BP Knew of Deepwater Horizon Problems 11 Months Ago

jkinney3 was one of several readers to send in news of recently discovered internal documents from BP which indicate the company knew "there were serious problems and safety concerns with the Deepwater Horizon rig far earlier than those the company described to Congress last week." According to the New York Times, "The documents show that in March, after several weeks of problems on the rig, BP was struggling with a loss of 'well control.' And as far back as 11 months ago, it was concerned about the well casing and the blowout preventer." Reader bezenek points out this troubling quote about BP's inconsistent risk assessments: "In April of this year, BP engineers concluded that the casing was 'unlikely to be a successful cement job,' according to a document, referring to how the casing would be sealed to prevent gases from escaping up the well. The document also says that the plan for casing the well is 'unable to fulfill M.M.S. regulations,' referring to the Minerals Management Service. A second version of the same document says 'It is possible to obtain a successful cement job' and 'It is possible to fulfill M.M.S. regulations.'"

Comments

Duh

[S.O.B.]

Does this really surprise anyone?

Re:Duh

[gt_mattex]

No.

What I would really like to see is the risk analysis report. How cautionary were the warnings of the engineers and how did the pencil pushers at the top translate this as an acceptable risk?

Re: Duh

[Black Parrot]

and how did the pencil pushers at the top translate this as an acceptable risk?

Apparently they just changed "unable" to "able".

Re:Duh

[3dr]

Oh, like this.

First of all, the sections of pipe are joined mechanically, and sealed with O-rings. The O-rings are specified for shallow water pressures (and temperatures), and rather than use adequate deep water parts, the shallow water parts were continued to avoid mandatory Federal oversight and testing.

On top of that, deadlines for completion were already tight, as no schedule variability was provided for unforeseen events, such as severe weather, that might hamper drilling and well conversion efforts. The conversion from an exploratory/research structure into a production well was a hard deadline, and pressure was on internally from the otherwise stagnant middle managers clamoring for achievement. There was no room for failure with a project named Deepwater Horizon.

As engineers' warnings flowed up the chain of command, the wording changed from "grave concern" to "concern" to "noted comment" to eventually "thumbs up!". Inter-hierarchical presentations followed a strict time schedule, so power point mentality and "no bad news up" reigned.

/satire

Re:Duh

[Anonymous Coward]

No matter, who screwed it up, the corporation should be liable for it. If someone is not 100% sure about what the warnings mean, they need to talk back/investigate it further. A corporation should be punished hard, if they create such a catastrophe due to neglect. It's the only way to get them to take security concerns and environmental issues seriously. They must know that, if they don't follow the rules and fuck up, they'll regret it bitterly, so that they really try to make sure that no mistakes are made, and if it means checking everything 2 or 3 times.
Afaik in aviation the manufacurers take security very seriously, because if they screw up and an accident happens, they are in big trouble. If oil companies handle things more lax and are not afraid of the consequences, something is going really wrong. It should be that way that the people on top insist that everyone in their company does his best to avoid such catastrophes and that they seriously go mad, if people fuck up, because they are afraid that the consequences for the company are severe. It can only work this way.

Re:Duh

[ObsessiveMathsFreak]

Of course not. Anyone with half a brain knows that private companies are utterly amoral entities beholden to no law or regulation beyond those they set themselves; Not even the profit motive--though this is most often their creed.

If you look at the problems seen in this spill, the financial crisis and elsewhere, you see that each and every single person involved in the poor and negligent decisions that were made acted in their own interests to the exclusion of all else. It's obvious why they did so; no-one was accountable for anything. And what happens when people can do whatever they want with no consequences?

Forget fines. Fines on large companies count as paperwork to them. No-one cares. Who's going to jail over this. Who will have to personally pay fines? That is the only type of punishment that people, human beings will understand. If the supervisors and managers of Deepwater Horizon knew that their jobs, pensions and freedom was on the line if anything happened at that plant, you can be certain that all measures would have been taken to ensure safety. Instead, punitive measures are passed on to the company in the form of (minor) bureaucratic fines, all while bonuses are paid out to employees for illegal/dangerous behaviour. Deepwater Horizon was one disaster amid millions waiting to happen under our current corporate system.

The problem is the corporate system, and the unnecessary and dangerous insulation it gives to individuals. Corporations and their actions are ultimately a result of the decisions and actions of individuals and those must be the people who are held to account, not some abstract entity. The science fiction cliché of mega-corporations who commit all kinds of outrageous crimes is not a fantasy so much as it is a logical extrapolation of what the corporate system will ultimately allow to happen; indeed, that is has allowed to happen.

This is of course the whole point of corporations. There whole purpose is to shield their owners and managers from liability, financial and otherwise, while enabling them to maximise profit. The net result is incompetent oil drilling safety measures with no contingencies in the Gulf, and bankers getting paid bonuses for every dollar of other people's money they shovel out the door. The only people who are surprised when things finally go belly up are those under some kind of ridiculous delusion that the people who run corporations are "good, reasonable, upstanding businessmen". The notion of the corporate suit as anything other than a pantomime villain is rapidly becoming obsolete.

Re:Duh

[QRDeNameland]

Oh, like this.

First of all, the sections of pipe are joined mechanically, and sealed with O-rings. The O-rings are specified for shallow water pressures (and temperatures), and rather than use adequate deep water parts, the shallow water parts were continued to avoid mandatory Federal oversight and testing.

On top of that, deadlines for completion were already tight, as no schedule variability was provided for unforeseen events, such as severe weather, that might hamper drilling and well conversion efforts. The conversion from an exploratory/research structure into a production well was a hard deadline, and pressure was on internally from the otherwise stagnant middle managers clamoring for achievement. There was no room for failure with a project named Deepwater Horizon.

As engineers' warnings flowed up the chain of command, the wording changed from "grave concern" to "concern" to "noted comment" to eventually "thumbs up!". Inter-hierarchical presentations followed a strict time schedule, so power point mentality and "no bad news up" reigned.

/satire

That reminds me of this old classic:

In the beginning was the Plan.

And then came the Assumptions.

And the Assumptions were without form.

And the Plan was without substance.

And darkness was upon the face of the workers.

And they spoke among themselves, saying, "It is a crock of shit, and it stinks."

And the workers went unto their Supervisors and said, "It is a pail of dung, and we can't live with the smell."

And the Supervisors went unto their Managers, saying "It is a container of excrement, and it is very strong, such that none may abide by it."

And the Managers went unto their Directors, saying "It is a vessel of fertilizer and none may abide its strength."

And the Directors spoke among themselves, saying to one another, "It contains that which aids plant growth, and it is very strong."

And the Directors went to the Vice Presidents, saying unto them, "It promotes growth, and it is very powerful."

And the Vice Presidents went to the President, saying unto him, "This new plan will actively promote the growth and vigor of the company with powerful effects."

And the President looked upon the Plan and saw that it was good.

And the Plan became Policy.

And that is how shit happens.

Re:Duh

[Peach Rings]

Well since BP's unconscionable business practices are being thoroughly exposed, you don't necessarily have to give them a second chance. There's a point where their organization is so flawed that it would be an unacceptable danger to have these people continue to drill when millions of lives can be affected. The best solution may be to dismantle BP's US operations entirely and let it serve as a warning to the rest.

Re:Duh

[fustakrakich]

Heh.. heh, you said O-rings.. Which reminds me of how the Challenger disaster went down, management dissing the grunts. I wonder what it would be like if we didn't repeat the same mistakes so damn often..

Re:Duh

[longhairedgnome]

Good, then they can move on to third-world countries where such control isn't in place, let impoverished foreigners suffer.

Re:Duh

[HiThere]

FWIW, I believe that under law the top level executives and the board of directors ARE personally liable. But somehow the prosecutors don't find those targets appealing, and they get to choose which cases they prosecute.

It doesn't *have* to be corruption. That's only one possibility. Personally, I think it is, but only if you give corruption a very wide interpretation. If a DA prosecutes someone powerful, whether they win or lose their career is probably over. Same for the Attorney Generals, but with a tougher criterion for powerful. And judges also, for whatever reason, tend to give favorable treatment beyond the bounds of law or reason to the more powerful.

They *laws* are fair (in the sense recognized by François Villon: simplified"The law forbids both the rich and the poor from sleeping under the bridge."), but the enforcement isn't even fair in that sense.

Re:Duh

[jbengt]

Good, then they can move on to third-world countries where such control isn't in place, let impoverished foreigners suffer.

Last I checked, corporations drilling for oil have to operate where the oil is.

Re:Duh

[Knuckles]

Like Nigeria. From that article,

In fact, more oil is spilled from the delta's network of terminals, pipes, pumping stations and oil platforms every year than has been lost in the Gulf of Mexico, the site of a major ecological catastrophe caused by oil that has poured from a leak triggered by the explosion that wrecked BP's Deepwater Horizon rig last month.

.

Re:Duh

[grcumb]

Does this really surprise anyone?

Yes, I am surprised. In one really important regard:

That NYT piece is an excellent piece of reporting. It gets to the facts - some of which are decidedly uncomfortable for both the government & BP and many of which required considerable research and effort - it ties everything nicely together and, without commentary, innuendo or logical fallacy, manages to paint a compelling picture of corporate and bureaucratic laxity.

Congratulations to Brown and Lehren for an excellent and important piece of work. This kind of journalism is exactly what we need.

Re:Duh

[Surt]

Nothing would ever get done. Food for thought. And thanks to all the corner cutting, BP can afford an environmental catastrophe of this magnitude.

Re:Duh

[theshowmecanuck]

I agree. If all countries had a 'buck stops here' type of law, with heavy jail time penalties, we wouldn't see shite like this happening. The CEO of BP should be thrown in jail for ten years without parole. Figure out a charge and make it stick. When CEO's see jail time for them as a option for bad or negligent behaviour by their company, new rules will go in to make sure bad or negligent behaviour doesn't happen. And if they do, and someone below the CEO is to blame (lies about a risk assessment for example), that person can take a vacation in the crow bar hotel. But the buck has to stop somewhere and ultimately the CEO should have to fall on his sword if they can't pin it anywhere else. After all they get huge bonuses for doing basically fuck all that others could do for a lot less. There should be another side to the job if they fuck up.

Re:Duh

[Klinky]

They can't go on to a third-world country if we sue them out of existence & charge their executives with negligence. Some time in prison would serve as a good warning for their idiocy. I doubt it'll happen to that effect, but the notion that we need BP to fuck-up our Gulf Coast because no one else can or that we need them to fuck-up our coastline so as to protect other nations, is retarded. If we really want to do something, then the executives responsible need to be punished & the company needs to be dismantled.

Re:Duh

[Klinky]

DEAREST BP EXECUTIVE,

I have a most profounded offer to you today! My brother who is a prince of high royalty has been imprisoned today due to unjustice in our country. Before he was unjustifiably taken away he left me a map of the deepest and largest oil reserves of this country. Seeing your current situation in the united states, I offer to you this map in a gesture of gratitude if you will help me free my brother who has the map in his cell hidden.

To bribe a guard we will need $10000 American USA dollars, please send me your account # so we may transfer this out, or if you prefer I may send you a money order that may be cashed and returned to me, so as you do not lose money.

Sincely,
Brother of Nigerian Prince

Re:Duh

[Peach Rings]

Why do you think the United States has the authority to dismantle BP's worldwide operations? It's not even an American-based corporation, the B stands for British.

Re:Duh

[Anonymous Coward]

What I would really like to see is the risk analysis report. How cautionary were the warnings of the engineers and how did the pencil pushers at the top translate this as an acceptable risk?
Typically this would be a HAZOP (HAzard and OPerability) study, performed by various engineers, project staff, and safety experts. I have participated in a number of these in the oil & gas world, and they constitute a very important part of the engineering process. They are also legal documents.

So I was pretty concerned to hear, from a senior management type at another large oil & gas company, how they handle HAZOP reports, after the engineers have finished. The next step is to pass it by the legal department, who go over it with a fine-tooth comb, looking for phrases that could imply liability via foreknowledge of problems (which they have no intention of fixing). The last paragraph of the summary is a classic for this type of thing:

"In April of this year, BP engineers concluded that the casing was 'unlikely to be a successful cement job,' according to a document, referring to how the casing would be sealed to prevent gases from escaping up the well. The document also says that the plan for casing the well is 'unable to fulfill M.M.S. regulations,' referring to the Minerals Management Service. A second version of the same document says 'It is possible to obtain a successful cement job' and 'It is possible to fulfill M.M.S. regulations.'"

Bear in mind that, although these statements will most likely be supported by the engineer's signatures (why do engineers sign off on changes like this christs sake?), the changes were made by non-technical staff, for non-technical reasons, without proper analysis as to the effect on safety. And that is how you screw an engineering job - pure unadulterated greed with little to no consequences. Drill baby drill, indeed.

Re:Duh

[Anonymous Coward]

And thanks to all the corner cutting, BP can afford an environmental catastrophe of this magnitude.

Maybe that's the problem in the first place...

Re:Duh

[GrumblyStuff]

Except that what they can afford is vastly different from they'll end up paying.

Re: Duh

[orgelspieler]

Actually, they changed "unlikely" to "possible." That is not nearly as dishonest. It's like the difference between "partly cloudy" and "partly sunny."

Re:Duh

[orgelspieler]

After the Texas City refinery disaster, not a lot of Houstonians are keen on giving BP any "second" chances. These asshats have a history of cutting corners and killing people. OSHA slapped them on the wrist last year. A record-breaking fine is just two days' profit for this company. Instead of "let the punishment fit the crime," it should be "let the punishment fit the wallet."

Re:Duh

[orgelspieler]

As somebody who has dealt with engineers and managers from Exxon, TransCanada, and ElPaso, I can tell you that most of these guys are legit hard-nosed engineers. They don't take any crap from any of their vendors, and if you want to stray from their SOP, you had damn well better have good data backing yourself up. Even then, their likely to tell you to go to hell. BP's strict, too, but not to the same level. Sometimes their contractors have to help them make improvements for safety and quality. Not everybody's an Enron.

Re:Duh

[rhakka]

don't worry. they will manage to find some mid-level patsy they can throw under the bus. he may do some time and probably finds himself well taken care of, somehow, when he gets out.

shit, drug dealers and gang members consider jail time part of the job. it is not difficult to expect that megacorporations with billions in profit at stake might have enough benefits available to coerce a few people to take a similar fall without ratting.

the question is... and I agree with you on the problem with the corporate system... even without it, could you ever really hold decision makers liable? or could they always find a "human shield" to take the blame in return for an appropriate level of compensation?

Re:Duh

[izomiac]

It really so bad of America to not impose such laws on other countries? If BP's offshore drilling causes a country's inhabitants to suffer, why would they allow it to happen in the first place? Chances are that the country's inhabitants will much prefer to be paid by BP for their 'suffering'. Perhaps it's imposing our values and views to even call it suffering at all...

I know, I know, impoverished people with a corrupt government that's willing to sacrifice the environment. It's really just apathy. The citizens don't overthrow the government that doesn't represent their will because they're happy enough as-is. The local environment gets destroyed because the locals don't care enough to protect it. Etc., etc., although notice that it's not our apathy that's the cause of any of that.

Are we not to allow international corporations to exploit other countries, but do so in a manner that doesn't infringe on that nation's autonomy? Must the king die?

Re:Duh

[tibit]

TSK, TSK, you haven't listened to their multi-million-dollar ad campaign. You *should* know that B stands for Beyond.

Obviously the U.S. should dismantle BP's U.S. operations as they relate to petroleum only. According to what their marketing would like us to believe, this should be an inconsequential part of a company that's green and progressive and beyond petroleum and all that. Right?

Riiight.

Re:Duh

[gknoy]

You note that as satite, but that's basically exactly what happened with the Challenger. The engineers had reliability reports and lots of testing data that showed launching in the cold was a Bad IDea... however, poorly constructed presentations didn't highlight THAT aspect of the data, and their warnings were generally misunderstood or ignored.

Re:Duh

[KDR_11k]

Offshore drilling can hurt countries who have no control over the oil well's location (it can be in another country's economic zone or completely in neutral waters) because oil can travel very far on water. I'm not sure how powers are divided up in the US but it seems states have fairly high autonomy and only a few states are affected by the current spill, if they tried overthrowing the federal government they'd have over 40 states standing against them. The power to overthrow still requires a vast majority to care, the people affected are too few to do that.

Re:Duh

[bsercombe72]

Actually, that NYT article is no better than most. Anyone who has had any experience with drilling opreations in the Gulf will know that loss of drilling fluids, kicks and other well control events are common, expected and routine. Dressing them up to be problems with the well design is pure horsepuckey. If you don't know what you're talking about then STFU. Even so-called "underground blowouts" are common and can be insured by lloyds. Furthermore the phrase 'casing was unlikely to be a successful cement job' makes no sense. The article is poorly written by people who do not have a grasp of oilfield equipment and procedures and obviously could not be bothered consulting with someone who was (familiar with them) in the rush to attempt to smear Pulitzer all over themselves. Now, this statement has nothing whatsoever to do with the actual issues which were: failure on BP and Transoceans part to identify excessive fluid flows following the cementation of the production liner AND failure (or so it seems from public information) to maintain the BOP- quite a difficult task given its located at the sea floor but any indication that it has problems should call for immediate halt and repair work. When drilling, your BOP is all that stands between you, catastrophe and death.

Re:Duh

[Klinky]

If we can't revoke their ability to operate directly, we should make sure they bare the full brunt of the economic and legal consequence their negligence brought. If you dumped barrels of oil into the ocean and one of them some how burst into flames killing 11 of your buddies and your only defense is "I didn't think it'd actually blowup" then I'd think you'd probably be going to jail and be facing massive fines. Just because BP is a corporation should not excuse them from this reality.

1. BP should experience high punitive damages for the deaths of the workers on the rig.
2. BP executives who made the decisions to cut corners, leading to the deaths of 11 works should all be charged with manslaughter.
3. BP should be held responsible for all clean-up costs.
4. BP should not be allowed to operate any new ventures in the USA and they should essentially be given a "get out of town" notice. Though that may not be needed as they might have to sell off all their assets & liquidate to pay for 1, 2 & 3.

What I do fear is that if criminal charges are brought forth, then those upper level executives are going to be playing a big game of "pine the tail on the scape-goat" and perhaps some of them will slip through, but at least it'll be good for some of them to be in the hot seat and some of them to get to spend time with Bubba.

Re:Duh

[Jedi Alec]

Not to mention the price for the *rest of us*.

Or is BP also going to keep every single business going tits-up thanks to their little effort afloat as long as it takes for things to go back to the situation pre-spill?

