Apologies if this subject has already been discussed, there are so many threads on the oil spill it’s hard to keep track.
I have seen estimates at the cost of the clean-up as high as $12 billion, now that’s a lot of money and i’m sure the notes aren’t being used to soak up the oil so who is going to be getting it? Which companies will be on the receiving end of this massive windfall and laughing all the way to the bank? Major oil spills don’t seem to happen too often so I don’t imagine there are companies dedicated to cleaning up these messes so will it be down to fishing vessels re-equipped with the tools to help out?
The money can’t simply vanish, can I buy stocks in whoever will be paid to clean up the mess, I imagine an extra $12 billion on their bottom line could net me a nice dividend!
Also, I seem to remember reading when this all began reading that oil companies pay into some group insurance account which, after paying an excess, means that companies are protected against paying the full cost of cleanup. Allowing BP to pay for part of the cleanup and the balance coming out of the ‘joint account’ of the oil companies. Was this completely wrong or is it just being ignored?
Much of the money will be spent by BP diverting other resources from profitable activities. For example, right now they have a container ship sucking up oil from the containment device, two separate drilling platforms digging relief wells, several robotic submersibles twiddling with the broken well-head, all sorts of construction ships, cranes and other paraphernalia, and all the support ships required for those, crew to staff them, and suppliers to feed and clothe them. Normally, all that stuff would be used to produce profitable product; now it’s being used to clean up the mess.
A large amount of money will be paid to state governments in the gulf region for public-works projects related to the cleanup. BP has established a $360 million escrow fund for Louisiana’s project to build protective sand berms. That money will presumably go to local companies with expertise in sand dredging.
They are spending a shitload of bucks on oil dispersants, as well. Several companies make them.
Would you rather nobody clean up anything? Or perhaps bring back slavery? Because those are the only possible ways that nobody will “win” from this situation.
The first two, definitely. Sombre-suited parasites, the lot of them. Healthcare workers have a little more positive input into society, so they’d get a pass.
Whoever is making Corexit (the oil dispersant) is cleaning up, no pun intended.
Anyone making oil booms, or any of the consumable absorbent materials that are being used to clean up the mess.
A few people here and there have attempted to organize boycotts of BP products (which is a very long list of items); presumably they are taking their business to other oil companies instead, which means those other companies are profiting.
While some oil companies’ retail operations may see an uptick in business due to any boycott of BP products, many also have operations in the GOM and AK and the moratorium on additional offshore drilling will have a huge impact on their business model. The lease bidding process, asset team operations, contracting of extremely expensive rigs, etc. are all complicated endeavors that involve large commitments of time and capital and sudden, unforseeable breaks in that flow will be hugely expensive for them, despite the fact they have zero culpability in the spill. In fact, many if not most are providing BP and the government any beneficial assets they can free of charge to aid with bringing the discharge under control.
Society, as a whole, will be poorer for this, and in that sense wealth will vanish from this disaster. Sure, people will get paid for cleaning it up, but that’s just a Broken Window fallacy: it would be even better, economically, if we just gave the money to the cleanup crews and never had the disaster in the first place!
Because pollution has a cost: wealth has been removed due to the pollution, due to the beach pollution and wildlife die-off (not to mention the loss of oil).
No shifting of money around will make up for the destruction of resources. In the aggregate, this reduces our average wealth.
Which is a totally pointless exercise, because BP products are all fungible commodities. Mobil or Sunoco will just buy BP’s gas on the spot-market and pump it into your car anyway, rather than increasing their production, if it’s cost-effective for them to do so. And it probably is.
[This isn’t intended as shitting on you, Joe. You didn’t advocate it, you just mentioned it. ;)]
Somewhat longer range, a possible result is that increased regulation will force drillers to buy new equipment to meet tougher safety standards. That would bring business to the manufacturers - CAM gets tarbrushed because it’s their blowout preventer that failed - their competitors are NOV and WFT.
I’ve been wondering who sells seafood not harvested in the Gulf. Their harvests presumably won’t be affected, and demand could go through the roof.
Offshore drillers not regulated by the US. In particular, PBR, whose finds off Brazil look more significant all the time.
This might provide some momentum for the alternative energy players, if you really feel like gambling.
