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Simon Says (Pt2) BP=<$1.00, "We Have Now Killed The GoM", CleanUp=$1,000,000,000,000

July 21, 2010 – Comments (7) | RELATED TICKERS: BP

GNorth write up:

Start here:

WKRG.com News

http://www.wkrg.com/news/article/part-two-of-news-five-investigates-testing-the-water/906808/Jul-18-2010_3-37-pm/

Second, BP is trying to hire experts at $250/hour, but with this restriction: they cannot publish their findings for 3 years. This would keep them from testifying for the government. Scholars in the Gulf region are turning down the offer -- a fact that is extraordinary in the academic community. It tells me that the experts expect to testify for the government.

Third, the jury is out -- so to speak -- on the latest attempt to cap the well. BP is the main source of information on the capping, with a retired Coast Guard admiral as a kind of prudently skeptical but encouraging uncle.

Fourth, other oil companies are remaining mute. This may be because their lawyers have zipped their lips. It may be because they fear a shutdown of their own rugs in the Gulf if this crisis escalates. But we are getting neither confirming nor skeptical comments from other companies with the expertise required.

Fifth, this report is from CNN's Anderson Cooper.

We found out today two public broadcasting journalists reporting on health issues say they have been blocked again and again from visiting a federal mobile medical unit in Venice, a trailer where cleanup workers are being treated. It's known locally as the BP compound. And these two reporters say everyone they have talked to, from BP to the Coast Guard, to Health and Human Services in Washington has been giving them the runaround.

We're not talking about a CIA station here. We're talking about a medical trailer that falls under the authority of, guess who, Thad Allen, the same Thad Allen who promised transparency all those weeks ago.

Sixth, BP has announced the sale to Apache Corp of its North Shore oil reserves. Price: $7 billion. BP is selling the family jewels at bargain basement prices.

Seventh, yesterday, warnings came of another oil leak, miles away, thus calling into question BP's efforts to cap the supposed source of the leak.

Finally, with this as background, listen to Matt Simmons' interview. He has made statements that sound libelous to me. It is as if he is daring BP to sue him. If I were BP, I would take him to court if these accusations are not true. He is accusing them of criminal acts. But BP is pretending he does not exist.

I think you should listen to this. It is apocalyptic. If it turns out that it is true, there will be a political disaster for the entire government.

Why doesn't BP shut him up?

A side issue, but typical, was BP's faked photo of its crisis room. The company got caught. Then it said the whole story is irrelevant. But it dropped the faked photo. These people really are idiots. They think they will not get caught. From start to not-yet-finished, this has been management's assumption. Then: boom!"

Zerohedge brings out Simmon again:

Matt Simmons Says Gulf Clean Up Will Cost Over $1 Trillion, Sees BP At $1, Says "We Have Now Killed The GoM"

http://www.zerohedge.com/article/matt-simmons-says-gulf-clean-will-cost-over-1-trillion-sees-bp-1-says-we-have-now-killed-gom

 Matt Simmons shares some startling revelations in his latest Bloomberg TV interview, in which he says none of the propaganda matters on TV 24/7 (photoshopped or not) as the ultimate clean up cost will likely be well over $1 trillion, and a result he is unconcerned about his BP short. He ultimately see the stock going down to $1. What Simmons alleges however is far more startling and audacious: that this is a joint cover up effort between the administration and BP, in which both entities keep throwing sand in the eyes of observers while distracting everyone from the matter at hand: "What we don’t know anything about is the open hole which is caused by the drill bit when it tossed the blow-out preventer way out of the hole…and 120,000/day minimum of toxic poison has now covered the floor of the Gulf of Mexico. So what they’re talking about is the biggest environmental cover-up ever. And they knew that that well, that riser, would finally deplete. And then they could say it’s over." On blaming the catastrophe on Transocean: "For two days they kept saying it’s a rig fire. When the rig sank they could no longer call it a rig fire. It’s a riser leak…Because if they said the truth they would all go to jail." The conclusion: "Unfortunately, we now have killed the Gulf of Mexico."

On whether the well pressure should be a concern:

“No, it’s a total diversion - that’s the gas condensation that was trapped in the drilling riser which blew off the wellhead at 10:01 PM CT on April 20th, it's a mile-long compressed natural gas."

"What we don’t know anything about is the open hole which is caused by the drill bit when it tossed the blow-out preventer way out of the hole…and 120,000 minimum of toxic poison has now covered the floor of the Gulf of Mexico. So what they’re talking about is the biggest environmental cover-up ever. And they knew that that well, that riser, would finally deplete. And then they could say it’s over. And unfortunately, we now have killed the Gulf of Mexico.”

“Some 5-10 miles away is what the NOIA research vessels have now proved is a deep oil lake that is growing by the day and it’s very toxic oil and its gases are very lethal. Basically if we have a hurricane now, we would have to evacuate the Gulf Coast.”

On the financial implications for BP:
“When people find out the magnitude of the story, I don’t know if we can technically clean up the Gulf but it would cost at least a trillion dollars.”

Simmons on his reaction to the rig explosion: 

“First of all when I woke up, when my wife turned on the television at 7:00 AM on the 21st and I saw this shocking news, that one of the greatest deepwater rigs ever built by one of the great companies in the industry, Transocean, was in the middle of this terrible fire, and then they said this was a rig fire, this is fuel on the rig, I know that there was 700 gallons of diesel on the rig, I said ‘This is a lie, the Gulf of Mexico is on fire. Why are they saying this?’  For two days they kept saying it’s a rig fire. When the rig sank they could no longer call it a rig fire. It’s a riser leak…Because if they said the truth they would all go to jail.”

On whether the blame lies squarely with BP:

"I think Transocean need Congressional Medals of Hero for this…I am really disgusted. Other than John Hofmeister, the retired president of Shell America, he's the only other person in the industry who I've seen to speak out."

Simmons on why he is shorting BP stock:

“You bet I did. Because I thought BP was going to go under. I’ve been saying that for months and months and when I read that 20 of the 24 Wall Street analysts had a ‘buys,’ I said ‘ That’s ridiculous, I’m going to short them.’ I’ve never shorted a stock in my life before.

"I have patience. The stock will go to one."

“They promised to clean up the Gulf, is that right?  Do you know how much it will cost if they can technically do it? Well over a trillion dollars.”

On whether there is hope for a permanent solution now that the oil has stopped leaking:

“No, because that’s not the gusher. That was a little bit of condensation that would have ended anyways. There’s no way to fix the gusher because there’s no casing left in the hole other than doing a small diameter nuclear bomb…It's the only way. With no casing left in the hole, the odds of the relief well working are zero. What the relief wells do-- if they can find the casing, they then cut a 4 inch hole--and then they have something to capture the mud with. With no casing there, it's like pouring oatmeal down a fire hydrant…The casing is not there. It's scattered over the ocean floor. The government now has gamma ray images of the actual blow-out preventer, which is five stories high, weighs 325 tons and it has two sections of casing that pierced through five stories of metal."