details on what is to be forthcoming as yet. A White House spokesman
told the Times an “escrow” account would be required to insure that BP
met all of its obligations.
“The
president will use his legal authority to compel them." Robert
Gibbs, White House spokesman.
This is the kiss of death for the dividend. This may mean that BP’s US
assets are encumbered in some way. Should it work out that there is a
form of conservatorship in the works it would be without precedent.
Like everyone else I am freaking out over the Gulf BP spill. The short
and long term environmental impacts are frightening. The consequences to
the country’s energy base are also frightening. While I am not
concerned with the fate of BP or its dividend, this too is going to have
a horrendous cost. It is clear that the gutting of this company is
going to have far reaching impacts to investors and pensioners.
It looks like the Coast Guard is going to take over operations this
week. That will be the beginning of the “big blank check
“for BP.
A curious announcement comes this weekend from Dredging
News. This site has had several articles bringing attention to the
fact that foreign flag oil cleanup resources are not being employed in
the Gulf. They blame it on the Jones Act.
Flanders
Today reports that Belgian dredging companies DEME and Jan De Nul are
"struggling to understand" why BP and the US authorities have not called
on them in the wake of the Deepwater Horizon oil spill in the Gulf of
Mexico.The
companies say that the fact that the Americans have not accepted their
proposed assistance is down to two reasons - that the US authorities are
reluctant to admit that somebody else has better equipment and the
protection of the American market through the protectionist 1920 Jones
Act, prohibiting foreign dredging companies from operating in US waters.
The Jones Act (1920) protects union jobs in the US. It was waved after
Katrina. It looks like it is going to waived again soon. From the same
source: (Dredging News. Go figure?)
“The
American maritime industry (MCTF) has not and will not stand in the way
of the use of these well-established waiver procedures to address this
crisis."
I read this statement as being a public acceptance (in advance) that
foreign vessels will soon be in the Gulf. A welcome development should
it happen. One has to ask why the suspension of the Jones Act was not
done sooner. We can only hope that pressure from (or fear of) unions was
not part of the reason.
Thad Allen, the Coast Guard Admiral who seems to be running things, had
this to say regarding the Jones Act during a Q and A on Friday:
"If it
gets—if it gets to the point where there's a Jones Act required, we're
willing to do that, too. Nobody's come to me with a request for a Jones
Act waiver, but any skimming capability we can bring in, we're looking
for."
Nobody’s come to you Thad? What have you been waiting for? It's well
past the ‘point’.
We don’t know how much is leaking into the Gulf. Assume an estimate of
40,000 barrels a day. Hopefully it is smaller than that. The following
is a picture of the reservoir in Central Park NYC. The leak is pumping
crude into the Gulf sufficient to fill this lake every ten days. If you
run around it you know it's pretty big.
The amount of oil spilled in the last 55 days is equal to about 8 hours
of average US consumption. It is equal to .06% of our annual usage. We simply use too much. How
quickly can we change this? A generation if we’re lucky.
President Obama needs my support (even though I am Canadian). I back clean energy...go solars!!!!:
Leo --
The BP oil spill in the Gulf Coast is the worst environmental disaster of its kind in our nation's history. I am returning to the region today to review our efforts and meet with families and business owners affected by the catastrophe.
We are working to hold BP accountable for the damage to the lands and the livelihoods of the Gulf Coast, and we are taking strong precautions to make certain a spill like this never happens again.
But our work will not end with this crisis. That's one of the reasons why last week I invited lawmakers from both parties to join me at the White House to discuss what it will take to move forward on legislation to promote a new economy powered by green jobs, combat climate change, and end our dependence on foreign oil.
Today, we consume more than 20 percent of the world's oil, but have less than two percent of the world's oil reserves. Beyond the risks inherent in drilling four miles beneath the surface of the Earth, our dependence on oil means that we will continue to send billions of dollars of our hard-earned wealth to other countries every month -- including many in dangerous and unstable regions.
In other words, our continued dependence on fossil fuels will jeopardize our national security. It will smother our planet. And it will continue to put our economy and our environment at risk. We cannot delay any longer, and that is why I am asking for your help.
Please stand with me today in backing clean energy. Adding your name will help Organizing for America create a powerful, public display of support for making this change happen.
