Oil Spill

[Texas Proud]

I'm an engineer and have worked in new technology fields all my life, including area where the consequences were significant in terms of life, equipment, and politics...think military space here.

The way it works is, if you want to use an unproven, potentially risky technology, you study the heck out of it, "prove" that it works in theory, and then carefully prove it works in practice under controlled-risk situations. You don't just develop it and try it.

I've worked on programs with formal military urgency requirements where people were dying every day that the technology was delayed. You still test it thoroughly and understand the risks. I have no doubt the oil industry does this as well, just apparently not well enough.

I've said before, I am not opposed to drilling, and I do suspect that one implication of this will be a much more conservative approach in the industry. But the only way you will have that is if you make the business consequences as severe as the human, ecological, and economic. The worst that can happen to BP is that they go under. Individual workers in future situations need to know that they have personal accountability if this is going to actually lead to change.

I've worked in a situation where I was an employee of a company but I was also accountable to the government for certain types of things that could happen. My boss only had a vague idea what I was working on. This is not unusual in the defense sector. It means you do your job regardless of what you are told. You follow the rules even when directed not to. The guy who directed you to take a short cut gets fired after a few attempts to do that to people. And eventually you end up with people who work for the common good rather than for the company's profits alone. They don't take shortcuts because there is nothing to gain and a great deal to lose.

Interesting you should mention space.... because the two space shuttles that blew up seems to me that the government (at least gvmt run) is not any better than others...

And as a percent... that was 2 out of 134 (when the last flights are flown)... not a good percent IMO...

remember... the second one was after a 'through review' so it wouldn't happen again... and there could have been a third with the foam coming off as it did...



Edit to add.... did anybody get charged with a crime in either of these disasters Just asking....

Did the gvmt pay all the wages for everybody who was laid off during that through review Just asking...

 

[Milton]

Dunno if this article has already been linked, and my apologies if it was: BP should hit back at U.S.. It certainly provides a fresh perspective.

There are no words BP can use to apologize sufficiently for the damage the leak has caused. Whatever it says, it's still going to be the most reviled company in America.

Instead, BP should try a different tack. It should tell the U.S., and everybody in it, to go take a hike. In reality, the U.S. is guilty of the most appalling hypocrisy. It's too late to rescue BP's reputation now; all it can realistically hope for is to salvage as much money for shareholders as possible....

BP's image in the U.S. matters only so long as it tries to do business there. If it cuts its losses and gets out now, it can carry on fine in Japan, France, Argentina and all the other countries where no one is really that bothered by what happened in the Gulf of Mexico.

There's some pragmatic advice to Mr. Hayward in the balance of the article: well worth reading.

 

[DoingHomework]

Dunno if this article has already been linked, and my apologies if it was: BP should hit back at U.S.. It certainly provides a fresh perspective.

There's some pragmatic advice to Mr. Hayward in the balance of the article: well worth reading.

Interesting article. Unfortunately, while I agree that few Europeans or Japanese care much about the Gulf of Mexico, they would care about BP abandoning its obligations here. Does the author actually think the Japanese or French would allow it to operate if they could not be assured it would clean up any mess it made? So that's the basic problem with the "take my marbles and go play elsewhere" argument.

 

[DoingHomework]

Actually, they can put the $20B in an account that is a bond... but is not payable NOW... it would only be there if they lost the case... I am sure any bank would love to take on the $20B in cash and put up the bond... it is not that difficult... and the results are not what you want...

It would have to be an escrow account...but again, they do not have the $20B to deposit.

As mentioned by someone else... you push to hard and BP says screw it, we will take our chances in court where the emotion is not as raw... and most judges actually read and follow the laws which might not be what we think....

They could do that. It seemed to work for Exxon.

I am sure BP would still be around if they lost their US operations... not as big, not as strong, but still working in a lot of other locations... and of course... they would sue to get all of their assets back and who knows if they would win... or lose...

I said a few days ago, I do not think BP is headed for bankruptcy. But the ratings agencies suggest it might. BK might also be a way to save face by escaping some of the cleanup obligations to save the company while not actually walking away. The shareholders would be wiped out. Given that the share price is down 50% since the accident I'd say the markets are pricing in a 50% probability of bankruptcy or its equivalent (the company having $0 value).

