BP Admits to Being “Not Prepared” (“Low Odds” Fallacy Edition)

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A sudden bout of semi-candor from BP suggests the top brass of the miscreant oil company recognized that it is in such deep doo-doo that the normal corporate PR playbook is no longer operative. Companies and governments often refuse to admit error or blame it on circumstances out of their control as a way to limit liability. Whether BP survives is now likely to be a function of intersecting political considerations, so BP executives may believe that a show of what looks like candor will buy them more points than obvious obfuscation (subtler forms are an entirely different matter).

Some key sections of an interview in the Financial Times with CEO Tony Howard:

“What is undoubtedly true is that we did not have the tools you would want in your tool-kit,” Mr Hayward said. He accepted it was “an entirely fair criticism” to say the company had not been fully prepared for a deep-water oil leak.

Yves here. This part was where the whitewashing occurred:

Tony Hayward said BP was looking for new ways to manage “low-probability, high-impact” risks such as the Deepwater Horizon oil rig accident.

Yves again. Trying to pass off what happened as a tail event misses the nature of any sort of a production environment. If you understand only the basics about operations, you’ll recognize that his comment is an utter canard.

Why is Six Sigma, a process designed to lower production defects, popular across a wide range of industries? Because the more steps you have in a production process, the lower the odds of having a fault-free end product.

Consider a twenty step process. If each operates at 99% (a 1% failure rate), the failure rate across the entire process is over 18%. Thirty steps brings the odds of failure up over 26%. Fifty takes you to slightly under 40%.

Now let us consider deep sea drilling. Admittedly, it’s not a liner process like a factory environment (as in the rig operators can make decisions and change course). But (and I’d enjoy it if the people who know oil production can chime in), I have to imagine there are more than 20 critical steps and choice points (as in: if you make a bad decision, get a false positive or false negative reading or a process unexpectedly fails, There Are Consequences).

Do you think that all decisions and actions in this setting are at the 99% tolerance level? One would bet against that at BP; it’s safety record alone points to cutting corners. As reader Marshall noted:

They’ve got 760 citations for “egregious, willful safety violations” from OSHA; their nearest competitor in the oil industry, Sunoco, has 8 (Exxon, the last poster-child for oil-industry irresponsibility, has only 1.) They’ve now had three fatal accidents in the U.S. in the last five years. There was plenty of evidence that BP had prior knowledge of the problems that led to its Texas City refinery explosion, which killed 15 people, and the horrific Alaska North Slope oil spill. The fines the company has had to pay just haven’t sufficiently cut into its profits.

Yves again. And as we have seen with previous mishaps in the industry, the consequences are catastrophic for worker, communities, and the environment….but heretofore, not for BP.

So in one sense, Hayward was completely honest when he said the Deepwater Horizon leak was a “low-probability, high-impact” risk. The failure in the past of governments to make oil industry perps pay the true costs of their misdeeds meant that it had always been low probability that an accident would have high impact on BP itself.

Oh, and if you think I’m being unfair to Hayward, consider his reaction to an injunction to force BP to provide cleanup workers with masks and other protective gear:

I’m sure they were genuinely ill, but whether it was anything to do with dispersants and oil, whether it was food poisoning or some other reason for them being ill. … It’s one of the big issues of keeping the army operating. You know, armies march on their stomachs.

It would be hard to find more vivid proof of the company’s attitude towards safety.

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47 comments

  1. attempter

    So in one sense, Hayward was completely honest when he said the Deepwater Horizon leak was a “low-probability, high-impact” risk. The failure in the past of governments to make oil industry perps pay the true costs of their misdeeds meant that it had always been low probability that an accident would have high impact on BP itself.

    Yes, and that goes to what a Big Lie all “free market” ideology and propaganda always was, since all “free marketeers” always intended to socialize as much risk and cost as they could.

    That there’s a laughable $75 million liability limit on this sort of operation, where any negligence was likely to lead to many, many billions in “quantifiable”, “actionable” damages (which is nowhere near the true damages; as I said in an earlier comment, the damages from this hemorrhage are for all intents and purposes infinite) is the most vivid testimony we could have to how they thought they had this locked up, and were therefore free to cut every corner secure in the assurance that no matter how far they drove up the probability of a costly disaster, the cost wouldn’t be to them.