The time has come, once and for all, for this nation to fully embrace a new future. That means continuing our unprecedented effort to make everything -- from our homes and businesses to our cars and trucks -- more energy-efficient. It means rolling back billions of dollars of tax breaks to oil companies so we can prioritize investments in clean energy research and development.
Many businesses support this agenda because shifting to clean energy creates opportunities for entrepreneurship. This is how we will reinvent our economy -- and create new companies and new jobs all across the country.
There will be transition costs and a time of adjustment. But if we refuse to heed the warnings from the disaster in the Gulf -- we will have missed our best chance to seize the clean-energy future we know America needs to thrive in the years and decades to come.
The House of Representatives has already passed a comprehensive energy and climate bill, and there is currently a plan in the Senate -- a plan that was developed with ideas from Democrats and Republicans -- that would achieve the same goal. But this is an issue that Washington has long ignored in favor of protecting the status quo.
So I'm asking for your help today to show that the American people are ready for a clean-energy future.
Please add your name to mine:
http://my.barackobama.com/CleanEnergy
Thank you,
President Barack Obama
Too bad there's no such thing as clean energy - they are all dirty on the input or the output. And too bad that if there was, they still have terrible inefficiencies that make them limp-wristed solutions for real problems. The promising technologies are rare, and unrealistically expensive. Even if they were affordable, or had remotely good kw/h to cost ratios, the US is flat, dead broke.
Look at the bedfellows of clean energy, and you'll find the same ones who are the bedfellows of fossil fuels. It's all just another chapter of command and control. The fact that obama - or any other public cheat - is endorsing it is clue #1 that something doesn't add up. The community organizer is not exactly an expert on this stuff, and has surrounded himself by like-minded energy dolts. But that doesn't mean they aren't masterfully brilliant when it comes to subjugation of sheeple. It's like shooting fish in a barrel to get citizens to jump on the latest green bandwagon.
Assuming there was a clean energy that was a) clean and b) energy, it would be a net loss for our GDP because the US would be importing them, like they do with everything else. So much for that GDP.
Clean energy is the perpetual motion machine of the obama/gore generation.
Industrial hemp would pretty much solve our entire global energy problem, and it's both cheap and environmentally friendly. Hence why Ron Paul sponsored the below bill.
http://www.govtrack.us/congress/bill.xpd?bill=h111-1866
Yes, it would.
http://www.youtube.com/watch?v=Ne9UF-pFhJY
Henry Ford's "hemp car".
http://www.youtube.com/watch?v=bxlj6fgQ-ZU&feature=related
And on a much lighter note, I personally think this skit titled "BP Spills Coffee" is pretty gosh darn clever and funny:
http://www.youtube.com/watch?v=2AAa0gd7ClM&feature=player_embedded
My question is: why all the fuss now over this oil spill?
We've been working hard on killing our oceans for decades, and doing a damn fine job of it.
Case in point: there's an existing dead zone in the northern Gulf of Mexico due to low dissolved oxygen in the bottom waters.
It's the size of New Jersey and it's been growing larger for many years.
See this for the complete technical explanation:
http://news.nationalgeographic.com/news/2005/05/0525_050525_deadzone.html
So, the BP leak is just one more wheel falling off the on-going slo-mo train wreck.
Just sayin'.
Oops, gotta go fertilize the lawn now.....this year I'm doing the new Scott's 12-step program (once a month application of their proprietary, exclusive, all-in-one formula of fertilizer, pesticide, insecticide, and green dye #3445).
WHEEE.....I'm envy of the neighborhood.
Carpet Pisser
"that lawn really tied the yard together"
Indeed. We're all part of BP - the Bigger Picture.
Why doesn't the Prez grow a pair, and threaten them with fire and damnation - I mean publicly? And where has Magoo been for the last 2 months?
What dumb-ass questions. I just junked myself.
Bruce,
Sorry, just read this. I have a question for you. Why didn't the US government just take over right away? This disaster is getting ridiculous. What are they waiting for?!? I think Robert Reich was right when he asked the same question yesterday on ABC's This Week. At one point, the US government has to step in and say enough is enough. I would have cleaned it up asap and stuck the tab to BP.
Yes we can! Yes we can! Yes we can! Yes we can! Yes we can! Yes we can! Yes we can! Yes we can! Yes we can! Yes we can! Yes we can! Yes we can! Yes we can! Yes we can! Yes we can! Yes we can! Yes we can! Yes we can!
Now bow down to your master.
