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Gulf Oil Spill - Extremist?
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<blockquote data-quote="astroboy" data-source="post: 427247" data-attributes="member: 4527"><p>An another:</p><p></p><p><img src="http://beta.images.theglobeandmail.com/archive/00677/WEB-bp-oil01rb1__677161gm-a.jpg" alt="" class="fr-fic fr-dii fr-draggable " style="" /></p><p></p><p><strong>BP faces daunting Gulf liability costs</strong></p><p></p><p>Damage to reputation of London-based multinational another area of concern as oil spill continues to spread.</p><p></p><p><strong>Shawn McCarthy Global Energy Reporter</strong></p><p>Ottawa — From Tuesday's Globe and Mail</p><p>Published on Monday, May. 31, 2010 7:17PM EDT</p><p>Last updated on Monday, May. 31, 2010 8:31PM EDT</p><p>BP (BP-N42.95----%) faces a staggering liability from the Gulf of Mexico blowout as the prospect of a summer of blackening seas strengthens the U.S. Congress’s determination to make the oil giant pay for every dime of damage.</p><p></p><p>The company is working to deploy another containment system this week – aimed at capturing most of the oil gushing from its Macondo well – in what may be the last chance to cap the blowout before relief wells are completed in August and limit the growing environmental disaster.</p><p></p><p>BP chairman Tony Hayward has vowed the London-based multinational will pay every legitimate claim associated with economic loss and environmental damage – a tab that some analysts have said could top $15-billion (U.S.). But the dire prospect of the well gushing uncontrollably for another two months, spewing the equivalent of four Exxon Valdez loads of crude into the Gulf, renders all estimates of BP’s ultimate liability into pure speculation. The final tab could strain even BP’s considerable resources.</p><p></p><p>As trust between the U.S. government and the company frays, the Obama administration and Democrat-controlled Congress are moving to ensure the company faces a legal requirement to cover costs, rather than relying on its goodwill gesture.</p><p></p><p>Legislation has been introduced in both the Senate and the House of Representatives to remove the $75-million cap on liability for economic damage from a spill, and senior officials at the U.S. Justice Department say they believe the bill raising it to $10-billion can be made retroactive to cover the BP blowout.</p><p></p><p>The liability cap only limits the company’s costs for direct economic impacts of the spill, and only if it is not found to have been negligent or in violation of federal regulations. BP has already spent $900-million on the cleanup effort and faces months of ongoing work – even if it can succeed in capping the blowout and funnelling most of the crude into a tanker.</p><p></p><p>It also faces the prospect of federal and state fines, and class action suits from people who the company feels do not have “legitimate” claims, or who believe BP’s compensation offer is inadequate.</p><p></p><p>U.S. Representative Ed Markey, chair of the House energy committee investigating the spill, is spearheading one effort to change the liability law.</p><p></p><p>“I do not believe that large energy companies should be able to escape liability for the catastrophes they create,” Mr. Markey told CBS’s Face the Nation on the weekend.</p><p></p><p>He claimed that company officials deliberately “low-balled” the estimate of crude gushing from the damaged well in order to minimize potential fines.</p><p></p><p>“If it’s 1,000 barrels per day, it’s a relatively low fine but if it’s 10,000, or 15,000 or 20,000 barrels a day, it could wind up billions of dollars in fines that BP executives would have to pay the federal government,” Mr. Markey said.</p><p></p><p>Republicans in Congress warn against raising the liability cap to $10-billion, saying it would drive out independent or smaller oil companies from exploring in the Gulf of Mexico. Democrats, however, argue companies should have the resources to deal with the worst-case scenario if they are going to be permitted to drill offshore.</p><p></p><p>The potential liability is daunting – even for a company of BP’s size – but is unlikely to cripple it. BP earned $6-billion in the first quarter of the year, and an average of $20-billion annually in 2008 and 2009.</p><p></p><p>And the oil company will no doubt seek to recoup some of its costs from its partners on the Deepwater Horizon, including Transocean Ltd. which owned the rig and Halliburton Co., which provided drilling services.</p><p></p><p>For BP, the damage is not just financial, but also reputational. The company has sought to repair its reputation after a series of accidents and incidents gave it a reputation for being reckless in its pursuit of profits.</p><p></p><p>After its deadly explosion at a Texas refinery in 2005, BP paid $2-billion to settle civil suits and $50-million to settle criminal charges under the Clean Air Act, the largest fine ever imposed under the Act. It is appealing an additional fine of $87.4-million imposed by the Occupational Health and Safety Administration last year for failing to correct deficiencies at the refinery.</p><p></p><p>After its Prudoe Bay pipeline leaked quantities of crude in Alaska in 2006, the company paid a $20-million fine, and faces an additional $50-million levy from the Environmental Protection Agency.</p><p></p><p>And in October, 2007, BP energy traders in Houston were charged with manipulation of propane prices. The company settled those charges with a $303-million fine, a record for commodity market settlement.</p><p></p><p>Source: <a href="http://www.theglobeandmail.com/report-on-business/bp-faces-daunting-liability-costs-from-gulf-oil-spill/article1587306/" target="_blank">http://www.theglobeandmail.com/report-on-business/bp-faces-daunting-liability-costs-from-gulf-oil-spill/article1587306/</a></p><p></p><p><img src="http://beta.images.theglobeandmail.com/archive/00668/oil2done_jpg_668942gm-f.jpg" alt="" class="fr-fic fr-dii fr-draggable " style="" /></p></blockquote><p></p>