    Therefore from the entrenched corporate point of view risk remains zero no matter how willfully, aggressively negligent you are.

    The rackets have to be eradicated completely. It’s clear by now that big corporations as such are a clear and present danger to freedom, humanity, and the earth.

    consider [Hayward’s] reaction to an injunction to force BP to provide cleanup workers with masks and other protective gear:

    I’m sure they were genuinely ill, but whether it was anything to do with dispersants and oil, whether it was food poisoning or some other reason for them being ill. … It’s one of the big issues of keeping the army operating. You know, armies march on their stomachs.

    It would be hard to find more vivid proof of the company’s attitude towards safety.

    Or their attitude toward humanity as such.

    It’s “let them eat cake” all right. The assaults, the injuries, and the insults will continue until we smash these criminals once and for all.

    1. Doug Terpstra

      “…that goes to what a Big Lie all “free market” ideology and propaganda always was, since all “free marketeers” always intended to socialize as much risk and cost as they could.”

      Well said. I can’t help but recall Greenspan’s eureka moment: “I found a basic flaw in my worldview” D’oh! It never ocurred to me that greed could be a problem.

      They socialized virtually all the risks. And worse, the Supine Court is likely to veto any attempt by Congress to (pretend to) lift the $75 million cap—which is not even a token of economic/ecological costs. Externalizing the cost of human lives, however, is the final nail, beyond remedy.

      1. attempter

        Greenspan’s like the remorseful alcoholic, with his intermittent mea culpas followed by regressions to his very mean mean.

        And I agree that most of the federal courts including the SCOTUS are write-offs by now. (In fact I say exactly that in tomorrow’s blog post.)

  2. Curmudgeon

    I’m somewhat familiar with the oil industry even though I don’t work in it.

    There are hundreds of steps in drilling a well and converting it to produce oil or gas. There is also some redundancy regarding steps that are essential to safety. Get one step wrong and you have a very, very costly business problem but nothing more. Get two critical steps wrong and there’s a very good chance people will die.

    The evidence so far suggests BP didn’t get just one step wrong but rather created a chain of catastrophe by failing to make sure that each step they had taken had been done right before moving onto the next step.

  3. anonymous

    Fairly clearly, BP isn’t the only one about to issue the same mea culpa. Problem is, the changes to regulatory law compelling the federal government to be prepared were predicated on the assumption, writ large in fact by the Exxon Valdez debacle, that the oil companies could not be trusted to prepare properly. BP not being properly prepared was the given and reason why Democrats were supposed to ensure that a robust inspection regimen, enforcement policy with penalties, and clean-up strategy was in place before the feds permitted the Deepwater Horizon to drill.

    And for those interested in reading the black print, why do you think the rig was named the way it was? The technology for drilling was in ‘deep water’. And the activity was taking place about a mile below the surface, beyond existing horizons. Good thing nobody thought about how difficult it might be to thread this particular needle a mile below the surface using robots in freezing temperatures.

    I mean, that’s the kind of thing only really, really clever people could have have imagined: jamming the drill in is a problem of one order of difficulty, jamming a cap into that hole is clearly another.

    Good thing the feds were doing what they were paid for.

    Heck of a job, all concerned.

    1. DownSouth

      anonymous,

      ….Democrats were supposed to ensure that a robust inspection regimen, enforcement policy with penalties, and clean-up strategy was in place….

      This comment is emblematic of what is wrong with America.

      It seems to get lost on these partisans that agencies like the MMS are supposed to be staffed by civil servants who are hired on the basis of merit, not politics. Presidents come and go, but the civil service employees stay.

      One of the reasons for this is to prevent public employment from becoming a spoils system, the plaything of patronage politics.

      Somewhere along the road we switched from a merit system to a spoils system. Both Republicans and Democrats participated in this debasement of the civil service sector.

      While I suppose one could argue that one party is more culpable than the other, I say a curse on both their houses.

      1. anonymous

        The Dems are responsible for staffing these agencies with merit hires because…wait for it…voters cast a ballot for something different better than Mike Brown. And wanted Dems to make merit hires. Dems didn’t. Get it?

        And you’re wrong, btw, to distribute blame equally. Clinton made any number of mistakes, but actually made merit-hires in FEMA and other agencies a temporary norm. Those of us who saw the current corporate shill as a less effective corporate shill than the alternative corporate shills have been largely proven right. I don’t much care whether Clinton, or Bush, or Obama is Republican or Democrat. Like most folks I’d settle for simple competence. That’s clearly asking too much.

