The Big Oil Spill

Recent history is full of CEO-crooks. C-level types and upper management are no more ethical than anyone else in a company or in society at large. (Many observers have made the case that they are less ethical, with little introspection given to, for example, laying off 10,000 people to boost stock prices and executive bonuses.)

There is a chance that they "took every precaution for this not to happen", but only a chance. Consider the history of dangerous car models, dangerous drugs, dangerous tires, etc., etc. In all the famous cases, upper management knows there is a problem, but does nothing.

I'd like to think that the world is as you see it, and admire your positive attitude. But we have all seen how things really work, too much of the time.

" The CEO's of BP and other companies have just as much to lose as the public."

Let's assume that the CEO of BP makes $10,000,000.00/year. Or supply your own figure.

The CEO of BP will still be making $10,000,000.00 (or your # here)next year.

How long did it take the venerable Japanese leaders of Toyota to admit that they lied?

As someone has suggested, It IS all about production. That's all about money.

Risk and reward.

In particular, because CEOs tend to be relatively short-timers in comparison to the damage they can cause, the tend to evaluate the risk horizons against the rewards horizons. Relatively immediate profits, quarterly and annually, are good for a CEO. whereas damages might not incur costs for a long time after the incident occurs, and the CEO may well have take his golden parachute and died of old age by then. It is the play now, do work later scenario. Play now is an immediate reward, like cooking the books to show higher profits will mean raises and bonuses now. Work later is something that the cost of not doing the work doesn't accrue until later, and hopefully someone else can deal with it by then because you won't be here.

The really sad news is that most of the truly injured parties will be long dead before the lawyers are done sucking the dollars out of the system. The survivors will get nothing.

I know this from personal experience.

what devices are those?

everyone should! I do, and I'm canadian!

You go Chris, your cojones are bigger than mine this morning.

Why does some Rush Limbaugh or Glenn Beck wanna be alway injecting this type of belittlement in a forum?

uh, you are wrong. exxon mobil paid more in taxes than it made in net profits last year. Stick that in your bong and smoke it.

Exxon claims they overpaid 2008 taxes, so they don't have to pay 2009, according to Forbes magazine. They paid a lot of tax to foreign countries for monies made there, and paid fees for using fuel from federal lands in the US.

There is still a lot of funny business with offshore accounts, but hell, GE is ducking taxes, too, so why not?

All wells should have to retrofit these devices, no matter what the cost. A really silly statement. How much are you willing to pay at the pump to cover all the equipment that could prevent any kind of oil spill no matter what the cost. (By the way the wells in northern Europe are fitted for the most part with "these devices". Now when will you and the American public start paying European prices for "gas".)

The oil companies can not complain, they don't pay taxes anyway. From where did you dredge this pearl of wisdom? It is patenly not true.

I make no excuses for BP - this should not have happened, but this sort of rubbish put forward as fact does nothing to help the situation. You should get a job with CNN, they appear to check their facts with the same source as you seem to.

I just googled 'exxon not paying taxes' and got a lot of info. Exxon denies everything, says it's all an accounting mistake, they overpaid the previous year. I think that was the same year they gave an unbelievable amount of money to congress, lobbying, of course, it's all legal, you know.

There are plenty of posts from Forbes Magazine and others, if you care to check. I only know what I hear and see, and I surely don't trust Big Business, Congress, or corporate stooges.

