The geyser of oil and less than cheery news on the Gulf oil spill continues unabated. The news updates of the day include:
Reports from a Congressional briefing that suggest, as many have speculated, that the mud was removed despite heavy gas output, a warning sign, with BP admitting its workers may have made a “fundamental mistake”
More discussion of BP’s next line of attack, the “top kill” (Economic Populist has a good compilation of charts and related videos)
But the one that got my attention was the exclusive interview of BP Chairman Carl-Henric Svanberg in the Financial Times, in which he remarked:
The US is a big and important market for BP, and BP is also a big and important company for the US, with its contribution to drilling and oil and gas production. So the position goes both ways.
This is not the first time something has gone wrong in this industry, but the industry has moved on.
Yves here. This is simply stunning. First, the BP chairman essentially puts his company on an equal footing as the United States, implying their relation is not merely reciprocal, but equal. BP doesn’t even approach the importance of Microsoft in its heyday, a-not-very-tamed provider of a near monopoly service. And his posture “this is just one problem like others, no biggie” is an offense to common sense and decency.
Many readers have pointed to signs that BP’s order of battle in combatting the leak is seeking to maximize recovery rather than minimize damage, again a sign of backwards priorities. The widely cited gold standard for crisis management, Johnson & Johnson’s 1982 Tylenol tamperings, had the company immediately doing whatever it took, no matter how uneconomical it seemed, to protect the public. BP instead has been engaging in old school conduct: keep a wrap on information as long as possible, minimize outside input, and (presumably) contain costs.
What is worse is the complete lack of any apology or sign of remorse. Even if BP engaged in more or less the same conduct, it would be far more canny for its top officials to make great shows of empathy for all the people who are suffering as a result of the disaster, remind the public that they lost their own men too, and make great speeches about not resting until the leak is plugged, and then add the caveat” “but we have to proceed in a deliberate manner, rushing could make matters worse. We know this is frustrating, and we wish we could hurry the pace.”
The inability to perceive the need to fake remorse shows how wildly out of touch many corporate leaders are with reality. Let’s face it, they are surrounded by sycophants and image-burnishers, they get paid beyond the dreams of mere avarice whether they perform well or abjectly screw up. Unless one happens to be an exception that proves the rule like Jeff Skilling, the worst that might happen to them is a little ritual hazing by Congress for an hour or two and being the subject of the occasional unflattering news story. Real aristocrats, by contrast, at least recognized the importance of noblesse oblige, even if they didn’t always live up to it.
And BP’s outsized institutional ego is making mincemeat of Obama. It is clear that the Administration has NO Plan B if BP continues to get nowhere. And it has tolerated less than comprehensive disaster responses. Why hasn’t BP been asked to do more to contain the oil spill? Given the magnitude of the outflow, even limited success would make a difference. Why hasn’t the Navy been brought in? Trust me, if Al Qaeda had somehow gotten a missile cruise ship with a nuke or two into the Deepwater Horizon location, I’m sure all sorts of military hardware would be dispatched. If the leak turns out to be as bad an many fear, this disaster will be far worse than any readily imaginable terrorist incident, yet our response is sorely wanting.
Why is Team Obama treating BP as its only recourse? It should have contacted every major oil company to see if they had experts and equipment they could deploy. Or if that was dismissed as operationally too complex, why didn’t the US consider the option reportedly used by the Russians, of sealing the leak with a nuclear weapon (presumably a missile)? The Administration’s response seems extraordinarily passive, as if it is cowed. As Bloomberg reports:
“It’s inexplicable,” Louisiana native James Carville, a Democratic consultant who moved to New Orleans after Hurricane Katrina in 2005, said today in an interview. “Why do we still not know how much oil has been pumped out? Why did it take us over 30 days to get the pictures? Who’s running this show?”…
The administration says it’s taking a tough line toward BP and won’t rest until the well is capped and the mess cleaned up.
Yves here. This is a hard line? It looks like rolling over and playing dead, with some grandstanding to try to hide that sorry fact. Back to the story:
Administration officials have emphasized both that they are pressing BP to perform and that they are depending on the company because only it has the equipment, expertise and legal responsibility to stop the leak and repair the damage.
Yves here. Last I checked, BP was far from the only major oil company that does deep water drilling. It does in theory have a situational advantage via this being their site but it is not unique. I wonder whether the “legal responsibility” part is being weighed far too heavily in this calculus. The US is already mounting a massive response effort (and is BP gonna be sent the bill for that?). While it may indeed be correct that ultimately there is not much in the way of better alternatives, Team Obama does not appear to have gone into high alert and made an exhaustive examination of its options. Moreover, it appears to have believed the initial BP BS, which that the leak was only 5000 barrels a days, which meant that even if the leak persisted a few months, the damage would be meaningful but not horrific. Now that it is clear that matters are much worse, the Administration appears unwilling or unable to switch gears, even as this leak increasingly looks like an environmental disaster:
The dependence on BP has raised the ire of Democrats such as Donna Brazile, a political consultant and commentator.
“The Obama administration is following BP’s lead and not pressing them harder on contingency plans that should have already been in place,” she said in an interview. “It’s past time the Obama administration put all hands on deck in helping BP cut off the massive oil spill, contain what is gushing to our shoreline, clean up the mess and compensate those impacted immediately.”…
Louisiana’s Republican Governor Bobby Jindal, standing alongside Salazar and Napolitano yesterday in Louisiana, described the federal government’s response as a “disjointed effort” providing “too little, too late to stop the oil from hitting our coast.”
Andy Borowitz offers an appealing solution: “Experts Propose Plugging Oil Leak With BP Executives.”