        1. NOTaREALmerican

          Re: Like most folks I’d settle for simple competence.

          Competence implies measurement and punishment for failure. Anything TBTF can’t be competent over the long run. This is probably why all big human organizations fail, eventually.

          Personally, if I worked for a TBTF organization (which I do), I’d be “working” to ensure there was no action directly accountable to me. (btw, that’s what I’m working on now).

          1. anonymous

            Cheers!

            I really enjoyed your candid post. You’re right, of course. A solid instinct for self-preservation is something we all bring to the job.

            Fortunately, I possess the ability to ‘punch-in’ and ‘punch-out’. I’ve worked for some extremely successful organizations and others less so. I don’t confuse my fortunes with theirs. And I’ve been fired. I bs’d my way into a job I didn’t really want and certainly couldn’t do.

            Rewarding incompetence is almost always a mistake.

            Mine included.

        2. DownSouth

          anonymous,

          I don’t much care whether Clinton, or Bush, or Obama is Republican or Democrat. Like most folks I’d settle for simple competence. That’s clearly asking too much.

          So after all that we finally get to something we can both agree on.

          1. anonymous

            No, after ‘all that’ I point to the close of my original post ‘Heck of a job, all concerned’, which you ignored in your rush to paint over the fact that Dems have no excuses for the laziness and corruption given the evidence of oil company incompetence (Exxon Valdez and sundry disasters) and the need to inspect and flush FEMA and other federal agencies in 2008-9 and re-evaluate existing ‘safe practice’ standards (Mike Brown and the 8 years of political cronyism).

            Dems are arrogant, dishonest and lazy. We can come up with some bad words for Republicans when they’re charged with enforcing existing laws and fail.

            The Gulf Oil spill is on Dems. My guess is you’d be one of the first making the ‘buck stops where?’ argument were a Republican administration and Congress running show. Your own partisan slip is flapping up and down this thread.

          2. DownSouth

            anonymous,

            You say:

            “The Gulf Oil spill is on Dems. My guess is you’d be one of the first making the ‘buck stops where?’ argument were a Republican administration and Congress running show. Your own partisan slip is flapping up and down this thread.”

            Come on. Now you’ve relapsed to your knee-jerk partisanship, into to your binary and uncritical way of thinking.

            In my criticism of Janet Lubchenco, the Obama appointee running the National Oceanic and Atmospheric Administration (see comment below), I stated that “The rhetorical strategy that Lubchenco is using here is the same as used by those who deny smoking causes cancer and other diseases, the creationists, those who deny that HIV causes AIDS, the climate change deniers and those who deny that laissez faire capitalism caused the GFC.”

            I don’t see how you can construe that as making any excuses for this administration or its appointments.

            But I also argue that this occurred within a larger trend that has been going on for about 30 years in which the civil service has been vitiated.

            It is this latter argument that seems to antagonize you, as you want to place 100% of the blame on the Democrats.

  4. Rex

    This Tony Hayward is astounding. How could such a putz make it to the top of the food chain?

    The first clue he gave was when he stated that he thought the impact would be minor. He knows he is in the spotlight, with cameras following him and he still continues to spew one insensitive, arrogant, deluded comment after another. I can only conclude he really is an self-centered dangerous idiot.

    1. anonymous

      I expect Obama will offer him a job along with Larry, Tim, and Ben. That’s how this administration punishes incompetence.

    2. NOTaREALmerican

      Re: I can only conclude he really is an self-centered dangerous idiot.

      Except for the idiot part, sounds like a male that most humans would worship in our frat-boy culture (at least until the frat-boy throws up in front of your house after another all night party).

      Dude, let’s drill dude! Dude, you da man, dude. No guts no glory dude. Dude, like, we’re not a bunch of liberal pansies. No way, dude, let’s start drillin’, dude. Oh dude, like, this is gonna be – like – soooo cooool, dude. Dude, F*in’ right dude. Dude, like, dude totally.

  5. pros

    The BP guys are sharp-
    they own the governments , including the judges…
    the financial consequences of these massive toxic discharges, “accidents”, etc. are de minimis

    our society has degenerated to a system that is completely broken and serves the interests of a small group of elite…
    look at health care, finance, defense..
    the endless wars..