Well it was a new well so no money was flowing from it yet. So technically they were losing nothing yet, but investing large sums of money on the hopes of something in the future. So I am absolutely positive beyond a shadow of doubt that they absolutely did not take "every" precaution for this not to happen. I believe they probably took every precautious they deemed financially sound for this type of investment and reasonable as they perceive it relative to the financial risk they might incur if a incident occurs and the probability, in their perception, of such an incident occurring. It is the same kind of uninformed cost benefits analysis that contractors use to base decisions to manufacture substandard products at a higher than acceptable frequency when they think oversight and/or enforcement is going to be more loose during manufacture/construction and they spread the potential cost amongst others if a failure occurs later due to uncertainties in the impact on the product from design, manufacture and operations variables. They just don't think their is a realistic possibility of something serious happening, then so does some other guy and another guy, and they all believe that they are covered by the safety of factor (which really doesn't accomodate intentional construction/manufacture errors). The error accumulate and a major failure occurs. Now everyone starts running about like a chicken with their head cut off, because they really had not anticipated something like this happening, and the response is lagged down due to liability and marketing concerns, and indecision from a lack of contingency preparedness (because it will never happen with all those safety factors built in). If stuff like this happened in say the Nuclear Industry with the frequency and degree of damage it does in the petroleum industry, the nuclear or chemical pesticides industry would be near non-existent nearly immediately (at least for that one product line). So maybe it is a matter of poor mamnagement controlling the quality of work in the petroleum industry, which you dont see in nuclear or chemicals. whuile it is true failures will happen, there is a substantial amount that proper management can do to control and limit the frequency and degree of impact due to failures. It is part of health and safety, preventative maintenance, contingency planning, etc... BP in this case just really dropped the ball. Not just in that there was a release, but mostly in their extremely poor response to the release to mitigate and reduce the release and related impacts. The Coast Guard should not have had to step in later as part of their other efforts to find out that BP really didn't have any plan to address the release, and had been telling the government that they had.

Start a new paragraph periodically or ramble less.

Hi ronseto, I was waiting for your input and thought.

I hope those good old boys pick BPs bones clean. Their livelihood is severely damaged. BP is going to have to support them until the Gulf returns to normal. Maybe ten years.

I wouldn't be surprised to see BP default and just tie it up in court. If they do, they better remove every asset they have from US soil first.

Won't work, do you realize how many people from upstream thru downstream and marketing BP employees, not counting support organizations?

What won't work, BP paying lost income to the Gulf Coast residents, or BP picking up their marbles and leaving until the smoke clears?

This statement most of all.

"If they do, they better remove every asset they have from US soil first".

BP has way too much invested in the US to leave, probably more than Exxon-Mobil, who to the best of my knowledge have no refineries left in the US.

Whiting, IN or Texas City TX refineries, either one, is probably valued at what the cost will be to do a full and complete clean up.

I certainly hope BP is willing to compensate for loss. Exxon has not done so for the Alaska spill, from what I hear. It's easy to deny and tie up claims in court forever. I just don't think Southerners are as easy going and forgiving as Alaskans.

Keep in mind they still carry grudges from the War of Northern Agression.

Keep in mind they still carry grudges from the War of Northern Agression.

I work in the Heart of Dixie, Alabama enough to agree, we re-fight the war every time I do a job down there (in fun now, I am not a Damn Yankee, just a Yankee, I go back up North), and they have not forgotten.

I feel for the Alaskans, they got the shaft in a lot of ways and still do, but so many were and are gentle souls that just wanted to get closer to nature and a frontier.

My father's side of the family is from Pensacola. All are fishermen and shrimpers. My dad was telling us his cousin was offer $5,000 not to sue BP. He turned them down told the representative he was going to wait and see how bad it gets.

"Jeez-Louise!" qac . . .

why kun't you simply paste a "Link" like THIS, instedda copyin-& pastin the whole flubber-de-jubberin' blog...

Wow, with all the money you would think they could afford the $500,000 for a acoustic blow off on a US well, like they are required to do in other countries, rather than lobbying and fighting against it. The Soviet Union represented one of the largest countries in the world under Stalin, that doesn't mean he cared much about the populace of the Soviet Union or the environment they lived in, and he didn't make nearly the profits BP appears to be making (well at least until their last fiasco). There is frequently a inverse correlation between the size of governments and corporations and their regard for public welfare or even their understanding of the concept, e.g. the East India Corporation grew to be of that nature as time progressed. Maybe the Us gov ernment has lost it interwst in competition and the public welfare in the last 30 years, except Microsoft but that was run by technically competent people that the typical business and government executives felt very uncormfortable being poorer than. BP invests in alternative fuel, because it is behind the curve and the government is going to require substanitial amounts of alternative fuel usage in the near future, which will mean reduced profits for oil companies unless they get their hands in and control the alternative fuel markets before someone outside the mainstream industry make substantial developments and gains a large market share that they will have trouble overcoming.