 

[DoingHomework]

did anybody get charged with a crime in either of these disasters Just asking....

No, but then nobody pushed to go ahead with the mission just to make a profit even though there was clearly something wrong.

Did the gvmt pay all the wages for everybody who was laid off during that through review Just asking...

Were there layoffs? Most of those involved were NASA employees or contractors on cost-plus contracts. So, in a way, the gvmt did pay the idled employees.

 

[ronocnikral]

Interesting article. Unfortunately, while I agree that few Europeans or Japanese care much about the Gulf of Mexico, they would care about BP abandoning its obligations here. Does the author actually think the Japanese or French would allow it to operate if they could not be assured it would clean up any mess it made? So that's the basic problem with the "take my marbles and go play elsewhere" argument.

the obligations are what is in dispute here. perhaps what you view bp's obligations to be is different than what the rest of the world views their obligations to be. even as an american who lives on the gulf coast, my opinion is that you have unreasonable obligations for bp at this point in time.

the basic problem with laying down to every demand is that the demands never end. anyone who has any business experience can tell you this.

if we are going to hold bp to every law, why should they do anything above and beyond the law? they are already doing more than is required of them at this point...

 

[Gumby]

Industry standards are not irrelevant and if they are unsafe/illegal they aren't industry standards.

This has been wrong as a matter of law for a long time now. A company could adhere to industry standard and practice in every particularity and still be negligent, because the industry practice could be negligent.

Here is a case all lawyers read in law school on that very topic.

60 F.2d 737 - Google Scholar

In this case, two barges sank in heavy weather. The tugboat towing the barges did not have a radio on board to receive weather reports. The defendant tugboat owner claimed it was not negligent in failing to have a radio on board, because industry standard was not to have radios on tugboats. The court rejected that argument.

The key language is this:

Courts must in the end say what is required; there are precautions so imperative that even their universal disregard will not excuse their omission.



Here, industry standard and practice may be of of some evidentiary benefit in evaluating negligence, but adherence to those standards and practices may not necessarily provide shelter to BP.

 

[DoingHomework]

the obligations are what is in dispute here. perhaps what you view bp's obligations to be is different than what the rest of the world views their obligations to be. even as an american who lives on the gulf coast, my opinion is that you have unreasonable obligations for bp at this point in time.

the basic problem with laying down to every demand is that the demands never end. anyone who has any business experience can tell you this.

if we are going to hold bp to every law, why should they do anything above and beyond the law? they are already doing more than is required of them at this point...

Which obligations are in dispute? No one questions their obligation to clean up the mess and return the GOM to the state before the spill. I would agree that is an impossibility. But there does not seem to be a dispute that they are obligated to do that regardless of cost. Do they have to pay every laid off worker and every restaurant owner that experiences a downturn in business? Probably not under the law, but they have said they will do that. And while public statements are not binding...the more they work with the government in addressing the spill the closer they come to creating a legal obligation in fact.

At this point I might concede that forcing them to pay for laid off workers because of the drilling ban is going too far...but it is also small potatoes. That cost is estimated at about $1B-$1.5B. Tourism in the Gulf Coast brings about $120B a year in and that has been decimated. Fishing is similar. It's not going to me hard to show an economic effect on the order of $100B. Is that an obligation? Maybe not. But have they said they will pay, under oath? Yes, today.

As this unravels BP and the entire oil industry is looking like a bunch of incompetent idiots. Even the company executives are embarrassed by some of their actions. The are legally obligated to be prepared to respond to a spill just like this BEFORE drilling. Every single oil company drilling in the GOM is violating the law as of today. It is an unbelievable situation.

As I said, I've worked on large government projects, not for the government itself. I understand about boilerplate plans, industry standards, regulators that are clueless, and all sorts of shenanigans that go on. But I have never observed the kind of incompetence and pure disregard for common decency that is being put on display here by BP and the other major oil companies. If the only defense is that we need the oil and this is how the "good 'ol boys" have always done it, I think we need some major changes.

