Will BP Have to Evacuate 20 Million People? [View article]
Jarco - - -
I was hoping that some discussion of the topic you mention might develop from knowledgeable readers as a result of posting this article. I have wondered what the possible consequences would be if a storm surge into Houston, New Orleans, Mobile or Tampa Bay areas deposited toxic materials that made certain areas unsafe for habitation. How long would this condition persist if it happened? Would BP be held liable for relocation of residents of such "brownfields" if they occurred in densely populated areas?
These are some of the issues that deserve to be discussed and it would be worthwhile if those knowledgeable would discuss what they can surmise based on available information. Perhaps the density of such material deposits from a storm surge would be insufficient to produce a permanent problem. I am not in a position to pass judgment.
I fear that the trivial nature and insulting nature of some of the comments may discourage those with expertise from entering the discussion. If that is the case, it is unfortunate.
The cost of permanent relocation and compensation for purchase of despoiled land does not have to cover very many people before the cost would exceed the resources available to BP for many years. That topic will probably not be discussed here based on the preceding comment stream. Too bad.
Will BP Have to Evacuate 20 Million People? [View article]
Mallarde and others who have defended me - - -
Thanks for speaking up in a vitriolic community of commenters.
I will try to continue to report on what I read in the MSM, even when it appears to be far fetched, if I think it will stimulate valuable dialog among readers. If we have to put up with some comments that do not offer any perspective (other than vitriolic venting), so be it. I guess that is a cost of having an open forum.
To those who propose to ban authors they don't agree with (or who report on opinions they don't agree with), would they object to having others ban their comments for the same reason?
If such a system were instituted SA would become a dull site indeed.
Lessons Learned From the BP Disaster [View article]
Jim - - -
I am not familiar with the production costs for Bakken shale. Is that the $200 per barrel of oil equivalent that you mentioned in another comment? Whether that is that cost of production or something totally independent, your comment about lack of a known production technology is most important and I want to emphasize it. Besides the water needed for gas production from shale, it is also energy intensive. Whatever the current cost estimates, miscalculation of energy requirements could quickly drive costs much higher.
I am in the camp that the cost of oil in the future is the biggest problem for the U.S., even if I accept the most aggressive global warming positions. We could go into a hundred year global cooling cycle (like 1800s) and we still have a great challenge to our way of life from massive energy import costs. I agree with you that drilling our way out of this problem is not the solution. We live on a finite planet and all resources have limits.
Lessons Learned From the BP Disaster [View article]
Jim - - -
Many appropriate observations here, but one stands out for me.
A major structural problem in our current corporate oligarchy is the profiting of the top executives without personal risk. This is the Achilles heel of private enterprise as practiced today.
The small businessman risks everything for modest (relatively) compensation. The executives at large corporations risk nothing for many millions in compensation.
Other factors you cover, such as the ineffectiveness of government, are important, but compensation without risk for the most powerful "capitalists" may be fatal to our system.
BP Spill Size Estimates Keep Growing - Along With Potential Costs [View article]
tallid - - -
That doesn't sound like much, but it is 6 x the Exxon Valdez. Your number is right in the middle of the new discharge range (official, from the government panel) of 20,000 to 40,000 barrels a day before the riser was cut. This official number will be updated later today to add the volume since the riser was cut. The new volume is certain to be larger before BP collections are subtracted. We don't know yet if BP collections will reduce the net discharge estimate to less than the previous 20,000 to 40,000 barrels per day.
These may be overdone, although the comeback for deep water drillers may be slower than other oil service businesses. I don't think there needs to be a rush to grab bargains here, but making some good picks over the next 3-4 months could be worth the effort. For deep water drillers, the fall may be soon enough to pick up some exposure.
Just my opinion based on a slow economic recovery scenario. A double dip or a strong recovery and my thoughts are on shaky ground (in opposite directions, of course).