Yep, The "to big to fail" must be the slogan of this decade.

It is a clear warning sign! It happened many times that nature has hit back and took appropriate measures to defend her self.

Size does matter, Ky.

Nature didn't hit back, that is a simplistic ignorant excuse to cover the fact that BPs and their subcontractors were extremely lax on quality control and quality assurance, and the regulators became overly lax on requiring adequate QA/QC measures and contingencies be in place and properly implemented. As a engineer, I routinely deal with Contractors whose construction projects fail because of the compounding of multiple minor effects where good QC was overlooked for expedience and profits, and they appear to have lacked adequate QA and enforcement by inspectors. It is just laziness, and corruption.

Sorry RCE

What I meant to say was that for me, oil coming out of the earths crust, is what nature does when given a chance to release pressure. This was caused by human activity and nature is only doing what it does best, hit back and react to a pressure differential the only way the laws of physics know.

Because the people in the know knew that something like this could happen that makes them criminals in my book. I would feel like one any way. Toyota was hit very hard because of some little part and compared to this, not much damage was done. They were ripped to shreds, mid air and never failed to sincerely apologize and rectify at an enormous cost. But here? Shame ,shame, shame!

If I would have known what I know now, I would have picked that weak spot and I suppose many had done so but were not listened to or sacked or left the industry altogether. The worst thing is that it hasn't even started yet. Denial has become part of the problem.

DORL have mercy on their souls, Ky.

Again, even the pressure differential is just a mother earth red herring. There is a pressure differential that occurs also when the well is properly functioning. Mother earth did not do this, it was a few greedy ignorant business people who knew how to promise investors and other corporate types they could do these things under budget and ahead of schedule no matter what occurred, then looked at the problems and decided they were not of any real consequence to impact the work progress. however, these people didn't know enough to make a proper decision and we are letting them off the hook for being ignorant and causing such destruction. That has really become the excuse of our modern society, the "I didn't know" excuse or "How could you expect someone with my education to know that" or "I'm not a scientist (or engineer) so how could I have known". Ignorance in theory is not supposed to be an excuse, and businesses are supposed to retain competent people to do the work who know when they are not qualified and seek educated people who can take responsibility if a failure in their work occurs. When a specialist informs Haliburton that there is some danger in continuing drilling, they should listen and not decide to continue based on their own experience in the office in New York, and then claim they didn't fully understand the risk. If I told you your house was likely to fall down, and you had a party inside where it fell on a lot of people, then you should go to prison, even if you claim to be ignorant. Ignorance is no excuse, if it were it would just mean our business models would promotethe stupidest people in our society to make all decisions because they could never be held accountable. There should actually be a extra criminal penalty for not retaining and listening to people who were not ignorant. corporations need to have people who are accountable just like a common person under the law, if they gain rights under the law they must have someone to prosecute and go to prison for them under the law. I bet then there would be much less ignorance in decision-making.

I wonder why the public would have a low opinion of oil magnates?

I guess you can thank Cheney and Bush for that.

it all boils down to two things, corporate inertia (and BP has as much inertia as the IRS because they used to be a pseudo-governmental entity of the british government. they were formed to keep the british navy in bunker fuel when they converted to oil driven ships instead of coal, and they were so tightly connected to the british gov. they essentially became a branch of it for all intents and purposes, and never really changed) and normalization of risk. Normalization of risk is where you take a chance on something, and nothing happens so you start thinking that you really didn't need to worry about that so you take the risk again, and again, and maybe to take another risk too, and on and on and eventually the karma runs out and it blows up in your face.

