The Gulf of Mexico Oil Spill IS NOT OVER

According to this exclusive report on CNN, the seafloor of the Gulf of Mexico about 40 miles west of Panama City, FL is a toxic sludge composed of speckled droplets of dispersed oil… moving east.


[H/T Ryan Bartek]

While the right-wing media machine diverts our attention to the “Ground Zero Mosque” and “anchor babies,” our magpie brains are forgetting about the Deep Horizon disaster. More importantly, we’re forgetting about the genesis of this disaster – the rampant deregulatory culture, the lax safety procedures – which, we might say, are features of the contemporary media culture as well, which chases sham political controversies instead of concentrating on matters of true importance.

Why the BP Oil Spill is Like the Mortgage Crisis

Okay, it’s like this. The main reason we’re in a Great Recession is that, back in 1999, the U.S. government compromised itself to death. Bill Clinton wanted to increase lending to minorities. The Republican-controlled Congress (swept into office by Newt Gingrich’s “Contract with America”) said, “Only if you decrease regulation at the same time,” and so Phil Gramm (appointed senior economic adviser to McCain’s presidential campaign) drew up a bill that gutted Glass-Steagall, the 1933 act that prevented the Depression from happening again. President Clinton, weakened by the Monica Lewinsky scandal, didn’t have much wiggle-room in the Oval Office any more, and signed the legislation.

So, naturally, you get a huge housing boom totally based upon dodgy accounting and ludicrous credit standards which blows up in the world’s face.

You can’t make this stuff up, right?

Guess what. The BP oil spill is a result of exactly the same legislative deathmatch. The New York Times has a superb piece this morning by David S. Abraham declaring, this is a disaster that Congress voted for. In a highly balanced and nuanced argument, Abraham details how Congress really and truly has been addicted to providing the oil industry with economic incentives beyond all reason:

In a 1995 attempt to encourage more exploration, Congress agreed to reduce the cut of the proceeds the government could collect on oil and gas drilling in deep waters. Ten years later, despite higher oil prices and declarations from President George W. Bush that more incentives were not needed, a Republican-led Congress reduced royalties yet again.

It’s madness, of course – especially when

at the same time that Congress called for new drilling incentives, it also gutted oversight. From 2002 to 2008, legislators approved budgets reducing regulatory staffing levels by more than 15 percent… A 2004 Coast Guard study found that its “oil spill response personnel did not appear to have even a basic knowledge of the equipment required to support salvage or spill clean-up operations.”

When Bobby Jindal calls for more offshore drilling in order to help pay for coastal damage inflicted by offshore oil-and-gas operations (yeah, you read that right), then we have truly entered a land of the comedic insane, where the Mad Hatter starts writing Catch-22 contracts. The astounding thing is that, at base, it’s an exquisitely simple recipe for disaster: radically lower the barriers to enter the market, while radically de-regulating (by which we mean: knocking down the laws and rules that govern participation in this country’s economy) and what you get are toxic assets. That’s what we call a house, these days: a toxic asset, destroying the person who possesses it (for D&D fans, that’s kind of like a poisoned amulet, except with lots of bricks and mortar and wiring and plumbing).

But we should  be calling the oil spill a toxic asset too. The definition’s more apt; no metaphors needed here. It’s a natural resource that’s killing our economy and destroying the ecosystems of our oceans. It’s a substance that, for decades now, has powered our economy; now it’s bringing the Gulf to a standstill. It’s the toxic asset, our home mortgage that’s underwater. The rich will probably walk away from it, their dirty souls skimming the tops of the oily waves in that Gulf between them and us.

From the British Pen

A lot of folk have been trying to convince me that pension funds are dividing Americans from their friends across the pond. I think a lot of it is media driven, a common phrase I don’t use very often. Maybe I should.

If you ask me, you shouldn’t gamble with retirement. If your savings are investing, that isn’t the same as a savings account. Risk is risk. Anyhow, have fun reading the Guardian,

In the 59 days since the oil leak in the Gulf of Mexico, Hayward has been transformed into one of the most hated men in the US, and the ferocity of the encounter between him and the House of Representatives committee on energy and commerce was much-anticipated. As one committee member noted: “The anger at BP is at fever pitch. It’s almost palpable.”

