Tag Archives: Oil Spill

Oil Spills – Oil Companies – BP

BP has been issued a bill for the oil spill in the Gulf back in 2010:

NEW ORLEANS — BP said Thursday that it will pay $4.5 billion in a settlement with the U.S. government over the disastrous 2010 oil spill in the Gulf of Mexico and plead guilty to criminal charges related to the deaths of 11 workers and lying to Congress.

The day of reckoning comes more than two years after the nation’s worst offshore oil spill. The figure includes nearly $1.3 billion in criminal fines — the biggest criminal penalty in U.S. history — along with payments to certain government entities.

The settlement, which is subject to approval by a federal judge, includes payments of nearly $2.4 billion to the National Fish and Wildlife Foundation, $350 million to the National Academy of Sciences and about $500 million to the Securities and Exchange Commission. The SEC accused BP of misleading investors by lowballing the amount of crude spewing from the ruptured well.

Now, I’m all for BP having to pay for the cleanup to all agencies that were harmed by the spill.  I think that allowing companies to poison rivers that does nothing to harm the company is a moral hazard that creates problems for everyone.*

And I don’t mind that government sets the amounts of those fines.  What I DO object to is the nature in which these fines are arrived at; politics, deal making and more than likely cronyism.

If we want to protect ourselves from oil spills we have to acknowledge two things:

  1. We can not prevent a spill from ever happening again.  The only thing that we can hope for is to increase the mean time between failure and decrease the meant time to repair.
  2. What we really object to is the damage done by the spill, not that there was a spill per se.  Therefore, if we can quantify the dollar cost to restore the damage, we should be alright with the transfer of that cost.

If we’re able to do this, and codify it so that the rules are clear and understandable, the oil companies will understand this and include it in their business models.  In fact, I suspect that the fines will be significantly high that those companies will have to take out insurance policies to protect them in the event of a spill.  And this is a good thing.

See, if the oil company requires insurance they’ll have to get it from another company that sells insurance.  These insurance companies, being rational, will not issue said policy UNLESS the oil company can demonstrate adequate safety processes.   In short, the insurance will drive increased safety and prevention.  And it will do it in a mostly free market way.  Today prevention agencies are government run and filled with execs from oil companies that are named based on politics.  These agencies aren’t adequate in writing and enforcing the rules.  But if insurance companies are in charge of that, we can be MORE sure that the whole thing is more modern and appropriate.

So, hell yeah BP should pay.  But the fine should have been known and predictable up front.  If it was, I claim that the next oil spill will occur further in the future than it otherwise would and be restored much quicker and wit less overall damage to the environment.

* I do NOT object to the poisoning of rivers that DOES harm the polluter.  In this case “rivers” is the name I’m giving to the general environment.

Latest Oil Spill: The Good News

A sense of doom hit me in the pit of my stomach when I heard the news:

The Coast Guard is responding to a report of a rig explosion and fire “and people in the water” in the Gulf of Mexico south of Vermilion Bay, authorities said.

Coast Guard Petty Officer Casey Ranel said the rig is around 90 miles south of Vermilion Bay and that a helicopter earlier today reported that it was in fire “and that there was smoke and there were people in the water.”

A very tangible sense of “here we go again” washed over me.

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I Wonder If They Could Define It

I resonate with getting and keeping things safe; I do.

But I wonder if everyone does.

RALEIGH — About 85 people held hands on a footbridge over Lake Johnson on Saturday afternoon to lament the oil spill in the Gulf of Mexico and to urge the transition to cleaner forms of energy.

What does that even mean?  This “transition to cleaner forms of energy.”

Who decides what “cleaner” means, and how do you measure it?

And then, who measures the damage done by transitioning OFF of oil?  Who’s gonna be in charge of that?

The spill in the gulf is a catastrophe; it’s horrible.

But it doesn’t mean oil is over.

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Serious?

How in the world can you say you are managing this thing if THIS is true?

June 6 (Bloomberg) — BP Plc Chief Executive Officer Tony Hayward hasn’t spoken directly to President Barack Obama since the Deepwater Horizon rig exploded on April 20.

Oil in the Water: Drilling for Oil

So, who woulda thought that oil would naturally seep into the ocean?  Not me.  Ever.  For some reason I always thought that oil was deep underground and very hard to get at.  Turns out that oil really does seep into the oceans naturally.  And, by humans drilling for off shore oil we actually prevent much of that oil from entering the water.

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Wherein Offshore Drilling Reduces Oil in the Oceans

The spill in the Gulf is horrible.  The damage done to the coast, to the wildlife, to the people living there and the economy as a whole will be devastating.  Generations of small business owners will have been impacted by this before it’s over.  It may be decades before the local fisheries produce again; if they ever do.

The lives of those people living in New Orleans, just now recovering from Katrina, will be facing the headwinds of the loss of economic drivers for years.

It’s sad; jaw droppingly depressing.

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Some Perspective: Big Oil Style

I trend Right.  Actually, what I like to say is that I like being “Left” in a “Right” world.   That is, I enjoy the fact that there are armies of men and women out there who work their asses off so that our nation and world can be what it is.  Yet I also enjoy playing the role of individual freedom spoiler in my little life.

I like fighting for the little guy.  I like pullin’ for the underdog.  I want the immigrant to hit the big time.  And I want the oppressed to rise up…if only to become part of the machine.

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Oil Spill: Helping or Hurting

As I’ve said before, I know a little something about managing a “break/fix” situation.  And from where I’m sittin’ BP ain’t doin’ a very good job.  Now I’m not plugged into the information like I would be if this occurred on my watch at work, but there seem to be key components missing in this effort.

I’m not getting the feeling that information is being communicated effectively.  For example, we still don’t know how much oil is entering the gulf each day, in short, we don’t know how big or small the leak is.  Unacceptable.

Next, it feels that we’re working in serial.  We have one solution that is dreamed up, prepped, deployed and then monitored.  When that doesn’t work, we go back to the beginning and start over.  Fresh.

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Who Would'a Known?

I don’t think there’s anyone alive who would dispute the damage that’s gonna be inflicted on the Gulf Coast.  It really is gonna mess things up down there for quite some time.  I remain convinced that the costs of drilling are no where near the benefits of drilling.

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