I've read over the responses and can report that I can neither agree nor disagree with all the statements. First off; I don't put much stock in statistics. They can and are easily manipulated to suit any agenda. As soon as someone quotes a statistic, like by a politician, I immediately question it. Those who quote statistics count on the public to accept without question. That is something I have never been able to do. To unravel the truth that is buried in the web of statistics takes a lot of digging, something the public can't invest time in. The easy way is to just accept and that's exactly what they want you to do. Truth can be so well covered up that many times it cannot be discovered until many years after the fact. The Kennedy assassination comes prominently to mind. We don't know, but we do sense a cover-up. I'm sure the truth will come out some day, but not in time to affect anything.

I don't believe anyone would risk such a great disaster happening. I could believe it from Bin Laden, but not from the CEO of BP. We all have seen disasters in the past where fault was laid at the feet of an unscrupulous contractor, such as in the Boston tunnel fiasco, but I don't see the CEO as an unscrupulous person; I maintain a reservation. I agree that he doesn't have much to lose personally, but his reputation and the reputation of the company is at stake. The U.S. government may be a willing player from the beginning of BP's presence in U.S. waters, but it may also have become an un-willing player in the drama which is unfolding. We will be bombarded from all sides on the guilt or non-guilt of BP with evidence again from statistics. The public will be put in the middle to believe or disbelieve. At any rate, it will be many, many years before this is put to rest.

Call me naïve, but I just can't believe that every reasonable precaution had not been taken considering the magnitude of the disaster. There was no precedent for this to happen. I know there will be victims, mostly due to the destruction of the seafood industry. They will blame BP regardless of what the cause is.

I know, I know…. the CEO's and top executives are immune from whatever the outcome is; they will still collect their bonuses, but assigning blame won't get the problem fixed. The truth may or there may not be revealed for a long time to come. Don't forget; things that happened hundreds of years ago are still being discovered that reveal truths to long held beliefs.

I've read there are roughly 3500 active wells in the Gulf of Mexico. I'll concede that this one is a really big mess. But 1 major incedent in 3500 tries? I think they have been pretty "reasonable" in thier attempts thus far. I also understand that "reasonable" is about to be redefined.

Some problems with math and assumptions there. You assume they have never had any major incidents in the gulf, but they didn't used to care or even pay much attention to releases decades ago (as long as it didn't wash up on some tourist beach). There is also the issue of tracking, if the company didn't need to know they likely would not track, and definitely would not tell anyone, and the government has been evolving over the past 3 decades to monitor what the corporations won't disclose. The over simplified use of 1 in 3500 tries does not account for the risk just the simple probability that there was a release of some arbitrary level deemed major incident. How much of a release was a major incident when they were installing the wells you described. Is a major incident in Mexican Waters, and is it monitored similarly, the same as the US. One measure of risk is the cost time the probability. In environmental cases it is typical to evaluate the total impact costs times probability. Risk assessment is what you base reasonableness on, not the simple probabilities. Otherwise, Bhopal would be 1 incident in millions of tries by the chemical industry, representing a low probability scenario (though in theory it could have been a risk that would have broken the corporation, had India not stepped in to limit payouts being mandated). So a comparison of the risk to benefits is really what needs to be done here, from the perspective of the property owners, the US government (not the oil corporation who leases rights).

Media Matters states that Exxon Mobil paid $27.4 million to lobby congress.

The White House is trying to raise the cap of $75 million for loss on this oil spill.

There are lots of millions of dollars flying around. I'm sure the lawyers, lobbyists, and congressmen are scurrying around like rats trying to scoop up as much as they can.

I just hope there is some left over for the poor folks on the Gulf Coast.

Media Matters is not exactly unbiased either.

How much did Goldman Sachs pay to lobby Congress and the president? Or BP? or AIG?

Who is on the White House Guest List most often? The head of Goldman Sachs.

What company did the highest percentage of Obama's advisors come from? Goldman Sachs.

BP paid lawyers to effectively argue against installing an acoustic blow off valve, which is required in other countries like Brazil, because it cost $500,000, which they would have had to cost agaisnt their profits.

Here is an idea.. See what you think.

Chris