The committee has been conducting an aggressive inquiry into the gusher, and called Hayward in to answer specific charges of suspected safety lapses and shortcuts in the design plan of the well in the days before the explosion on the ill-fated Deepwater Horizon rig.

But Hayward, who had been carefully coached by legal and media teams and was testifying under oath, failed to satisfy.

“The committee is extremely frustrated with your lack of candour,” Bart Stupak, who is leading the investigation told him. “You are the CEO. You have a PhD. We hope you have more candour in your responses.”

The reprimand was just a taste of the rancour towards Hayward. He was told by angry committee members that BP had a history of cavalier disregard for environmental rules and workers’ safety.

Hayward’s claims to have ushered in a new regime of safety after taking over as chief executive of the company in 2007 were plainly ridiculed.

“When I heard of the explosion in the Gulf, the name that immediately popped into my mind was BP,” said Stupak.

read more.

Holy Crap That’s a Lot of Money: 34 Billion in Fines

The Guardian reports quite a heavy bill for BP, and this may really set a buzz for the President’s fist Oval office speech tomorrow.

BP is facing a bill of up to $34bn from the Gulf of Mexico disaster after US senators demanded the oil company deposited $20bn into a ring-fenced account to meet escalating compensation costs.

The sum dwarfs many analysts’ previous estimates, shared by BP, that put the cost of the clean-up effort and payment of damages to affected communities, such as fishermen, closer to a total of $5bn.

Shares in BP nose-dived by more than 9% today as investors took fright at the demand by the 54 Democratic senators, who represent a majority in the US upper house. The company is now worth almost half what it was before the accident of just under two months ago.

BP already faces up to $14bn in civil penalties, payable under US environmental law, assuming the leak is plugged in August. These punitive damages are directly linked to the size of the spill – already estimated at being up to eight times worse than the Exxon Valdez disaster in 1989 – with BP liable for up to $4,300 for each barrel-worth spilt.

Senate leaders insisted the $20bn ring-fenced account should be exclusively for “payment of economic damages and clean-up costs” and should not be seen as a cap on BP’s other legal liabilities. With punitive damages pending too, the theoretical total of $34bn is equivalent to more than half the corporation tax paid by all British companies last year.

Tony Hayward, chief executive of BP, and other directors of the company, will meet Barack Obama at the White House on Wednesday prepared to offer concessions in the hope of taking the sting out of mounting political attacks on the company.

BP will be in “listening mode”, willing to cut its next dividend, worth about $2.5bn, possibly paying the cash into the clean-up fund. It will also reiterate its commitment to paying all legitimate claims arising from the disaster. But the company does not believe that the demand by the senators to stump up $20bn is justified.

read the rest at the Guardian

Offshore Oil Back in Business, With a Few New Rules

Looks like somebody read Gov. Bobby Jindal’s letter. President Obama is soon to announce the new rules for moderate depth off shore drilling as early as this week, lifting the freeze on coastal exploration. You may recall a spokesperson for BP this weekend called the halt on exploration sensible, but hoped for a quick prognosis and reform in order for the industry to plan for the future. The White House didn’t miss a beat. Let’s hope when it comes to the bigger depths they include a mandatory relief well to accompany production as they do in some parts of Canada. Response Coordinator Admiral Thad Allen suggested that was a good idea just yesterday.

WASHINGTON—The Obama administration, facing rising anger on the Gulf Coast over the loss of jobs and income from a drilling moratorium, said Monday that it would move quickly to release new safety requirements that would allow the reopening of offshore oil and gas exploration in shallow waters.

Gulf Coast residents, political leaders and industry officials said delays in releasing the new rules, along with the administration’s six-month halt on deepwater drilling—both issued amid public pressure—threatened thousands of jobs.

Well-owner BP PLC, meanwhile, faces penalties “in the many billions of dollars,” for the Deepwater Horizon drilling disaster that has been spewing an estimated minimum 12,000 to 19,000 barrels of oil a day into the Gulf, said White House Press Secretary Robert Gibbs. The costs of the spill will “greatly exceed” the amount BP could recoup by selling any of the captured oil on the market, he said Monday.

read more at WSJ