 

[Westernskies]

That's like shooting someone and saying much of the death came from the bleeding rather than the bullet impact.

I know several people with vacation rentals along the coast, mostly in Florida. Visitors are canceling not because they are directly worried about oil. But they have alternatives (Atlantic coast, Carolinas, etc.) so why risk it? Many of these owners are now going to have trouble paying their mortgages within a few months. As far as I know none of these owners has gotten a dime from BP yet because BP is demanding nonexistent proof - you can't produce 5 years of tax records for a 2 year old condo.

I've obviously been critical of BP, and I don't doubt what you are saying. But if you are a tourist you have choices. It is entirely reasonable to avoid an area that MIGHT have problems just so you don't have to deal with it on vacation. The bottom line is, were it not for BP there would be no media frenzy. That makes losses resulting from the media frenzy part of the effects of the spill.

Your abstractions are getting absurd. People decide not to go to specific locations every year for a variety of reasons, for example hurricanes, floods, tornadoes, dead German tourists, etc. Now you want BP to compensate people in areas not affected by the spill for lost income due to media misrepresentation of the damage? If I follow your logic... because I chose not to go to the Gulf on vacation again this year (I have never been in the past, and probably never will) that decision is depriving someone, somewhere , in a Gulf location not affected by the spill- of a weeks condo rental, and that is now somehow BP's fault, right? As for several years of tax records, it's prudent on BP's part to determine if it is a legitimate claim for lost business- otherwise, I'll buy a POS condo on the beach tomorrow (sight unseen) and then bill BP for "lost income" (at 200-300%% of market rate) until the last drop of oil has been accounted for, because I couldn't get any rental income from it.

I don't think you will be happy until BP is completely bankrupt, 95,000 of their employees are out of work, their shareholders are wiped out, all the BP stations in the US are closed, and their execs are paraded naked through the streets in shackles and chains so the enraged citizenry can pelt them with rotten tomatoes? If this happens a lot of people with legitimate claims will not get what the deserve, there will be nothing left to pay them with.

I'd like to see BP start playing hardball; they cannot win in the court of public opinion anyway, and every politician out there running his mouth without a clue about what they are talking about is exacerbating their situation by exploiting thid disaster for their own political gain.

 

[REWahoo]

I'd like to see BP start playing hardball; they cannot win in the court of public opinion anyway, and every politician out there running his mouth without a clue about what they are talking about is exacerbating their situation by exploiting thid disaster for their own political gain.

You're suggesting BP adopt a "screw you guys, we're outta here" policy like this?

BP should hit back at U.S..
There's some pragmatic advice to Mr. Hayward in the balance of the article: well worth reading.

 

[lets-retire]

Exercising poor judgment is negligence.

No doubt about that, but the discussion was about criminal conduct. Just because someone is negligent does not mean they committed a crime.

 

[Westernskies]

You're suggesting BP adopt a "screw you guys, we're outta here" policy like this?

Not at all. I believe they ARE responsible for paying legitimate, well- documented claims. Period. But kow-towing to every talking head politician or media clown with an agenda to discredit them with a sound bite on the evening news at every opportunity, NO. Paying for "lost revenue" in areas not touched by the spill? NO. Paying for lost revenue for people who cannot or will not provide legal proof of loss? NO If our Administration officials insist on trying them in the kangaroo court court of public opinion, they should close their cheekbooks, dig in their heels, and play by the letter of the law. You can't have it both ways.

 

[REWahoo]

If our Administration officials insist on trying them in the kangaroo court court of public opinion, they should close their cheekbooks, dig in their heels...

Too late to close their cheeks - they've already "assumed the position". BOHICA...

 

[Texas Proud]

That's like shooting someone and saying much of the death came from the bleeding rather than the bullet impact.

I know several people with vacation rentals along the coast, mostly in Florida. Visitors are canceling not because they are directly worried about oil. But they have alternatives (Atlantic coast, Carolinas, etc.) so why risk it? Many of these owners are now going to have trouble paying their mortgages within a few months. As far as I know none of these owners has gotten a dime from BP yet because BP is demanding nonexistent proof - you can't produce 5 years of tax records for a 2 year old condo.

