Poor BP

The latest inanity coming from the BP oil spill fiasco was US Representative Joe Barton R-Tex apologizing to BP because of how unfairly the company has been treated by the US government. He called the $20 billion compensation fund demanded by Obama a shakedown, and said even if they were wrong, it wasn’t right for the government to demand the money. The Repug leadership quickly moved to disown his comments.

In the Exxon Valdez case, it took 20 years of legal wrangling to wrest a mere $500 million out of Exxon. A jury originally awarded damages of $5 billion but that judgment was easily overturned by a higher court. After all, five billion is practically 10% of one year’s profit. They did pay some compensation right from the beginning but nowhere, no how did it cover actual loses. There is no corporate weighing of right and wrong regarding legal culpability or claims against it, only a simple bottom line calculation. If the corpse thinks it can avoid a billion dollar judgment by spending $990 million on legal costs, that’s the track it works on.

David Cameron, UK Prime Minister, has cautioned Obama against bad-mouthing BP too seriously out of concern for the corpse’s stockholders and pension funds who hold its shares. Others are comparing it to Britain bashing even though BP is no longer officially British Petroleum, only BP.

I’m not totally without sympathy for pensioners who lose out as a result of BP’s reckless behavior and its casual, even malevolent, attitude toward safety regulations, but that’s the name of the game: investing is speculating, which is just barely, if at all, above gambling.

A lot of people have gotten the idea, from the corporate philosophy that’s been ingrained into the Western mindset that investing is fool-proof and as good as money in the bank. Conservatives have rightly understood that bringing lots of people into investing through pension funds and such, essentially tying them into the capitalist structure, would change their political attitude. What they didn’t count on was stocks going down; they’re only supposed to go up, you know.

It’s too bad so many large developed economies have lowered their interest rates to near zero in frantic attempts to stimulate growth, because that has left many people thinking they had no choice but to invest rather than just put it in the bank.

So why not invest in BP? It’s one of the world’s largest and most stable corporations, it’s always profitable and always pays good dividends. Well, if you were an astute investor, one not totally blinded by the hype, you’d look at BP’s safety record before you put your money into it. If you did, you’d find that BP not only has a sorry record of spills and explosions, but they’ve been cited by the US government for safety violations far more than any other oil company. In the last 3 years BP has received more than 700 citations for flagrant safety violations; all the other big oil companies combined received just 9. Moreover, many of those 700 also had the terms, ‘willful’ and ‘egregious’ attached to them.

The US supreme court has ruled that corporations are persons before the law with all the rights of individuals. Nowhere have they specifically ruled that corporate persons are allowed to get away with murder, but that’s the way it works. Flagrant, willful, egregious safety violations must be the corporate equivalent of drunk driving, yet a human person convicted of drunk driving causing death would be taken off the roads and imprisoned pretty damn quickly.

Not a corporate person, they just get paltry fines levied against them that are cheaper to pay than following safety rules and since the bottom line rules for them, they’ll break the rules as long as they can get away with it. It seems to me that the government in this case is almost as guilty as BP. Corporations are like young children: You can not expect a corporation to act responsibly without strong rules and serious consequences for not following the rules any more than you can expect a two-year-old to know right from wrong; they have to be taught, guided, restrained and disciplined.

Getting back to BP’s gusher, it’s still at least 2 months before one of the relief wells meets its target and the flow can be stopped. However, there’s no guarantee that will happen; both might miss the target. BP could have tried digging three or four relief wells at the same time for better odds but they cost $100 million each and the sea above the well might get quite crowded with that many drill ships working at the same time. So they’re crossing their fingers.

Meanwhile the worst case scenario is so terrifying it disheartens even a doomsdayer like myself. It postulates that BP may never be able to stop the gusher, but rather it’ll continue to flow until the reservoir is emptied of its billion plus barrels of crude. This comes partly from shoddy work to the point where the well was weak and vulnerable to begin with and is now losing its integrity. Leaks are appearing before the blowout preventer and in general the well is eroding quickly - because there are always abrasives in the crude - from the oil gushing out at very high speed and pressure. This scenario may be way off the mark but considering how little anybody really knows about these things, as good as a lot of other possibilities.

In order to stop the flow the relief well has to hit the gushing well far underground, very close to the reservoir, and it has to happen before the well totally degrades; that is, while the well is still intact, otherwise there’ll be no way to ever stop it and this spill will become a nightmare of biblical proportions – literally decades of oil spewing out and contaminating everything.