I'm sure you all dismiss what I say as coming from some kind of radical enviromentalist, a liberal, or whatever. I'm not. Sure, I'm not a fan of pollution but I also realize we need oil and it doesn't grow on trees. And I'm fiscally conservative, don't like the government in my business, etc. Basically a Republican, though Sarah and her ilk just didn't work for me. But I also think for myself. This is NOT a normal or acceptable situation. This industry clearly needs dramatic change!

 

[winger]

Given all the money they are spending, BP is acting like they are guilty of something.

 

[Westernskies]

This industry clearly needs dramatic change!

Now, where have I heard that before?

 

[Rustic23]

They are, haven't you been reading!

 

[Nords]

It would have to be an escrow account...but again, they do not have the $20B to deposit.

How much of a dividend is BP paying out in the next few weeks?

Surely the stockholders won't mind putting that in escrow for a few months while the Gulf is cleaned up.

 

[lets-retire]

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.

 

[frayne]

Doesn't look good at all for BP.

http://energycommerce.house.gov/documents/20100614/Hayward.BP.2010.6.14.pdf

 

[DoingHomework]

How much of a dividend is BP paying out in the next few weeks?

Surely the stockholders won't mind putting that in escrow for a few months while the Gulf is cleaned up.

$7B. Right, I'm sure the stockholders won't mind keeping the dividend in escrow.

I think folks are just waiting for BP to make the right decision on the dividend. If they decide to pay I think it will be moot because there will be actions in US and British courts to tie it up until the mess is cleaned up. The US part of the company would go into receivership. I'm not sure what the British courts would do but court systems around the world have one thing in common - they work conservatively and glacially. I'm sure the British courts would freeze the dividend while they consider the issue.

 

[kcowan]

Doesn't look good at all for BP.

http://energycommerce.house.gov/documents/20100614/Hayward.BP.2010.6.14.pdf

Good, current and complete summary. I suspect that this series of compounding actions might contribute to a finding of criminal negligence. But it will be a judgement call.

 

[lets-retire]

Good, current and complete summary. I suspect that this series of compounding actions might contribute to a finding of criminal negligence. But it will be a judgement call.

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

 

[Emeritus]

$7B. Right, I'm sure the stockholders won't mind keeping the dividend in escrow.

I think folks are just waiting for BP to make the right decision on the dividend. If they decide to pay I think it will be moot because there will be actions in US and British courts to tie it up until the mess is cleaned up. The US part of the company would go into receivership. I'm not sure what the British courts would do but court systems around the world have one thing in common - they work conservatively and glacially. I'm sure the British courts would freeze the dividend while they consider the issue.

Actually the cleanest answer is you get a consortium of big banks to extend a standby letter of credit in favor of the US government for the amount of the dividend.

 

[Milton]

How much of a dividend is BP paying out in the next few weeks? Surely the stockholders won't mind putting that in escrow for a few months while the Gulf is cleaned up.

I'm not a BP shareholder (thank God). But if I were, and if I was relying on the regular payment of dividends to support me in retirement, I think I would mind.

 

[Westernskies]

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.

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?

 

[TromboneAl]

http://energycommerce.house.gov/docu....2010.6.14.pdf

Good, current and complete summary.

I thought the same thing. Maybe I have to reevaluate my opinion of the government.

 

[frayne]

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

On the surface it looks as if the BP person in charge went on the cheap in order to save some time and money. The comment about not conducting the test to confirm the integrity of the plug job does sound almost criminally negligent.

 

[John Galt III]

I wonder if they can actually use all that oil they siphon off and skim, or if they just end up burning it up....

 

[DoingHomework]

I wonder if they can actually use all that oil they siphon off and skim, or if they just end up burning it up....

I read something about that the other day - they CAN process the watery oil (or oily water) to recover usable oil. But currently they are burning much of it off so they can keep the operation going and keep the ships from having to go to shore as often to offload.

 

[TromboneAl]

I wonder if they can actually use all that oil they siphon off and skim, or if they just end up burning it up....

Yes, and BP said that all the profits would go to gulf coast restoration and residents. They should have said all revenue would go...