  6. jh

    Hayward was completely honest when he said the Deepwater Horizon leak was a “low-probability, high-impact” risk.

    Got half of that equation right anyway.When you’re
    beginning a drill a mile under the sea – low
    probability – is already out the window.

  7. Francois

    Although corporate sleaze a la BP never cease to amaze me, what I truly find astounding is to witness public officials act as servants of such sleaze.

    Case in point: The director of NOAA, which is a scientific agency at its core, cannot bring herself to get out of BP’s PR line about the infamous underwater oil plumes.

    http://www.huffingtonpost.com/2010/06/02/noaa-director-toes-bp-lin_n_598461.html

    Here’s a choice example:

    Despite more than three weeks of accumulating scientific evidence that gargantuan plumes of oil lurk beneath the surface of the Gulf of Mexico — presenting an imminent threat to sea life and a possibly decades-long threat to the nation’s coastlines — NOAA Director Jane Lubchenco on Wednesday refused to contradict BP CEO Tony Hayward’s statement over the weekend that “the oil is on the surface” and “there aren’t any plumes.”

    Scientists on NOAA and academic research vessels have been reporting since the week of May 10 that they have spotted — and sampled — oil suspended in the water column. And the Huffington Post has learned that lab results from a previously secret NOAA research mission have been analyzed; its results just haven’t been made public.

    But to Lubchenco, the Obama appointee running the National Oceanic and Atmospheric Administration, all the accumulated evidence is just “circumstantial.” (As opposed to what, exactly?)

    And what others call oil, she calls “anomalies.” (I wish I could call Director Lubchenco a “regulatory anomaly”, alas…she’s more the norm than the exception)

    “I can tell you that there have been a number of anomalies identified by a number of different cruises,” she told reporters in a conference call. “Those anomalies are features at various different depths in the water column that may be oil, they may be other features.” (Like what?
    Lubchenco in the Sea With Diamonds?
    )

    “It is quite possible (Possible? I mean…intubate me!!) that there is oil beneath the surface,” (If one can find cereal box toys in the Pacific’s Great Garbage Patch, I guess it is “possible” there is oil where a huge leak of oil exist. Good deduction my Dear Watson!) Lubchenco finally acknowledged under repeated questioning. “I think there is reason to believe that may be the case.” But that’s as far as she would go.

    Since we’re all in need of a good laugh, she added:

    “I am not at all in denial,” she insisted.

    Enough said!

    1. DownSouth

      Francois,

      Thanks for the link. Very eye-opening.

      But to Lubchenco, the Obama appointee running the National Oceanic and Atmospheric Administration, all the accumulated evidence is just “circumstantial.”

      And what others call oil, she calls “anomalies.”

      “I can tell you that there have been a number of anomalies identified by a number of different cruises,” she told reporters in a conference call. “Those anomalies are features at various different depths in the water column that may be oil, they may be other features.”

      “It is quite possible that there is oil beneath the surface,” Lubchenco finally acknowledged under repeated questioning. “I think there is reason to believe that may be the case.” But that’s as far as she would go.

      “I am not at all in denial,” she insisted.

      The rhetorical strategy that Lubchenco is using here is the same as used by those who deny smoking causes cancer and other diseases, the creationists, those who deny that HIV causes AIDS, the climate change deniers and those who deny that laissez faire capitalism caused the GFC.

      “Doubt is our product,” as Yves put it in a recent post.

      For a virtual showcase of this and other rhetorical strategies employed by the anti-science crowd (“agnostics” is how they prefer to mischaracterize themselves), there is the comment section (there are almost 700 comments) following this post on scieneblogs.com:

      http://scienceblogs.com/aetiology/2006/08/interview_with_hiv_rethinker_r.php

      Tara C. Smith, an Assistant Professor of Epidemiology, points out and bats back what she calls the “tactics” and “methods of argumentation” used by those who deny HIV causes AIDS.

      It is a primer in the rhetorical strategies employed by the anti-science brigades. Very enlightening.