Re:Duh

[DeanOh]

The risk analysis summary was probably rendered poorly in PowerPoint. Now Edward Tufte can write another book.

Re:Duh

[AmonTheMetalhead]

BP might be able to afford it, however, we might not be able to afford it, this disaster will cause a lot of damage, from endangered species to loss in tourism, and BP won't have to pay a penny for the actual damage they caused

Re:Duh

[AmonTheMetalhead]

The people should be accountable, not some faceless company

Re:Duh

[Hognoxious]

Yeah, that worked so well with Exxon.

Re:Duh

[shiftless]

And on the bright side, at least we've learned that we know nothing about how to stop deep sea gushers. Hopefully this will lead to the develop of the necessary technology to do so.

Re:Duh

[AK Marc]

This is of course the whole point of corporations. There whole purpose is to shield their owners and managers from liability, financial and otherwise, while enabling them to maximise profit.

I know you are saying it to bash it, but in saying it, you are actually supporting it.

The purpose of corporations is to limit losses of the investors to no more than the amount invested. Every person making a decision in a corporation is personally responsible. The only reason they aren't held accountable is that they all get good lawyers, and when you have 10 guilty people in a room, they all point to the others, and there will never be proof beyond a reasonable doubt of who actually did what. Just charge them all with conspiracy and be done with it. But there's nothing in the formation of the corporation itself that protects any active owner or manager from liability. Only owners with no ability to guide daily functions have any shield from liability. Everyone else, including directors, is fair game. But the lawyers have worked hard at making convictions impractical. Look at Enron. It took all that pressure to get anyone interested in pursuing anything against anyone in that case, and even then the conviction rate was horrible.

Re:Duh

[AK Marc]

People on slasehdot especially have been very quick to decide to hang BP's CEO whereas you have no idea what he does when he's not in the media limelight for disaster.

He is the Chief Executive. He's criminally negligent because he approved drilling in the Gulf after having indicated they were ready for a spill when they didn't have access to the proper oil booms to midigate damage. Well, either that, or he's criminally negligent because he's a CEO with no actual oversight of his operations. It surprises me how the CEOs demand billions in compensation, then, when the shit hits the fan, they claim they've never heard of Deepwater Horizon or this "gulf" thing you keep talking about.

Does a CEO deserve to go to jail when unknowingly a single subordinate 4 levels below somehow manages to fuck things up to the point of worse oil disaster?

Yes. At the very minimum officials of BP spoke to Congress indicating the ability to contain such an accident. And they lied to Congress. Either the CEO didn't pay any attention to such things (And should go to jail for negligence) or they knew what was said and didn't verify the company's readiness (and should go to jail for negligence) or did check and knew there was a problem (and should go to jail for negligence and perjury) or was incapable of determining if they were actually ready for the spill (and thus should go to jail for negligence). They claim their massive responsibility is one reason they are paid billions. As such, make him earn it. His company killed people and did billions (maybe even trillions) of dollars of damage. Either he's responsible, or he's incompetent. And so far, every CEO I've ever seen go to court has claimed incompetence. Yet the cost of these CEOs isn't decreasing, even when every one of them swears under oath they that are incompetent. Personally, I'd say taking a job they are incompetent to do that has the ability for such destruction is criminally negligent.

Re:Duh

[couchslug]

Punishing the company doesn't punish the PEOPLE whose conduct caused the disaster. Put the malefactors in general population doing hard time, in the worst prison available. Louisiana should have a good selection...

The law should hold the guilty people liable, and carry large prison sentences for ecological and economic crime.

Re:Duh

[Peach Rings]

There likely aren't people who are responsible. It's probably just management under pressure from higher management to meet deadlines, and stupid policies crafted by committee politics. It's probably just people trying to do their jobs while being yelled at as little as possible, to go home at night and have money.

Liability caps

[Darkness404]

How does this come as a surprise since the government limits BP's liability to just a drop in the bucket for them? Yeah, they are thinking about retroactively removing it, but seriously, anytime you reduce the liability to an artificially low number, you are just asking for trouble.

Re:Liability caps

[Darkness404]

Yeah, but the nice thing about corporations is that unless government interferes, you can -choose- not to use them. If because of these fees BP has higher priced oil than say Exxon, people will flock to Exxon and ignore BP.

Of course due to governments creating artificial monopolies, kickbacks, bailouts and the like this doesn't happen for many businesses.

Re:Liability caps

[Lunoria]

If because of these fees BP has higher priced oil than say Exxon, people will flock to Exxon and ignore BP. Of course due to governments creating artificial monopolies, kickbacks, bailouts and the like this doesn't happen for many businesses.

More likely, Exxon will simply raise their prices to be the same as BP's.

Re:Liability caps

[Jeremy Erwin]

Any damages applied to them would simply be passed on to the consumers.

BP has competitors. If BP "passes on" the damages to consumers in the form of higher prices, those competitors can easily undercut BP's prices.

Re:Liability caps

[General Wesc]

More likely, Exxon will simply raise their prices to be the same as BP's.

Chevron, on the other hand...

Re:Liability caps

[bhtooefr]

Except oil is a fungible commodity, so BP oil being more expensive will affect the entire market.

Re:Liability caps

[Jeremy Erwin]

More profits for BP's competitors, then.

Re:Liability caps

[ultranova]

Any damages applied to them would simply be passed on to the consumers.

Bullshit. BP is already pricing its oil to whatever brings it most profits. It can't pass anything to consumer since rising prices would send consumers to competitors instead, leading to less profits for BP.

Re:Liability caps

[Anonymous Coward]

This is definitely what will happen. I used to work with the retail pricing team at Shell, and the prices at the pump are set almost entirely based on what the competitors in the local market are charging.... where 'local market' may be as specific as a single intersection with gas stations on 3 corners, and local prices being set and re-evaluated twice every day.

If BP has higher costs, and is therefore forced to charge (for example) 4 cents a litre more at a given location, then the other retailers that compete in that location will simply bump up their prices by 3.9 cents a litre... with the 0.1 cents being enough of a difference to swing more than a few customers.

So not only will customers end up paying for BP's fines... but we'll also end up paying for increased margins at all of BP's competitors.

Re:Liability caps

[RyuuzakiTetsuya]

blahblahblah. More Libertarian nonsense.

When I'm out of town and don't know the area, and my car nearly dies running out of gas, I really don't have a choice about what the next gas station is. Whether BP, Citgo, 76, Gulf, etc.

Speaking oil and monopolies, yes, Standard Oil became a monopoly with out the Government's interference. So did many other monopolies.

Re:Liability caps

[squiggleslash]

Kinda sorta. Unless they team up with Exxon, Shell, and the numerous other giant oil companies, it'll be difficult for them to charge anything beyond a market price for gasoline. The fact BP needs to charge more will have a slight impact on consumer prices, but it's unlikely to have a significant effect.

(And even if they made an illegal cartel agreement with the other oil companies, the other oil companies would make huge amounts of money on the higher prices, while BP would break even - they'd be given an enormous advantage over BP in the longer term.)

The more likely result of this is BP losing an enormous amount of business and possibly entering a death spiral. Dying or not, the shareholders will collectively lose tens of billions of dollars. Once dead, the other oil companies will fill the gap, taking over the existing production business.

And good riddance.

Re:Liability caps

[shutdown -p now]

We have anti-monopoly laws and investigators to deal with these kinds of things.

Re:Liability caps

[feepness]

Any damages applied to them would simply be passed on to the consumers.

Not a problem in my book. The consumers create the demand for the oil in the first place.

Re:Liability caps

[QuantumRiff]

Chevron is just as much in Collusion as Exxon and BP. Have you noticed how much gas has dropped in the last 2 weeks? right before the big 3 day weekend, when more drivers were supposed to hit the road than in the last few years? If I was a smart better, I would think, that because Demand is going up, and supply is going down, (a few million gallons are sitting in the ocean, instead of at the refinery) price SHOULD go up.

However, price has dropped 30Cents/gallon here in the last 2 weeks or so. As the oil companies are getting lots of flak. Almost like they are trying very hard to make us happy, so we won't push congress to get to nasty to them.

Re:Liability caps

[teg]

Any damages applied to them would simply be passed on to the consumers.

That's only true if you are a monopolist, and there are no substitutes for your product. BP by itself can't e.g. raise gas prices, because of the competition - so any fines will have to be out of their profits or capital.

Re:Liability caps

[obarthelemy]

the idea is not to wait until you're almost running out of gas to check local prices and shop smart.

you don't HAVE to, though.

Re:Liability caps

[obarthelemy]

maybe we should give them money then ? 'coz if taking money from them help them, then giving them money must hurt ? either that, or you're a moron ?

Re:Liability caps

[MasterPatricko]

Bullshit. BP is already pricing its oil to whatever brings it most profits. It can't pass anything to consumer since rising prices would send consumers to competitors instead, leading to less profits for BP.

Bullshit.

The gasoline retail industry is notorious for having a pricing strategy of "the maximum the consumer can withstand". As soon as BP raises prices (which they won't have to, that's not where they make their money anyway) the neighbouring stations would raise their prices too.

In any case BP, Exxon, Chevron etc. don't make their profits at the pump. They run refineries, they supply fuel direct to major consumers like airlines, they sell raw crude on the commodities market. What average Joe pays at the station is not their cash cow - any small fluctuations in price benefit the individual station owners, not the big mega-corp.

Re:Liability caps

[uncqual]

Why just the CEOs?

If the CEO didn't know about the individual decisions that led to the problem (which, in the GoM situation, is likely) surely they are no more criminally culpable than the persons who reviewed them or those who made them. So, folks lower down in the chain should, at a minimum, get punished at least as severely.

For example, if a software programmer's bug or bad design contributed to the disaster (in the GoM situation, that's probably not the case), they should do hard time as well. More to the point, if a rig worker did something wrong (esp. if they failed to report it) which contributed to the disaster, shouldn't she be doing jail time as well?

Of course, in the United States, one has to find a pre-existing law and prove beyond reasonable doubt that the defendant(s) violated it -- we're kinda funny about that in the United States. So far I've not even heard a single claim of what law, for example, Tony Hayward has violated (being a slimy weasel is not, specifically, a crime -- at least in the U.S.).

Re:Liability caps

[MasterPatricko]

Kinda sorta. Unless they team up with Exxon, Shell, and the numerous other giant oil companies, it'll be difficult for them to charge anything beyond a market price for gasoline. The fact BP needs to charge more will have a slight impact on consumer prices, but it's unlikely to have a significant effect.

(And even if they made an illegal cartel agreement with the other oil companies, the other oil companies would make huge amounts of money on the higher prices, while BP would break even - they'd be given an enormous advantage over BP in the longer term.)

The more likely result of this is BP losing an enormous amount of business and possibly entering a death spiral. Dying or not, the shareholders will collectively lose tens of billions of dollars. Once dead, the other oil companies will fill the gap, taking over the existing production business.

And good riddance.

Why does anyone who has heard of "supply/demand" think anything in the real world works that way? BP has enough cash to power America's cars simply by burning notes, but anyway what gives you the idea that BP makes money from tiny street-corner gas stations? BP sells in bulk, they run refineries, they trade billions of dollars a day on the commodities markets. The only people affected by small changes in gas station prices are the individual gas station owners.

And anyway do you have any idea how much money BP makes? $45 million dollars profit A DAY last I checked. They could pay everyone in the Gulf enough money to retire and still make a profit on the year. The amount they have had to spend, and will eventually have to spend paying off all those affected, is literally nothing to them.

BP dying, hah. It has a larger turnover than most countries. If things got REALLY bad, they would just shut down one of their refineries for "maintenance" till the oil price rose enough to sustain them anyway.

Re:Liability caps

[fermion]

Oil is a commodity and commodities are the freest market in the world, largely devoid of government control. Their costs tend to based on what the market will bear, not what the government mandates. For instance ADM was able to fix prices on food commodities, charging what the market would bear. The majority of these costs were passed on to consumers. It was only when the US government came in and killed the free market that the price fixing ceased and prices fell, not because consumers demanded it.

Oil is a much more transparent market that food commodities, but it still charges what the market will bear. For instance, prices right now are around $70 and that is a magical number, a number that has little to do with what the product is worth. In Saudi Arabia, for example, I have heard it costs much less than $10 a barrel for exploration, drilling, transport, administration, everything. That could be $20, but the point is that it is the lowest int he world.

Oil is a commodity, it costs the same no matter where it comes from, pretty much. A refinery is going to buy oil from whoever it needs to. The US only has 1-3% of the worlds reserves, so US refinaries are going to buy from whomever. The fact that it cost 5X as much to produce oil in the gulf is not going to raise the oil to $350 a barrel.

And here is the problem. Gulf oil producers have to compete with essentially free. This means that they are going to always be corners cut and safety compromised. If oil were $150 a barrel and we paid $4.50 a gallon at the pump, then life would be different. But offshore oil rigs are competing with free. Half the oil reserves are likely on easily drilled land based properties, just waited to be drilled for $20 a barrels or so. The rest of us have to compete with it. We are either going to live with the risk, or change our outlook.

The US produces at most 2% of the worlds oil, we don' have to. It would make many people poor if we don't, it would make me poor, so I hope we don't, but this crocodile tears outrage, and blaming the government, it pathetic. Energy is running in a free market. The only government control is Saudi Arabia trying to keep prices low enough so developing alternatives are not cost effective. The only thing that the US government could do is subsidize shale oil so it is cost effective at $70 a barrel instead of $100, cut drilling in sensitive locations, pull out of the middle east and develop peaceful ties with central and south america, and promote efficiency and short and long term alternatives to crude oil. Otherwise they can leave the free market alone and cry with the citizens when something goes wrong.

Re:Liability caps

[osu-neko]

We have anti-monopoly laws and investigators to deal with these kinds of things.

Hehe!

Oh dear, you were being sarcastic, right?

Re:Liability caps

[osu-neko]

the idea is not to wait until you're almost running out of gas to check local prices and shop smart.

you don't HAVE to, though.

Depends on where you are. Some parts of the country, you leave one town with a full tank and at less than half by the time you hit the next town. You fill up at whatever station is there, you really have no choice, because the alternative is to run out in the middle of the desert before you hit the next town.

Re:Liability caps

[osu-neko]

Depends. How much oil does BP produce vs. their competitors? If it's a large enough percentage, they can raise their rates and count on the fact that everyone will just buy from someone else, because if demand is large enough, people will be forced to buy from them when their competitors simply don't have enough oil to sell to meet demand. The larger a company is, the less this ideal market idea of yours works. Sufficiently large corporations with a significantly large portion of the market can raise prices and count on the fact that their competitors can't fulfill the demand without them.

Re:Liability caps

[osu-neko]

s/count on the fact that everyone will just buy from someone else/count on the fact that not everyone will just buy from someone else/

Long story short -- if your percentage of the market is large enough that, absent you, other people cannot meet the demand, you can dictate prices on the market, whether you have a monopoly or not. As soon as all your competitors stock is bought up, everyone else will come to you, and your competitors will raise their prices to deal with the demand larger than they can accommodate without you.

Re:Liability caps

[dotgain]

Only if we were deliberately choosing to buy oil from people we knew were operating in a way as to be dangerous.

I won't speak for you, but I'd suggest a month ago most people had no idea there was the potential for such a thing to happen and go so long without being fixed. BP Management, however, did. If they had have come out and told me then - fine - they didn't, so they get to carry the can by themselves.

Re:Liability caps

[phoenix321]

Doesn't matter - Exxon will rake in the cash then while BP pays all out for the settlements and punitive damages. And next time, Exxon and BP *will* remember.

Doing nothing will not work, so you either dissolve BP altogether, put the Execs in prison - or you institute fines on them so huge they make the annual deficit of the Fed look like bird droppings.

Re:Liability caps

[coredog64]

True. It probably has nothing to do with the HUGE decrease in aggregate demand and absolutely nothing to do with large drop in the price of a barrel of oil ($85/bbl @ the end of April, under $75/bbl today, and has even been down around $70).

Re:Liability caps

[binarylarry]

You must be new here!

Re:Liability caps

[adolf]

Slice it, dice it, and spin it any way you want, but: When it's all said and done, every bloody red penny spent to correct the Deepwater Horizon snafu will have been paid by The People.

Re:Liability caps

[Elektroschock]

Most parts of the US are not affected by the oil spill.

Re:Liability caps

[coredog64]

What color is the sky on your planet? BP is subject to the federal Oil Pollution Act, which has an infinite limit for cleanup damages: http://frwebgate.access.gpo.gov/cgi-bin/usc.cgi?ACTION=RETRIEVE&FILE=$$xa$$busc33.wais&start=4683182&SIZE=13816&TYPE=TEXT What is limited by the OPA is Federal claims: The $75M is the easy money where plaintiffs don't have to prove that BP was careless or negligent in order to collect their money. The OPA DOES NOT preempt state laws, where there is no limit to what BP will have to pay. The only bar for plaintiffs in state court is that they have to prove that BP was careless or negligent.

Re:Liability caps

[fustakrakich]

Main street economics do not apply to wall street. As one who has money invested in BP, Chevron, Exxon, Shell, various Russian, and Chinese oil companies, I would be totally unaware of any "competition" amongst any of them. And if, as a BP executive, if I see the value of my "competition" increase, the first I will do is to invest, as opposed to undercut. Just like the smart campaign "contributors" invest in both parties. That way the prices stay up, and I make more money.

Re:Liability caps

[Man On Pink Corner]

More Libertarian nonsense. When I'm out of town and don't know the area, and my car nearly dies running out of gas, I really don't have a choice about what the next gas station is.

Um...

Never mind, I just don't know what to say.

Re:Liability caps

[shutdown -p now]

No, I weren't. Then again, I don't live in US. If it seems sarcastic to you, then maybe you should start by fixing your government.

Re:Liability caps

[fustakrakich]

Standard Oil became a monopoly with out the Government's interference.

On the contrary, there was much government interference, against their competitors. It was/is government protection that enabled the monopoly.

Re:Liability caps

[noidentity]

Liability caps, haha. I wonder how BP would respond if the government had trouble capping liability, and it just kept increasing uncontrollably...

Re:Liability caps

[KDR_11k]

The point is that if increasing the price would actually increase profits why the hell haven't they increased prices before the spill happened? There's no reason for them to run on sub-optimal pricing until a fine comes along.

Re:Liability caps

[O('_')O_Bush]

Maybe it's because I'm on the east coast, but it's rare to be in a town without more than 1 gas station option.

Re:Liability caps

[KDR_11k]

And the commodities market is less forgiving of price differences. If BP would have to sell the barrel for 10% more then the buyers will prefer buying from other sellers.

So what if they make 45M/d? Make the fine appropriately sized, like 250 billion dollars. That'd be a massive dent in their bottom line and shareholders have panicked over smaller things.