(If you want to delve into this fiasco on a more technical level I highly recommend adropofrain.net. For really technical stuff theoildrum.com is an excellent resource. I can understand the technical stuff, but only to a limit.)

It’s a race against time. If BP loses, it will certainly cease to exist and may well go down in the annals of corporate infamy as the worst of all time. You can bet that BP is already investigating splitting off its American operation so it can limit its liabilities and go bankrupt without taking the whole company down, which is why Obama’s extraction of $20 billion from BP was a very wise move.

If you are one of the shareholders of BP, pensioner or otherwise, who is due to lose your shirt, I’m sorry but that’s the way the game is played: You gambled, you lost. Which is nothing compared to what the Gulf has lost.

This ongoing eco-tragedy however has not stopped the US government from issuing deep

water drilling permits in spite of Obama mandating otherwise. It also has not stopped Republicans from demanding that Obama not enforce a moratorium on new drilling permits. What the heck, it can’t happen twice in the same area, can it? Those mendacious idiots can’t even wait until the full story is told and serious adjustments are made to drilling rules and procedures that might make another blowout less likely. Drill, baby, drill.

It Ain’t Over Yet

All three stories I’ve been following recently – BP, Thailand, Israel – are assuredly unfinished, with serious repercussions yet to follow.


In BP’s case, its fouling of the Gulf has barely begun. It’s recent failing gambit to stop the flow of oil, the top kill, which involved pumping large amounts of trash into the well hoping to clog it up, was one more indicator of its impotency. To some it was a publicity stunt. Since plugging an undersea well hasn’t been done much in the past and never at the depth of the Deepwater Horizon blowout, they are just flailing away, trying anything they can think of, hoping it’ll be a magical cure.


It really wasn’t necessary for BP to think ahead and try to plan for possible blowouts or malfunctions since, paraphrasing Barack Obama, the technology is really advanced and so the chances of encountering problems is very remote.


But, as the famous Murphy once exclaimed, if something can go wrong, it will. So now the current Hail Mary is to make a clean cut in the riser, the pipe that leads up from the broken Blowout Preventer, and try to cap it so most of the gushing oil can be siphoned off. It would be impossible to make a tight fit in such a circumstance, so even if they are successful there will continue to be a substantial amount of oil leaking into the Gulf. They are now siphoning off about 30% of the oil and will try to increase that proportion; this is considered a success.


Regardless of the relative success of the latest gambit, it will continue to leak at least until August when one of the two relief wells now being dug is able to intersect with the leaking well so it can then be plugged off. Actually, the August target is a product of BP’s wishful thinking, independent experts think September is far more likely as a best case.


It is actually quite a challenge to drill from a mile above the sea floor and then through two and a half miles of earth and accurately intersect with the well casing. In fact, it’s entirely possible that neither of the two relief wells now being dug will hit the leaking well closely enough to plug it. In that case it would take another 4 months before the next attempts reach the well.


If they’re lucky, they’ll be able to plug the leak in September. That assumes the whole operation isn’t waylaid or seriously delayed by hurricanes, since the official storm season has officially arrived and is predicted to be an active one.


Meanwhile, the 1989 Ixtoc well blowout in Mexican waters took a full ten months to plug and that was only in 150 feet of water where divers could access the wellhead. More recently a blowout in the Timor sea took five tries before a relief well properly intersected the leaking well.


A lot of people, as reported, are angry at BP for failing to stop the leak. That is stupid and nonsensical. Rest assured BP is doing all in its power to try to stop the leak; its profits, not to mention its very existence is at risk.


People are also complaining that Obama is not doing enough to stanch the flow of oil. Here too they are way off base, there’s not much he or the government can do that BP isn’t already doing. As the government has said, it has neither the equipment nor expertise to do the work.


That said, Obama is partly culpable since the public should be directing the effort and controlling the narrative. BP has consistently tried to low-ball the estimate of how much oil is flowing and held back the first release of videos of the leak until pressure from congress and independent researchers was too great for it to refuse. BP made the ridiculous excuse that they were too busy trying to stem the flow to be distracted by showing the pictures… like you can’t scratch your balls and watch TV at the same time.


