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  1. #471
    Gold Member Gold Member AppSysCons's Avatar
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    By RAY HENRY, Associated Press Writer Ray Henry, Associated Press Writer – 6 mins ago, 6/15/2010

    NEW ORLEANS – A bolt of lightning struck the ship capturing oil from a blown-out BP well in the Gulf of Mexico on Tuesday, igniting a fire that halted containment efforts in another setback for the embattled company in its nearly two-month struggle to stop the spill, the company said.

    The fire was quickly extinguished and no one was injured. BP said it hopes to resume containing oil from the well sometime Tuesday afternoon.

    The fire occurred on the Discoverer Enterprise, where engineers are siphoning about 630,000 gallons of oil a day through a cap on top of the well.

    "At the moment, there's no capture, no containment going on, but we'll start up the Enterprise when it's safe to do so," BP spokesman Robert Wine said.
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  2. #472
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    Closing BP's escape routes

    "Legitimate claims"-BP's weasel phrase.

    Closing BP's Escape Routes

    by Robert Weissman

    BP generates enough cash to absorb its liabilities from the oil gusher in the Gulf of Mexico.

    But that doesn't mean it will.

    One of the benefits of the corporate form is that it gives giant corporations the ability to escape liability. BP may or may not choose to capitalize on such escapes, but it would be foolish to presume that it won't. That's why President Obama's call for the company to establish a $20 billion escrow account is such a positive and needed -- if still inadequate -- step.

    Consider first the liabilities that BP may face. No one really knows what the damage from the oil gusher or the overall costs to BP may ultimately be. Some analysts are now throwing around numbers of $70 billion on the upper end -- but it's not hard to see how the ultimate cost to BP could rise even higher.

    The company faces civil fines of up to $3,000 per barrel of oil polluting the ocean. If the gusher lasts for four months at 40,000 barrels a day, the fine alone could hit $14 billion. If it is found that the actual oil flow is double that level, the fine could potentially approach $30 billion -- more, if the gusher lasts for more than four months.

    Beyond the payments the company is making, it is going to face massive lawsuits, with damages surely in the billions and quite possibly in the tens of billions. On top of that, it may face a massive punitive damage award. Exxon challenged a punitive damages award of $10 billion in the Valdez case, and succeeded through appeals in dragging out payment for 20 years and lowering the amount to $500 million. But that was $500 million on top of compensatory damages of $500 million.

    On top of all this, BP's brand -- just a couple months ago, the most valued among oil companies -- is now ruined.

    Still, as hard as it is to conceptualize, BP can afford to pay $70 billion. The company made $14 billion in profits in 2009, a bad year. Before the Gulf disaster, it was on track to make much more in 2010.

    BP may be able to pay $70 billion, but it surely doesn't want to. Even as the company pledges again and again to cover all "legitimate" claims, you can be sure that its attorneys are conjuring a variety of maneuvers to avoid paying. Here are five approaches they must be considering:

    1. The AH Robins/Dalkon Shield Bankruptcy Scam

    A.H. Robins, the manufacturer of the defective Dalkon Shield intrauterine device, filed for Chapter 11 bankruptcy in 1985. Women who were victims of the dangerous device received less compensation than they otherwise would have. Meanwhile, with the company's otherwise open-ended liability demarcated in the bankruptcy process, Robins' value shot up. AHP (now part of Wyeth, itself now part of Pfizer) acquired the company at a premium, with the Robins family making off with hundreds of millions of dollars.

    BP wouldn't follow the Robins' model exactly. The play for BP would not be to declare bankruptcy for the parent company, but for BP America or another subsidiary that could be tagged with the liability for the Gulf of Mexico gusher.

    In advance of such a move, BP might try to move assets out of the designated subsidiary and into other subsidiaries in its vast network. Such asset shifting is not permissible, and creditors would challenge any such moves, if they could discover them. But using its labyrinthian structure, BP might hope to evade the creditors.

    Even without the asset shifting effort, bankruptcy for an affiliate could prove attractive for BP.