Right, Leo. They'll just step right in and fix it...
This word contained is going to kill us Leo. They thought that was the case with sub prime. They thought that was the case in GoM. They fucked up both times.....
In a month if we're 'not'.
http://www.scientificblogging.com/chatter_box/bp_gis_and_mysterious_vani...
NATIONALIZE THE FUCKING SECURITY PROBLEM!
I mentioned somewhat flippantly on another related story that BP would sell itself (ex-US operations) to the Chinese who would then tell us to go pound sand.
Maybe not quite but I also mentioned that the Brits may be a little miffed at Obama's sudden termination of the US/UK "special relationship" and are going to be more concerned with protecting BP and it's UK shareholders than in helping Obama or fretting over our environment. I think it's looking like that will be a factor as this thing plays out.
Miffed?---sent the Churchill bust back from the WH. Protect the pension funds (worse shape than in the US).
Oh, and keep the assets to mitigate out of GoM; deep water submersibles from Woods Hole, Scripps, NOAA survey ship, block offers of int'l booms, use dispersants too early/too close vs. burning. Passive Coast Guard "command".
Rahm doesn't let a good mega crisis go to waste.
- Ned
I don't think BP will go down. you'll see. Obama will pass the bill to taxpayers.
So, Obama will go down on BP.
Just so you know...
http://www.youtube.com/watch?v=TMCf7SNUb-Q
Beautiful, yet in a way also kind of sad. Have you ever seen a gorilla or chimp habitat at a zoo? They are way too intelligent and self-aware to be kept in a glass box/cage - and the humanoid features/behavior just makes it REALLY obvious. At least with the dolphins, the facial expressions are harder to read...
Beautiful. Your YT posts are always worth the click.
DOW chart warns of a rally :
http://stockmarket618.wordpress.com
http://www.zerohedge.com/forum/latest-market-outlook-1
Why would one "warn" of a rally? Is that not good news? Make up your mind.
I'm ready to tone down assesments AFTER the damn thing has been capped...as far as things are going now....there is a distinct eventuality a major extinction of marine life can be triggered. And if we finally succeed to trigger a breakup of the food chain..then finallt Nature can start the process of liberating the planet by the most obnoxious infestant parasite evolution has produced...Good Night and good luck, if we don't stop the beast FAST!!
Budd, if the info in the above link is correct then you are way behind the curve.
Ain't no capping or controlling this.
http://www.theoildrum.com/node/6593#comment-648967
The administration is talking about a ring-fenced fund where BP puts $20-30 billion. What do you know, in case of BP bankruptcy, who benefits from that the most but the banksters? If history is a guide they'd be assigned to hop over that ring-fence and manage it after BP goes down. And, what do you know, the banksters all have prop trading desks now, don't they?
You don't think there's any opportunity for hijinks here, do you? No, I didn't think so.
I was betting BP would come through this. But after this news, I'm beginning to put long odds on that. Way too many long knives out on this one.
tempo, I generally agree with your take with the caveat that dispersants, in particular tons of Corexit, were used at Ixtoc. That blowout was very similar to Deepwater Horizon, with the exception of DH's much greater depth, and, so far, Ixtoc spewed more total oil. The long-term, widespread environmental impact of Ixtoc was surprisingly small given the big footprint of the spill. That should give us hope on that front. Another hopeful thing is that the hurricane season of 1979 was severe, and it included Hurricane Frederic which was the most costly hurricane to make landfall in the US up to that point. Already we see people freaking out about what the coming storm season may mean for the current spill, and, if 1979 is any guide, the storms might actually help break down the oil at sea.
The spill's a disaster and nothing good can come of it. But there is reason to hope it won't be as dire a long-term disaster as many fear.
In 1979 the Ixtoc well leaked 3.3 million bbls of oil over 290 days in the Gulf of Mexico. The oil was untreated and Govt studies two year later determined that there was no marine or envirnomental damage due to the spill. NOAA estimates 2 to 3 million bbls of oil seep naturally every year in the Gulf of Mexico. Thus far the BP well has leaked about 1.5 million bbls and total leakage will total about 3 million bbls (all treated with dispersements in 80+ degree water) if the relief well is successful in August. The blowout is not the end of world. IF Obama's decision to halt offshore drilling results in the loss of 300,000 to 500,000 high paying jobs, thats a real problem. If Obama's decides to take over BP America and ignore the rule of law, thats is really big long term problem as capital will move away from the US faster than the oil is flowing from the BP blowout. Obama can and will likely make the current terrible situation much worse over the next week.