  8. Ronald

    If this event had taken place off the coast of Africa or other out of the way locations other then GOM, in the U.S. during an election year, most would hardly know it was occurring. BP is the largest driller in the world and has the resources to tackle deep water drilling but given this experience what will change besides that BP is dead man walking, maybe that governments (taxpayers) will have to assume the financial risk for these deep water drilling tasks as it clearly is outside the realm of even the biggest companies to survive such an event and accidents do occur and will continue to happen no matter how thick the safety manual or well managed the driller or closely monitored by regulatory agencies.

  9. Dwight Baker

    “That’s no comfort to the president. Expertise has failed him in a big way. But it can be a small comfort to the rest of us. Going forward, he’s bound to put more stock in skepticism and common sense”. Joshua Green Boston Globe

    Mr. President this is the ‘PLAN’ to stop the oil and gas flooding into our Gulf.

    The TAME NATURE Overshot Plan was first sent to BP
    May 13,2010
    By Dwight Baker
    June 3, 2010
    Dbaker007@stx.rr.com

    TAME NATURE overshot plan will give surface ships access to the well, safe, secure and in constant contact with the BOP, connected by 7” casing. Once done pumping can begin and not end till the well is filled with heavy weight drilling mud —loss circulation media then cement. Well control can be maintained with readily available high-pressure oil well tools. As an added safety feature a ‘SNUB DOWN’ can be installed on the rig floor to maintain constant pressure on the 7” casing against the top of the BOP when the TAME NATURE overshot is in place. The weight of the 7” casing is 200,000 lbs and along with the fluids inside the pipe to be pumped that is more than sufficient weight to keep constant contact with the BOP.

    The pressure differential between the seabed pressure of 21,600 PSI and the flowing oil pressure is from 1,000 to 3,000 PSI. Therefore the job of pumping into the BOP quickly and surely will not require new techniques or methods never used before. A simple fix for an out of control disaster.

    I envisioned this TAME NATURE overshot cure and passed it along to BP many days ago and still hold to the basic premise that We the People must demand President Obama to demand BP to use Tame Nature overshot plan to stop the oil from gushing into our Gulf of Mexico.

    I have published the TAME NATURE overshot CURE for all to see.
    To receive the details of the problems that created the blow out and the TAME NATURE overshot cure —- Please contact me for the 2500 word manuscript with large detailed drawings including technical ecological social and political conclusions built around facts. The file size is 1.01 MB

    Contact Dwight Baker at dbaker007@stx.rr.com and the file will be sent.

  10. Dwight Baker

    American Champs in oil and gas time to enlist!
    By Dwight Baker
    June 3, 2010
    Dbaker007@stx.rr.com

    Anger frustration has led many in America to disappointment and discontent so much that 90% of the comments on the internet about the Blow Out are senseless stupid and most times more about party lines. Now is that stupid or not?

    Chu does not have a clue about the techniques pipes etc in oil and gas ‘folks oil and gas is a generational passed down occupation’. Nor does many from Harvard, Yale, and Princeton and on — but one thing for sure there has been a learning curve 90 degree straight up. And over time the brightest will always come to the top for study defines them. E-mail Dbaker007@stx.rr.com for What Went Wrong and the Cure for the BP Blow Out.

    Most reports on the Blow Out in the TV news media are faulted. The Blow Out has set them back for none knew what was really going on, so on and on — that has gone on— one emulating the other with neither have the common sense and reason about oil and gas matters to understand the subject matter they were reporting.

    Thus the rub has come for the working class of folks in America. For many of them have grown up valuing common sense and reason more highly than years of grueling education. And for many that was the only way for them to go — for lack of funds and preparatory education to get them ready for Colleges and Universities.

    Yet none should forget the Wall Street crisis was led by the blue blood elites with years of training in Universities.

    Now it is time for many who do not have a clue to bow out and let many CHAMPS with generational oil and gas common sense and reason take over. And from that crowd of Champs there is many that would stay and stay and stay until the job is finished knowing when complete the best had been done for all around.

    In the BP culture of folks I have not seen any of that type. Therefore BP needs to pay whatever it takes then stand back and let the AMERICAN CHAMPS in OIL and GAS take over.

  11. Dwight Baker

    BP cannot be trusted
    By Dwight Baker
    June 2, 2010
    Dbaker007@stx.rr.com

    BP has not come forward to clearly state anything to my knowledge. Between seven and ten thousand folks from around the world has sent in ideas of how to help.