Re:Liability caps

[hardburn]

How does monopoly law apply? BP isn't the only oil company, and isn't even the biggest, or even second biggest.

I can buy an argument of collusion between oil companies, but that's not quite the same thing as a monopoly.

Re:Liability caps

[shutdown -p now]

Yeah, I should have said "anti-trust laws", but it's still the same bunch of them.

Re:Liability caps

[JimPenn]

I really don't have a choice about what the next gas station is. Whether BP, Citgo, 76, Gulf, etc.

In addition to that, it's silly to talk about oil production in terms of domestic vs. foreign. The market for crude oil is global, not local. If B.P. goes tits-up the price per barrel of oil is affected everywhere not - just in Britain or the US.

Boycotting individual oil companies is nearly meaningless. Instead we as a culture need to reduce our reliance on petroleum itself to levels compatible with our conscious and climate.

Re:Liability caps

[ultranova]

The gasoline retail industry is notorious for having a pricing strategy of "the maximum the consumer can withstand".

Yes. That's what I said. BP will extract every last burnt wooden penny it can from the customer/victim, as does every other business.

As soon as BP raises prices (which they won't have to, that's not where they make their money anyway) the neighbouring stations would raise their prices too.

So why haven't they done it already and raked in higher profit margins?

In any case BP, Exxon, Chevron etc. don't make their profits at the pump. They run refineries, they supply fuel direct to major consumers like airlines, they sell raw crude on the commodities market. What average Joe pays at the station is not their cash cow - any small fluctuations in price benefit the individual station owners, not the big mega-corp.

That's nice. Now where does the money ultimately come from? From Joe Average at the the pump.

Re:Liability caps

[roman_mir]

Oil is a commodity and commodities are the freest market in the world, largely devoid of government control. Their costs tend to based on what the market will bear, not what the government mandates.

- pure nonsense. Look at BP, previously known as Anglo Persian Oil company, or the guys who pumped oil in Iran before the fifties and then, when the Shah was removed and a democratic government came to power, this company went crying to Governments of UK and US and those governments killed democracy in Iran and helped the oil company to get a more favorable contract.

If that is not government 'control' or help, then what the hell is?

--

Nixon set price controls on food and where did this lead? It lead to food manufacturers making sure that the government provides strong subsidies to the farmers to grow corn and soy and wheat (and cotton, whatever) and this destroyed the health of first Americans and second of citizens of many other countries because in order to keep with the inflation, instead of setting the food prices at market rates, the companies had to concentrate on cutting costs only and this lead to the health disaster that is provided by fructose.

Re:Liability caps

[RyuuzakiTetsuya]

Sirius-XM.

Name any other satellite radio provider that sells on a national level.

Yes, 1worldspace exists in Eastern Asia, but, in America? Sirius XM is the only game in town; simply due to the costs of getting into the market.

Re:Liability caps

[roman_mir]

the Radio business? This is tightly regulated and controlled by FCC, which is a government agency if I am not mistaken. However I find it difficult to see how this is a monopoly with all the alternatives including the Internet radio, FM/AM etc. In its own niche it could as well be a monopoly but that does not make it an industry monopoly. It competes with different types of media as well as with the Internet radio, cable etc. A monopoly in a particular segment can arise and hold IF it is as efficient as possible and nobody can undercut it. Once the prices rise, it will be undercut by a competitor.

Re:Liability caps

[Skuld-Chan]

I don't know about you but the only gas station in my town that isn't owned by the same distribution company the rest of them are serviced by is the one run by Walmart. Every wonder why the gasoline prices are pretty much the same for every single station in any given locale?

Chances are if BP did want to pass the savings on to their customers (which there is every indication they will) all the other prices will be affected too.

Re:Liability caps

[RyuuzakiTetsuya]

I find it highly ironic that many libertarians decry consumerism but when pressed about problems that largely have been seen by the mainstream as being solved by regulation, Libertarians start suggesting that you plan your life around your life as a consumer.

Re:Liability caps

[uncqual]

Things work: Board of Directors get reelected without controversy and reap director fees and other perks.
Something fails: Board of Directors scapegoats CEO and appoints a new one.

Things work: Investors reelect BOD and reap stock appreciation from continued success.
Something fails: Investors elect new BOD members and reap stock appreciation from depressed levels of when things were failing.

It works all the way up and down. The directors collectively are as responsible as the CEO is. Since investors are responsible for electing the BOD, arguably even they are as responsible (although, the investors have no operational control so the buck probably should stop below them even though they are at the top of the hierarchy).

Re:Liability caps

[Surt]

The real bummer is being in that first town with no internet access, so that you weren't able to plan your fuel purchase. Towns with no internet suck!

Re:Liability caps

[HBoar]

It's not uncommon for petrol companies to lower prices before holidays..... In fact, it happens before pretty much every big holiday in NZ.

Re:Liability caps

[tumnasgt]

Actually, unless BP pay up for all the costs they have incurred, (including Government time) ALL of the US will be affected, by having their tax money spent on it

Re:Liability caps

[shadowbearer]

Standard Oil became a monopoly with out the Government's collusion.

  Only slightly inaccurate. Pardon my subtle sarcasm.

SB

Re:Liability caps

[dryeo]

Around here (BC) the oil companies always go on about how price decreases have to work their way through the pipeline, which they say takes months. And sure enough prices have been steady for months including the May 24th long weekend.
Of course when the price goes up it shows up at the pumps that day and all the oil companies always charge the same.

Re:Liability caps

[shadowbearer]

Oil is a commodity and commodities are the freest market in the world, largely devoid of government control. Their costs tend to based on what the market will bear, not what the government mandates.

  *cough* Alcohol, cigarettes, pharmaceuticals, opium, intellectual property... oh, wait, nevermind.

SB

 

Re:Liability caps

[dryeo]

You're lucky, here in Canada (BC) they usually jack up the prices for long weekends and any other reason they can.

Re:Liability caps

[maxume]

If you are driving 500 miles or more in a day, your time is probably costing you more than 20% in excess fuel prices (and that much excess seems sort of unlikely to me).

I certainly pay attention to the various fuel prices I see, but I don't go out of my way to save $2.50 if I forget to buy cheap when it is convenient.

Re:Liability caps

[bignose55]

Are you saying that as long as supplier is providing what a consumer desires, the supplier has no liability? No culpability? If that is the case, then absolutely anything goes...

Re:Liability caps

[LurkerXXX]

It normally raises before big driving holidays in the U.S..

Re:Liability caps

[jo42]

Really? In Canada they jack up the prices before long weekends and holidays.

Re:Liability caps

[nanoakron]

>>Oil is a commodity and commodities are the freest market in the world, largely devoid of government control.

Ever heard of OPEC, or are you being wilfully ignorant of the true geopolitics behind oil?

Re:Liability caps

[Fieryphoenix]

By definition, when prices are fixed, the market is not free. The government didn't destroy the market, it freed it. Don't buy the double-speak of laissez-faire advocates. The "free" in free market refers to freedom from distortions and hinderances on the workings of supply and demand, not free from government regulation.

Re:Liability caps

[feepness]

Are you saying that as long as supplier is providing what a consumer desires, the supplier has no liability? No culpability? If that is the case, then absolutely anything goes...

No, no I'm not saying that at all. But the more expensive gas is, the faster we stop using it.

Re:Liability caps

[GrumblyStuff]

Then, perhaps, caps as per this thread. Cap their wages, whomever is at fault, rather than just skimming a static amount or percent. Or in the case of a corporation, cap profits.

It's, what, day 40 of the leak? 25,000 barrels a day * $4,300 a barrel * 40 days of leaking = $4.3 billion.

Considering that they made over that in the last three months I'd say that much is a decent start to making them feel something for this god damn mess.

Re:Liability caps

[budgenator]

Pump prices normally go up on Thursday and down on Tuesday, in Michigan USA, they go up a little extra for most 3 day weekends and a little more for the 3 day memorial weekend. The economic chaos in Europe has dampened demand lately so our pump prices are slowly lowering and the usual weekend increases are much less or not happening.

Re:Liability caps

[Jeremy Erwin]

From your link:

The environmental group Sierra Club estimates that the April 20 explosion at Deepwater Horizon has released more than 1,444,952 barrels into the Gulf as of midday Wednesday. By that estimate, BP would owe more than $6.2 trillion in fines so far if the federal government imposes a $4,300 penalty per barrel.

That's a bit of a stretch.

Re:Liability caps

[budgenator]

More to the point, if a rig worker did something wrong (esp. if they failed to report it) which contributed to the disaster, shouldn't she be doing jail time as well?

Of course, in the United States, one has to find a pre-existing law and prove beyond reasonable doubt that the defendant(s) violated it -- we're kinda funny about that in the United States.

At least one of the people partially responsible for the accident is dead. As for others I'd think if reckless endangerment may fit.

Re:Liability caps

[GrumblyStuff]

Yet that's only a bit over 36k barrels a day which is high but nowhere near the top of the range of estimates that I've seen.

Also, FoxNews sucks. I don't know why I linked them but they fucked up and said trillions instead of billions. That's only three magnitudes off....

Re:Liability caps

[thegarbz]

Oil != Gasoline.

Oil is a commodity traded on the open market at a price that people will pay for it. Also all crude oils are not the same. The gulf of mexico mainly supplies sour crudes which are traded far more cheaply than the west Texas intermediate crudes (the price quoted in the news). Yet some refineries are especially kitted out to process sour crudes, and some only process sweet crudes. As such a price rise by BP for oil from the Gulf of Mexico will ultimately still lead to it being sold in the open market. Thus the market price will rise slightly. In several key places around the world (depending on the local economics and refining capacity) the refineries of ALL companies running this type of crude will have to absorb these costs. This leads to a higher cost of gasoline coming out of the refineries. Local economics will then lead to the costs ultimately being passed on to consumers who have to gasoline from these refineries.

The free market approach of competition breaks down due to barriers caused by different crudes, different refining capacities, geographical locations, cost of transport of goods, and the general convoluted screwyness of how oil and petrol are traded on the open market. If your competition idea worked flawlessly with none of these barriers there wouldn't be any refineries in Australia for instance because all the refining capacity here is less than 1/5th of one of the reliance petroleum refineries in India who can produce stuff far cheaper. Fortunately they can't run much sour crude.

Re:Liability caps

[Hognoxious]

BP by itself can't e.g. raise gas prices, because of the competition

Does the competition have enough capacity to supply all the demand themselves? I suspect not. IIRC refining is a particular bottleneck.

Re:Liability caps

[teg]

Does the competition have enough capacity to supply all the demand themselves? I suspect not. IIRC refining is a particular bottleneck.

Are there bottlenecks? Certainly. But the price isn't set by BP as such, they sell their product for the most they can get for it already. They are not a charity, if they could increase the price per liter with 10 cents, they would do so. Company specific fines and costs don't change that.

Re:Liability caps

[TheRaven64]

He didn't say just the CEOs, he just said that was a place to start. The only defence for the CEO should be that they had procedures in place for avoiding this and that people further down the chain were intentionally violating these procedures and falsifying reports. Wilful ignorance should not be an excuse, but being ignorant after an effort not to be should at least count as a mitigating factor. Everyone down the chain should have the same metric applied.

BP is not to blame for this. BP is an abstract entity and is not capable of making decisions. People are to blame, both individually and collectively. Allowing them to hide behind a corporate shield only encourages others to do the same.

Re:Liability caps

[drinkypoo]

When I'm out of town and don't know the area, and my car nearly dies running out of gas, I really don't have a choice about what the next gas station is. Whether BP, Citgo, 76, Gulf, etc.

This is slashdot, and you're complaining about being stuck with low fuel and being forced to go to a particular gas station? If you haven't accessorized your car with a homebuilt GPS that tells you where all your favorite-brand gas stations are and warns you if you have too little fuel to make the next one, you need to turn in your geek card.

Speaking oil and monopolies, yes, Standard Oil became a monopoly with out the Government's interference. So did many other monopolies.

I disagree. Every time you see a true monopoly there has been government collusion, even if it is limited only to failing to prosecute prosecutable offenses.

Re:Liability caps

[V for Vendetta]

Personal fines or jail for board members on the other hand....

Personal fines? Part of upper management contracts are clauses which regulate that the fines are paid by the companies.

Re:Liability caps

[Hognoxious]

Happened to me out in the boonies, lessa than 1/8th of a tank as I arrived at the sole gas station just as they were closing. Luckily they were nice folks and were happy to hang on for five minutes, or I'd have been sleeping in the van till next morning. They even let me have a free coffee too - the man said they were just about to throw it away.

Re:Liability caps

[pz]

We have anti-monopoly laws and investigators to deal with these kinds of things.

Hehe!

Oh dear, you were being sarcastic, right?

No, actually, the anti-monopoly laws were created to deal with Standard Oil and the robber-barons of the late 1890s. That's right kids, the Sherman Anti-Trust Act (use Google and/or Wikipedia) was specifically targeted at the then-near-total monopoly of an oil company. The Act hasn't been used many times, but it is an exceedingly heavy and powerful hammer that allows the US Government to forcibly dismantle even the very largest corporations.

Re:Liability caps

[Hognoxious]

this company went crying to Governments of UK and US and those governments killed democracy in Iran and helped the oil company to get a more favorable contract.

If that is not government 'control' or help, then what the hell is?

It's ancient history, that's what.

Most of us here weren't even born half a century ago when the events you're describing occurred.

Re:Liability caps

[Khyber]

"However, price has dropped 30Cents/gallon here in the last 2 weeks or so."

Where's 'here?' because the price of gas in California hasn't dropped a damned dime that I've seen. I hit the gas pump every other day.

Re:Liability caps

[RyuuzakiTetsuya]

But Satellite radio isn't. Market regulation also isn't the same as wholly propping up a firm as a monopoly. It's ensuring that say, Rupert Murdoch doesn't wind up interfering with my wifi or bluetooth connections because he wants to beam down BBC Radio 2

Re:Liability caps

[demonlapin]

Troll? really? srsly, metamods, smackdown.

Re:Liability caps

[Elektroschock]

Government spending is not lost, large parts of the US budget are borrowed.

Re:Liability caps

[NateTech]

Oh for fuck's sake... ever hear of Contango or even the words "high inventory levels"? Grow up. The U.S. refineries are fully-supplied with crude. The temporary shutdown of the Alaska pipeline for a contained spill last week was more problematic for the logistics folks than this... because none of this oil had ever made it to market nor was there a daily pumping rate to meet from this well.

Re:Liability caps

[NateTech]

Feel free to share which stellar government you live under so we can use it as an example there, sport.

Re:Liability caps

[nanoflower]

Is there any surprise the CEOs do this? After all they have the best example of people taking credit for anything that goes right while blaming anything that goes wrong on someone else. That's in politics. It's what the guy in power will always do whether it's Congress or PoTUS or your local mayor. There isn't anything that can be done about it so long as the populace allow (or even encourage it.) After in politics it's great to blame anything that wrong on the other guy whether you are a politician or you are a supporter of the politician or party. If we changed that philosophy in politics (yeah.. let's change human nature) then we would probably see it start to change with corporations. However we all know that's not going to happen.

Re:Liability caps

[RyuuzakiTetsuya]

You do know that Standard Oil was broken up in 1911 and the Teapot Dome Scandal didn't involve any of it's broken up parts and that Teapot Dome didn't exist as an oil reserve until 1921?

Why do Libertarians hate history? Is it because it's their greatest enemy or because they have some contempt for anything that shows that Libertarianism doesn't work and we moved away from it for a reason?

Re:Liability caps

[fustakrakich]

I use Standard Oil as the generic, like Kleenex.. But the fact is monopolies cannot survive on their own. They need an irresistible force of exclusive "rights" to prop them up.. The government is supposed to protect the competitors, but it does exactly the opposite, using things like "property rights", subsidies, tax breaks (to the point where some pay no tax), etc.

I most definitely believe that basic infrastructure is a government job. That's where society's pooled resources (taxes) are supposed to go..

Standard Oil was broken up in 1911...

Not really... "different board of directors? Bah! The stock holders didn't change. Collusion amongst the sisters never went away... It was just hidden a little deeper in the paperwork. Enough cross ownership is still allowed assured that it would be business as usual.. It, like BP (whose assets should have been seized a long time ago) remains as unaccountable as ever, as ExxonMobil.

A whole lot of regs would be completely unnecessary if the government did its job and kept everybody honest. No monopoly could ever survive real transparency.. And more than anything, exclusivity and secrecy are the real problem.. When I say I want an open market, I do mean open.. The so called libertarians just want to keep the shell game running. Don't mistake me for a bunch of rednecks who want to bring back domestic slave trading.

Re:Liability caps

[shutdown -p now]

Yeah, well, I guess I can't complain - as they say, Slashdot is a US-centric website...

Re:Liability caps

[couchslug]

They may all fill up from the same trucks. Keep an eye out for generic fuel haulers like APC and you'll see what I mean.

I have to wonder what goes on inside BP

[Improv]

Did they not honestly believe that a disaster could occur? Did the right people not talk to each other? Or was the urge to cut corners simply so great that people ignored the risk?

From the ABC interview with one of the survivors, the BP people were arguing with the Transocean people, insisting that it would be ok to skip some phases of sealing the well because they wanted to move the schedule up. I wonder what that BP manager was thinking.

Re:I have to wonder what goes on inside BP

[foobsr]

I wonder what that BP manager was thinking.

Beyond Petroleum, of course of $$$.

CC.

Re:I have to wonder what goes on inside BP

[AnonymousClown]

Did they not honestly believe that a disaster could occur? Did the right people not talk to each other? Or was the urge to cut corners simply so great that people ignored the risk?

From the ABC interview with one of the survivors, the BP people were arguing with the Transocean people, insisting that it would be ok to skip some phases of sealing the well because they wanted to move the schedule up. I wonder what that BP manager was thinking.

If BP is like every other big monster multinational corporation, there were multiple departments or divisions arguing with each other and with the contractors. As far as they were concerned, they knew what was the thing to do and everyone else was a bunch of stuffed shirts and the contractors were morons.

As far as the contractors were concerned, the BP guys were big corporate paper pushing morons that if they knew anything, would be working with the contractors.

The 'BP' in the above statement can be searched and replaced with any big corporation and their outsource "partners".

Don't confuse malice with corporate bureaucracy, internal fighting, politics, and the arrogance of people in the field and in the offices.

Now, this being the typical corporate fuck up, everyone will be pointing fingers at the others stating "We told them so!" but the were: too stupid, political, arrogant, or didn't listen and therefore the disaster happened. If only they listened to us.

The CEO will still get his hundred million dollar paycheck but the peons are probably gonna be axed without much compensation. It's good to be king - CEO.