I've obviously been critical of BP, and I don't doubt what you are saying. But if you are a tourist you have choices. It is entirely reasonable to avoid an area that MIGHT have problems just so you don't have to deal with it on vacation. The bottom line is, were it not for BP there would be no media frenzy. That makes losses resulting from the media frenzy part of the effects of the spill.

Sooo.. the solution is to have those places that are making MORE money because of the oil spill to pay the people who make LESS...

Do you have direct knowledge that BP is requiring 5 years of tax records for a 2 year old condo? Or, it is just they have asked for your last 5 years of tax returns... and then they can see it is only two years old.

And should BP be responsible Let's say rentals in Key West are down this year... they can say 'well, it was that BP oil' and make a claim... but there is no BP oil. Our legal system is based on direct damage (well, who knows for sure.. just saying)... I will give you an example. They did street work in our downtown a few years back. They installed a light rail system. Well, it was difficult for people to get to some of the stores located on that road... but since there was not 'direct' cause for the people to stop coming (they still could get there, just had to walk some and be next to the construction) there were no damages. A lot went out of business. Is this 'fair'... nope. Was it legal... yep... However, I think BP probably will pay for some of these losses... but I also think that they should be able to 'prove' them. OHHH, another example... I am renting a condo on the beach in August... I can tell you there are a number of options.. some are booked all summer long... other are booked a few days here.. a few days there... lots of openings... so if I were going to pay them... I would want to know if they were the ones that were booked all the time or the ones who only had a few days booked in a season... this is not supposed to be a free lunch to people...

One last thing... someone who buys a condo to rent out and can not carry the note without rental income for a few months.. or even a year should not have bought it in the first place... there are things called hurricanes that can change people's mind also..

But then again... who am I to say what people should do with their own money...

 

[Emeritus]

So, I'm sure the national media will be depositing a few billion into an escrow account to compensate the MS tourism industry for the loss of revenue due to their professional misconduct and gross negligence?

Unlike BP they owe no one any such "duty". Complaining about the media has been the staple of incompetent politicians and a variety of other deadbeats for 300 years.

 

[Emeritus]

And should BP be responsible . Our legal system is based on direct damage (well, who knows for sure.. just saying)... I will give you an example. They did street work in our downtown a few years back. They installed a light rail system. Well, it was difficult for people to get to some of the stores located on that road... but since there was not 'direct' cause for the people to stop coming (they still could get there, just had to walk some and be next to the construction) there were no damages. A lot went out of business. Is this 'fair'... nope. Was it legal... yep...

Actually this depends a great deal on the exact facts and which statute is involved and who built the rail line. . A well known case is Kinsman Transit.

I assure you that a store that goes out of business due to the release of oil (and yes due to is complex) has a claim whether or not they saw any oil

 

[Emeritus]

Not at all. I believe they ARE responsible for paying legitimate, well- documented claims. Period. But kow-towing to every talking head politician or media clown with an agenda to discredit them with a sound bite on the evening news at every opportunity, NO. Paying for "lost revenue" in areas not touched by the spill? NO. Paying for lost revenue for people who cannot or will not provide legal proof of loss? NO If our Administration officials insist on trying them in the kangaroo court court of public opinion, they should close their cheekbooks, dig in their heels, and play by the letter of the law. You can't have it both ways.

Right. And how do you think that plays with the courts that assess the penalties for the spill. Not compensation=penalties.

"I decided to dig in my heals judge 'casue these assholes wanted compensation just cause I spilled some oil in the next town. "

Try it.
\

 

[FinanceDude]

Unlike BP they owe no one any such "duty". Complaining about the media has been the staple of incompetent politicians and a variety of other deadbeats for 300 years.

No worries, this is already being blamed on Bush and Cheney..........

 

[Emeritus]

Hadn't heard that but the blame can be shared by all the "GET THE GOVERNMENT OFF INDUSTRY BACK' types who gutted the regulatory system.

