No! It is not because of the oily pelican trying to fly away in the above picture.It is all about the money and what BP may face in terms of fines for spilling all this oil.
Here is the civil penalty for spilling oil:
"The basic amount, the law is $ 1,100 per barrel spilled. But the penalty may increase to $ 4,300 per barrel as a federal court rules of the spill is the result of gross negligence."
The basic cost $1000 per barrel. Maximum cost is $4300 per barrel if it is determined that the spill resulted from gross negligence.
So, let do some math.
The spill will not be stopped until August. The spill started in May. May thru August is 4 month or about 120 days.
BP original "estimate" was 5000 barrels per day. So, 5000 bbl/day x 120 days x $1000 = $600 million dollars.
But wait, they are talking now about the gusher being 100,000 barrels per day according to a government panel tasked with determining the size of the spill.
ONE HUNDRED THOUSAND barrels of oil per day at the minimum fine will be 12 BILLION dollars.
But wait, it get better. What is there is gross neglegence? The maximum fine becomes 51.6 BILLION dollars.
So what's at stake? The difference between 600 million and 51.6 billion dollars. Let me put that on the same basis.
$600 million
$51,600 million
Which would you rather pay -- $600 or $51,600 putting it in terms we can understand.
Do you still wonder why BP does not want anyone to know how much oil is leaking or how it happened?
Of course at BP's current profit rate of over $5 billion dollars in the first quarter of 2010, they can pay the $51.6 billion dollar fine is a little over 2.5 years.
Don't you wish you could pay off your mortgage that quick?
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Considering that they've lost all credibility, one might think that a decent legal strategy would be to man up and be -- you know -- honest. DOJ lawyers will shred them in court.
ReplyDeleteYou know, I'm not so sure this will ever see court. BP is the 4th largest corporation in the world. They are bigger than most countries and they own a lot of politicians. I say it is at best 50/50 that they will ever see the inside of a courtroom.
ReplyDeleteI wouldn't take odds on BP EVER paying one dime of fines. As you say, they owe 25% of the frigging world.
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