Re:I have to wonder what goes on inside BP

[Improv]

I wouldn't suggest any malice was involved. The manager who was arguing for the schedule to be pushed up was, as far as I know, one of those killed in the initial explosion.

I guess my original "questions" were full of hyperbole - it's just a shame when people cut corners in industry like this.

Re:I have to wonder what goes on inside BP

[bmo]

Don't confuse malice with corporate bureaucracy,

Any sufficiently advanced incompetence is indistinguishable from malice.

Now, this being the typical corporate fuck up, everyone will be pointing fingers at the others stating "We told them so!" but the were: too stupid, political, arrogant, or didn't listen and therefore the disaster happened. If only they listened to us.

Then we need to start plugging the well with BP executives. From what we've all seen, they are largely worthless and incapable of making the decisions for which they supposedly earn their astronomical rock-star pay.

And then we need to regulate their sorry asses. Incapable of doing the right thing? You've earned onerous regulation. BP was arguing in front of the Canadian parliament that they don't need to drill relief wells in the same season as the production wells *after* this disaster started. They are obviously fucking nuts and need to be *told* what to do - with teeth. There needs to be fines targeting not just the company but the executives themselves. Jail time would be nice too, but then the only people who really serve jail time are those who are poor or of color, so that appears to be asking for too much.

Stop excusing BP.

--
BMO

Re:I have to wonder what goes on inside BP

[wooferhound]

and What about the other Oil Companies, don't you think they are cutting all the same corners and their well aren't any safer ?

Re:I have to wonder what goes on inside BP

[thetoadwarrior]

They know people are like junkies and don't care as long as they can get cheap oil. In fact it wouldn't surprise me if there were a huge number of people that would suck dick like a crack whore for some free gas / oil.

They have us by the balls and there simply aren't enough people willing to do anything that would threaten possibly raise the price of gas. How many people hold the Exxon-Valdez incident against ExxonMobile despite the fact the area is still screwed up?

If you knew people will pretty much forget about this completely possibly as soon as a year you'd cut corners too so it's no surprise this mirrors an incident that happened in 1979. http://www.youtube.com/watch?v=GHmhxpQEGPo

Whether or not oil will run out there are many reasons why we need to cut our dependence on oil.

Re:I have to wonder what goes on inside BP

[General_Fei]

Whatever the reasoning, this is a sickening story.

Re:I have to wonder what goes on inside BP

[Anonymous Coward]

Its not a shame its criminal negligence. Even if its never "proven" in a court any child can understand that greed killed this well, the gulf, billions of dollars in lost income for local residence, 11 lives of the platform workers, and is probably going to extinct a few species. I have never been for the death penalty until now.

Re:I have to wonder what goes on inside BP

[mcgrew]

Don't confuse malice with corporate greed. Why shoud they care about the environment? All they care about is money.

It's a sickness.

Re:I have to wonder what goes on inside BP

[O('_')O_Bush]

I don't know about that. BP Stock has dropped by about 33%. That's enough for any public company to axe the CEO. Remember, the CEO still serves the board, and the board serves their bank accounts.

Re:I have to wonder what goes on inside BP

[IdolizingStewie]

Ummm.... no, actually. Some are, probably, but I really like living and generally prefer not to cut corners that could result in me dying, ergo, these corners are not cut on my platform. Anyone who would like to, I will run off. I also know that my bosses understand that the costs associated with a disaster of this proportion could pay for a hell of a lot of safety expenses.

Re:I have to wonder what goes on inside BP

[HiThere]

Iff you start holding management (top level and their immediate subordinates) and the board of directors personally responsible, this will stop...or at least vastly slow down.

Originally that "iff" at the start was a typo, but as I went to correct it, I changed my mind. I think "If and only if" *is* the correct operator.

Re:I have to wonder what goes on inside BP

[geoskd]

Did they not honestly believe that a disaster could occur? Did the right people not talk to each other? Or was the urge to cut corners simply so great that people ignored the risk?

From the ABC interview with one of the survivors, the BP people were arguing with the Transocean people, insisting that it would be ok to skip some phases of sealing the well because they wanted to move the schedule up. I wonder what that BP manager was thinking.

As someone who has found himself on both sides of this thought process, it is actually very easy to fall into the trap of making bad assumptions. People inherently underestimate risks. This leads to the common belief that cutting a few corners once in a while is acceptable. 60%-80% of Americans use a cell phone while driving on a regular basis, in spite of the fact that almost everyone agrees that this is a dangerous habit, and study after study has shown that it overwhelmingly increases your chances of being in an accident. The root of the problem isn't this particular set of people making the decisions, the problem is that people have any say in the process at all. Decisions at this level should be made by following a rigorous procedure without exception. When safety is concerned, no exceptions should ever be made. If exceptions can be necessary to proceed, then either the situation is unsafe, or the procedure was inadequate to begin with.

-=Geoskd

Re:I have to wonder what goes on inside BP

[ultranova]

I don't know about that. BP Stock has dropped by about 33%. That's enough for any public company to axe the CEO. Remember, the CEO still serves the board, and the board serves their bank accounts.

The CEO and the board both serve their bonuses, nothing less, nothing more. And they are going to get bonuses, after which the CEO - if he's going to be fired - will get a golden parachute.

Personal responsibility is for the serfs.

Re:I have to wonder what goes on inside BP

[rhizome]

Did they not honestly believe that a disaster could occur?

Every single drilling plan is required to include contingency plans for every conceivable problem.

Re:I have to wonder what goes on inside BP

[shadowbearer]

Any sufficiently advanced incompetence is indistinguishable from malice.

  Which is why we have a proliferation of lawyers.

  Apologies for the misuse of the word proliferation. Weirdly enough, if one takes the word apart, it's pro life ration, which also sums up the current status quo quote well.

SB

Re:I have to wonder what goes on inside BP

[khallow]

This fuck up will take generations and untold trillions to undo.

Cite please. Keep in mind that there was a similar oil spill in the Gulf thirty years ago.

Re:I have to wonder what goes on inside BP

[arekusu_ou]

It's not always about ignorance or willful ignorance, or plain ol' stupidity.

Sometimes it's about holding off the potential problem until you empty the coffers then run off, leaving someone else to hold the bag or pick up the check.

That is capitalism, and it's been rampant with CEO's and upper management over the years. We have had CEO's running companies into the ground, pulling out outrageous bonuses, and paying stockholders to shore up the illusion and then run off after.

Re:I have to wonder what goes on inside BP

[thegarbz]

I overhead a conversation with a process engineer once about their "risk mitigation". The entire discussion stemmed around using gas detectors as a layer of protection to prevent disaster near an LPG bullet. It was a scary thought that anything that detects gas AFTER it has left the pipework could be considered as a layer of PROTECTION.

But that's the mindset of some of these people.

Re:I have to wonder what goes on inside BP

[cdavidneely]

The Ixtoc 1 spill of 1979 was nothing like this. It was in relatively shallow water and most of the oil stayed on the surface of the water. A significant portion of this oil spill is sitting below the water, perhaps aided by the use of dispersant chemicals, causing damage in ways we can't calculate yet.

Re:I have to wonder what goes on inside BP

[khallow]

The Ixtoc 1 spill of 1979 was nothing like this. It was in relatively shallow water and most of the oil stayed on the surface of the water. A significant portion of this oil spill is sitting below the water, perhaps aided by the use of dispersant chemicals, causing damage in ways we can't calculate yet.

Nobody is going to spend trillions to clean it up and only complete and permanent elimination of the fishing industry in the Gulf and Atlantic Ocean would near "trillions of dollars" in damage.

As to the claim that the Ixtoc spill is "nothing like this", I have to disagree. First, the dispersant chemicals used in the Deepwater Horizon accident are being applied on the surface, because that is where the oil ends up, being for the most part less dense than water. Second, in Ixtoc, they used dispersant chemicals as well and it is likely that a considerable portion of the Ixtoc spill ended up on the bottom of the Gulf.

Re:I have to wonder what goes on inside BP

[Tenebrousedge]

I grew up in Valdez, where the Exxon spill happened. The beaches were black for months, although I don't remember a whole lot from the time. These days I like to go kayaking and boating there as much as I can, and although I have no scientific training along those lines, I have never as an adult seen any evidence of the spill. It seems like here, if people remember it at all, they're only upset that the settlement was reduced to $500m. Exxon is a name that doesn't get spoken a lot here though, and generally not in pleasant terms when it comes up.

BP actually has a much stronger presence in Alaska than Exxon these days, and their reputation at the moment is plummeting. We've most of us seen what an oil spill looks like, and there's no reason to be happy about one that size. Whether or not our government agrees, those involved in this disaster should be held responsible. We as citizens should probably investigate ways to make that happen, I suppose.

Re:I have to wonder what goes on inside BP

[carp3_noct3m]

It would be interesting to see if there were any major volume shorts on BP prior or directly after the incident, and who made them.

Okay... so now what?

[mark-t]

The more I learn about this, the more I'm inclined to think that the last thing BP ever does as a company on this planet will be cleaning up the mess.

Re:Okay... so now what?

[fuzzyfuzzyfungus]

You honestly think BP will face more than token consequences and maybe a name change?

Re:Okay... so now what?

[mark-t]

Well, insurance doesn't tend to cover criminal negligence, so... yup.

Re:Okay... so now what?

[bazorg]

"on this planet" may be a little exaggerated, but I really don't see why the USA should honour any concession agreement with a company guilty of negligence of these proportions.

Re:Okay... so now what?

[shutdown -p now]

I hope so. Obama seems to be determined to make a show out of it to prop up his own position, but, for once, this may actually be a positive thing - if only coincidentally.

Re: Okay... so now what?

[Black Parrot]

and maybe a name change?

Too bad "Gulf Oil" is already taken.

Re:Okay... so now what?

[waltmarkers]

Actually even if there was a strong criminal / intentional exclusion on the policy it probably wouldn't matter. Business insurance policies have an innocent party carveback, so the policies would defend everyone who did not commit an intentional / criminal act. So, an individual who gave an order to ignore a safety regulation in violation of a criminal statute would not be defended against civil litigation individually, his company would still have the policy defend them unless the rest of the company knew / agreed to violate the law.

Re:Okay... so now what?

[Zerth]

You honestly think BP will face more than token consequences and maybe a name change

Not really, but I'm still shorting BP in hopes they'll get reamed.

Much like the Exxon case, I imagine they'll weasel out of the worst of it, but there were lots of people at BP were screwing things up for months, unlike the Valdez's one passed-out captain and a few sleepy overworked crewmen.

Old memo deja-vu

[Valacosa]

From here:

BEN-VENISTE: Isn't it a fact, Dr. Rice, that the August 6 PDB warned against possible attacks in this country? And I ask you whether you recall the title of that [President's daily briefing]?

RICE: I believe the title was, "Bin Laden Determined to Attack Inside the United States."

Was anyone else reminded of that little gem?

Re:Old memo deja-vu

[Anonymous Coward]

How about from here?

Q: Why was this PDB prepared?

DCI Tenet has already described the genesis of this PDB item in a letter to the 9-11 Commission dated March 26, 2004. This PDB item was prepared in response to questions President Bush asked his PDB briefer. The President had seen previous intelligence reports about possible al-Qa'ida threats to U.S. targets outside the United States. The President had asked whether any of the information pointed to a possible attack inside the United States. When this PDB item was presented to the President on August 6, 2001, his PDB briefer told him that it was prepared in response to the President's previous questions.

Q: What information does this PDB item contain?

The article advised the President of what was publicly well-known: that Bin Ladin had a desire to attack inside the United States. Bin Ladin had stated publicly in 1997 and 1998 that his followers would try to "bring the fighting to America." Most of the information in the article was an analysis of previous terrorist attacks by al-Qaida and a summary and discussion of general threat reporting from the late 1990s. The draft was prepared by CIA after consultation with an FBI analyst.

Q: Did the PDB item include any warning of the 9-11 attack?

No. The only recent information concerning possible current activities in the PDB related to two incidents. There is no information that either incident was related to the 9-11 attacks. The first incident involved suspected "recent surveillance of federal buildings in New York." This information was based on a report that two Yemeni men had been seen taking photographs of buildings at Federal Plaza in New York. The FBI later interviewed the men and determined that their conduct was consistent with tourist activity and the FBI's investigation identified no link to terrorism. The second incident involved a call made on May 15, 2001 by an unidentified individual to the U.S. Embassy in the UAE "saying that a group of Bin Ladin supporters was in the US planning attacks with explosives." The caller did not say where or when the attacks might occur. o On May 17, 2001, the NSC's counterterrorism staff convened the Counterterrorism Security Group, whose members include State, DoD, JCS, DoJ, FBI, and CIA, and reviewed the information provided by the caller. o The information was also shared with Customs, INS, and FAA. o The PDB article advised the President that CIA and FBI were investigating the information. o We had no information, either before or after 9/11, that connects the caller's information with the 9/11 attacks.

Re:Old memo deja-vu

[coredog64]

If only I hadn't negated my mod points in this thread...

Re:Old memo deja-vu

[FragHARD]

Yep seems pretty typical of GOVERNMENT anything they get their hands into goes to sh!t, but now that 0bama is in control this will be fixed........Ohhhh wait a minute he has been in control the whole time.... Ohhhh he is the one who has been in complete control of the MMS for how long ??? to the naysayers who say he did not control the MMS - HE put the head MMS people in charge long ago they had ample time to 'fix the system' just like he fixed the bank,auto,etc industry in the same time period.

this surprises no one.

[Essequemodeia]

Those lying sons of bitches...

Re: this surprises no one.

[Black Parrot]

Those lying sons of bitches...

Make that "Bastard Pravaricators".

Yes.

[Saeed al-Sahaf]

You honestly think BP will face more than token consequences and maybe a name change?

Yes.

This incident has a lot of visibility, and the government can not afford to let it go with a slap.

Beyond that, lawsuits arising from this will fill the courts for YEARS. The lawsuits will cost BP much more money and bad publicity that any government action.

BP *WILL NOT* come out of this unscathed, if they come out at all.

Re:Yes.

[Dragoniz3r]

Fortunately for the government, the people of our country have the attention span of a goldfish. Weeks will go by, everyone will forget about this just like they've forgotten about everything else, and the government will hand out a barely-publicized slap on the wrist.

Re:Yes.

[TerranFury]

Yes. This incident has a lot of visibility, and the government can not afford to let it go with a slap.

If what happened to Exxon after Valdez is any indication, then there will be an initial, very large and very public fine, which they will eventually find a way to avoid paying. See here. In short: They were told just after the disaster to pay $2.5 billion, but years later the Supreme Court reduced that number to just $500 million.

Re:Yes.

[Anonymous Coward]

This incident has a lot of visibility, and the government can not afford to let it go with a slap.

BP *WILL NOT* come out of this unscathed, if they come out at all.

That's like saying "I'm twelve years old and what is this?". Seriously, corporations that size have nothing to fear.

There will be a few token publicity actions from politicians and BP but that'll be it. All they have to do is convince the idiot population that they did something and quickly move on to some petty squabble to overshadow the affaire. Too many bribes went into their pockets to really hurt BP.

Hell, even if politicians suddly grow a spine and take the blame when their bribes get exposed, BP could stil run any government into the ground by exploiting every single legal loophole for the next 100 years.

While we are at it, how's ExxonMobile doing these days? ;)

Re:Yes.

[zill]

You and I will probably forget in a year. But the thousands of fishermen who can never fish in the gulf again will never forget.

Re:Yes.

[bmo]

"HP *WILL NOT* come out of this unscathed,"

Exxon did. Their fine was a drop in the bucket.

--
BMO

Re:Yes.

[thetoadwarrior]

How many people care about the Exxon-Valdez incident or the last Gulf of Mexico oil spill, Ixtoc I? Yes there will be lawsuits and BP will be paying out but when you're part of the richest industry ever and can easily pass the cost onto the consumer who will forget about this why would you worry?

Re:Yes.

[Jah-Wren Ryel]

BP *WILL NOT* come out of this unscathed, if they come out at all.

But the people responsible will do just fine. That's what a corporation is for - a liability shield to enable management to take risks where the only consequences of a bad decision are shouldered by the shareholders (and the rest of the world) but the benefits of a good decision (or even a bad decision) go to management as well in the form of bonuses.

If BP gets hit hard enough in the courts they will go bankrupt and the assets will be acquired by another petrocorp for pennies on the dollar. Many in management will just find new jobs within the industry, in many cases with the acquiring company itself ('continuity of operations' and all that).

The problem is that whole liability shield thing, in some rare cases it can be pierced but not when the defense has hundreds of millions to spend on lawyers.

Re:Yes.

[Dragoniz3r]

Sure, but they don't have any real power to do anything about it. As long as the majority forgets, that's all the government needs.

Re:Yes.

[HiThere]

FWIW, I've heard that BP was to blame for the extent of *that* disaster, also. BP had been contracted ahead of time to hire cleanup crews to be available in case of any problems, but instead they sat on the money. So there weren't any "stand-by emergency workers" standing by.

Could be wrong. Don't really know. But it was one of the stories I heard.

Re:Yes.

[Lars T.]

You and I will probably forget in a year. But the thousands of fishermen who can never fish in the gulf again will never forget.

Just like thousands of fishermen who can still not fish in Prince William Sound. Exxon is still the biggest publicly traded company.

Re:Yes.

[zippthorne]

The problem is the liability max. To bring BP up to the full level of accountability would require ex post facto laws and/or a bill of attainder. Both of which are prohibited by the constitution. The best we can hope for is to set things up so that the next company to have such a disaster, should such disaster occur in the future, would not be so protected.

Re:Yes.

[ColdWetDog]

And that's done those folks in Alaska exactly what? They won't forget, but it's not like Exxon is making anything or anyone whole (except a bunch of lawyers, they seem to be doing fine).

Re:Yes.

[Surt]

BP's annual profit is less than 60 billion dollars.
http://www.marketwatch.com/investing/stock/BP/financials

The US debt is about 13 trillion.
http://en.wikipedia.org/wiki/United_States_public_debt

13 trillion / 60 billion / year = 216 years.

Even BPs gross of 366 billion would take 35 years to pay off the debt.

That's more than 'a few', not that that really undermines your point, which is really that BP is too big to let any government fine it willy-nilly. It will defend itself to a ridiculous level in the courts, and whatever they pay out in the end will be a pittance.

Re:Yes.

[BitZtream]

Wow, you're completely out of touch with reality aren't you?

Re:Yes.

[Xyrus]

Never underestimate the power of cheap shit over a consumer populace.

Re:Yes.

[shadowbearer]

  True... but some of us aren't worrying, we're just hoping.