    2. The Union Carbide Disappearance

    Union Carbide was the company responsible for the world's worst industrial disaster. A gas escape from its chemical facility in Bhopal, India killed many thousands (likely tens of thousands) and severely injured tens of thousands more. After settling for a paltry amount with the Indian government, Union Carbide disappeared as a standalone company. It is now a subsidiary of Dow Chemical.

    Says Dow: "Dow has no responsibility for Bhopal." Moreover, "the former Bhopal plant was owned and operated by Union Carbide India, Ltd. (UCIL), an Indian company, with shared ownership by Union Carbide Corporation, the Indian government, and private investors. Union Carbide sold its shares in UCIL in 1994, and UCIL was renamed Eveready Industries India, Ltd., which remains a significant Indian company today."

    BP might conceivably be acquired by another oil major. Or, more likely, it might just sell some or all of its U.S. subsidiaries. If the liability cap in the Oil Pollution Act works to protect BP from legally recoverable claims (perhaps less likely than has been reported, since the cap does not apply to a spill caused by violation of applicable federal rules), an acquiring company could simply state that it refuses to make good on the liabilities that BP now says it will voluntarily accept. A new company would also benefit from operating BP assets with a new, uninjured brand name.

    3. The Shell Company Game

    A variant on the Union Carbide Disappearance gambit would involve selling one or more subsidiaries' assets, but leaving the current corporate structure in place. Liability would still attach to the old subsidiaries, but it would be devoid of assets to pay -- if BP could find a way to move the cash it received for selling assets out of the subsidiary and out of reach of creditors.

    Again, such a move should not be legal. But it would be a mistake to assume that formal legal rules provide guarantees when billions or tens of billions of dollars are at stake for a giant, global multinational.

    4. The Exxon Hardball Approach

    BP's lawyers are undoubtedly considering other, more straightforward approaches to limit the company's liability.

    Under the Exxon Hardball approach, BP would follow its oil company brethren's approach to the Valdez spill. Drag out compensation payments. Challenge adverse legal rulings. Rely on a corporate-friendly judiciary to overturn or scale back any large scale jury verdicts or government-proposed fines.

    5. The Big Tobacco Global Deal

    Another approach might be for BP to offer a "global settlement" of all claims arising from the Gulf Oil gusher. This would follow the precedent of Big Tobacco, which in 1997 offered to put hundreds of billions of dollars on the table, and accept some regulatory restraints, to settle lawsuits for its past misconduct and effectively preclude new litigation. (This deal was ultimately scuttled.) For BP, the play would be to put a "shock and awe" amount of money on the table to resolve all claims and penalties. Its aim would be to eliminate the prospect of getting hit with outsized punitive damages or fines, and escaping payment for ecological damage that may not be apparent for many years --amounts that might vastly exceed what BP pays.

    Against this panoply of available maneuvers, public officials have limited options. The Obama administration is finally doing the right thing in first, talking about the danger of BP draining company assets via dividend payments, and, second, demanding the establishment of an escrow fund. Calling attention to abusive corporate stratagems not yet underway is one of the best ways to prevent their deployment. And an escrow fund would establish a guaranteed pool of available money for victims -- establishing the fund apart from BP's control is at least as important as ensuring fair and independent handling of victims' claims.

    What this and future administrations also need is a way to exert control over companies facing environmental or other liabilities of the scale now facing BP -- a kind of receivership to prevent manipulations of the corporate form to enable corporate goliaths to escape liability.

    Forcing corporations to pay for the damage they cause is not sufficient to prevent them from recklessly endangering people and the planet, but it is certainly necessary. Permitting them to avoid liability and foist costs on to others is to ensure more and worse corporate catastrophes.
    (c) Robert Weissman

  3. #473
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    Current guesstimate is 60,000 bbl per day.

    They did everything in their power to avoid doing anything costly or time-consuming that might hurt them financially. Much in the same way builders and sellers that used Chinese-made sheetrock did nothing.

  4. #474
    OSO OG Gold Member DollaBill's Avatar
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    put a wedding around it. It'll stop puting out immediately
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  5. #475
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  6. #476
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    Two very costly mistakes here

    From Rippem's post; BP's engineers disregarded the advice of two of the most experienced oil companies in the business; Halliburton and Schlumberger;

    BP also apparently rejected advice of a subcontractor, Halliburton Inc., in preparing for a cementing job to close up the well. BP rejected Halliburton's recommendation to use 21 "centralizers" to make sure the casing ran down the center of the well bore. Instead, BP used six centralizers.

