Oil spill

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Whatever, they may have made some token increase of the liability limit, but it won't make any real difference. BP does not have nearly enough money to cover the damages they've done, so even without any limits on their liability you wouldn't get enough from them.

And you know that the state still doesn't make as much as others do from the oil revenues?

Wow, the leak might not be stopped to August. That's horrifying.

The oil disaster unfolding in the Gulf of Mexico could present BP with much higher costs than previously thought as a result of US government penalties of up to $60bn (£40bn), according to City analysts.

The penalties are in addition to BP's already huge bill for the clean-up mission, which stood at $760m yesterday, and potentially unlimited damages payable by the company to fishermen and other affected local communities. BP also faces billions of dollars of lost earnings as a result of its damaged reputation in the US, which could result in it being barred from bidding for future contracts.

The Guardian has obtained a confidential briefing, from a top-level US environmental lawyer who specialises in oil industry litigation, to stockbroker Canaccord, assessing the financial impact of impending legal action on BP.

He warned that under US law, BP is liable for $1,100 in civil penalties for each spilt barrel of oil and gas, to be paid to the US federal and affected state governments. If BP is found to have acted with gross negligence – and there is no evidence so far that it has – this fine would rise to $4,300 for each barrel.

The issue of legal liability for the accident is complex, involving US federal and state laws. City analysts' calculations of the bill faced by BP have ignored the potentially ruinous cost of these civil penalties.

They also highlight the implications for BP of establishing how much oil is leaking from the damaged pipeline, which is hard to measure – unlike a leaking tanker, which holds a finite amount of oil.

BP had been relying on official estimates for the spill of 5,000 barrels per day, which are based on satellite images taken of the surface of the sea above the leaking pipeline. But BP has been pumping hundreds of thousands of gallons of chemical dispersant close to the leak, resulting in vast underwater oil slicks. The company recently admitted that the actual figure is likely to be higher and some scientists say 115,000 barrels of oil per day are spewing into the Gulf. BP would be liable for $60bn in civil penalties if oil continues to leak at the highest estimated level for the next two months, when a relief well being drilled to plug the reservoir is completed. With the spill in its fifth week, pressure is mounting as all attempts to stem the leak have been delayed or largely failed.

The Environmental Protection Agency (EPA) has indicated that BP faces fines over the disaster, and there is also speculation that the company could eventually face a criminal investigation.

BP is preparing to carry out its latest attempt to staunch the flow of oil from the damaged Deepwater Horizon well. The operation, which the firm hopes to start tomorrow, will involve pumping heavy fluids into the broken pipe and then capping it with cement.

The technique has proven successful in previous surface oil spills, but it has never been tried at a depth of 1.6km under the sea and BP can only hazard that it has a 60% or 70% chance of working this time.

The crisis began on 20 April with the explosion of the Deepwater Horizon rig about 50 miles off the coast of Louisiana. Eleven workers died in the blast, and a private memorial service was to be held yesterday afternoon in Jackson, Mississippi.

The Obama administration is increasingly feeling the heat over why it has taken so long to contain the crisis. As a sign of how seriously the spill is being taken, Obama will break off a long weekend in Chicago on Friday to travel to Louisiana to witness the clear-up efforts.

Bobby Jindal, the governor of Louisiana, is increasingly acting as the conduit of criticism of both the oil giant and the government, vowing to mobilise the local National Guard to protect the sensitive ecosystems on the Gulf of Mexico in the absence of an adequate federal response. "We are not waiting for them," he said.

Senior figures in the Obama administration continued to voice frustration with BP, but also displayed internal confusion about what should be done to deal with the slipping timescale. The US interior secretary, Ken Salazar, hinted that unless BP gets a grip on the crisis the federal government would "push them out of the way". This was almost immediately contradicted by Thad Allen of the US Coast Guard: "To push BP out of the way would raise a question – to replace them with what?"

BP's chairman, Carl-Henric Svanberg, accepted that the accident had damaged the company's reputation but said that critics should remember that BP was "big and important" for the US.

"The US is a big and important market for BP, and BP is also a big and important company for the US," he said in an interview with the Financial Times.

Svanberg said the company's board felt that chief executive Tony Hayward was doing a "great job", in spite of criticism.

"This is not the first time something has gone wrong in this industry … Of course our reputation will be tarnished, but let's wait and see how we do with plugging the well and cleaning up the spill," he said.


http://www.guardian.co.uk/environment/2 ... egal-costs

Compared to the eruption of Mt. Toba about 75,000 ybp, what is happening in the Gulf is not even a twitch. The eruption of Mt. Vesuvius in 79 C.E. was more of a disaster. Even the eruption of Mt. Krakatoa in the 19th century was more of a disaster. Five years from now, none of this will matter hardly.

ruveyn

That appears to be off by a couple orders of magnitude. Exxon paid a couple of billion in cleanup costs, and many millions on top of that in penalties. This article estimates the total at $4300 million:


http://www.nytimes.com/gwire/2010/05/03 ... 91298.html

And part of the problem with the Valdez disaster was that the containment equipment that was supposed to be available was not. Ironically, BP was in charge of having the containment equipment on hand:

http://ricksblog.biz/?p=9691

News flash: the one who has been in charge of enforcing the regulations for the past couple years - Obama - is not a right winger.

A lot of deregulation of industry occurred under the Bush administration, many of his appointees in regulatory bodies are still in place, and Obama has failed to move to reverse Bush's policies.

It will to me when I want seafood and I can no longer get fresh seafood because it's all dead here.

Obama pretty much is just Bush's right-center counterpart.

Get it from the Pacific and Indian ocean.

And it won't be "all dead". Even now there is plenty of live fish in the Gulf.

When the Siberian and Deccan traps erupted that killed 99 percent of all life in the sea. If the traps could not kill all the sea life, how do you expect a minor oil leak to kill all sea life?

ruveyn

I'm talking in the fishing region that provides south Louisiana with its fish....our own coasts and waterways. You don't get it and that's fine but don't act like you do have a clue because that ends up hurting others.

Note that the issue was enforcement, not regulation. Enforcement is clearly the current administration's responsibility.

Nor is there any real evidence that enforcement was lax under Bush. Certainly no major oil spills like this occurred.

It's not a left/right issue. It's a lack of competence issue.

We can't "blame it all on Bush". Airlines were deregulated in 1978 and the telephone company was broken up in 1986.

However, failure to enforce regulations that still exist is the greater wrong than deregulating what should be regulated. The first is a corruption of the law, the latter is just bad judgment.


ruveyn

And it's quickly coalescing again. If you look at it, Verizon and AT&T are basically two parts of Ma Bell and they have the largest portions of the pie....a duopoly instead of a monopoly. The illusion of choice.

On the other points, I think the tendency to point to the deregulation and the lack of movement on Obama's part plays in with the failure to act on the few existing regulations. It's part of a greater overall problem of government being too cozy with large multi-national corporations and letting them essentially self-govern and, in some cases, self-legislate. This becomes a failure on the part of the government to do the basics in terms of protecting property rights and other businesses.

That may be. My point was that de-regulation cannot be blamed on either Bush administration. The New Deal has been unraveling incrementally for the last 25 or 30 years. Good riddance.

ruveyn