  Massive changes in society tend to come from massive impacts on said society. With Katrina still in the public "consciousness", perhaps this will reinforce our national guilt a bit.

SB

Re:Yes.

[ThrowAwaySociety]

"HP *WILL NOT* come out of this unscathed,"

Exxon did. Their fine was a drop in the bucket.

Exxon's fuckup was in a remote area (Alaska) and Exxon's fuckup only lasted a few days (no live video.)

Re:Yes.

[bmo]

>Exxon's fuckup only lasted a few days (no live video.)

I don't think you're old enough to remember it being in the news for months.

--
BMO

Re:Yes.

[budgenator]

TITLE 33--NAVIGATION AND NAVIGABLE WATERS

                                                CHAPTER 40--OIL POLLUTION

                  SUBCHAPTER I--OIL POLLUTION LIABILITY AND COMPENSATION

Sec. 2704. Limits on liability ...
(3) for an offshore facility except a deepwater port, the total
        of all removal costs plus $75,000,000; and
                (4) for any onshore facility and a deepwater port, $350,000,000. ...
(c) Exceptions

                                        (1) Acts of responsible party

                Subsection (a) of this section does not apply if the incident
        was proximately caused by--
                        (A) gross negligence or willful misconduct of, or

[[Page 648]]

                        (B) the violation of an applicable Federal safety,
                construction, or operating regulation by,

        the responsible party, an agent or employee of the responsible
        party, or a person acting pursuant to a contractual relationship
        with the responsible party (except where the sole contractual
        arrangement arises in connection with carriage by a common carrier
        by rail).
OIL POLLUTION LIABILITY AND COMPENSATION

I don't think the liability cap is going to affect this incident.

Re:Yes.

[pz]

BP *WILL NOT* come out of this unscathed, if they come out at all.

Agreed. Since I first heard of the oil spill, I've been saying, "BP will not survive this disaster." It will need to spend a very large amount of its cash on hand to pay for the cleanup (the growth in the extent of which is showing no signs of slowing), the damages, and general remediation of what will probably be three or four states' worth of coastline. The American body politic will want heads to roll. Dismantling or nationalizing BP's US operations is, at this point, a distinct possibility.

The only good thing to come out of this disaster is that future offshore drilling operations in the US are likely to be safer.

Re:Yes.

[Khyber]

"Seriously, corporations that size have nothing to fear."

Bloodthirsty Eco-terrorists that will now see this as a justification for their acts of violence against the oil companies, and thus the acts escalate.

Re:Yes.

[thetoadwarrior]

True but I still don't think people will care that much over a short period of time. It's not like this is the first oil still in the gulf. Granted it is the worst but I just don't see people wanting to stop drilling in the gulf for oil and it's bound to happen again.

If there is any truth to the fact that BP's clean up effort, at the moment, is complete shit and lacks any signs of expertise and the worst they're facing is to clean up after themselves, I can't really see it getting any worse for them unfortunately.

Re:Yes.

[Khyber]

Unless it's the very public at large that has turned terrorist and the governments cannot control them.

News Flash!

[clyde_cadiddlehopper]

Drilling oil wells through three miles of rock while floating a mile above the wellhead is really hard and dangerous and - oh my - there were documents that say exactly that.

Re:News Flash!

[sjames]

Yes. There were also documents that said that in spite of being well aware that it was no time to skimp on safety (being that it was already a difficult and risky operation), they did exactly that at every opportunity right until it blew up (literally).

Re:News Flash!

[rta]

Seriously. I don't understand all of the hate being thrown at BP. We don't even know what happened yet (and probably will never know). It's possible that some of the decisions they made contributed to the gas explosion, but it's also possible that this would have happened no matter what. Until the last hour before the explosion or so everything was "ok". Not great, but not terrible either.

In addition, BP seems to be doing the right thing in terms of response and clean-up so far. They have already spent close to $1B on response and mitigation/ clean-up without anyone twisting their arm when technically their liability is limited to something like $10M or $75M and there is still no end in sight.

Finally, given the volume of oil that's been spilled, the impact SO FAR has been pretty limited. Only a small amount of wetlands have been affected (36 acres was the number i saw) and ~150 miles of shoreline. The bulk of the oil is in these underwater "plumes", but those have yet to be shown to have any serious impact. (see e.g. http://www.npr.org/templates/story/story.php?storyId=127263477 (note that the phrase "The oxygen levels are crazy low..." is mis-transcribed. If you listen to the audio the prof says "AREN'T" which makes more sense in context)). The long and the short of it is that oil in the deep waters and these oil plumes MAY be bad but they may not be and really we don't know much about them.

So yes, this spill is bad, and it might get worse, but right now it's not the end of the world and BP seems to be behaving quite well so far during the response.

Re:News Flash!

[deserttrail]

Okay. Time for a (bad) analogy.

A boy is riding his bicycle and is struck by a car and killed. It appears that the car's brakes failed. During the course of the investigation, it is discovered that the driver's mechanic had told him that his brakes were bad and could fail at any time, but the driver was too cheap to get them fixed.

Is it possible that he would've killed the boy even if his brakes didn't fail? Yes.

Would you really be sitting here saying: "Why all the hate on this guy? He totally paid for the funeral even though no one asked him too!?"

I don't think most people are questioning BP's response. I think they've done the best they could given the situation. It's the events leading up to the disaster that have people angry.

Re:News Flash!

[mcgrew]

Dude, you need to sell all that BP stock you're holding. Or did you not read the summary or anything else about it? Or are you just a damned troll?

Re:News Flash!

[mcgrew]

Did you not even read the damned SUMMARY? This was an "accident" like a drunk driver doing 100 mph in a school zone has an "accident". BP was negligent.

Re:News Flash!

[rta]

Even in your scenario one would have to show that the mechanic was correct and that the brakes failed (if you were in a criminal case at least; in a civil case it seems all bets are off as evidenced by e.g. airlines ALWAYS paying out if there's a crash)

More importantly I'd modify the scenario as follows: Let's say that the driver took his car in for service. The mechanic recommended set of repairs A. The driver instead asked for the cheaper set B. The mechanic did B and the government said that B is ok.

That's a lot closer to what's happened so far w/ this well. It could be the case that doing A would have prevented the accident that B allowed, and one could argue that the driver had undue influence on the mechanic and on the government agency... but now things are a lot less clear.

It's certainly possible that some people at BP acted badly, etc but, based on the information currently available i don't see how one differentiates between "negligence" and "accident".

Re:News Flash!

[rta]

Heh. BP looks to be down about 30% since this started (vs ~9% for the Dow). If i had stock, selling it now would be way too late.

No, i'm not trolling. It's just that everything here is relative. Let's look at a quote from the NYT article:
"BP documents released last week to The Times revealed that company officials knew the casing was the riskier of two options.

Though his report indicates that the company was aware of certain risks and that it made the exception, Mr. Hafle, testifying before a panel on Friday in Louisiana about the cause of the rig disaster, rejected the notion that the company had taken risks."

From these statements and others like it how can one judge whether BP acted "correctly" or not? One can't. What's an acceptable level of risk? How much riskier was the option chosen ? Without at least some framework to evaluate this, it's pure innuendo.

Or, let's look at another:
"
On at least three occasions, BP records indicate, the blowout preventer was leaking fluid, which the manufacturer of the device has said limits its ability to operate properly. ...
When the blowout preventer was eventually tested again, it was tested at a lower pressure — 6,500 pounds per square inch — than the 10,000-pounds-per-square-inch tests used on the device before the delay. It tested at this lower pressure until the explosion.

A review of Minerals Management Service’s data of all B.O.P. tests done in deep water in the Gulf of Mexico for five years shows B.O.P. tests rarely dropped so sharply, and, in general, either continued at the same threshold or were done at increasing levels.

The manufacturer of the blowout preventer, Cameron, declined to say what the appropriate testing pressure was for the device.
"

It certainly SOUNDS suspicious, but is it relevant? They don't say, and I don't know. This information could be very damning or it could be irrelevant. Without further analysis it's impossible to make a determination. I have yet to see such analysis (in the NYT or anywhere else).

This isn't just philosophical masturbation... in my unexciting career as a software engineer i've been involved in 100s of situations where we had to choose between alternative courses of action where we had to balance cost/time vs features and/or confidence usually w/ less than perfect information about costs and consequences. Much lower stakes in my case, but same general dynamic.

The transcript in the article could be turned into a template that applies to pretty much every project i've been witness to.

Re:News Flash!

[mcgrew]

in my unexciting career as a software engineer i've been involved in 100s of situations where we had to choose between alternative courses of action where we had to balance cost/time vs features and/or confidence usually w/ less than perfect information about costs and consequences.

You wouldn't have if you were designing software for a fighter plane or a piece of radiation therapy equipment, now would you?

Much lower stakes in my case

See, that's the deciding factor. If your software crashes you don't destroy an entire ecosystem spanning hundreds of miles, and the lives and livlyhoods of thousands of people. They KNEW this was a possibility and should have taken no chances whatever for the sake of speed or money.

President Obama

[retech]

If you do want to "own" this disaster and take responsibility then here is a challenge for you. Take this memo and every other smoking gun a decent investigation will reveal and seize BP and all its assets. Take the assets of ALL the top level execs and board, use that to pay for the clean up. Hold those same people criminally responsible for ALL of this and imprison them. Have BP continue to run and use all of its future profits and assets to fund some proper alternative fuel projects, or just pay off the national debt.

This is something the people would gladly see happen. It may restore some faith in us, letting us know the gov't is not completely corrupt and run by these bastards. And it would go a long way to prove you are not just a puppet who provides lip service on the news. It could show you actually give a damn.

So, are you willing to be the change you spoke about?

Re:President Obama

[troll8901]

... seize BP and all its assets. Take the assets of ALL the top level execs and board, use that to pay for the clean up. Hold those same people criminally responsible for ALL of this and imprison them.

Hypothetically, that sounds like what dictators of certain countries would love to do to companies and newspaper publishers that don't support them. Just find an excuse, or create one.

You honestly think this is a correct course of action?

Re:President Obama

[rrohbeck]

And the legal base for this would be?

Re:President Obama

[Bysshe]

Besides that, BP isn't a US company. This will clearly violate foreign sovereignty as well. Its a good way to piss off one of the US's only real allies in Europe.

Re:President Obama

[QuantumRiff]

the united states used to dissolve the charters of thousands of corporations a year. Way back when, it was a valid punishment for fucking up. Then, suddenly, corporations became people too.

Re:President Obama

[Pharmboy]

That is called populism, and while it might make people feel good, it doesn't have a basis in law or the constitution. Holding them financially responsible is an obvious point, but you can't seize assets of the employees (4th Amendment) nor hold them personally responsible unless you can show criminal negligence or that they broke some other law. That is entirely possible for some.

What we can't do is knee jerk react and create new laws because of this. The problem isn't that we don't have enough laws, the problem is that the current system of laws and regulations wasn't followed. Politicians love to pass new laws when the shit hits the fan, because it makes it look like are doing something, when in fact it is a useless gesture.

Re:President Obama

[retech]

Yes I do think it's a perfectly acceptable solution.

If a corporation wishes to be treated as an entity then hold it responsible as such. If you or I went out drinking and slammed our car into a McD's we would be held criminally and civilly liable for those actions. The courts would imprison us, take the car and seize worldly assets to pay the damages.

I am tired of corporations (globally now, but clearly the US set the stage) completely raping local resources (labor, infrastructure, taxation abatement, natural resources) and being patted on the back when the well runs dry. Their upper echelon walks away with well lined coffers and the local area gets shit.

I do not care where this company is "located" they played in the Gulf, they fucked it up, they can pay for it (criminally and civilly). I highly doubt if you did something this egregious they'd (BP Execs) would want you to just walk away from it.

Re:President Obama

[Nimey]

I can hear teabaggers screaming about socialism already.

Re:President Obama

[ArghBlarg]

IANAL of course, but it's pretty common knowledge that corporations in the US are considered 'persons', and as such, truly heinous crimes such as this should merit the corporate equivalent of the 'death penalty' -- revocation of their corporate charter to operate in the U.S. and dissolution/seizing of all U.S.-based assets. So there -is- basis in law for it.

Of course this power has almost never, from what I've read, been used. Which means corporations are actually -more- than people, being immortal, immensely rich 'people' who are in all practical senses above the law.

Re:President Obama

[Sponge Bath]

Might makes right? Mob rule?
"There's no justice, like angry mob justice."

Re:President Obama

[thetoadwarrior]

The awesome thing about Obama is that he is proving that black people are the same as white people and even when put into government they become as useless as anyone else you put in there.

He needs to grow a pair of balls and do something about this. He probably won't and to be honest it probably won't be held against him. Sadly if he did something and the cost of gas went up that would be held against him.

Re:President Obama

[thetoadwarrior]

It's not like he is saying to do it to a company that is doing nothing wrong or has done a little wrong. This company has created possibly the worst environmental disaster ever. I would agree that an extra special cock-up deserves an extra special punishment. After all had Hitler not taken his own life do you think it would have been fair to just stick him in prison for life?

Oil companies have proven time and time again to have not learned their lesson. Clearly something needs to be done. That should come in the form of an exceptional punishment for BP and better regulation to ensure this is less likely to happen again because quite frankly grabbing profits afterwards every time won't fix the damaged environment.

Perhaps a better solution would be to ban BP from ever operating in US territory again.

Re:President Obama

[rhizome]

Hypothetically, that sounds like what dictators of certain countries would love to do to companies and newspaper publishers that don't support them. Just find an excuse, or create one.

You mean like "indefinite detention" for onetime-suspected terrorists and sex offenders? Sorry pal, but the "makin' shit up" method of justice has a fresh coat of asphalt, and the entire US government (as well as a large portion of its citizenry) is barreling along on that strategy bus. Might as well use it.

Re:President Obama

[FunWithKnives]

If I remember correctly, corporate charters were revoked many times in the early days of the country.

Now that these beasts have grown so immensely and have their tentacles not only in our government but governments throughout the world, I imagine it barely happens anymore.

However that doesn't mean that BP management can't (or shouldn't) be held responsible. They deserve due process of course, but if, through litigation, criminal negligence (or malice) is determined to have taken place and they are found to have been the parties responsible, then they need to spend the rest of their lives in prison, a la Enron. Ken Lay was sentenced to 45 years for securities and wire fraud, for goodness sake. We're not talking about simple fraud here (though that may very well have taken place), we're talking about eleven potential homicides and the destruction of the entire gulf coast, and consequently the coastal environments/economies in at least four states.

Someone must be held to task for this mess.

Re:President Obama

[HiThere]

If you want them to behave responsibly, hold management responsible for when they don't. Demand extradition of felons. (Promise that capital punishment won't be imposed, and mean it, so that governments that believe that they shouldn't kill except in anger won't have legitimate grounds to refuse extradition.)

And if you can pull random Canadians off international flights that just happen to be diverted to a US airport, then you can certainly pull one of these felons off.

I should technically say suspects, but everyone knows without reasonable doubt (or can find out if they're interested) who the Chief Officers of these corporations are.

P.S.: Insurance is against accidents, not against intentional crimes. If the convict (after the trial!) has any insurance that could pay part of his fine, confiscate it in addition. One can't buy insurance to pay off intentional torts.

(Caution: IANAL. I'd be interested in hearing reasoned arguments as to why what I'm proposing is against the law more than current governmental actions already are. [I don't accept that the US had any business pulling a passenger off an international flight, even if it *was* diverted to a New York airport.])

Re:President Obama

[jim_v2000]

Yeah, I'm pretty sure that the president of the United States cannot just take anyone's assets, be it a domestic or foreign company. He's the chief executive, not the Dictator of Justice.

Re:President Obama

[cdrguru]

The problem with nationalizing a company - any company - by the US government is that is pretty much opens a door that is very hard to close.

Further, once that door is open just a tiny little bit it makes it pretty obvious to anyone with sizable assets and either potential or actual large-scale liabilities that the same thing might happen to them. Suddenly, the US is a very bad place to have any assets because they might get seized.

Sure, you could claim that the US needs to nationalize BP because of the oil spill. So what about nationalizing Toyota because of their car problems? A whole lot more people may have been killed from Toyota's problems than will ever die because of the oil spill. Same thing really applies to GM and Ford for exactly the same reasons. Would GE be safe, considering they make a huge percentage of the jet airliner engines?

The problem isn't even that the government doesn't want to be in business. It is that once it is "acceptable" take stuff over where exactly do you draw the line and how do you keep Congress from not crossing over that line? Short answer is that you don't.

I'd say if BP was nationalized anyone with sizable assets in the US would simply pull out. If they needed some resource that was in the US there would be a subsidary set up to operate it and it would be treated as something that could disappear in a moment.

Basically, the US would be a third-world country overnight and there would be nothing anyone could do to stop it because it would be 1,000 independent decisions by boards of directors. I'd expect the unemployment to go from 20% to 40% in a year and stay that way basically forever.

It would be an incredibly stupid move. But, given the current government in Washington, it isn't anything that I would say would be impossible to do. And it would be extremely popular. For a while.

Re:President Obama

[ultranova]

I can hear teabaggers screaming about socialism already.

That's a good indicator that you're doing something right.

Re:President Obama

[melikamp]

Holding them financially responsible is an obvious point, but you can't seize assets of the employees (4th Amendment) nor hold them personally responsible unless you can show criminal negligence or that they broke some other law. That is entirely possible for some.

It looks like firms adapted to this challenge and we may indeed need new laws. It may well be impossible to collect enough evidence to convict any single executive because the responsibility was purposefully spread as thin as possible. One guy does buying, another guy does ordering, yet another one does inspection, yet another one is responsible for personnel training, and they all have supervisors of various degree. Any fuckup, no matter how bad, can be ultimately blamed on a failure to get a message through the system, so that no single person can be held responsible.

And I think that holding someone responsible is an obvious point. I mean, it all happened in the broad daylight. They drilled a hole and when it came to the most basic and most predictable kind of contingency, they had no solution for it. The company has to pay, and I just cannot think of a good way to make it pay other than to make the top management pay. This is the only way to make other companies to behave more intelligently. If no one person can be shown criminally negligible, then entire board should pay, each out of their own pocket. If there is no law to make them do that, there should be.

Re:President Obama

[Pharmboy]

The courts would imprison us, take the car and seize worldly assets to pay the damages.

That depends on each state's laws, and in several states (Texas and Florida, for example) they can't even take your house, per homesteading laws. Ask OJ Simpson about that. In most circumstances, an individuals total assets are not liquidated, if any. FUTURE earnings might be garnished to a large degree, but not so much of current assets. At least here in the USA.