The US Environmental Protection Agency told BP to use a less toxic oil dispersant, BP arrogantly ignored the EPA directive. The government wasn’t told the top kill had failed until 18 hours after the fact. Cleanup workers are regularly sickened by the spill’s fumes but BP insists they are not to use respirators, probably because it wouldn’t look good. BP is not just trying to plug the leak they are also trying to cover their ass. With the government in control and information flowing more freely, independent experts might have been able to assist the effort.


Best case scenario is that the cap works to divert most of the oil so that the gusher continues at mere disaster level instead of catastrophic level, hurricanes conveniently wait to unleash their fury until after BP lucks out with one of its first two relief wells and the leaker is plugged in August. Equally likely is that the cap doesn’t work very well, fierce storms seriously hamper the relief well effort and it takes another six months to a year to stop the flow. By then the Gulfstream current could take the oil all the way to Europe.


It ain’t over in Thailand either.


Unelected Prime Minister Abhisit probably feels really good about himself for stopping the red-shirt protest. So good, in fact, that he’s forgone seeking reconciliation and accommodation with protestors who represent the majority of Thais and instead is seeking to charge its leaders with terrorism.


All he bought with the death of 88 protesters was a little time. The Red-shirts will be back. They feel the government was stolen from them and are rightly concerned that, even with an election, it will happen again. Since the government, backed by the yellows, believes that the riff-raff that makes up the opposition is not capable of governing – not smart enough essentially - they may well try to institute some form of limited democracy. Otherwise, as mentioned previously, the reds will undoubtedly win the next election.


Back when I first went to Thailand in 1992, it’s tourist slogan, Land of Smiles, was surprisingly true. Just entering immigration the guy behind the desk was as warm, smiley and pleasant as could be. Today, you’d need to look hard to find a smile in the same circumstance, it’s all completely matter-of-fact. Tourism has tripled over the last 18 years and become boring; the immigration officers working the lines probably have limited incomes and are pissed, consciously or otherwise, at the great income disparity in their country, the worst in the region.


Even back in 1992 I was surprised at poverty levels in a place with glittering high-rises and so many cars it had possibly the worst traffic jams imaginable: In many parts of Bangkok, traffic would back up in peak hour to the point where nothing would move for nearly an hour. Meanwhile, large numbers of people were living in hovels more typical of a dirt poor country like Cambodia than up-and-coming Thailand.


At this point the common people of Thailand are tired of seeing the fruits of prosperity residing totally amongst the elite, and livid with rage at how the first Thai government ever to consider their needs was deposed by people who seek to limit democracy so they can maintain their power and status.


So it ain’t over yet, the Red-shirts will be back.


Once again Israel has resorted to brute military force to counter its opponents. Since its continuing illegal and immoral blockade of Gaza (in which items as simple as pencils, notebooks and coriander are forbidden, not to mention the cement and other building materials desperately needed to rebuild the 50,000 homes and other important structures damaged or destroying in its attack on Gaza) is not justifiable either in international law or common human decency, the only response it can make is intimidation and murder.


Israel says it was attacked, but since they confiscated all cameras and cell phones, not to mention laptops, money and all personal effects, the other side of the story can not be shown. According to eyewitness accounts, Israeli commandos started firing even before the reached the Mavi Marmara’s deck, but, of course, there is no way to visually verify that.


While everyone else in the world is calling for an independent investigation of the incident, the Obama administration, in one of the most craven acts of political cowardice every recorded, wants Israel to investigate itself. We all know the outcome of that one.


The Rachel Corrie, the last ship to try to break the blockade just yesterday, couldn’t join the flotilla because of mechanical problems. For those of you unfamiliar with the story, Rachel Corrie was a young American activist who was crushed by an Israeli bulldozer in 2003 while trying to stop the demolition of a Palestinian home. She was in full view wearing bright clothes. The dozer operator chose to kill her. If you think he was ever punished for that murder, you’re living on another planet.


According to Israel the purpose of the blockade is to make life for Gazans so difficult they will turn against Hamas and choose a government more to Israel’s liking; that is, docile and subservient. It ain’t gonna happen. If it takes ten years or fifty years or a century, the Palestinians will not stop fighting for their land and freedom.


Israel likes to say it left Gaza but that’s a lie considering it still controls nearly everything that goes in or out. Israel’s plan for a two state solution to the Middle East would have the West Bank divided into three Bantustans each completely surrounded by Israeli territory thus enabling Israel the same stranglehold on the West Bank it now has on Gaza. A totally untenable non-starter.


