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BP: Still Beyond Belief

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May 24, 2010 – Comments (7) | RELATED TICKERS: BP

I meant to post last week, but got behind on things, but I put BP on our Walk of Shame for the week. This still feels very timely though, as the crisis continues to wear on. I am not an expert on the industry, but it has come across as blundering and occasionally even lackadaisical response to this disaster (which will have environmental as well as economic ramifications for a heck of a lot of people). I was also floored by some of CEO Tony Hayward's comments on the situation that have been reported by the media. I'm pretty sure most of us would like to think that there are contingency plans for such disasters, that folks actually know what to do when they occur, and BP has not given a very comforting impression over the last month that it has much of a clue how to proceed at all. 

I then remembered some of the resolutions BP shareholders shot down at the annual meeting, just days before the Deepwater Horizon disaster, and I couldn't help but point out that I think some of those resolutions could constitute some degree of foreshadowing of possible losses down the road. Activist shareholders are often pointing out some kind of risk, and shareholders do not have to agree but hopefully they aren't simply dismissing them out of hand.

On a related note, I ran across what I thought was an interesting op-ed piece recently, discussing liability caps and spill subsidies, which of course brings some added complexities into the discussion of why things like this happen. (I don't regularly follow this industry, so I was previously unaware of anything like this.) I would like to avoid getting too political, but what I liked about this piece is it points out some good food for thought, perhaps: that giving special protections to an industry is NOT pro-market, as much as the rhetoric likes to suggest it is, maybe it's simply pro-Big-Oil (or some other industry). I think there's a big difference, although I feel like people get these elements confused or muddied a heck of a lot of the time. And of course, special protections certainly may reduce the incentive for an industry to be prepared for worst-case scenarios. Why prepare if the financial damage probably won't be that great? Something to think about maybe, and I think I'm sensing a bit of a "theme" these days. (Being accountable for all of the liabilities seems pretty fair to me, and seems like it would send a pretty important message about safety and the importance of having contingency plans, not to mention being responsible.)

7 Comments – Post Your Own

#1) On May 24, 2010 at 4:41 PM, devoish (96.28) wrote:

How a deep water oil leak would behave was studied in 2000, search "deep spill" and the results are published. The vast majority (more than 90%) of the oil is not at the surface.

 

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#2) On May 24, 2010 at 4:44 PM, topsecret09 (44.31) wrote:

http://caps.fool.com/Blogs/ViewPost.aspx?bpid=391249&t=01009917921919779399

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#3) On May 24, 2010 at 6:03 PM, TMFLomax (46.97) wrote:

 devoish

Thanks for the tip - I found this article that addresses the data from 2000. But hey, what we can't see on the surface is not actually there, right? Kidding, that's gallow's humor. It may be a good metaphor for all kinds of things these days. 

topsecret09 

Thank you for letting me know you have been posting about the issue as it's progressed. Sorry I missed it before! (Oh and I see you posted how Hayward has been quoted in the media saying he could sleep at night... wow, just wow.)

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#4) On May 24, 2010 at 10:03 PM, topsecret09 (44.31) wrote:

topsecret09 

Thank you for letting me know you have been posting about the issue as it's progressed. Sorry I missed it before! (Oh and I see you posted how Hayward has been quoted in the media saying he could sleep at night... wow, just wow.)      Your welcome....  I will keep adding articles on this very unfortunate Incident. This needs to be talked about more here. This "ONE SPILL" has the potential to affect a large part of our economy. If they cannot cap this thing on Wednesday, ( May 25th) It may not be stopped for MONTHS !!  

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#5) On May 24, 2010 at 10:05 PM, topsecret09 (44.31) wrote:

  Yea, It's a lot harder to keep on the good blogs here due to the fact that their are only 4 posts now In the buzz box. They need to take the blogs bak to 8 on the main page....  

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#6) On May 25, 2010 at 11:46 AM, patternpro (< 20) wrote:

In canada they have the rigs drill a releif well at the same time as the original.  That way if something blows oil is not still leaking into the ocean 1 month later.  just an idea

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#7) On May 25, 2010 at 4:42 PM, TMFLomax (46.97) wrote:

topsecret09

Yeah, I just saw the stats that the company thinks it's a 60% to 70% chance of success but that the administration only thinks it's a 10% chance of success, and if it's not successful it waits till August for a relief well or something... every day it gets more frustrating.

I think I just saw something about how they're going to shut down the live video feed tomorrow, too.

patternpro

Sounds like a good idea! Whew.

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