Forgive me if this has been addressed in the other long BP threads…
Seems like BP has been tried and found guilty and many want to move on to the penalty phase already.
Certainly they are not innocent but I’d think there are other parties involved who might be found to have contributed to the problem… including government agencies.
Have we dealt with anything like this before?
I think it was Robert Reich on ABC yesterday who advocated “receivership” … what would it take to do that and how difficult would it be for BP to fight it?
BP is the legally responsible party. Beyond them, I would have to say that Anadarko and Mitsui will end up penalized the most and bear the highest costs. Halliburton, Transocean, and Cameron will get named on thousands of lawsuits, but probably won’t end up paying much as they were not the responsible parties.
Any talk of doing something crazy (seizing assets or other) is extremely foolish and shouldn’t be looked at as anything other than a last resort. If BP is paying the costs, as they are, and pushing forward on the relief wells to ultimately kill the leak then I don’t see any point in this sort of talk now other than to look like a nation that doesn’t care about the rule of law.
When you consider the long term financial damage this will cause in the food industry I don’t see how BP could possible fund this and the cleanup effort and the capping effort.
What scares me is the nature of oil that is coming ashore. I saw a newscast that had a container of it and it was so thick it didn’t pour. It looked more like asphalt than oil. How the hell do you clean the ocean floor?
Let’s wait and see if they are able to. Remember, they don’t need to fund 100% of the cleanup costs; that will be shared with their partners: Anadarko and Mitsui. The punitive damages will be and should be large, but BP has a lot of resources. Just for a sense of the size, I believe I have read that the seafood industry off LA is around $2.5 billion per year. It certainly isn’t going to be completely wiped out, and will probably be back to close to normal in 2 years. In addition to the significant liquidity that BP has on hand right now, they can easily generate free cash flow of $20 billion per year. If this ends up costing $50 - 75 billion, they should be able to handle it.
It’s not all that thick tar like substance. In fact, I believe that is less than 5% of the spill.
If they can generate that kind of money indefinitely then there’s hope. I think 2 years may be optimistic for the damage. The surface oil will be the easiest to capture but then there’s the stuff that is floating below surface and the oil that settles on the floor. I’m not sure how much of the food chain works it’s way up off the ocean floor but the combination of that and subsurface oil has to affect a broad range of ocean life.
As per the banks, you don’t get away with minimum oversight and regulation by accident. Politicians will make BP do what they have to do to assuage the media and public concern, then it’ll be back to the serious business of taking the oil companies cash as ‘advisors’, etc.