The issue is that BP is a multinational, and unless you have global laws that enforced, it is difficult to hold them fully liable. What is even tougher is selling the American people on global laws, as the vast majority would be against losing that kind of sovereignty, and I would agree on that point.

Re:President Obama

[Pharmboy]

The problem with rushing to create new laws is that is saying "This isn't covered under current law", which is another way to let those responsible go scot free, and undermines a real investigation and prosecution. We can make new laws that cover very specific situations like this, but common law regarding criminal negligence should suffice.

The more detailed and specific you make a law, the more difficult it is to actually enforce.

Re:President Obama

[khallow]

This is something the people would gladly see happen. It may restore some faith in us, letting us know the gov't is not completely corrupt and run by these bastards. And it would go a long way to prove you are not just a puppet who provides lip service on the news. It could show you actually give a damn.

As Napoleon (who later became the infamous tyrant and conqueror of most of Europe) figured out, this sort of problem can be solved with a "whiff of grapeshot". Once you give government power to seize the property of unpopular people (as happened during the French revolution), then bullets to silence public discontent aren't far behind.

Re:President Obama

[wardred]

For instance... the law that was recently passed repealing a corporation's cap on campaign contributions because it would inhibit free speech... Never mind that the only people "speaking" are the top executives and the board, and that they probably *DO NOT* represent the interests of the thousands of employees that make their paychecks, dividends, and campaign contributions possible.

Re:President Obama

[nedlohs]

Sure just ignore what the law says about their liability and so on. Much better to run the country by presidential decree, than with this stupid rule of law thing.

Re:President Obama

[khallow]

For instance... the law that was recently passed repealing a corporation's cap on campaign contributions because it would inhibit free speech...

That sounds like Citizens United v. Federal Election Commission, a US Supreme Court decision which struck down some unconstitutional parts of the McCain-Feingold Act. The law in question that was upheld was the First Amendment to the Constitution which as I understand it is generally considered the most important of the amendments to the Constitution. That's not looking good for your case.

Re:President Obama

[budgenator]

BP does significant business in the US, I'm sure that their US operations are a US incorporated subsidiaries and even if they weren't it's not like they'd just walk away from a market the size of the US.

Re:President Obama

[happyhamster]

We don't care what it's called. The current order in the U.S. is really fascism, yet no one cares. Using republican-demonized words like socialism and populism doesn't scare anyone.

The law and the constitution you refer to were written by a bunch of self-appointed rich landowners who were not even democratically elected, thus being stacked overwhelmingly in their favor and against the people doing actual work. Shove it. The majority will do as it pleases.

In a human society based on common humanitarian reason instead of unfair, arcane, outdated laws the executives would be hung, drawn, and quartered.

Re:President Obama

[AGMW]

BP does significant business in the US, I'm sure that their US operations are a US incorporated subsidiaries and even if they weren't it's not like they'd just walk away from a market the size of the US.

BP have said they are going to pay for the cleanup. They have already passed the legal limit of their fiscal responsibility and are continuing to pay. If I was BP that's also what I be doing too! They want to pay, but not so much to appease the US people, but to try and make it more likely that they will, at some future time, be allowed to continue chasing the deep oil deposits because there's a LOT of money in them thar wells!

It certainly does look like the fuck-up fairy was alive and well in the BP hierarchy and I'd guess that BP are fully cognisant of the depth of excrement they now find themselves in. The fact of the matter is that BP are also the people best equipped to dig themselves, and the gulf, out of it. They need time to do this.

Once the dust settles there likely will be massive improvements to the safety requirements for all deep drilling operations around the world and BP will be the company with that valuable experience.

Fingers crossed they can stem the flow soon ...

Re:President Obama

[AGMW]

He needs to grow a pair of balls and do something about this.

Like what for example? Whilst I'd agree that it certainly looks like BP were negligent it isn't proven yet, and they are the best hope for capping the well and cleaning up the mess. Seeing all the 'mercins hollerin' and a-marching up and down with the pitch forks and torches is kinds sweet though - Something must be done ... yep, s'right, and that something is :-
1) let BP cap the well and clean up their mess
2) a proper investigation to find the ratio between (bad)luck and negligence amongst all the companies involved (many of which are US companies remember)
3) then decide what, if any, punishment should be meted out, and to whom.

All this over exciting mud-slinging before the facts are known seems decidedly counter productive to me, and so like the US "sue 'em" culture - you call your lawyer before you call 911!

All efforts, from all quarters, should be focussed on fixing the problem FIRST.

Re:President Obama

[khallow]

So we can't cap corporate campaign contributions, but we can place protesters in "free speech" zones.

"Free speech zones" are a gray area and it looks to me like that they are sometimes being used to suppress speech, which would be unconstitutional (BTW to the outside reader, the US government is not the only government that has to observe the First Amendment, governments of the states of the US and by delegation, their local governments, have to respect all parts of the Constitution too). But large protests do pose a public safety hazard and can impose harm of various sorts on uninvolved parties. So it's reasonable to expect that you shouldn't be legally able to protest anywhere you'd like (eg, in the middle of a road or inside someone else's building).

Re:President Obama

[troll8901]

Thank you for your reply. It's enlightening reading all the various viewpoints, including yours. I just wish I know which side to take.

Re:President Obama

[drinkypoo]

The more detailed and specific you make a law, the more difficult it is to actually enforce.

You have that ass-backwards. The reason we have a cellphone law is that the less specific you make a law, the more difficult it is to actually enforce. We already have laws against unsafe driving, so we don't even need laws about driving while distracted, which are already present in some states. So then we get cellphone bans, why? Because it's easier to nail someone for using a cellphone when it is prohibited than it is to nail someone for driving unsafely. You saw them use the phone, so obviously they're guilty. You don't have to wind up in court with lawyers arguing about what kind of behavior is unsafe.

The actual problem with making laws more detailed and specific is that they only apply to specific, detailed situations. So then you need another law to cover the situation when someone does something almost but not precisely identical to the law you've created, but which clearly is against the spirit of that law.

Re:President Obama

[cdavidneely]

The problem with nationalizing a company - any company - by the US government is that is pretty much opens a door that is very hard to close. Further, once that door is open just a tiny little bit it makes it pretty obvious to anyone with sizable assets and either potential or actual large-scale liabilities that the same thing might happen to them. Suddenly, the US is a very bad place to have any assets because they might get seized.

Very well. We seize BP for royally messing up and creating a horrible environmental disaster. We lay claim to their company because they operated outside proper safety procedures and caused intense human suffering and environmental degradation. We send a message that says "if you operate unsafely we will take over your company and make sure you operate within proper safety guidelines." Which companies will pull themselves from America based on this statement. Companies which refuse to operate safely. I say good riddance to them.

Re:President Obama

[atamido]

I think what the grandparent was talking about was increasing the number of criteria for a law. A cellphone law had two situations that must intersect, 1) operating a motor vehicle and 2) talking on a cell phone. Many laws have 100 required criteria because they are built upon other laws with criteria. In these circumstances it becomes trivial to circumvent the law in any number of ways by a slight modification of your actions so that you don't align with one of the criteria.

Extra legislation to cover edge cases with so many criteria becomes a losing battle, and eventually everyone recognizes the law as useless.

Re:President Obama

[Pharmboy]

You don't have to wind up in court with lawyers arguing about what kind of behavior is unsafe.

It is called precedent. You don't need to make a law against murder with a gun, murder with a knife, murder with a brick. What if you murder someone with a baseball bat? Perhaps since there isn't a law against that particular type, then you get away with it? That is my point. What is negligence and what is not is already established by precedent, and those at BP that violated those standards can't be tried by new laws (ex post facto) so it makes no difference in this case. The key is prosecuting them to the fullest extent of the existing laws before making any decisions about any new law being needed.

Re:President Obama

[Hognoxious]

Hypothetically, that sounds like what dictators of certain countries would love to do to companies and newspaper publishers that don't support them. Just find an excuse, or create one.

It's totally different when the likes of Castro or Chavez do it. See, those guys are communists, and communism is un-American, anti-Christian and just plain old wriddly-diddley-wrong.

Re:President Obama

[Hognoxious]

there are alot of countreys that have had natalised industry. the uk natalised steel and the railways

They sent them to Sitt Ifrikeh?

Re:President Obama

[lenski]

just imagine how much it's going to cost when oil rig employees have to be compensated well enough to offset not only the risk of death but also imprisonment at the hands of an angry mob

Citation required.

So far as I've read and seen on this disaster, not one word has been spoken of or about the oil rig employees, other than ones who got their asses killed because "accidents happen". I have read and seen multiple reports about multiple failures by decisionmakers to cut corners in an enterprise whose risks are significant and (if not precisely known) are legendary. Worse, the costs of failure in this particular enterprise are massive and ongoing dislocation of large numbers of people whose productive lives depend on the gulf of Mexico.

So you have tried to twist an argument about decisionmakers behaving in a criminally negligent way, into personal risk of oil rig employees facing an angry mob.

It is an invalid and in my opinion irresponsible argument.

I've read your comments in other threads and you are both smarter and wiser than this.

Re:President Obama

[Jonner]

I think your attitude is much more rational than the GP. BP should be held responsible for all costs of fixing the well and cleaning up the mess. If the company is able to do that, they should be allowed to continue doing business. The very high price for this mismanagement and better oversight and regulation will cause future executives and shareholders to pay more attention to risks. I don't think the Federal government taking over BP would fix the big problems in the oil industry any more than its taking over several banks has fixed the financial industry.

Re:President Obama

[MadUndergrad]

http://en.wikipedia.org/wiki/Corporate_personhood_debate

The second god damn paragraph as of this posting, with several citations. Seriously, do a quick Google search or shut the fuck up.

Re:President Obama

[thetoadwarrior]

You know I initally thought that too but then I found this video: http://www.youtube.com/watch?v=kMuoSlJwkUY

I thought they presented a good case with decent picture evidence but the whole distorted voice thing and excessive swearing put me off so I've investigated it further and found videos like this showing it doing nothing http://www.youtube.com/watch?v=U60W_g_t9vc and even uk emergency documents that support the original original video's notion that you just don't lay a single boom like we're seeing from BP.

So really, are they out best hope for cleaning this up? I'm starting to think that is not the case. What would help is if the media would actually investigate this but they're not. No one is really taking it any further than saying BP is promising to pay for everything. That doesn't really matter if they're doing a half assed cost cutting job.

Re:President Obama

[khallow]

The second god damn paragraph as of this posting, with several citations.

Another infiltrated Wikipedia article. All I got was that someone is selling a book on evil corporations. Should have known, I guess. Note that there's a huge gap in the article from the late 19th Century to the beginning of the 21st Century in which the Wikipedia article cannot find anyone complaining about corporation personhood. I think that was because it was a "if it's not broke, then don't fix it situation". My view is that nothing has changed, it still works, but we have to sell this book.

Also, it's worth noting that some of the legal cases that generated precedent involve remarkable abuses of government power. For example, Trustees of Dartmouth College v. Woodward involved an attempted takeover of a private college by the state of New Hampshire or Santa Clara County v. Southern Pacific Railroad which involved a deliberate attempt to unfairly tax railroads in California (apparently by ignoring the debts of the railroad while regular citizens could count their debts against their taxes).

And that brings me to the as yet, unspoken problem with the criticism of corporate personhood - what to replace it with. Until you can come up with a better implementation of corporations (preserving the essential features of a corporation such as limited risk and fungible ownership), the current implementation of corporations is going to stay.

Re:President Obama

[wardred]

There's no maybe about it. It *IS* restricting free speech, and it's *NOT* a safety issue.

Making sure that the protests are nowhere near the event they're protesting so that said protesters don't show up on T.V. It's not even crowd control as there are tons of people there *SUPPORTING* the event.

Should you hold up a placard protesting something - when everybody else in the crowd has been vetted as a supporter, you get hauled off to the free speech zone, or simply arrested.

Cops being inserted into crowds to act as instigators of riots to claim that the crowd is rowdy and arrest everybody when in fact the crowd had been pacific before said undercover throws something or incites something that could be riot like.

It is different if you're on private grounds and the organizers want you to be affiliated in one way or the other, but these things often happen on public ground where it *should be* expected to have both supporting and dissenting voices in the crowd.

Re:President Obama

[wardred]

GP - I believe you're right, it was a Supreme Court decision.

Parent - thank you for pointing out that this only limited *corporate* caps - which is the center of my argument.

A corporation *is* made up of people - the corporation itself is not a person. Unfortunately, more and more it's getting the rights of a person while maintaining all the protections of a corporation and separations of consequences that a corporation affords its majority shareholders and board.

In fact, to some extent, corporations are lobbying to become not just individuals, but investigators - without the constraints that the police have to put up with, or even the constraints about breaking and entering of computer equipment that individual must abide by, or consequences for actions of said investigations should they cause damage to the equipment they're investigating. (See Hollywood's campaigns to broaden their rights to snoop on what individuals are doing with their computers, while trying to diminish wire tapping laws, and remove any claims of damages individuals might make in regards to said investigations should the company bork your computer in the course of its "investigation", even if nothing is found on the computer.)

A small fraction of 1% of the "people" of a corporation get to decide the "voice" of said corporation. The voice of the corporation is not even its employees, in most cases, but its majority stock holders.

So here you have this massive multi-national pouring in so many millions of dollars, favors, or whatever into some campaign warchest, and the only people with a voice are the large % stock holders who elect the board, the board itself, and the very senior executives. There is *NO* representation for the minority stock holders or the corporation's employees - and the employees are what enable said corporation to have those millions to poor into campaign contributions.

There are always people who will have a "bigger" voice than others, whether it be because of money, contacts, or what have you, but a corporation is not an individual. Giving the majority stockholders the added boost to their already influential voices of all the output of all the employees and stock holders under them isn't right. It tips the balance way too far in their direction, and they didn't *need* the help making their voices heard.

That's my opinion, even if the Supreme Court disagrees by a narrow 5-4 vote.

Re:President Obama

[khallow]

There's no maybe about it. It *IS* restricting free speech, and it's *NOT* a safety issue.

Again, there are a number of times when speech can be restricted (eg, shouting fire in a crowded theater, revealing the US's nuclear launch codes to an enemy). And yes, it is a safety issue. People can and do die in mass protests. You're free to disagree, but you're not free to be right.

And again, I did say that these often appear to be used to suppress speech rather than merely address public safety issues.

Re:President Obama

[budgenator]

There is no legal limit on cleanup costs, the limit is $75M + clean-up costs, only if there wasn't negligence. The impression I've gotten is the real oil people in BP are very conscientious, the business types not so much.

Re:President Obama

[wardred]

Sure there are times and places where speech can be restricted. I won't argue with you there. Heck, if protesters start doing more than simply waving banners around and calling out the protests - say starting fights or throwing things, then yes, I'd expect the police to do something about it - assuming that they aren't the ones instigating things. (Not usually the case, but it *does* happen.)

And I'll grant you that you did say it appears to be used to curtail speech.

I'm simply calling B.S. on the safety thing. We've had dissenting opinions in public gatherings for politicians for hundreds of years without having to coral people into over packed pens miles from where the where the politicians are.

Having to show support for a fearless leader when he makes a public appearance - be he Republican or Democrat - reeks a bit much of totalitarianism to me. We're not there yet, not by a long shot, but little steps like this help nudge us in that direction.

That "safety" excuse gets thrown around a lot to curtail our constitutional rights. Not just today, but in WWII, and throughout our history.

Generally, when we "come to our senses" we look back at the particular incidents with a bit of shock that we could've done such horrendous things. Japanese internment camps, for instance. Or McCarthyism.

Re:President Obama

[couchslug]

Nationalizing enemy property has been done in wartime, seizing drug dealer assets is done all the time, there is ample precedent.

People don't behave themselves unless they fear punishment. Companies are difficult to punish, so take them away when their humans use them to misbehave.

Re:President Obama

[couchslug]

The government can seize assets used for crime. A corporation used for crime qualifies, and fear of seizure should be incentive to greater shareholder oversight. Corps that don't provide transparency will lose investors.

"What we can't do is knee jerk react and create new laws because of this."

Why not? The country is overrun by literally evil corporations. Revenge is a legitimate goal. Punish them for wrecking our economy and poisoning the land. It's long overdue. The enemies of the people should fear the people.

Wow... Just wow...

[Saeed al-Sahaf]

The pressure in a properly drilled and cased oil well is supposed to be static. You're supposed to have to pump the oil out. If the drill pipe accidentally breaks off, you're not supposed to have oil spewing out.

I take it you're *NOT* a engineer or drilling expert?

Re:Wow... Just wow...

[bsercombe72]

Yep, clearly someone who has only ever seen nodding donkeys and thinks that all oil is on pump. Generally speaking, wells only require pump when the reserviors are shallow or depleted (or both). The reservior that BP had reached was neither- by a long, long margin.

Halliburton?

[dogsolitude_uk]

Apologies if this is old news, but didn't Halliburton actually do the work on the pipe that broke? According to The Independent it would seem so:

http://www.independent.co.uk/news/world/americas/what-was-halliburtons-role-in-us-oil-spill-1987038.html

A commenter on that story asserts that a week before the trouble occurred, Halliburton bought a smaller company who specialise in these kinds of repairs, but I've been unable to find any details about this. Anyone got anything on this?

Re:Halliburton?

[Saeed al-Sahaf]

Apologies if this is old news, but didn't Halliburton actually do the work on the pipe that broke?

And your point is?

Of course a number of contractors where used in this project, including Halliburton, who as we all know is involved in oil exploration.

Are you suggesting some mysterious involvement of the ex-Vice Prez? The CIA? Black helicopters? OLIVER NORTH???

Honestly, I'm trying to understand your point.

Re:Halliburton?

[dogsolitude_uk]

Not at all, I was actually asking if anyone knew any more about who/what was involved. The other thing is that BP may attempt to offload responsibility on Halliburton and other contractors, that's all.

No black helicopters or tinfoil hats or anything, just trying to find out a bit more. I've noticed that a lot of folks here on Slashdot are pretty clued up (no sarcasm, I learn a lot from reading the comments here) and thought I'd ask if anyone else had anything to add. I was particularly curious to see if anyone could substantiate the claim that a commenter made on the Indy site about Halliburton having bought a company that specialised in this kind of repair work.

Apologies if it looked like I was trying to make a point, that really wasn't my intention. Reading back over my comment I can fully understand how it appeared that way though!

Re:Halliburton?

[copponex]

He's probably pointing out that they continue to be massive fuckups. Whether killing soldiers with faulty wiring, or overcharging the government and ripping off the taxpayer, Halliburton proves itself to be a solid American corporation!

Choose Halliburton!

(Or Cheney will shoot you in the face.)

Re:Halliburton?

[Jeremy Erwin]

From the WSJ's article on the Deepwater Horizon.