    They have looked at very few of them. BP has gathered around them every one they can —to —at some point bale out. Some of the things that they have done and in doing it appeared to many good people to be the brainchild of the many that they have swarming around them.

    Yet that is just not the truth. I did turn in a proposal to TAME NATURE with an overshot. But after serving in oil and gas for over 25 years I can smell a con a mile away. Therefore I did not use their proposal form, sent mine directly into the main office in London. Yesterday I got three personal messages from them that basically told me to SHUT THE HELL UP.

    The oil patch is a rugged profession and men that take on that kind of job like that. I did — when I spent many years problem solving and out of that come 13 USA Patents.

    Folks the only real cure is the TAME NATURE overshot plan. When finished in less than a day after getting the things made and pipe delivered the blown out well would be cemented to never leak again. And beyond BP doing that we are stuck in the muck of oil ruining our Gulf.

  12. Dwight Baker

    BP unleashed nature
    High pressures over 21,600 PSI broke loose as the drilling mud and water whipped and ripped around shredding the Deep Horizon drill ship in little pieces. Eleven good men met their demise. My God Forbids!
    By Dwight Baker
    June 1, 2010
    Dbaker007@stx.rr.com

    Eagles Eye View Aiming at Issues for We the People Advocates

    BP big bosses do not want to face those kinds of pressure again. Yes they made the final and fatal mistake of not following Oil and Gas old time techniques of finishing off a well as should be done.

    Now they run like cowards afraid to face the problems that they caused that fatal day. Mr. Hayward is a coward in every way and he is a liar to top all that off, but one thing he has proved while being at the helm of BP he knows how to cut budgets [jobs] and that improves the bottom line. Most ‘Bean Counters’ at the helm do not know one thing about what the Corporations they run do.

    The reason BP at this time is shying away from using the TAME NATURE overshot plan there might be a slight element of risk in it, yet most oil field engineers have approved it — We all must be about saving our People our Gulf and our planet.

    The zone that BP drilled into has more pressure in it than 21,600 PSI. The Sea Floor pressure where the BOP stands is 21,600-PSI Therefore the flowing pressure that we have seen vaguely is more than that, BP knows the exact pressures but they ‘Ain’t’ telling. That is a felon’s way of doing business in the USA. Remember the felon con artist in the Wall Street Heist just like yesterday?

    No one in oil and gas that has an ear for their fellow man believes that they can educate the American People in all aspects of what went wrong that fatal day in a twinkling of an eye.

    The video’s following proves the point that high pressure can destroy what gets in its way. And that my friend is the fear that Mr. Hayward is not about to face, even though our people our Gulf and our planet is in peril and is in its dying days.

    http://www.youtube.com/watch?v=ycvlXhYjeLc&feature=related

    1. Ronald

      The New Orleans area supports a large concentration of chemical companies, oil drillers,oil drilling service companies and is the end point for massive industrial pollution flowing down the Mississippi creating the GOM dead zone. The marshes in the GOM reflect Americans concern for environmental damage,NOT MUCH! Why do you think all those chemical companies are located near those sensitive marshes?
      What do you think happens to all the industrial waste?
      Watching the Carville’s whining on CNN was typical Americans as it suddenly mattered to them that the level of environmental damage was ruining their front yard, hurting their business prospects and home values!
      The oceans,Bays and wet lands are big dumping grounds for our industrial and lifestyle waste yet hardly a sound is heard except by concerned extremist environmental types the rest of us are busy commuting to work by car,flying around the world to attend important events or picking over the various fruit and vegetables flown in from South America to bother being pissed off about the daily industrial effluent
      waste being dumped; maybe if we colored it black folks might get concerned!

      1. DownSouth

        I read the other day that 53% (measured in $/year) of the Gulf economy is petroleum-based.

        46% is tourist-based.

        The other 1% is shipping- and fishing-based.

        (These are from memory and unfortunately I didn’t save the link.)

        The impact on the petroleum-based industry will not be immediate. Drilling projects underway will not be shut down. Existing oil and gas production will not be shut down. Refineries and other petrochemical plants will not be shuttered.

        The impact to the tourist industry, on the other hand, is immediate. A polling of hotels from Texas to Florida indicate reservations have declined by 50%

        The impact to the fishing industry, also, is immediate. Reports are that 25% of commercial fishing operations have already been shut down.