Israel’s ongoing theft and colonization of Palestinian land in the West Bank (By the way, it’s not called the West Bank in Israel; there it’s Judea and Samaria, thus an essential part of Greater Israel) makes the two state solution impossible. What it really seeks to do is repress, harass and humiliate Palestinians to the point where they will go somewhere else; exactly where is not specified, though many Israeli Jews want to deport them all to Jordan.


As for the Free Gaza Movement, its leaders say they’ll be back next time with even more boats. They say they have many more people who want to participate in trying to break the blockade. I wish I could go myself, but all I can give is my sympathy.

Oil Be Damned Update II

In British Petroleum’s latest gambit to try to stem the flow of oil out of its gusher in the Gulf, they successfully inserted a 4 inch (10 cm) pipe into the well, which looks to be at least a foot wide, to siphon off the oil. At first we heard they were getting 1000 barrels per day or 20% of the flow, then they upped that to 2000 barrels or 40%. Last word was they were up to 5000 barrels which should have completely stopped the flow since we’ve been told right along by BP (and parroted by the government) that that was the total amount being spewed into the Gulf.

Meanwhile, after three weeks of intense pressure on the part of congress and independent researchers for more information on the gusher, BP released a 30 second video of it, the first to the general public. By virtue of modern digital technology, researchers determined that the amount coming out of the well is at least 10 times and possibly 20 times the figure stated. That means somewhere between 2 million and 4 million gallons per day or a spill equivalent to the Exxon Valdez every 3 to 5 days.

Therefore it’s easy to understand why BP was desperate to withhold the video. They were probably hoping one of their magical cures would stop the flow before anyone found out the true extent of the damage. The fundamental problem is they have no idea what they’re doing or how to cope with a spill one mile down.

That, however, didn’t stop them from cutting corners to save a few bucks, like lobbying against the requirement to include a remote controlled switch on the blowout protector. Or, as has recently come to light, BP failed to do a required final inspection on the just installed concrete casing on the well. This in spite of the fact that failure of concrete casings was the cause of about half of all underwater spills.

Now they want to shove old shredded tires or heavy mud or some other such bulky, funky thing into the well to try to stop the flow. I’m not an engineer but that seems to me like trying to plug a high pressure fire hose by shoving a cork in it. LOL.

What’s remarkable to me is that the oil is coming out like a geyser even though pressure at that depth is about 2300 pounds per square inch or one metric ton per 6 square centimeters.

The only sure way to stem the flow, which could take another two months, is to drill a companion well into the original one and plug it from there. Meanwhile, they are using large amounts of chemical dispersants to try to prevent the oil from coming ashore. What this does is break up the oil, which otherwise would come right up to the surface in large coherent blobs, into tiny globules that hang below the surface.

While it’s probably a good idea to try to stop the oil from coming ashore, it’s hardly benign having millions of barrels of oil hovering below the surface, besides the fact that a million gallons of dispersant, which is basically a solvent, can’t be too good for the water either… so a lose-lose situation.

Meanwhile, the doomsday scenario, which has to put fear in the hearts of all involved, is a good strong hurricane which would coat everything inland for miles with a toxic mixture of oil and dispersant.

Meanwhile, in spite of the current disaster, oil companies are itchy to start drilling in the Arctic Sea. You can just image a blowout happening under a frozen sea with no way to get to it through the ice and absolutely nothing to be done about stemming the spill until next warm season.

But those are the kinds of places where the remaining oil is and we’re hungry for it (and the profits involved) 0so desperate measures are required and warranted.

Meanwhile, though BP has said it will take responsibility for the damage, you can bet they will spend the next couple of decades fighting proper compensation in the courts. So what if they spend a billion dollars on legal fees, they’ll still save billions in comp costs. The bottom line is what’s important.

The current fiasco is another reminder that corporations desperately need to be reined in. If I as an individual cause death and injury, even if unintended, I’ll serve time for it. When a corporation causes death and destruction on a scale we are now seeing in the Gulf, it should face the death penalty and the CEO’s and top managers who okayed cutting corners in spite of the danger should face jail time. The US cannot shut down BP because it’s a multinational corporation, but it can ban it from doing business in America. LOL again.