I've taught Technical safety regulation for 35 years and Date back to Nixon and Watergate.
Some things never change

 

[DoingHomework]

Sooo.. the solution is to have those places that are making MORE money because of the oil spill to pay the people who make LESS...

Do you have direct knowledge that BP is requiring 5 years of tax records for a 2 year old condo? Or, it is just they have asked for your last 5 years of tax returns... and then they can see it is only two years old.

And should BP be responsible Let's say rentals in Key West are down this year... they can say 'well, it was that BP oil' and make a claim... but there is no BP oil. Our legal system is based on direct damage (well, who knows for sure.. just saying)... I will give you an example. They did street work in our downtown a few years back. They installed a light rail system. Well, it was difficult for people to get to some of the stores located on that road... but since there was not 'direct' cause for the people to stop coming (they still could get there, just had to walk some and be next to the construction) there were no damages. A lot went out of business. Is this 'fair'... nope. Was it legal... yep... However, I think BP probably will pay for some of these losses... but I also think that they should be able to 'prove' them. OHHH, another example... I am renting a condo on the beach in August... I can tell you there are a number of options.. some are booked all summer long... other are booked a few days here.. a few days there... lots of openings... so if I were going to pay them... I would want to know if they were the ones that were booked all the time or the ones who only had a few days booked in a season... this is not supposed to be a free lunch to people...

One last thing... someone who buys a condo to rent out and can not carry the note without rental income for a few months.. or even a year should not have bought it in the first place... there are things called hurricanes that can change people's mind also..

But then again... who am I to say what people should do with their own money...

I agree, it's complicated. Some places will make more money. Shrimpers that help with the cleanup may...wait for it...cleanup. They might do better than they would shrimping. So someone does have to manage this. I just don't want it to be BP. If a careful economic analysis of the entire Gulf Coast economy shows a decrease in economic activity of $150B this year then that's what the BP payment should be (the appropriate agencies track this kind of thing and it can be calculated). The distribution of the hypothetical BP payment should be managed by a third party. That prevents BP from decreasing their costs by making it complicated to collect.

Frankly, I don't have much sympathy for vacation rentals that can't pay their bills over this. I agree people should be able to cover expenses for a long period. But it is not as simple as it sounds. They can get business interruption insurance for a very modest amount per year. But this kind of event is not contemplated or covered. Hurricanes are. Some of these people are ill-prepared. But some have nothing but assume that companies drilling in the Gulf would not poison it.

 

[DoingHomework]

I don't think you will be happy until BP is completely bankrupt...and their execs are paraded naked through the streets in shackles and chains so the enraged citizenry can pelt them with rotten tomatoes?

I think tarred and feathered would be more appropriate.

For the record, I don't want to put people out of work or hurt individual station owners. My guess though is that station owners are already suffering. Even without a boycott there are many people that will drive by the BP station and fill up at the Chevron I'm sure.

As for putting people out of work, I want to BP facilities to be taken over by another major oil company and regulated better. Putting BP out of business does not change the amount of oil that needs to be extracted, refined, and distributed. I just want it done by a responsible, ethical company.

 

[Westernskies]

I've taught Technical safety regulation for 35 years and Date back to Nixon and Watergate.
Some things never change

Maybe time for a change of curriculum?

 

[DoingHomework]

No worries, this is already being blamed on Bush and Cheney..........

Of course. As soon as they crossed Haliburton it was all over. Ignoring the Haliburton engineers' recommendation to use 21 centralizers got DC involved. They say he personally flew down in one of his black helicopters and guided teh UFOs in to blow up the well.

 

[Westernskies]

As for putting people out of work, I want to BP facilities to be taken over by another major oil company...

Hugo Chavez, is that you?

 

[ronocnikral]

As for putting people out of work, I want to BP facilities to be taken over by another major oil company and regulated better. Putting BP out of business does not change the amount of oil that needs to be extracted, refined, and distributed. I just want it done by a responsible, ethical company.

hugo chavez says the same thing...

what company would want to put their name on someone else's mess? it's loose-loose. if hayward had any marbles, he'd hit back and say screw it. one the first lessons of business - you give an inch, they take a foot.