Turn off the Fox News / Limbaugh and listen to some actual conservatives who aren't buying the corporate line you've bought and are currently distributing. The information you posted is Yahoo! comments-worthy.
Tracking some articles that may be of interest...
http://caps.fool.com/Blogs/bp-deserves-to-die-latest/406732
"The amount of oil spilled in the last 55 days is equal to about 8 hours of average US consumption. It is equal to .06% of our annual usage. We simply use too much. How quickly can we change this? A generation if we’re lucky"
Due to export-land model, post-peak oil the exports will dry up much quicker than the actual rate of decline. It is unlikely there will be much oil, if any available for export 30 years post-peak extraction.
Today's (6/13/10) Dallas Morning News front section has nothing about the Gulf oil situation. The 4th page of section P has an article. This is the 5th secton in the paper. Talk about mind control.
So much for the MSM. Cold war Soviet Union...
So let's get this straight - the Magic Mulatto thinks he can make fiat statements about how a UK entity organises its cash flow? Since when?
The take-away from this is that the legislative framework in the US is not 'stable' as far as international investors are concerned - the political class can on the one hand refuse to deploy the BEST resources in the cleanup (on the basis that they're not 'Merkin... the South Park "Dey tuk err jaaahbs" mentality), but on the other they hold BP accountable for ALL un-cleaned-up bits of the spill.
What about RIG? What about HAL? How come they're not on the hook?
Faced with "legislation by poll numbers", if I was BP I would now simply jettison BP America (and its employees and their entitlements) - the actual entity which is exposed. It is a quite distinct 'corporate person' as far as the law in concerned.
This would inoculate the bulk of the company from the ramifications of the spill. Then BP should tell the Obama administration that they are welcome to enter the oil business. BP US is less than 25% of BPs overall cash flow (and declining).
By deciding policy on the run, the US government is showing that companies that deploy capital in the US face as much political risk as they do in a third-rate banana republic.
The political class is simply trying to make hay by tapping the inherent chauvinism of the US polity: if this was a Chevron spill in Thailand, Obama would send in warships if the political class there pulled bullshit like this.
Cheerio
GT
Two words: fraudulent conveyance.
Not sure where you got the information that BP (the mothership entity) would be insulated from BP America, but you're fucking crazy.
Here's how these things generally work. BP sets up a mothership entity that has all the assets/money. BP's subsidiaries (BP America) have shit and pass most things through to the mothership. There are probably dozens if not hundreds of subsidiaries.
Plaintiffs' attorneys will always attempt to get the mothership entity in on the action. As a result, they will allege that corporate formailities were not followed and/or that the mothership is in some other way responsible. In general, the subsidiaries are not truly unique and independent, rather with even in the most diversified companies, I've seen the mothership get stuck with the bill.
The concept of univeral and strict insulation works from a passive investing standpoint generally, but not when you make executive decisions that effect subsidiaries... I'm willing to bet that facts will be discovered in which make the BP mothership fair game. That's the entire focus at this juncture... throwing out turnips and finding fresh blood.
Also, as a practical matter, I just don't see most federal judges taking this one lightly. In general, BP is going to bear the burden as to why the mothership shouldn't come in... despite any law to the contrary. This is just practical lawyering...
Regardless, to say that BP can magically spin off its american subsidiary(ies) and be absolved is ridiculous. We need more facts and, in all likelihood, BP doesn't have a shot in hell at overcoming the natural instinct to make them pay, one way or the other. The other issue is, WHO DO THEY SELL IT TO? Who would take that piece of shit? With potential liabilities likely to be in the trillions? The potential clawback of BK money... no way jose.
I would take it if the offered it to me... and I'd give myself a nice sign on bonus... and make sure the preference period had run... and then drop that bitch into BK. But I dont think anyone else is going to sincerely take it... it would be like GE and GE Capital... one shit ass branch can bring the whole shebang down.
Correct me if I'm wrong, but you seem to be saying that if we had elected a white president, this situation would be under control. Perhaps I'm reading too much into what you said, but would you agree with that hypothesis?
Escapeclaws
Have you NEVER watched a movie or TV show with a Black President? Always fucked up.