Very good point. I made a lot of money buying MO after it was beat up. I collected a rich dividend and sold covered calls for several years before getting the stock called away with more than 300% capital gain and more than 150% gain from dividends and call premiums. The same could happen for BP if your scenario of BP as a cash cow for government and class action entities becomes reality.
I think it is too early to make a determination on this eventuality.
G&D - - -
Thanks for bringing up the possible parallels between BP and MO. Very good thought.
BP Spill Size Estimates Keep Growing - Along With Potential Costs [View article]
Mark - - -
If we were to turn the historical clock back to the days of caveman discovery of fire, would the enforcement of recognition of externalities have made the fire too expensive?
This is a frivolous, facetious question with a serious underlying thought.
BP's Hayward: 'Majority' of Oil Being Captured [View article]
Trader - - -
Taking the final bill for remediation and liability for the Exxon Valdez spill of just over $3 billion and a volume of 11 million gallons, the cost there was about $270 a gallon. So far it sounds like the Gulf spill is at least 20,000 barrels a day (probably more), which would total at least 36 million gallons so far and a corresponding cost of nearly $10 billion.
Factors that could well make the cost per gallon higher include:
1. Inflation. 2. The higher population density affected. 3. The greater value of the commercial interests involved (fishing and tourism).
Of course, every day that goes by puts the volume of oil in the Gulf higher.
As you suggest, I don't think many investors have started to consider the dollar cost possibilities for BP. I made a stab at this issue in an article last week: seekingalpha.com/artic...
BP: The Mother of All Egregious Violators [View article]
v@gue - - -
I have been hearing talking heads on TV making comments about the lack of regulatory inspection in the absence of an event. I have been looking for such reports in print and have not yet found them. It certainly is a good question you raise and I have been looking for documentation.
Will BP Have to Evacuate 20 Million People? [View article]
I was hoping that some discussion of the topic you mention might develop from knowledgeable readers as a result of posting this article. I have wondered what the possible consequences would be if a storm surge into Houston, New Orleans, Mobile or Tampa Bay areas deposited toxic materials that made certain areas unsafe for habitation. How long would this condition persist if it happened? Would BP be held liable for relocation of residents of such "brownfields" if they occurred in densely populated areas?
These are some of the issues that deserve to be discussed and it would be worthwhile if those knowledgeable would discuss what they can surmise based on available information. Perhaps the density of such material deposits from a storm surge would be insufficient to produce a permanent problem. I am not in a position to pass judgment.
I fear that the trivial nature and insulting nature of some of the comments may discourage those with expertise from entering the discussion. If that is the case, it is unfortunate.
The cost of permanent relocation and compensation for purchase of despoiled land does not have to cover very many people before the cost would exceed the resources available to BP for many years. That topic will probably not be discussed here based on the preceding comment stream. Too bad.
Will BP Have to Evacuate 20 Million People? [View article]
Thanks for speaking up in a vitriolic community of commenters.
I will try to continue to report on what I read in the MSM, even when it appears to be far fetched, if I think it will stimulate valuable dialog among readers. If we have to put up with some comments that do not offer any perspective (other than vitriolic venting), so be it. I guess that is a cost of having an open forum.
To those who propose to ban authors they don't agree with (or who report on opinions they don't agree with), would they object to having others ban their comments for the same reason?
If such a system were instituted SA would become a dull site indeed.
Lessons Learned From the BP Disaster [View article]
I just watched the first half of Gasland and will watch the rest on DVR later. Depressing stuff.
Lessons Learned From the BP Disaster [View article]
I just ordered it (Kunstler) but it has not been delivered yet.
Lessons Learned From the BP Disaster [View article]
I am not familiar with the production costs for Bakken shale. Is that the $200 per barrel of oil equivalent that you mentioned in another comment? Whether that is that cost of production or something totally independent, your comment about lack of a known production technology is most important and I want to emphasize it. Besides the water needed for gas production from shale, it is also energy intensive. Whatever the current cost estimates, miscalculation of energy requirements could quickly drive costs much higher.
