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BP's oil spill - should Statism come to the rescue?

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24

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    #32
    Fratton Fred
    Closed Accounts Posts: 26,567 ✭✭✭✭Fratton Fred


    This is nothing like Bhopal. There is already very very strict regulation in place, but something went wrong.

    I have seen a very thought provoking film about a guy at an Exxon refinery and he talks about how he cut corners to save time, with disastrous consequences.

    He had all the safety equipment, he had the safety talks and knew he was breaking the rules, but he was being lazy. Short of having a safety inspector shadowing every employee, what more can a company do?


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    #33
    Knarr
    Closed Accounts Posts: 117 ✭✭Knarr


    Fratton Fred wrote: »
    This is nothing like Bhopal. There is already very very strict regulation in place, but something went wrong.

    I have seen a very thought provoking film about a guy at an Exxon refinery and he talks about how he cut corners to save time, with disastrous consequences.

    He had all the safety equipment, he had the safety talks and knew he was breaking the rules, but he was being lazy. Short of having a safety inspector shadowing every employee, what more can a company do?

    If you read the article posted by Jamiebly there, the regulations were not enforced and inspections were not being carried out by state authorities frequently enough.

    How do you know it was nothing like Bhopal when a proper analysis of the cause has not been carried out.


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    #34
    Fratton Fred
    Closed Accounts Posts: 26,567 ✭✭✭✭Fratton Fred


    Knarr wrote: »
    If you read the article posted by Jamiebly there, the regulations were not enforced and inspections were not being carried out by state authorities frequently enough.

    How do you know it was nothing like Bhopal when a proper analysis of the cause has not been carried out.

    Bhopal was a company exploiting lax regulation in a developing country. Iirc, they wouldn't have been allowed to even produce those chemicals in the US.

    I know BP and they way they work. They have been heavily fined in the US for breaching safety rules over an explosion at a refinery and they are putting **** loads of effort into repairing their reputation, to the extent where lots of very senior people have been replaced.

    Once this is sorted, there will be some serious arse kicking internally at BP, I wouldn't be surprised to see the head of exploration and production (the division responsible for extracting dinosaur juice from the ground) losing his job.


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    #35
    P. Breathnach
    Registered Users Posts: 12,089 ✭✭✭✭P. Breathnach


    Fratton Fred wrote: »
    I know BP and they way they work. They have been heavily fined in the US for breaching safety rules over an explosion at a refinery and they are putting **** loads of effort into repairing their reputation, to the extent where lots of very senior people have been replaced.

    Once this is sorted, there will be some serious arse kicking internally at BP, I wouldn't be surprised to see the head of exploration and production (the division responsible for extracting dinosaur juice from the ground) losing his job.

    What this amounts to is that BP attend to safety (and probably other matters of interest to the public, like pollution) because of regulation and the costs of legal penalties.

    Bloody state: interfering with business.


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    #36
    Knarr
    Closed Accounts Posts: 117 ✭✭Knarr


    Fratton Fred wrote: »
    Bhopal was a company exploiting lax regulation in a developing country. Iirc, they wouldn't have been allowed to even produce those chemicals in the US.

    I know BP and they way they work. They have been heavily fined in the US for breaching safety rules over an explosion at a refinery and they are putting **** loads of effort into repairing their reputation, to the extent where lots of very senior people have been replaced.

    Once this is sorted, there will be some serious arse kicking internally at BP, I wouldn't be surprised to see the head of exploration and production (the division responsible for extracting dinosaur juice from the ground) losing his job.

    At the end of the day FF, we will have to wait for the outcome of an inquirey into the cause.

    Essentially we are talking about two different things here, and I dont entirely disagree with you. One is whether market or state forces are best at managing and preventing disasters, the other is outside of that and into micro management and individual mistakes -which is what I think you are discussing.


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    #37
    Fratton Fred
    Closed Accounts Posts: 26,567 ✭✭✭✭Fratton Fred


    P. Breathnach wrote: »
    What this amounts to is that BP attend to safety (and probably other matters of interest to the public, like pollution) because of regulation and the costs of legal penalties.

    Bloody state: interfering with business.

    BP do whatever is best for their share price. Regardless of the direct cost of this whole affair, the damage to their share price has cost them millions as well.


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    #38
    Executive Steve
    Registered Users Posts: 3,373 ✭✭✭Executive Steve


    The invisible hand of the market will clean it up.

    As soon as some benevolent megacorporation figures out how much people like clean oceans they'll figure out a way to make a buck out of it far more efficiently than the government could.

    I think I'll give libertarianism a shot tbh, it seems so logical


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    #39
    P. Breathnach
    Registered Users Posts: 12,089 ✭✭✭✭P. Breathnach


    Fratton Fred wrote: »
    BP do whatever is best for their share price. Regardless of the direct cost of this whole affair, the damage to their share price has cost them millions as well.

    Money has no inherent morality and neither, to any significant extent, does "the market". Share price is affected by current profitability, expectations of future profit, dividend policy, asset backing, and such matters. Not by dead birds.