    In an e-mail on April 16, a BP official involved in the decision explained: "It will take 10 hours to install them. I do not like this." Later that day, another official recognized the risks of proceeding with insufficient centralizers but commented: "Who cares, it's done, end of story, will probably be fine."

    The lawmakers also said BP also decided against a nine- to 12-hour procedure known as a "cement bond log" that would have tested the integrity of the cement. A team from Schlumberger, an oil services firm, was on board the rig, but BP sent the team home on a regularly scheduled helicopter flight the morning of April 20.

  7. #477
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    Everyone of those greedy S.O.B's need thrown in jail & distribute there fat banks accounts out to all those without jobs now.... Not just BP paying out....

  8. #478
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    The "Blue Dogs", TransOcean and the President

    How BlueDog Boys kept Obama's boot off neck of BP's U.S. partner

    By William Lowther
    Last updated at 8:43 AM on 13th June 2010

    The American owners of the drilling rig at the centre of the Gulf of Mexico oil spill have been involved in nearly three-quarters of all significant safety incidents on rigs in the region since 2008, according to new figures.

    Transocean, the world’s largest rig operator, has so far avoided much of the fall-out from the environmental disaster heaped on BP by President Obama and members of Congress following the Deepwater Horizon explosion.

    But an analysis of government data reveals it has a highly questionable safety record. Over the past five years, the US government has investigated four fires aboard deep-water rigs – all operated by Transocean. British regulators have also issued a warning over a Transocean rig in the North Sea because of worries over a key safety device, the blowout preventer.

    Investigators believe April’s explosion on the Deepwater Horizon rig – which caused the death of 11 workers and the growing oil slick in the Gulf – was caused by the failure either of a seal meant to keep oil and gas from escaping from a well or by the blowout preventer, which is designed to close off the well in an emergency.

    The company recently relocated its HQ to Switzerland, which has a more favourable tax regime for multi-national companies.

    It has so far proved far more adept than BP at handling the intricacies of US politics, and last month hired an influential lobbyist and former politician to represent its interests in Washington.

    He is ex-Democratic Congressman Bill Brewster of Oklahoma, who remains a powerful figure in Washington among politicians linked to the oil industry.

    He is also a member of the Blue Dog Coalition, a group of conservative Democrat Congressmen from the southern states whose support Mr Obama desperately needs in the face of difficult mid-term elections later this year which could see many of his party’s Congressmen unseated.

    Questions are certain to be raised when the oil firms involved with the spill are grilled in Congressional hearings starting this weekend.

    Records show Trans*ocean has had trouble in the past with both cement seals and blowout preventers. In 2006, a blowout preventer failed at least in part because of maintenance issues and in 2005 an oil well leaked drilling fluid because of problems with a cement seal.

    All executive bonuses at the company were dropped last year after four workers died aboard rigs in separate incidents.

    Some industry experts say that Transocean’s reputation slipped after it bought out rival GlobalSantaFe in a £10 billion deal three years ago.

    Company rigs were involved in 13 of 39 incidents investigated by the US government’s Minerals Management Service from 2005 to 2007 – 33 per cent of the incidents at a time when it had 30 per cent of the total number of rigs working in the Gulf of Mexico.
    The Blue Dogs - so named because it was said they were so loyal to the party they would vote for a blue dog if it were a Democrat

    However, since the merger with GlobalSantaFe, Transocean has been involved in 24 of the 33 incidents investigated, 73 per cent of the incidents at a time when it had fewer than 50 per cent of the rigs operating in the Gulf.

    It came under the scrutiny of the UK Health and Safety Executive in 2006, which issued it with an improvement notice criticising the testing of a blow-out preventer.

    A Transocean official said: ‘Safety is the number one priority at Transocean and there is no scenario or circumstance under which it will be compromised.’

    It was also pointed out that Transocean’s 2009 safety record, as measured by injuries per hour worked, was better than the overall industry average.