I am in the camp that the cost of oil in the future is the biggest problem for the U.S., even if I accept the most aggressive global warming positions. We could go into a hundred year global cooling cycle (like 1800s) and we still have a great challenge to our way of life from massive energy import costs. I agree with you that drilling our way out of this problem is not the solution. We live on a finite planet and all resources have limits.
Lessons Learned From the BP Disaster [View article]
Many appropriate observations here, but one stands out for me.
A major structural problem in our current corporate oligarchy is the profiting of the top executives without personal risk. This is the Achilles heel of private enterprise as practiced today.
The small businessman risks everything for modest (relatively) compensation. The executives at large corporations risk nothing for many millions in compensation.
Other factors you cover, such as the ineffectiveness of government, are important, but compensation without risk for the most powerful "capitalists" may be fatal to our system.
BP Spill Size Estimates Keep Growing - Along With Potential Costs [View article]
That doesn't sound like much, but it is 6 x the Exxon Valdez. Your number is right in the middle of the new discharge range (official, from the government panel) of 20,000 to 40,000 barrels a day before the riser was cut. This official number will be updated later today to add the volume since the riser was cut. The new volume is certain to be larger before BP collections are subtracted. We don't know yet if BP collections will reduce the net discharge estimate to less than the previous 20,000 to 40,000 barrels per day.
BP: The Modern Philip Morris? [View article]
These may be overdone, although the comeback for deep water drillers may be slower than other oil service businesses. I don't think there needs to be a rush to grab bargains here, but making some good picks over the next 3-4 months could be worth the effort. For deep water drillers, the fall may be soon enough to pick up some exposure.
Just my opinion based on a slow economic recovery scenario. A double dip or a strong recovery and my thoughts are on shaky ground (in opposite directions, of course).
BP: The Modern Philip Morris? [View article]
Very good point. I made a lot of money buying MO after it was beat up. I collected a rich dividend and sold covered calls for several years before getting the stock called away with more than 300% capital gain and more than 150% gain from dividends and call premiums. The same could happen for BP if your scenario of BP as a cash cow for government and class action entities becomes reality.
I think it is too early to make a determination on this eventuality.
G&D - - -
Thanks for bringing up the possible parallels between BP and MO. Very good thought.
BP Spill Size Estimates Keep Growing - Along With Potential Costs [View article]
If we were to turn the historical clock back to the days of caveman discovery of fire, would the enforcement of recognition of externalities have made the fire too expensive?
This is a frivolous, facetious question with a serious underlying thought.
BP Spill Size Estimates Keep Growing - Along With Potential Costs [View article]
I can't debate your position because it is what I intended to say in the article. If I failed to make your point, I apologize.
BP Spill Size Estimates Keep Growing - Along With Potential Costs [View article]
One of the biggest problems in economics is the existence of externalities. These are costs of actions that are not included in the initial pricing.
BP Spill Size Estimates Keep Growing - Along With Potential Costs [View article]
BP itself has said the well has the potential to produce a spill of 60,000 barrels a day if there are no impediments to flow.
BP's Hayward: 'Majority' of Oil Being Captured [View article]
Taking the final bill for remediation and liability for the Exxon Valdez spill of just over $3 billion and a volume of 11 million gallons, the cost there was about $270 a gallon. So far it sounds like the Gulf spill is at least 20,000 barrels a day (probably more), which would total at least 36 million gallons so far and a corresponding cost of nearly $10 billion.
Factors that could well make the cost per gallon higher include:
1. Inflation.
2. The higher population density affected.
3. The greater value of the commercial interests involved (fishing and tourism).
Of course, every day that goes by puts the volume of oil in the Gulf higher.
As you suggest, I don't think many investors have started to consider the dollar cost possibilities for BP. I made a stab at this issue in an article last week: seekingalpha.com/artic...
BP: The Mother of All Egregious Violators [View article]
I have been hearing talking heads on TV making comments about the lack of regulatory inspection in the absence of an event. I have been looking for such reports in print and have not yet found them. It certainly is a good question you raise and I have been looking for documentation.