    Just to be precise: a fall in share price does not not cost a corporation anything unless it happens during a share issue. It can cost the shareholders, and a corporation is usually run principally for the benefit of shareholders.

    If BP is hit with a huge bill for the cleanup, then of course it affects the bottom line. Were there a libertarian disregard for externalities, the only effect the spill would have on profitability or share price would be the lost production.


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    #40
    jank
    Banned (with Prison Access) Posts: 13,018 ✭✭✭✭jank


    They should just plug the hole!! End of!
    After the mess is cleaned up, they should be given a bill for the entire cleanup operation and loss of revenue for the drop in tourism.

    I wonder how their bottom line is then?

    On a side note i guess the mantra of "drill baby drill" wont be a GOP saying in 2012 ;)

    http://en.wikipedia.org/wiki/Drill,_baby,_drill


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    #41
    Overheal
    Registered Users Posts: 81,730 ✭✭✭✭Overheal


    jank wrote: »
    They should just plug the hole!!
    i believe they've tried that already...


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    #42
    SLUSK
    Closed Accounts Posts: 1,156 ✭✭✭SLUSK


    BP should be forced to pay all the costs, including the loss of income to fishermen in the area, if this leads to the bankruptcy of BP I don't care. We cannot allow private corporations to pass the costs over to the taxpayers.


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    #43
    ei.sdraob
    Closed Accounts Posts: 9,376 ✭✭✭ei.sdraob


    P. Breathnach wrote: »
    That's a load of bollocks. One of the great weaknesses of the free market model so beloved of libertarians and other right-wingers is the problem of externalities, and pollution is an important externality. It hardly counts as ideological profiteering to point to a dramatic illustration of the problem.

    externalities yes
    Nobel Prize-winner Ronald Coase further undermined interventionist welfare analysis with the publication of his paper, "The Problem of Social Cost," in 1960. Coase demonstrated that as long as property rights are clearly defined and transaction costs are low, the individuals involved in these situations can always negotiate a solution that internalizes any externality.

    Consider the case of river pollution from the foozle factory. If the people downriver from the factory have a property right in the river, the factory will have to negotiate with them in order to legally discharge waste through their property. We can't say what solution the participants might arrive at-the factory might shut down, the people downriver might be paid to move, or the factory might install pollution control devices or simply compensate those affected for suffering the pollution. What we can say is that, within a system of voluntary exchange, each party has demonstrated that it prefers the solution arrived at to the situation that existed before their negotiations.

    Furthermore, we should note that negotiating between the parties affected allows them to use the "particular circumstances of time and place," with which they alone are familiar, to arrive at a solution. The factory owner may be aware of an alternate foozle material that does not pollute the river, or the people downriver might know that the river is stinky anyway and that it's best to move. Regulators generally cannot take such specific knowledge into account in their drafting of edicts.

    Case studies have illustrated the resourcefulness of voluntary exchange in accounting for potential externalities. An oft-used example of a positive externality in economics is in the production of fruit trees and beekeeping. The growers of fruit trees provide a benefit to beekeepers: flowers. And beekeepers provide a benefit to the growers: pollination.

    The standard analysis, however, contended that neither party had an incentive to take account of the benefit to the other. Thus, there would be "too few" orchards and beekeepers. Economist Steven Cheung has studied these markets, however, and has found that the parties involved had accounted for the externalities quite well, contracting with each other to raise production to optimal levels.


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    #44
    ei.sdraob
    Closed Accounts Posts: 9,376 ✭✭✭ei.sdraob


    SLUSK wrote: »
    BP should be forced to pay all the costs, including the loss of income to fishermen in the area, if this leads to the bankruptcy of BP I don't care. We cannot allow private corporations to pass the costs over to the taxpayers.

    Yep thats exactly what should be done

    they made the mess, they clean it up and pay for it

    just like banks should have been left to wallow in their own excrement


    none of this "socializing" the risks nonsense being sprouted If the government steps in its effectively a bailout of BP

    and does the US government even have the know how to deal with deep drilling?


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    #45
    BluePlanet
    Registered Users Posts: 2,345 ✭✭✭BluePlanet


    In one way, we are fortunate that the oil is heading towards USA's coast.

    Just imagine BP's response if it were heading toward Mexico or some other "insignificant" Central American country.
    I doubt they'd be so bothered as to maintain a "Live Feed" of the leaking pipe!
    Also, they would surely maintain their gross underestimation of the leak, and their overestimation of how much they are capturing.

    I'd imagine those countries would have to make representations to their Statist counterparts in the USA, who in turn would have to be bothered enough to lean on BP. Then BP would run to the coroporate media for a good ol whingefest about how unfairly their being treated for such an "act of god" and surely our thoughts should instead be with those families whom lost loved ones, blah blah blah, spin spin spin.


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    #46
    BluePlanet
    Registered Users Posts: 2,345 ✭✭✭BluePlanet


    ei.sdraob wrote: »
    Yep thats exactly what should be done

    they made the mess, they clean it up and pay for it

    just like banks should have been left to wallow in their own excrement


    none of this "socializing" the risks nonsense being sprouted If the government steps in its effectively a bailout of BP

    and does the US government even have the know how to deal with deep drilling?
    How long should people wait around for BP to destroy the environment?