    Transocean hired Mr Brewster to help improve its image with the Democrat-controlled Congress last month.

    In 1994, Mr Brewster – a major figure in the fight against gun control – formed a caucus of politicians from oil-producing states called the Congressional Oil and Gas Forum and served as its first chairman.

    He was also a founding member of the Blue Dogs, so named because it was said they were so loyal to the party they would vote for a blue dog if it were a Democrat.

    Last night it emerged that when BP chairman Carl-Henric Svanverg meets Mr Obama this week he will effectively hand control of its dividend policy to the President.

    Mr Obama fears BP cannot pay its shareholders and meet the costs of the clean-up at the same time.

    Gulf of Mexico holds enough water to fill one billion Olympic swimming pools. The oil spilled by BP would fill just two and a half of them

    When BP chief executive Tony Hayward claimed the volume of the oil leak was ‘tiny’ compared to the size of the ocean, he faced immediate criticism.

    Mr Hayward said: ‘The Gulf of Mexico is a very big ocean. The volume of oil and dispersant we are putting into it is tiny in relation to the total water volume.’

    His comments appeared dismissive in their tone, but it seems they are correct in purely mathematical terms.

    Leaking oil and gas from the Deepwater Horizon oil spill: There are almost 1.4 million gallons of oil being spewed from the seabed into the Gulf basin each day

    Scientists last week revised their estimate of the number of barrels of oil leaking from the seabed each day from 20,000 to 40,000. A standard barrel of crude oil contains 35 gallons.

    Based on that measurement, there are almost 1.4 million gallons of oil being spewed from the seabed into the Gulf basin each day.

    This is the equivalent of around two-and-a-half Olympic-sized swimming pools worth of oil (a pool can hold approximately 550,000 gallons of water).

    By comparison, the Gulf of Mexico, the ninth largest body of water in the world, contains some 535 thousand billion gallons of water – equal to one billion Olympic pools.

    Read more:

  9. #479
    VIP Member VIP Member Marginmn's Avatar
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    For two months BP has been gushing oil into the Gulf of Mexico at what we now find out is a rate of 60k barrels day and our President will finally meet with the company responsible for this disaster, today?

    Sadly, this is what happens when you have an administration packed with professional politicians instead of real world business leaders. Instead of concentrating on solutions to the problem at hand and solving it, they concentrate on politics and removing blame from themselves. You don't have to like BP or oil people in general but if you want to solve the problem you don't wait two months before you meet with a company pumping 60K barrels of oil into the Gulf. It's just sickening. Sickening that BP has been lieing all along and sickening that this president left BP alone in charge because he didn't have the business experience to know that he needed to deal with BP and the best oil people in the industry directly, everyday of this crisis.

    Any leader worth his salt would have tapped the best oil minds in the busniess, set up a war room in the white house packed with them and met with them "and BP" EVERY FREAKING DAY, and only after getting their input allowed BP to proceed with their quick and cheap solutions to stopping the leak. BP's top kill procedure likely made the problem worse and runied the casing and any hope that the relief wells will even work, and cutting that pipe likely tripled the output rate of oil into the gulf. Instead of rolling up his sleeves and meeting with oil people daily to solve the problem he gets all his info from his energy czar professor and his first response in the crisis was to send his attorney general to the gulf to look for criminal acts.

    The man is a politician - not a leader and the Gulf is worse for it. Two months into this he doesn't have near enough manpower or equipment in place to deal with this disaster and he's finally going to meet with BP. There are thousands of oil skimmers in the USA. 21 foreign governments have offered use of their oil skimmers. This administration has refused all offers and we currently have a whopping 32 oil skimmers in the GULF of Mexico working this massive problem. This administrations respose to this is so Katrina-like. We are in big trouble.
    Last edited by Marginmn; 06-16-2010 at 07:23 AM.
    The Beak be gone

  10. #480
    Member #154 Platinum Member Indy's Avatar
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    Quote Originally Posted by Marginmn View Post
    Sadly, this is what happens when you have an administration packed with professional politicians instead of real world business leaders.
    Its business professionals and their decisions that got us into this mess in the first place.

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