BP also skipped a quality test of the cement around the pipe—another buffer against gas—despite what BP now says were signs of problems with the cement job and despite a warning from cement contractor Halliburton Co. ....

Halliburton, the cementing contractor, advised BP to install numerous devices to make sure the pipe was centered in the well before pumping cement, according to Halliburton documents, provided to congressional investigators and seen by the Journal. Otherwise, the cement might develop small channels that gas could squeeze through.

In an April 18 report to BP, Halliburton warned that if BP didn't use more centering devices, the well would likely have "a SEVERE gas flow problem." Still, BP decided to install fewer of the devices than Halliburton recommended—six instead of 21.

BP said it's still investigating how cementing was done. Halliburton said that it followed BP's instructions, and that while some "were not consistent with industry best practices," they were "within acceptable industry standards."

The cement job was especially important on this well because of a BP design choice that some petroleum engineers call unusual. BP ran a single long pipe, made up of sections screwed together, all the way from the sea floor to the oil reservoir.

Companies often use two pipes, one inside another, sealed together, with the smaller one sticking into the oil reservoir. With this system, if gas tries to get up the outside of the pipe, it has to break through not just cement but also the seal connecting the pipes. So the more typical design provides an extra level of protection, but also requires another long, expensive piece of pipe.

"I couldn't understand why they would run a long string," meaning a single pipe, said David Pursell, a petroleum engineer and managing director of Tudor, Pickering, Holt & Co., an energy-focused investment bank. Oil major Royal Dutch Shell PLC, in a letter to the MMS, said it "generally does not" use a single pipe.

BP's Mr. Gowers said the well design wasn't unusual. BP engineers "evaluate various factors" to determine what design to use for each well, he said.

Despite the well design and the importance of the cement, daily drilling reports show that BP didn't run a critical, but time-consuming, procedure that might have allowed the company to detect and remove gas building up in the well.

It's possible that they are simply covering their ass, but it's also possible that Halliburton learned from the Montara accident and was arguing for extra safety measures

Re:Halliburton?

[dogsolitude_uk]

Thanks, that's the kind of thing I was looking for! I'll have a nose through the rest of the article too.

Re:Halliburton?

[IdolizingStewie]

Halliburton did buy Boots & Coots in mid-April, which is a fairly prominent well control company. For anyone who is trying to draw the link you were not, Boots & Coots is not the well control company BP is using for the Deepwater Horizon. They are using Wild Well Control.

Re:Halliburton?

[budgenator]

Costly, time-consuming test of cement linings in Deepwater Horizon rig was omitted, spokesman says pretty much tells who did or don't do what.

Re:Halliburton?

[AGMW]

The other thing is that BP may attempt to offload responsibility on Halliburton and other contractors, that's all.

Of course it is just possible that some of the contractors at the site may have been instrumental in the blow-out and resulting deaths and pollution and therefore rightly called upon to shoulder some of the responsibility and accept some of the blame.

Re:Halliburton?

[MachineShedFred]

But it's HALLIBURTON!

*waves hands in a scary fashion*

HALLIBURTON! SCARY!!!

Do you see it now?

"I wonder what that BP manager was thinking."

[Colin Smith]

20% bonus if I come in ahead of schedule. etc etc etc.

 

Re:"I wonder what that BP manager was thinking."

[rrohbeck]

+1
That's exactly how it works.

Re:"I wonder what that BP manager was thinking."

[noidentity]

20% bonus if I come in ahead of schedule. etc etc etc.

You left out an "etc". You're supposed to put four in a row.

Re:"I wonder what that BP manager was thinking."

[MostAwesomeDude]

You left out an "etc". You're supposed to put four in a row.

He was trying to post ahead of schedule.

Re:Okay... so now what? - Revoke corporate charter

[j-stroy]

Incorporation is a privilege granted, rather than a certainty, or a "right". It can be revoked, although in the century since the accountants and lawyers started running things, it hasn't happened much. BP's apparent dishonesty and negligence would seem valid reasons for this action, given the outcome: Many people dead and a huge environmental / economic effect.

After seeing this proclaimed "biggest US environmental disaster", I think we might consider all the other massive impacts of industrialization on the US and question not how bad the Gulf is (terrible and worse every moment), but just how bad everything else that has been allowed to become. (mountain top removal, pesticide and medications in water supplies, species extinctions, massive deforestation, Hanford Nuclear Reservation, etc) Can we really be sucked into believing that this is just one bad thing on one bad day?

Flamebait

[roman_mir]

That's right, it's not the engineers who run those companies and when I point this obvious fact out it gets a 'flamebait' score.

If it's a flamebait, then I am going for it again. ... BP, Transocean, Halliburton have not rationally considered the options and have not rationally analyzed the feasibility. They are doing exactly the same thing they have been doing for the past 30 years at least. The current oil spill is a mirror image of the Ixtoc disaster, the difference is just how deep they are drilling. They couldn't stop the spill in 50 meters of water with the blow out preventer, it did not work then, didn't work now; with the 'sombrero' = 'top hat', with the 'junk shot'= some metal balls they were throwing into the well then, they couldn't stop the leak with pumping the mud='top kill' etc.

Engineers can take all the offense they like, but this is simply the truth. Engineers are not running BP or Transocean or Halliburton. Engineers matter only to the question 'how much more money can we dig out of the earth' and not 'how do we deal with a disaster we may cause'.

Re:Flamebait

[kabloom]

Give me a list of all offshore oil well blowouts in the last 30 years (since Ixtoc 1) and how they were capped. Just comparing two incidents, we can't possibly know whether these two events were anomalies, and sombrero/top hat, and top kill are techniques that have worked on other wells in the interim, and that could generally be expected to work.

Re:Flamebait

[Rudisaurus]

Engineers can take all the offense they like, but this is simply the truth. Engineers are not running BP or Transocean or Halliburton. Engineers matter only to the question 'how much more money can we dig out of the earth' and not 'how do we deal with a disaster we may cause'.

Engineers matter to the question 'what could go wrong and how do we keep it from happening?'

I doubt that engineers would design the BOP stack with a discharged battery, or with shear rams undersized for the weight of drill-pipe in the hole. I doubt that engineers designed the well-suspension program to proceed regardless of the results of the positive and negative pressure tests on the cement job or without a retrievable bridge plug set before pulling out of the hole.

Other people are often responsible for carrying out the plans of engineers, and the causes of accidents are often attributable to failure by others -- whether workers or management -- to follow the designs and recommendations of the engineers. Not always, of course, which is why engineers sit on boards of inquiry in an effort to ensure that the mistakes of the past are not repeated. The classic example is the Challenger accident, where management overruled the caution of the engineers with a well-known result.

So, in short, I think your excoriation of engineers' work generally is a bit misplaced.

DISCLAIMER: I am one.

Re:Flamebait

[roman_mir]

First, I was replying to this comment and he or she was replying to mine.

Now to yours.

I doubt that engineers would design the BOP stack with a discharged battery ...

That is not the point. The original point was that given the amount of time that these companies had to prepare real solutions to the oil leaking like it is in the Gulf and the companies did nothing. My point is valid, the engineers were used as tools who worked on deeper drilling but not on safety or oil leak/spill solution. And so we are witnessing this in full glory right now - same thing that happened during Ixtoc spill is happening now with exactly the same steps and with exactly the same failures, but SURE they are doing this now 30 times deeper. Good for them.

So again, engineers are not running oil or other companies, management who only cares about profit and not any damage they may cause is running them.

So I am not an oil drilling engineer and I proposed that they need to do something else that they did not look at previously and all of a sudden a bunch of assholes, including that 'engineer' are pissed at me for proposing shit that apparently is 'stupid'. Well fuck them, fuck that engineer and whoever wants to spout bullshit. Were are their solutions that are DIFFERENT and can WORK rather than the same useless crap as before? Nowhere in sight.

So, in short, I think your excoriation of engineers' work generally is a bit misplaced.

- so in short, I was not attacking the stupid engineers, who can't understand what I am saying, I was attacking the BP and other companies involved. If engineers want to take offense, I already said what they can do.

Time for the CEO to do some hardtime / the chair

[Joe The Dragon]

Time for the CEO to do some hardtime / the chair!

BP: birthed out of the destruction of Iran

[copponex]

1953 Iranian coup d'etat
http://wearechangecoloradosprings.org/docs.php (pdf source documents for OPERATION AJAX)

The Persians were dissatisfied with the royalty terms of the British petroleum concession, the Anglo-Persian Oil Company (APOC), whereby Persia received 16 per cent of net profits.

In 1921, a military coup d'état—"widely believed to be a British attempt to enforce, at least, the spirit of the Anglo-Persian agreement" effected with the "financial and logistical support of British military personnel"—permitted the political emergence of Reza Pahlavi, whom they enthroned as the "Shah of Iran" in 1925. The Shah modernized Persia to the advantage of the British; one result was the Persian Corridor railroad for British military and civil transport during World War II.

In the 1930s, the Shah tried to terminate the APOC concession, but Britain would not allow it. The concession was renegotiated on terms again favorable to the British. On 21 March 1935, Pahlavi changed the name of the country from Persia to Iran. The Anglo-Persian Oil Company was then re-named the Anglo-Iranian Oil Company (AIOC)...

The overthrow of Iran's elected government in 1953 ensured Western control of Iran's petroleum resources and prevented the Soviet Union from competing for Iranian oil. Some Iranian clerics cooperated with the western spy agencies because they were dissatisfied with Mosaddegh's secular government...

After the 1953 coup, the Shah's government formed the SAVAK (secret police), many of whose agents were trained in the United States. The SAVAK was given a "loose leash" to torture suspected dissidents with "brute force" that, over the years, "increased dramatically".

Another effect was sharp improvement of Iran's economy; the British-led oil embargo against Iran ended, and oil revenue increased significantly beyond the pre-nationalisation level. Despite Iran not controlling its national oil, the Shah agreed to replacing the Anglo-Iranian Oil Company with a consortium—British Petroleum [40% owner] and eight European and American oil companies.

Re:BP: birthed out of the destruction of Iran

[mjwx]

British Petroleum [40% owner] and eight European and American oil companies.

This is just the American Government picking on European companies.

Hey, it works for you guys when complaining about the EU even when the corporation is blatantly doing something illegal. Turnabout is fair play.

Yeah right...

[copponex]

Like 9/11 and terrorism have anything to do with oil... err wait.

Long jail sentences for management chain

[stomv]

Fines don't amount to much, even if they're huge -- shareholders get hurt, but the decisionmakers don't get hurt enough.

The solution: long jail sentences, from the CEO on down to middle management. If you knew about this and were anything but a prole, you need to go to jail. A policy like this and management will consider safety far more important than they do now.

P.S. Same goes for Massey up in West Virginia, etc.

Re:Long jail sentences for management chain

[DaMattster]

Both long jail sentences and fines for such flagrant disregard is in order! On a side note, and this is not in any way designed to lessen the severity of the environmental impact, this might just create the impetus necessary for real alternative engery developement and exploration - not just paying token homage to it. It is a royal shame for a major environmental catastrophe to make this happen, but I think a large amount of the inertia toward alternative energy has been or will be overcome in the following months.

Re:Long jail sentences for management chain

[J.J. Dane]

Jail sentences and multi billion dollar fines would certainly be in order, and that would probably make the next batch of company brass think twice before cutting corners. For about 6 months until the banks, hedge funds, investment firms et.c who really run things replace them with others more likely to get them the ridiculous profits they've come to expect.

Until these people/institutions start incurring real,substantial losses because of situations like this nothing will change long-term.

If you don't like the music, don't shoot the monkey,shoot the organ grinder..

Re:Long jail sentences for management chain

[khallow]

then take it out of their hides by charging ALL cleanup costs

I disagree. Government is notorious for exploding costs of activities like this. Someone will turn it into a milk run. If such a situation occurs, BP should only pay what is reasonable, which may be nothing since government is effectively taking responsibility for the disaster here. The ever gullible taxpayer should get the rest. It's only fair. I don't say this merely to troll the anti-BP folk here. I really think that doing as you say opens the door to government barging in on anyone's life, not merely an unpopular oil executive's, and charging up arbitrary costs that no one could pay.

As much as corporations want to be regarded as people, they aren't, not in any way that matters.

Name a corporation that wants to be regarded as a person.

Re:Long jail sentences for management chain

[shadowbearer]

  We put people in prison in this country because they smoke a joint, or sell a "feel good" drug to someone else who wants it, or jaywalk too many times, etc. The trials are short, for the most part (excepting celebrities).

  Greedy asshats who fuck up thousands+ lives haven't even been indicted.

  The "justice" system in the US has been bought and paid for, and those who flaunt it don't even have to hide anymore.

  The quote at the bottom of this load of the article is " If you don't drink it, someone else will. "

  Koolaid.

  SB

Re:Long jail sentences for management chain

[khallow]

All of them?

Nope. The vast majority of them are created solely to save on federal taxes, either as personal businesses or shell/holdings companies. The owners could care less whether the corporation is regarded as a "person" or not. In fact, as I was implying, I doubt you could find a corporation owner who really wants their corporation to be treated as a person. Of course, it's not hard to prove me wrong. Just create a corporation yourself and call it George.

They want to be given the same rights and legal status as a regular person, but because they're not "real individuals" they don't suffer consequences the same way (you can't put a corporation behind bars) and those who can be punished (executives) will hide behind the corporation. The only viable punishment you can give a corporation is a monetary cost; and that's because it's the only reason they exist in the first place - to make money.

Executives can't "hide" behind the corporation. You can jail the people who make the decisions. And punishing a corporation is like punishing a car. I understand that it has been done, particular with respect to US drug law, but property generally doesn't commit crimes, people do.

Moving on, corporations are created for many reasons other than to make money. For example, I used to volunteer for an aerospace non-profit which was incorporated. There the primary purpose was to put people in space, not make money.

oh, don't worry, CEO Tony is going away over this

[swschrad]

he won't be broke and broken, living under a bridge, but he's going away.

the question at hand should resolve over whether BP PLC is going away. there is ample proof of negligence and recklessness over the Mondero well, so there is no cap on liability.

kick ass!

[swschrad]

first intelligent suggestion I've seen in six weeks about B razen P olluters.

Re:"News for nerds"??

[Luke has no name]

News for Nerds, [and] Stuff That Matters.

This matters, in the broad sense.

doesn't work with oil.

[CFD339]

Oil is almost as fungible as any national currency -- more so than most. The nature of oil moving in the global market is such that unless a boycott is nearly universal in its application, there is virtually no penalty against the boycotted firm. The only place consumers can really have an impact would be at BP stations in their community, and in general that would only impact the local owners and operators, while the refinery simply sold their products to other retailers.

Re:doesn't work with oil.

[debrain]

Oil is almost as fungible as any national currency -- more so than most

Sir –

Oil futures are almost as fungible as any national currency. Oil itself is a physical quantity that is actually not very fungible at all because it goes bad, it must be physically transported to purchasers, and it must be refined in order to be useful. Oil futures, on the other hand, are — like currency — traded in title (i.e. low transaction cost), available in vast quantities (i.e. liquidity), and easily transferrable to other commodities and to currencies (i.e. convertibility). Unlike currency, oil futures eventually become oil (i.e. expiration), and oil future values are based on future expected demand (i.e. not fiat).

I think I understand what you meant, but it's important (and interesting) to draw the distinction between the trading of actual oil and oil futures.

Re:doesn't work with oil.

[CFD339]

Well, technically you're right of course, but I don't think it makes the slightest difference to the point -- which is that local boycotts of BP stations or even a small block of nations boycotting BP shipments wouldn't really have the impact the parent post suggests.

The real leverage the US Congress has here is the threat of direct sanctions like revoking existing permits and/or denying new ones for activity within our boards are coastal waters.

Re:doesn't work with oil.

[NateTech]

I've sat with oil company traders. Futures vs. real doesn't really apply, because they're all traded like they're real. And there's a reason... if you buy too many futures for the tank farm you have, you're going to have your asses handed to you by your trading competitors when they start to fill up and your competition knows you have nowhere to put it.

So, futures, real... doesn't matter. It's all traded like it's real. The place where they don't is if they have information that Company X needs oil due to a problem at a pumping station, etc... and Company Y has it... and you as Company Z can effectively trade against both sides. That's one of the ONLY times I saw traders on the desk making any kinds of calculated risk of having too much oil around to deal with.

And of course, oil like any other industry (computer bugs, whatever) has things that change from day to day.... at the morning conference calls the refinery might say XYZ device barfed, and a replacement will take a week, lowering need for crude and production by X number of bbls per day.... totally throwing all the careful month-long (or longer) hedging that a trader did to provide them with the stuff for the next one to six months... out of whack.

Saying there's a difference in futures vs. real is like saying there's money to be made in futures on the weather. You'd get your ass handed to you, not on the trading desk where your numbers might look great, but in the back-room meetings when the refinery called and said they had to stop all the pumps because the tanks are full.

(Add in twists like common-carrier pipelines where if you don't take what you bought, someone else is going to take it out of the pipeline for you and charge you for the "service", etc... and it gets even more complex.)

Re:doesn't work with oil.

[debrain]

Sir –

I don't necessarily disagree with your conclusions, but I would emphasize some interesting points on your analysis.

The point of my post was to contrast oil and currency by drawing the distinction between oil futures and oil itself, and how the futures are analogous to currency whereas oil is not. Certainly, as oil futures get closer to expiration, much like a bond as it gets closer to maturity, the value of the future converges on the value of oil, the same way bonds converge on their face value. The further from expiration/settlement, the more speculation is the future (similar to how a bond yield can be different from the coupon rate).

Thus the value of oil futures is what the price of oil will be at the date of expiration/settlement — not what the price of oil is at the date of purchase. As production goes up and down as reality presses on, investors can make more efficient investments in the future value of oil, and hence the convergence of prices of the future and the real price of oil as the future approaches settlement. You are somewhat correct in the sense that at settlement oil and oil futures become the same, otherwise the exploitation known as arbitrage would occur. Alas, there is a healthy arbitrage market at settlement of oil futures as they are converted to cash or commodity not equal to the real value of oil at the time. The arbitrage does bring the oil futures and oil prices in line – not for the once-holder of the futures, but for the arbitrageur.

Traders must draw the distinction between futures and their underlying commodities. One is a speculative investment on the future value of a commodity, the other is a commodity. In the context of my post the distinction is important for a long number of reasons, but foremost because of the mentioned qualities of futures contracts: low transaction cost, liquidity and convertibility. Oil itself has none of these (economic) qualities.

