June 22, 2010

The $20 Billion Boondoggle

President Obama brags about it, saying that the $20 billion BP has agreed to pay into an escrow account  is a sign that the administration is doing something.

Smokin’ Joe Barton goes ballistic and mea culpas on bended knee in front of BP execs, berating our President for what he called a shakedown.

With respect to the President, but not the fool Barton, $20 billion ain’t gonna be near enough.

Consider this. The administrative fine to BP for each leaked barrel of oil is $4,300. At the estimated rate of leakage, the estimated time necessary for the relief well to be drilled and the flow cut off, $20 billion might not even cover that fine.

In addition, we can expect that payment to hundreds of thousands of injured parties, residing in five states, for all of the liabilities already suffered and all those to come, added to the total cleanup costs for hundreds of miles of coastline and millions of acre-feet of water... will exceed $100 billion even in the short run.

Then there are the long-term effects of the very unwise, knee jerk moratorium enacted by the administration. Using industry estimates we could potentially see some 200,000 lost jobs just in the drilling and oil services industries.

For every lost job the multiplier effect may mean two, three or even five additional jobs lost in industry ranging from construction to manufacturing to fast food. This means a potential of a million job losses. Businesses will close due to lost business, and regardless of what eventually happens, many of those jobs will be gone forever.

So don’t be fooled by all the foofarah over a measly $20 billion. Such an amount is a drop in the bucket, and anyone thinking BP will actually pay the full, real cost incurred now and continuing into the future, is deluded.

On the news today we hear of tar balls washing ashore along Alabama and Florida coastline. This photo is of a 1-ton tar ball scooped out of the GOM a few miles off Florida's western coast. The orange thing appears to be a Billy Pugh personnel basket, commonly used to transfer personnel from rig to boat or vice versa. It has about a six-foot diameter, so the size of this thing is easily determined.

I’m glad to see anything that will help those losing livlihoods, but in the end $20 billion probably wouldn’t buy a hot lunch for all of the people hurt by BP's carelessness.


Comrade E.B. Misfit said...

The President did say that the $20 billion was not a cap on what BP will ultimately pay for its fuckup.