        Talking economics, one can see how residents of the Gulf Coast region could easily get caught in a vice between conflicting priorities.

      2. NOTaREALmerican

        Good points. The country got exactly what it actually wanted. Just as the country gets the government that matches its society.

  13. Doug Terpstra

    Excellent again, Yves. The damning record grows.

    Reader Marshall: “760 citations for “egregious, willful safety violations”” That’s almost 100x its nearest ‘competitor’ for that dubious distinction. Outrageous that it should go beyond THREE such citations: where manslaughter is involved, three strikes = life without parole.

    This must be an extinction event for BP in its current incarnation. It should be an extinction event for the Obama administration as well.

  14. Vinny

    “They’ve got 760 citations for “egregious, willful safety violations” from OSHA; their nearest competitor in the oil industry, Sunoco, has 8 (Exxon, the last poster-child for oil-industry irresponsibility, has only 1.) They’ve now had three fatal accidents in the U.S. in the last five years. There was plenty of evidence that BP had prior knowledge of the problems that led to its Texas City refinery explosion, which killed 15 people, and the horrific Alaska North Slope oil spill. The fines the company has had to pay just haven’t sufficiently cut into its profits.”

    Seeing this criminal FOREIGN company come to the US to recklessly and with impunity destroy the environment, and kill and maim human beings just to satisfy its greed, makes me very angry.

    Furthermore, seeing this lying, arrogant, murderous son of a bitch, Tony Howard, spew his garbage in the media largely unchallenged, only indicates we need to bring back the guillotines asap and make an example out of him. I will never understand how scum like him ever gets the time of day on Bloomberg or FT.

    Fortunately, the US still has the death penalty on the books, thus it would delight me greatly to see him and his cronies receive a quick trial for mass murder, followed by swift televised execution.

    Are you reading this, Mr. Obama? People are really angry about this. It’s time you take over the operation in the Gulf, time you shut down British Petroleum’s operations in the US, and it’s high time you arrest this miserable piece of human garbage, Tony Howard, immediately and start criminal proceedings. But do something, Mr. Obama! Do something today, please!

    Vinny

    1. Toby

      I’m a Brit, though I left the mother land long ago and now live in Germany, but am deeply enraged by the GoM disaster. Everything about it is despicable. DownSouth and others have made excellent comments above, and in total I find the blogosphere to be miles ahead of the MSM in reporting this incident. There is so much to be enraged about, so much corruption and cowardice being exposed, sociopathy and psychopathy on naked display, and yet I am still against the death penalty. It cannot be enough to kill a bad guy. We’ve been doing it for millennia, inflicting all sorts of torture too, and the bad guys keep on coming. This is a systemic issue, not a local anomaly.

      This GoM oil volcano is one systemically-manifested crisis amongst many. We must address the systemic problems at their roots and not attempt to quench fury with executions, whether literal or symbolic. Despite the horror of what is unfolding, this is also an opportunity to change course radically and focus in on those things that give rise to true wealth and prosperity, nurture them, derive our sense of profit and success from them, and make such change lasting.

      I’ve believed for a long time now that ‘free’ market socioeconomics is a breeding ground for psychopathy. The BP catastrophe is the poster child for everything that is wrong with this sick and sickening money ueber alles paradigm. As Yves pointed out and DownSouth quoted “Doubt is our product”. Let’s not buy it any more.

  15. DownSouth

    Yves says:

    Oh, and if you think I’m being unfair to Hayward, consider his reaction to an injunction to force BP to provide cleanup workers with masks and other protective gear:

    “I’m sure they were genuinely ill, but whether it was anything to do with dispersants and oil, whether it was food poisoning or some other reason for them being ill. … It’s one of the big issues of keeping the army operating. You know, armies march on their stomachs.”

    This is yet one more example of the “Doubt is our product” rhetorical strategy that emanates from the anti-science crowd.

    For a superb overview of the science debunking Hayward’s “skepticism,” there’s this CNN report:

    http://www.cnn.com/video/#/video/us/2010/06/03/ac.cooper.oil.in.marshes.cnn?hpt=T1

  16. Independent Accountant

    Down here in the world’s energy capital, Houston, BP is the firm everyone else hates. Why? Its history of reckless operations. Except for going to the moon, drilling an oil well in 5,000 feet of water, is one of man’s most difficult endeavors. Anything can go wrong. And does. You have to be ready for almost anything happening when you drill a well.