 

[REWahoo]

Most of you probably know BP had a poor (OK, abysmal) safety record prior to the Deep Water Horizon explosion. Now the attorney who represented victims in a 2005 BP refinery disaster that killed 15 people is making public some internal BP documents:

From an internal BP email the day the explosion took place:

"Looks like injuries and loss of life are heavy. Expect a lot of follow up coverage tomorrow. Then I believe it will essentially go away -- due to the holiday weekend," BP America public relations chief Patricia Wright advised other executives.

The explosion led to big fines and penalties for safety violations...

In 2007, BP pleaded guilty to a felony, agreed to pay $21 million in fines from the Occupational Safety and Health Administration and paid another $50 million in criminal penalties in connection with the disaster.

...and even bigger penalties when BP failed to make fixes:

The plea agreement required the company to fix the problems that led to the explosion. But when that didn't happen, they fined BP again in 2009 -- an $87 million proposed penalty that would be the largest in the agency's history if upheld.

Sure gives the impression BP's strategy isn't focused on disaster prevention but rather on damage control.

BP documents highlight PR strategy after deadly Texas blast - CNN.com

 

[clifp]

Interesting document. Gee maybe now is the time to buy BP stock.

Actually, I think I'll come out of retirement to go work for BP. I was a fairly creative marketing guy but it is really tough to put a good spin on their safety record but I enjoy the challenge

The best I can come up with is "BP committed to reducing overpopulation one incident at time"

 

[DoingHomework]

hugo chavez says the same thing...

what company would want to put their name on someone else's mess? it's loose-loose. if hayward had any marbles, he'd hit back and say screw it. one the first lessons of business - you give an inch, they take a foot.

It's clearly important to stand up for yourself in business...but only if you have a winning hand. When you have screwed up or made a bad decision it is equally important to cut bait and move on. Don't you agree?

At this point, regardless of my opinion, I don't see how anyone thinks BP could have a winning hand. If they take a hard line things could go very badly for them very quickly. There are a lot of things the president COULD do if pushed. I'm sure BP knows that. Would they win a challenge eventually? Maybe. But in the meantime they'd be sunk. Standing up to the USG will only prolong the bad situation.

As a citizen I am angry and appalled at what BP is doing/has done. But if I were in Hayward or Svanberg's shoes I think I would have to recognize that the company is screwed in the short term and I would focus on 5-10 years out. I would ask what BP can do now to make money then. Their most valuable assets are their operations, infrastructure, and reputation. I would be working hard to preserve those things.

I don't see how taking a hard line would help in any way but to preserve a little cash now. My opinions aside, when I try to see how this could possibly play out over the next decade I think it is all about reputation. From what I have read, the people most affected along the Gulf coast don't have a bad opinion of BP right now. They are just frustrated by the delays in getting their expenses covered and with the uncertainty. So if I could keep people happy with a little bit of free flowing cash I think I would.

I actually think creating this fund and letting Feinberg manage it is brilliant. He will now take the heat for delays and denial and BP looks good for doing exactly what the USG requested. Heck, I'm even feeling a little convinced that they might be genuinely interested in making things right. But not totally.

 

[IndependentlyPoor]

For those of you not familiar with the Texas and Louisiana coasts, this map of pipelines may be of interest.
Talking Points Memo | Breaking News and Analysis
The Gulf is thick with platforms, and "all" boaters know that the shallow water platforms, which are regulated by the states, are much more poorly maintained than the deep water platforms regulated by the feds. There are many old, abandoned, and unlit platforms. We sailed through them once, five days and four long, long nights. Never again. You just pray that you don't run into something too small to show up on your radar.

 

[Westernskies]

Standing up to the USG will only prolong the bad situation.

"I think that if rape is inevitable, relax and enjoy it."
~ Bobby Knight, Indiana University, April 25, 1988