Futures are, of course, a legal fiction created to facilitate market efficiency. It is the underlying legal fiction, much like our fiat currencies, that drives oil futures (and hence, in the eyes of laypeople, oil itself) towards what can be perceived to be something analogous to currency. However it is just that – a legal fiction giving rise to an analogy – and we ought not to rest great conclusions of import upon it without understanding the underlying forces and principles — notably how oil futures differ from fiat currencies.

Re:doesn't work with oil.

[NateTech]

Replace "futures" with "Money" and you've just described the entire system, right? Money is the real fiction. Trading of it in "futures" or whatever really doesn't matter -- the value of money goes up and down on whatever the news-du-jour of the day is.

I generally agree with all of your points. My point in other threads (not this one) has been that the entire system is just a riddle/puzzle/game, and "bankers" and "traders" and their companies are not necessarily "evil" for playing... it's just the natural (as in "behavioral economics" natural) behavior of humans.

Trying to find other humans who are supposedly "morally superior" who can regulate such things efficiently and correctly, is pretty much a fallacy too.

Thus, we can slap all the laws and fines and whatever we want on BP or any other corporation, even putting them clean out of business in the process if we all so desire. The problem will be that as long as we're a petroleum-based society, there will always be gamesmen playing with the numbers. For many of these folks, they're just playing a game they were taught by society at-large via MBA schooling.

Not entirely true. Here's some insights

[Bysshe]

While the top guys are often not engineers, what you're saying isn't entirely true. They have very rationally considered the options. Here's a nice link to a technical briefing from last week where they outline their options and the current situation.

In addition Tony Hayward is a geologist with a PhD.

Re:Not entirely true. Here's some insights

[roman_mir]

My point is valid that the company did not rationally considered options and did not prepare for the disaster as a coherent unit, in a way that is meaningful and that could be used. My point is valid that the technology of trying to stop the leak has not advanced since 30 years ago and probably longer than that. They are doing the same thing and failing in the same way they did before.

Re:Not entirely true. Here's some insights

[GrumblyStuff]

Here's what roman_mir is talking about: http://www.youtube.com/watch?v=GHmhxpQEGPo

They're trying the same shit now that was used way back then.

BP Doesn't care. No really

[dokebi]

The really interesting stuff is after 1:30

http://www.youtube.com/watch?v=i6ZN6r5-1QE

Re:BP Doesn't care. No really

[metaforest]

http://www.youtube.com/watch?v=i6ZN6r5-1QE

Fucking amazing crash course in fucking boom deployment... fucking A!

So how much longer...

[asm2750]

...until BP is declared an enemy of the state?

Re:Okay... so now what? - Revoke corporate charter

[IamTheRealMike]

Well ...... yes. You could theoretically forcibly liquidate BP with an act of law. What would it achieve though? The people running these operations don't grow on trees. Engineers stopped going into the oil business in the 70s and the industry faces a massive skills shortage. If you liquidated BP and all the staff were fired, not only would it be an immense disruption to world oil supplies and thus prices, but the very same people who made the proceed/don't proceed calls at BP will get hired by their competitors and go right back to work!

It's too early to say exactly what the problem was at Macondo Prospect. Whether it was BP management problems, or (more likely) a murky and complex story involving errors of judgement by multiple people at multiple levels, it's too early to say "the fix is to kill off BP". In fact it's very unlikely to be the solution.

Deep... Water?

[gringer]

Looks like the people who were involved in Deepwater Horizon are in a pile of deep brown stuff.

Re: Does it Matter?

[Black Parrot]

You and I both know, no matter what comes out...no matter how bad and damning the evidence is against BP...the USA taxpayer and consumer will bear the brunt of the cost of the cleanup.

That's "privatize profit, socialize risk" in action.

This is good for the United States

[arcite]

Face it, your populace have turned into a bunch of overweight zombies. Bush, Obama, whats the difference? The corporations own your government and your asses. Where are the protests in the streets? Where is the outrage? Are you all just going to accept this disaster and go fill up your car with gas and go buy some more junk food (as usual)?

Oh wait a minutes.... you guys got lawyers by the hundreds of thousands, that will SOLVE all your problems. Just sue yourselves while you're at it, you could use the Ca$h I'm sure....

Perhaps,... just perhaps this epic MAN-MADE eco disaster will wake up enough of your patriots (are there any left anywhere in the world these days?) to take back the agenda and start acting like you deserve the moniker, Superpower...

BTW, this isn't a flame, I'm a Canuck and I believe that the US is the greatest country on the planet...Americans are awesome, Hell, I even work for the US government (via third party)! In conclusion; Show some vision will ya? WAKE UP!

Re:This is good for the United States

[icedcool]

Yes.

Re:This is good for the United States

[yyxx]

Face it, your populace have turned into a bunch of overweight zombies. Bush, Obama, whats the difference? The corporations own your government and your asses.

And which magical kingdom do you live in where this is better than in the US?

The zombie here is you because you mindlessly repeat the stereotypes that your own media and government want you to believe.

Re:This is good for the United States

[orient]

Actually, Canada is the greatest country on the planet. Looks like you've been blinded by the American beacon showing the world the path to [insert utopic ideal here].

Re:This is good for the United States

[Raineer]

Take it easy Mr. Nicholson, the OP is exactly right.

Re:This is good for the United States

[bill_mcgonigle]

start acting like you deserve the moniker, Superpower...

please, no, that kind of thinking is part of the problem. "Avoid foreign entanglements".

Re:This is good for the United States

[carp3_noct3m]

The problem is that the people that are aware of the problems are far fewer than the sheeple who continue without a care. I'm afraid that until something extreme shocks the nation nothing can be said or done to "wake up" enough people to actually get fundamental issues changed. And those groups that do many of those things are often misguided, extremists to a point of flaw, or infiltrated by those that are. Yeah, the problem is also that it is no longer just the US. You think canucks or Euro's are any more immune to this (on a relative scale?) , yeah, were all pretty much fucked methinks.

Re:This is good for the United States

[NateTech]

Says the man typing on a keyboard made from petroleum products...

Re:Does it Matter?

[vlm]

the USA taxpayer and consumer will bear the brunt of the cost of the cleanup

and have an unlimited supply of $$$

You may wish to meditate on the relationship between the above two quotes. Where exactly does BP's unlimited supply of dollars come from? I don't think you realized how closely those two quotes are related.

I will be shocked if they are held accountable in the end

Relatively little oil is pumped out of the GoM and shipped around the world to Saudi Arabia.

If by "they" you mean the USA taxpayers, its only fair if we're the ones burning the oil, that we're the ones paying to clean it up.

The only difference between "BP" taking our money at the gas pumps to pay, or the USG taking our tax money to pay, is whom has a more efficient cash handling system, whom can skim more money off, etc. Generally BP works on a cash in cash out system, whereas the USG spends about $2 for every $1 taken in taxes, leading to national debt, which is somewhat beyond the scope of this post, although it is another minor difference.

Risk-assessment - was BP prudent?

[davidwr]

1) What did BP know and when did they know it
2) Nothing is risk-free. Would a responsible independent risk assessment say they should've done more to prevent a leak, or did it say that doing more would've been an unnecessary cost given the odds of something going wrong?

You don't crucify someone because they made the smart decision and it backfired. You crucify them if they made a stupid decision and it backfired.

To put it another way: We can have safer drilling if we are willing to pay more for oil or have less oil available. We rely on industry and regulators to find that balance between making drilling cost-effective and protecting the public and the environment. If they make responsible decisions and something goes wrong, that's the price we pay for affordable oil. If they make an irresponsible decision and something goes wrong, they are responsible for cleaning up the mess.

Anyone taking bets on when BP's US unit will file bankruptcy, and when the first indictments will be handed down?

Take Damages Directly out of Shareholder Equity

[catchblue22]

If you want to make corporations pay attention regarding flagrantly negligent behavior, how about threatening to take the damages directly out of shareholder equity. After all, when you buy shares, you already assume a fairly large amount of risk. If shareholders can be held liable for damages done by their company, I suspect corporate behavior would change markedly. The liability would be limited to the amount of equity owned. In an extreme case, perhaps where a corporation has blatantly flaunted the law, the shareholders or owners could have all of their equity liquidated, and sold to other buyers. Call it the corporate death penalty.

After all, if corporations are "people", why shouldn't they be held to the same level of responsibility as people? Why shouldn't they have penalties similar to those which we the people must live with? The idea of a corporate death penalty would likely have a huge effect, even if it is never used. Corporations would be far less likely to cut corners on safety. BP would have had to factor into its bottom line the costs of say drilling another relief well at the same time as the current well. They would be less likely to risk using an inferior method of cementing the casing. They would have had proven methods of capping such blowouts in place before they started drilling.

Re:Take Damages Directly out of Shareholder Equity

[Chris Mattern]

how about threatening to take the damages directly out of shareholder equity

Um, they do. Whenever a limited liability company pays for anything, that's where it comes from. The stockholder's equity is the ownership of the corporation's assets; when assets are lost, the equity shrinks.

Re:Does it Matter?

[Man On Pink Corner]

Where exactly does BP's unlimited supply of dollars come from?

Several thousand feet underground, mostly.

Duh.

[gbutler69]

Where do you think damages are paid from in a civil suit against a corporation?

Re:Duh.

[catchblue22]

How about confiscating shares and reselling them? I don't think that is done right now.

Re:Duh.

[TheRaven64]

Or just issuing new shares, which are either held for later sale. This dilutes the value of all individual shares, without singling out anyone to be punished specifically - the value of all shares drops. If it happens enough times, then the corporation ends up nationalised as a side effect, because the government owns more than 50% of the shares.

So

[dnwq]

What future disasters does someone in BP know about now?

Re:So

[Apple Acolyte]

Apparently the executives don't know much at all.

Re:Does it Matter?

[ultranova]

The only difference between "BP" taking our money at the gas pumps to pay, or the USG taking our tax money to pay, is whom has a more efficient cash handling system, whom can skim more money off, etc.

Um, no. The difference is whether and how much BP executives get bonuses for a job well done. That's the only difference between "private" and government.

excellent indicator

[Titan1080]

What becomes of this tragedy in the gulf will be a great way for everyone to finally realize just how fascist our system of government has become; that is if it goes the way many of us believe it will, a slap on the wrist to BP. Of course I could be wrong. Some judges and prosecutors might actually acquire some balls and give BP what they truly deserve. I will not be satisfied by anything less than: 1. 10+ year prison terms for at least ALL senior BP executives, 2. the dissolution of ALL of BP/auctioning of all assets and seizure/redistribution of all available BP funds. Basically, get completely rid of the entire company for good.

Sick of Pocket Know-it-alls

[bsercombe72]

Anyone who has had any experience with drilling opreations in the gulf will know that loss of drilling fluids, kicks and other well control events are common, expected and routine. Dressing them up to be problems with the well design is pure horsepuckey. If you don't know what you're talking about then STFU. Even so-called "underground blowouts" are common and can be insured by lloyds. Furthermore the phrase 'casing was unlikely to be a successful cement job' makes no sense. The article is poorly written by people who do not have a grasp of oilfield equipment and procedures and obviously could not be bothered consulting with someone who was in the rush to attempt to smear Pulitzer all over themselves. Now, this statement has nothing whatsoever to do with the actual issues which were: failure on BP and Transoceans part to identify excessive fluid flows following the cementation of the production liner AND failure (or so it seems from public information) to maintain the BOP- quite a difficult task given its located at the sea floor but any indication that it has problems should call for immediate halt and repair work. When drilling any well, your BOP is all that stands between you, catastrophe and death. /rant

Re:Sick of Pocket Know-it-alls

[bsercombe72]

Probably I didn't get the thrust of your question, but the reason a giant boulder won't work is the bottom of the GOM is mostly soft mud. Your bolder would twist and split the top of the pipe. Oil would then erode its way through the soft sediment and squirt around the side of the boulder. All you'd achieve is making it even more difficult to plug the leak. In fact we are all pretty lucky that the wellhead is in such good condition. Sometimes a blowout will blow pipe out of the hole- if that had happened a relief well would be your only solution. Recently there was a a similar blowout off Western Australia. It took 3 months to kill the failed well with a relief well. People don't seem to understand just how hard it is to hit a target that is 9 5/8ths inch across when it is a mile deep in seawater AND 18,000 feet below the surface of the seafloor.

Re:Sick of Pocket Know-it-alls

[DeanOh]

I never thought a "giant boulder" was a solution...but understand why somebody might asked that question given the lack of effort by BP and the US government in explaining the "how it's done" of both normal oil drilling from deep sites or the response to the Deepwater Horizon site.

You are full of shit.

[arcite]

Governments exist to create and maintain standards. You can blame bureaucracy, special interests...but your excuse is that there is a FREE MARKET? HA! There is no free market in this world. I have worked in the middle east, the gas is cheap there because it is completely SUBSIDIZED by the government to placate their citizens from overthrowing their despotic rule. If everyone is able to drive around the latest Land cruiser and Mercedes, and fill their tank with 10cent liter fuel, they are much less likely to protest the fact they have very few civil rights. Please get a fucking clue. The minute the world discovers that Saudi are out of oil, they will have an Islamist revolution, it is a certainty. Its a fucking shell game. FREE MARKET is mostly an illusion to keep the peons like yourself in line while the elites fight over who gets to be in charge next. Most of the large oil producing countries are centrally controlled by the elite citizens of those countries. It is by no accident that the largest oil producers have poor democratic records...if they have democracy at all, most of them are actually totalitarian regimes. The funny thing is, the USA is the only superpower in the world. China has little ability to affect foreign affairs as their military has no ability to project power. China is reduced to giving free trade deals to such outstanding countries as Sudan, Iran, and the like. If, for example the US decided tomorrow to convert to a hydrogen economy you can bet your ass there would be revolution in Iran the day after. It is the elites in the US, the bankers, the 'investment funds' who pull the strings, who have their interests, that prevent this change from happening.

If you don't have a clue yet, the future success is not to subsidize more oil exploration (shale? ha! Why not just buy more tar sands from Canada?) The real change will come with INCENTIVES from the government for technological INNOVATION. Solar, wind power, wave power, dams, fuel cells, Nuclear, energy efficiency... its not fucking rocket science, there just needs to be the political will to make it happen.

Re:You are full of shit.

[Khyber]

"Governments exist to create and maintain standards."

No, scientific standards boards exist to create standards. Government exists to enforce law (in theory) and to provide care for its citizenry (in theory.)

This is familiar

[codecore]

So some low-level technician or engineer knew there was an issue, passed the information to management, and against all sound judgement, they proceed. It's Challenger all over again. Perhaps if we started hanging the over-paid mangers by their thumbs, this kind of crap will stop happening.

history and context

[yyxx]

People should really be aware of the history and context of these companies.

This is British Petrol, the same company that is effectively responsible for the mess in Iran today. They have a history of blatant disregard for safety.

And the platform is owned by Transocean, a Swiss company, the same company that had a nearly identical accident in 1979 that was the second largest oil spill in world history, the Ixtoc I (the largest being the oil spill that was part of the Gulf War).

The reinsurance companies are two German companies; insurance companies are supposed to assess the risk, insist on necessary safety measures, and price insurance accordingly. They dropped the ball too.

It's disturbing that Europeans are so quick to point the finger at the US. This is a problem that has been primarily created by European companies. It would have been nice if US regulators had regulated them more strongly, but that doesn't transfer responsibility to the US government.

What do we expect?

[SmarterThanMe]

What do we expect when we (not the US, the entirety of the Western Hemisphere at the moment) have a corporate culture where spending the least possible, while still charging the most possible is the major determiner for success?

What bonuses (boni?) did BP management receive for bringing this impending disaster on us? Will they have to be paid back? Doubt it. Pat on the back, well done, we'll just fire some low-level workers to cover costs or just transfer them to the idiot customers (to which competitors to BP will just say "hooray", meet the price and pocket the higher profits).

Same situation for the toxic debt problem. Same situation for the rushed Iraq invasion. Same situation for most other environmental disasters.

This is evident in every facet of our lives. In my industry (education), we're trying to pack more students into smaller spaces with fewer teachers. We're wondering why we're seeing things like lesser empathy in tertiary students... DUH.

On purpose

[SgtChaireBourne]

So in other words, the disaster was more or less planned on purpose.

The oil executives have waged war.

[lenski]

I am old enough to remember the oil shocks of the 70's and the national response to them. People thought a little bit about efficiency, and for a few years demanded research funding on alternatives. The result was a 25% (or so) drop in demand for "oil" and its derivatives. Those events pissed off the top executives, so they began a comprehensive and sustained war against any credible replacement of their product, or even for ways to dilute their market power.

I have been thinking about what you are saying here for 30 years.

Every single year it's the same damn story: "Don't touch our energy supply! It will destroy the economy!"

Not once have I heard anyone with real influence say something new like "We should really be researching how to manage a transition away from what appears to be a limited, environmentally risky, and internationally de-stabilizing energy supply."

The incumbents (oil execs, etc.) have succeeded in preventing this society from even trying to figure out how to be economically viable if/when it becomes necessary to move beyond petroleum. So now we have people noting (unfortunately correctly) how dependent we are on the decisions of between 60 and 200 boards of directors of the major energy companies.

All that talk about "the market" is totally fucking bogus. The fact is that all of western society is stuck with the planning decisions of those executives. I hear libertarians and conservatives talk about the government all the time talking about "private industry" having the "freedom to innovate".

Sorry guys, those executives and a few others (the top few banking institutions, the top few media companies, etc.) are basically running things exactly the way the planned economies of yore were run, with the same effects: An absolutely perfect record of failure to manage change effectively.

Dear BP

[hallux.sinister]

Thank you thank you thank you THANK YOU!!! -Exxon.

Each "failed" executive will face...

[lenski]

... retirement with resources that would serve as comfortable retirement packages for, I'm guessing, 100 middle-class families.

Every time I hear this bullshit about the board serving stockholders and the CEO serving the board, I remember that they tend to downsize from 6 yachts to 4, and from 6 chalets to 2.

And we have politicians running for office in the upcoming U.S. elections demanding that "the government get its boot heel off BP's throat".

This is how we treat those whose decisions lead to catastrophic consequences for society and the people who actually have to work for a living. Drop their $200 million retirement package all the way down to $130 million. Tough shit for those executives.

Re:There's ANOTHER Leak:

[pandrijeczko]

Let us know when their flights back to the UK are.

I'm sure there's more that a few of us here will happily barricade the airports so they can't get back in and have to return to face US prosecution.

Deepwater Horizon?

[DarthVain]

Is anyone surprised they accidentally drilled into hell?

jdmuskrat@gmail.com

[jdmuskrat]

thank you Regan/Cheney/Bush for all the "let the private industry self regulate" ideas you all implemented. thank god the free market is free to do as they please for maximum profits. Profit Uber Alles!