[QUOTE="astroboy, post: 427247, member: 4527"] An another: [IMG]http://beta.images.theglobeandmail.com/archive/00677/WEB-bp-oil01rb1__677161gm-a.jpg[/IMG] [B]BP faces daunting Gulf liability costs[/B] Damage to reputation of London-based multinational another area of concern as oil spill continues to spread. [B]Shawn McCarthy Global Energy Reporter[/B] Ottawa — From Tuesday's Globe and Mail Published on Monday, May. 31, 2010 7:17PM EDT Last updated on Monday, May. 31, 2010 8:31PM EDT BP (BP-N42.95----%) faces a staggering liability from the Gulf of Mexico blowout as the prospect of a summer of blackening seas strengthens the U.S. Congress’s determination to make the oil giant pay for every dime of damage. The company is working to deploy another containment system this week – aimed at capturing most of the oil gushing from its Macondo well – in what may be the last chance to cap the blowout before relief wells are completed in August and limit the growing environmental disaster. BP chairman Tony Hayward has vowed the London-based multinational will pay every legitimate claim associated with economic loss and environmental damage – a tab that some analysts have said could top $15-billion (U.S.). But the dire prospect of the well gushing uncontrollably for another two months, spewing the equivalent of four Exxon Valdez loads of crude into the Gulf, renders all estimates of BP’s ultimate liability into pure speculation. The final tab could strain even BP’s considerable resources. As trust between the U.S. government and the company frays, the Obama administration and Democrat-controlled Congress are moving to ensure the company faces a legal requirement to cover costs, rather than relying on its goodwill gesture. Legislation has been introduced in both the Senate and the House of Representatives to remove the $75-million cap on liability for economic damage from a spill, and senior officials at the U.S. Justice Department say they believe the bill raising it to $10-billion can be made retroactive to cover the BP blowout. The liability cap only limits the company’s costs for direct economic impacts of the spill, and only if it is not found to have been negligent or in violation of federal regulations. BP has already spent $900-million on the cleanup effort and faces months of ongoing work – even if it can succeed in capping the blowout and funnelling most of the crude into a tanker. It also faces the prospect of federal and state fines, and class action suits from people who the company feels do not have “legitimate” claims, or who believe BP’s compensation offer is inadequate. U.S. Representative Ed Markey, chair of the House energy committee investigating the spill, is spearheading one effort to change the liability law. “I do not believe that large energy companies should be able to escape liability for the catastrophes they create,” Mr. Markey told CBS’s Face the Nation on the weekend. He claimed that company officials deliberately “low-balled” the estimate of crude gushing from the damaged well in order to minimize potential fines. “If it’s 1,000 barrels per day, it’s a relatively low fine but if it’s 10,000, or 15,000 or 20,000 barrels a day, it could wind up billions of dollars in fines that BP executives would have to pay the federal government,” Mr. Markey said. Republicans in Congress warn against raising the liability cap to $10-billion, saying it would drive out independent or smaller oil companies from exploring in the Gulf of Mexico. Democrats, however, argue companies should have the resources to deal with the worst-case scenario if they are going to be permitted to drill offshore. The potential liability is daunting – even for a company of BP’s size – but is unlikely to cripple it. BP earned $6-billion in the first quarter of the year, and an average of $20-billion annually in 2008 and 2009. And the oil company will no doubt seek to recoup some of its costs from its partners on the Deepwater Horizon, including Transocean Ltd. which owned the rig and Halliburton Co., which provided drilling services. For BP, the damage is not just financial, but also reputational. The company has sought to repair its reputation after a series of accidents and incidents gave it a reputation for being reckless in its pursuit of profits. After its deadly explosion at a Texas refinery in 2005, BP paid $2-billion to settle civil suits and $50-million to settle criminal charges under the Clean Air Act, the largest fine ever imposed under the Act. It is appealing an additional fine of $87.4-million imposed by the Occupational Health and Safety Administration last year for failing to correct deficiencies at the refinery. After its Prudoe Bay pipeline leaked quantities of crude in Alaska in 2006, the company paid a $20-million fine, and faces an additional $50-million levy from the Environmental Protection Agency. And in October, 2007, BP energy traders in Houston were charged with manipulation of propane prices. The company settled those charges with a $303-million fine, a record for commodity market settlement. Source: [url]http://www.theglobeandmail.com/report-on-business/bp-faces-daunting-liability-costs-from-gulf-oil-spill/article1587306/[/url] [IMG]http://beta.images.theglobeandmail.com/archive/00668/oil2done_jpg_668942gm-f.jpg[/IMG] [/QUOTE]
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