There are two facets to the cost of this oil spill – One is the clean up, the other is damages. Damages include the economic impact to things such as the seafood and tourism industries, shoreline properties etc.
First, the clean up, there doesn't seem to be any confusion around who is responsible here. All parties are in agreement, including BP, that they are on the hook.
According to this CNN article BP says they have invested 350 million in their efforts to clean up the spill. This sounds like a lot, but to put it in perspective, this is 9 days of profit for them.
Last year BP made 14 Billion Profit according to this press release
Here is the math:
So, let's not feel too bad for BP.
The really bad news here is that we have left them in charge of the clean up at all. We are at their mercy regarding getting it done – which obviously they are not doing. As they sit around figuring out how to stuff tires and golf balls down these pipes, oil is spilling into the gulf at a rate of about 200,000 gallons per day. Why are we allowing this? We have THE best navy in the world. If this were in their hands, we would be way better off economically and environmentally. BP DOES NOT CARE how much oil they are spilling out to the ocean. Barack Obama should give them 2 more days to find a solution and if they can not do it, we can. Then we can send them a bill. We are the ones losing here. And this is why:
Economical Damages – There is a cap on economical damages that is set at 75 MILLION dollars.
And no matter what they say, BP is not going to pay one cent above that. Why would they?
For every day that they do not find a solution, economic damages are mounting. This great Washington Post article offers some perspective on the exact size of the economic impact.
The economic implications of the disaster are potentially mammoth -- but highly uncertain. The annual commercial seafood harvest in the gulf is $661 million, recreational fishing contributes $757 million and nearly 8,000 jobs, and tourism related to wildlife adds $517 million, according to the Harte Research Institute for Gulf of Mexico Studies
Who will end up paying for that – not the corporations, us, the taxpayers. And, do you want to know what the REAL kicker is – Not ONE of these three companies are incorporated in the US. That's right, BP – as you know is a British company and their profits all head back to the UK. Halliburton is incorporated in Dubai, and Transocean is incorporated in Switzerland. NONE of these three companies is contributing to US tax income.
And yet both Transocean and Halliburton found their starts right here.
From the Halliburton website:
Halliburton's fascinating and proud history reveals a continuous focus on innovation and expansion that began with the company's founder, Erle P. Halliburton. After borrowing a wagon, a team of mules and a pump, he built a wooden mixing box and started an oil well cementing business in Duncan, Oklahoma.
From the Transocean website:
Danciger Oil & Refining Company, founded in 1919 in Louisiana, USA, purchases its first drilling rig.
Of course why would these companies incorporate here in the US, when they can incorporate in other countries, pay minimal taxes but still get the full benefit of doing business in our great country with zero tariff or tax penalties. Then, while they are here, why not just destroy our environment, kill our shoreline industry, have no disaster back up plan. Then when it all falls apart blame each other.
OK – Rant Over
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