Sunday, May 2, 2010

Your Sins Will Come Back to Haunt You

Here is an interesting report on ABC News:
BP, the company that owned the Louisiana oil rig that exploded last week, spent years battling federal regulators over how many layers of safeguards would be needed to prevent a deepwater well from this type of accident.

One area of immediate concern, industry experts said, was the lack of a remote system that would have allowed workers to clamp shut Deepwater Horizon's wellhead so it would not continue to gush oil. The rig is now spilling 210,000 gallons of oil a day into the Gulf of Mexico.

In a letter sent last year to the Department of the Interior, BP objected to what it called "extensive, prescriptive regulations" proposed in new rules to toughen safety standards. "We believe industry's current safety and environmental statistics demonstrate that the voluntary programs…continue to be very successful."
Doesn't this sound oddly similar to Wall Street that spent tens of millions (hundreds?) on lobbying to get the Glass-Steagall Act rescinded? You know, the one that kept the banking system sound for 70 years after the Great Depression and which, once rescinded, resulted within 10 years in The Great Recession as the banking system imploded!

I sure hope there isn't a BP "TARP" bill rushed through Congress to save BP. (I'm joking.)

But I do hope that the cleanup costs bankrupt BP. That's the kind of scare that will make the other energy companies sit up and pay attention to investing in the level of redundancy and the amount of safe guards needed to ensure this kind of disaster doesn't occur again.


kanna said...

Two things here.
I am sure that BP would never put profits first, surely this is just that mean old media again.
We the people are going to have to face facts one day. We must get control of our energy use and our corps, even though they are persons.
Not all of them are as "successful" as BP and the coal mining industry have shown they are with safety and environmental safeguards.

RYviewpoint said...

Kanna: It is funny how history "advances" with bumps and jolts. I'm thinking that this spill, since it keeps getting bigger, will be a catalyst for big changes.

My biggest hope is that it gets Obama to be serious about alternative energy. There is a crying need for fundamental research as well as a fair amount of money to do engineering studies and fund pilot plants to establish scalability and the real economics of alternatives.

This disaster may just be the straw that breaks the back of that old camel, oil & coal corporations.

Nothing will happen quickly because we are talking of an infrastructure with trillions of dollars invested in it. But over the next 20 years, I expect to see clear changes.

thomas said...

Kanna, Ry;

I saw tonight that the cap on this sort of thing is 75 million dollars... A spit in the ocean.. sorry to say this but our laws and policies are way behind the times. But, I am sure that BP will take care of this on their own accord..

RYviewpoint said...

Thomas: Somebody thinks that the cap isn't $75M. The stock price has fallen from $60/share to $50/share and the current valuation of the company is $159B, down from $192B. That's a drop of $33B. Somebody thinks it is going to cost $33B to clean up the mess (plus take the hits of BP's reputation and the loss of customers who refuse to deal with a company that is this lax in its safety standards). That's about 400 times the $75M hit you read about. I'm willing to bet that the market is the better estimate of the real cost.

kanna said...

Money is what matters to the Corp and Wall Street.
So just maybe this will get their attention for 5 minutes.