  17. propertius

    No offense, Yves, but it seems to me that one of the problems here is that finance professionals are not equipped to evaluate the risks of these kind of operations – and they’re the ones who call the shots in most corporations these days. This is particularly true when companies are shielded from much of the financial liability (as is the case in offshore drilling). It’s very hard even for engineers to estimate the odds of a catastrophic failure with a technology like this – when you’ve also skewed the liability calculation, I don’t see how anyone can make a rational risk calculation. As it is, I suspect that BP will just litigate any liability claims to death, as Exxon did with the Exxon Valdez spill.

    Criminal prosecutions might change this in the future, but I’m not optimistic.

    1. NOTaREALmerican

      Re: No offense, Yves, but it seems to me that one of the problems here is that finance professionals are not equipped to evaluate the risks of these kind of operations

      The financial professionals did their job when they got the 75 million dollar limit. If that doesn’t show professionalism, I don’t know what does.

  18. Mannwich

    I think it’s time to throw Tony Hayward into the hole. Call it “Idiot Executive Kill”.

  19. mespilus

    It is a good thing they got us all arguing whether the earth is flat, or we Americans would be really mad.

  20. Keith

    How was the EPA’s preparedness ?
    There seems to be a media blackout on the subject.
    Aren’t they supposed to be first responders ?

  21. V

    How much responsibility does the ‘investment community’ also share in this?
    Companies are lauded by Wall St for their efficiency when they cut costs, reduce staff, improve productivity numbers etc, and then investors pile in, but where does this lead?

    Ultimately companies cut corners, reduce preparedness for tail risk events, commission reports on things to justify that lack of preparedness. Some get lucky, but on occasion some get found out and this is the situation in which BP finds itself.

    Also the situation where we have BP and oil/drill engineers and others doing their earnest best to bring this spill to a close, while the millions do nothing but speculate about it and drive about in their SUVs, leaves much to be desired.
    I forget that this is the hypocrisy that has become the USA of today. In many ways this incident is just a microcosm of the economy.

  22. F

    BP is guilty, no matter what: the Law of the Large Numbers in probability implies that, with probability 1 (100%), an event with positive ocurrence probability (no matter how small it is) will ocurr in the long run. BP should have been prepared for the worst, because it was “destined” to occur some day.

  23. DWIGHT BAKER

    Dwight Baker
    PO BOX 7065
    Eagle Pass, TX 78853
    Tel 830-773-1077
    Dbaker007@stx.rr.com
    June 13, 2010

    David Axelrod White House Senior Adviser 1-7

    SUBJECT: Stopping the oil from the blown out BP well:

    The time is right to get the blown out well –cemented and permanently capped using my TAME NATURE overshot plan that is a proven oil and gas engineering technology and methodology.

    I submitted the TAME NATURE PLAN with overshot to President Obama a copy following for your information.

    Timing is key and at this time with the departure of Tony Hayward and coming aboard of Director Svanberg we ride on a the crest of the wave filled with a colossal ONCE IN A LIFE TIME opportunity to make all look good associated with this horrific disaster. That is the way I see it from an Oil and Gas engineering professional POINT of VIEW. Also I believe that NO GUILT can be found toward any of us except for a few in MMS. The guilt lies straight on the back of BP.

    Director Svanberg has the golden keys to BP vault in his hands and what he does not have is just a phone call away. Mr. Svanberg is an accomplished and richly awarded administrator engineer. He has proven time and time again that he can control and yield to others points of view and needs in the art of high-level negotiation.

    Major Points of interest repeated from Interview with David Gregory

    President Barack Obama plans an address to the nation on the Gulf disaster this week, White House senior adviser David Axelrod told NBC’s “Meet the Press” on Sunday.

    The address will follow Obama’s trip to the region Monday and Tuesday. “When he returns, he’s going to address the nation from the White House,” Axelrod told moderator David Gregory.

    “We’re at a kind of inflection point in this saga, because we now know … what we can do and what we can’t do in terms of collecting oil, and what lies ahead in the next few months. And he wants to lay out the steps that we’re going to take from here to get through this crisis.”

    Thus the stage is set to do this thing right not wrong.

    Please reply with your thoughts, questions and suggestions.

    Best Regards
    Dwight Baker

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