Fuck you. And take your limbaugh snark with you.
The fact is BP is responsible for the greatest man made ecological calamity in human history. Suffocating the Gulf Of Mexico is phase 1, wait till the hurricaines blow this dispersed poison on the crops, cities and water tables.
Political risk is nothing compared to what is going to happen next.
barry has been an impotent jerk, some decisive move should have been made within the first month.
The escrow account should have been already set up, and the rig site is a crime scene.
We've known for at least that long that the ocean floor is damaged.
We are in a heap of trouble.
The escrow account will not help. When crops fail, you can not eat paper. Sending Mrs. Rebel to Sam's club to clean out the 50lb bags of pinto beans. He who panics first, panics best. Don't want to be fighting the hoards for pinto beans when the storm comes.
Right on, Reb. Just whatch 2 items.
1. Phytoplankten
2. Hydrogen Sulfide levels
Though planketen grows much faster in cool/cold waters, what happens when the plumes cross the Atlantic from New Foundland. Decrease in oxygen, increase in CO2.
I would recommend not breathing HS if possible.
OK, I am going to share a little tip, as long as you all don't tell anyone. It only works if few people know about it. We all see that in a crisis, the first thing that happens is that there is a food panic. Remember all the times on the news when you have seen clips of an approaching hurricane, and the store shelves are empty. Now imagine a real crisis, and imagine just how empty for how long the grocery store will be. Some have already stored food, and some have built up their food producing infrastructure. Others have not gotten around to it yet.
If you do not have food stored, and a crisis hits, don't even think about the grocery store, they will be out of food by the time you get there. OK, here is the secret. Feed stores are not thought of, and off the radar screen. All cities and towns have them. They have huge stocks of 50 pound bags of grain. While people are pillaging the grocery stores, casually stroll down to the feed store, and buy 50 lb bags of grains. Things you can eat are corn, wheat, pinto beans, and milo. Make sure to get the kind intended for feed, as some of the grain intended for planting has been treated with nasty stuff. Deer corn can be ground, and if you dont have a grinder you can boil it. Won't be the tastiest stuff, but will keep you alive. You could probably pick up 500 lbs of grain for $500.
Good tip Reb. We have a farm supply store just about a mile from my house. I regularly browse the shelves and have found some really neat stuff. Also, you can get some pretty damn handy drugs and medicines (for your "cattle" or "canine" use, of course) without any prescriptions. One of those cow testicle pliers might come in handy if you need to get information out of a neighbor as to where his stashes are. But, all seriousness aside, I got animal traps, fishing gear, bird netting, etc. Stuff that would be great for trades if needed. The salt lick is a bit bulky but who knows.
Hi Rocky,
Another feed store shopper! Actually, I buy grains there for Mrs. Rebel, who makes awesome corn bread and wheat bread from home-ground grains. The stuff in the feed store is the same as the stuff in the grocery store, just 10X cheaper.
Funny you should mention those pliers. I worked many summers castrating sheep, goats and cattle. In a pair of skilled hands, those pliers can be devastating.
"BP US is less than 25% of BPs overall cash flow (and declining)."
GeoffreyT: I am with you -- but I was under the impression, that BP's US operations accounted for about 45% of cash flow...
Ok - NYT just reporting - this is fairly amazing - that American Geologists, working with the Pentagon - for past seven years- have discovered vast mineral riches in the(Afghanistan) country. They are releasing this information, as they plan to move into Kandahar, They are basically laying out for all to see, that Afghanistan has huge assets for mining companies.This is a wild card at this point.
http://www.nytimes.com/2010/06/14/world/asia/14minerals.html?pagewanted=2&emc=na
The quote from Thad Allen raises a question: Who is in charge? If the resources needed to contain the spill require a waiver, then who should be asking for it? If it is BP's responsibility to ask for the waiver, then its management has been incredibly derelict in its responsibilities to all of its stakeholders and has put the company at risk. If it is the Coast Guard's then Allen is an idiot and no one is coming out of this fiasco smelling like a rose.
People within Obama's administration have made it clear that they are signing off on all efforts. There's going to be some geopolitical fireworks between the U.S. and U.K. on this issue.
Agreed, but that is not my point. If the resources exist elsewhere to more effectively contain the spill, why has it taken 55 days to mobilize them and whose responsibility is it to mobilize them? Apologize if I was not as clear as I could have been earlier.