    It maybe true that the US government doesn't have the know-how, but apparently neither does BP.


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    #47
    ei.sdraob
    Closed Accounts Posts: 9,376 ✭✭✭ei.sdraob


    BluePlanet wrote: »
    How long should people wait around for BP to destroy the environment?

    It maybe true that the US government doesn't have the know-how, but apparently neither does BP.

    If the government steps in now, that means BP have to step aside

    and that will mean more wasted time and more pollution

    the question you should be asking is: how long would it take the US government to stop the leak?


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    #48
    BluePlanet
    Registered Users Posts: 2,345 ✭✭✭BluePlanet


    ei.sdraob wrote: »
    If the government steps in now, that means BP have to step aside

    and that will mean more wasted time and more pollution

    the question you should be asking is: how long would it take the US government to stop the leak?
    It would depend on how many resources the USA would throw at it.
    Those Statists over there have put a man on the moon remember.


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    #49
    ei.sdraob
    Closed Accounts Posts: 9,376 ✭✭✭ei.sdraob


    BluePlanet wrote: »
    It would depend on how many resources the USA would throw at it.
    Those Statists over there have put a man on the moon remember.

    You didn't answer my question

    you can throw the whole US army at it and without the expertise of doing things 5 kilometres 5000feet down they will not know what to do

    all while the leak continues to spew


    and i did post a link to russians offering to plug the hole for a fee with a small nuclear explosion, tho I don't think the americans like the sound of that pragmatic solution :P (which was used before)

    need I remind you that these "statists" are not even capable of putting a man in orbit anymore with the shuttle retiring ;) never mind the moon


    edit: Americans use feet not meters :P my bad


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    #50
    Permabear
    Closed Accounts Posts: 39,022 ✭✭✭✭Permabear


    This post has been deleted.


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    #51
    ei.sdraob
    Closed Accounts Posts: 9,376 ✭✭✭ei.sdraob


    http://www.reuters.com/article/idINIndia-48135020100430?
    "We are taking full responsibility for the spill and we will clean it up and where people can present legitimate claims for damages we will honour them. We are going to be very, very aggressive in all of that," Tony Hayward told Reuters in an interview on Friday.

    United States federal law limits BP's liability for non-cleanup costs to $75 million unless gross negligence is proven.In a letter to administration officials, BP said it would pay for all cleanup and remediation “costs and damages, regardless of whether the statutory liability cap contained in the Oil Pollution Act applies.” Nevertheless, some Democratic lawmakers sought to pass legislation that would increase the liability limit to $10 billion. Analysts for Swiss Re have estimated that the total insured losses from the accident could reach $3.5 billion. However, according to UBS, the final bill could be as much as $12 billion

    they caused this mess and they are willing to clean it up

    the government stepping in now with NO PLANS will only ensure BP are let of the hook and the environment suffers

    An April 30 Merrill Lynch report found that five companies connected to the disaster, BP, Transocean, Anadarko Petroleum, Halliburton and Cameron International, had lost a total of $21 billion in market capitalization since the explosion

    whats that? the market punishing the companies involved?? who would have thought


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    #52
    Permabear
    Closed Accounts Posts: 39,022 ✭✭✭✭Permabear


    This post has been deleted.


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    #53
    BluePlanet
    Registered Users Posts: 2,345 ✭✭✭BluePlanet


    ei.sdraob wrote: »
    You didn't answer my question
    Your question of how long it would take the US government to stop the leak?
    I don't know, my crystal ball doesn't answer.

    I suggest the answer is directly proportional to how many resources the government would throw at the problem + the level of urgency the task is assigned.

    Statism is quite good at thinking on the feet as the landscape changes.


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    #54
    ei.sdraob
    Closed Accounts Posts: 9,376 ✭✭✭ei.sdraob


    BluePlanet wrote: »
    ... Statism is quite good at thinking on the feet as the landscape changes.

    Fixed Your Post


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    #55
    Laminations
    Registered Users Posts: 4,693 ✭✭✭Laminations


    ei.sdraob wrote: »
    externalities yes

    Nobel Prize-winner Ronald Coase further undermined interventionist welfare analysis with the publication of his paper, "The Problem of Social Cost," in 1960. Coase demonstrated that as long as property rights are clearly defined and transaction costs are low, the individuals involved in these situations can always negotiate a solution that internalizes any externality.

    Consider the case of river pollution from the foozle factory. If the people downriver from the factory have a property right in the river, the factory will have to negotiate with them in order to legally discharge waste through their property. We can't say what solution the participants might arrive at-the factory might shut down, the people downriver might be paid to move, or the factory might install pollution control devices or simply compensate those affected for suffering the pollution. What we can say is that, within a system of voluntary exchange, each party has demonstrated that it prefers the solution arrived at to the situation that existed before their negotiations.

    Furthermore, we should note that negotiating between the parties affected allows them to use the "particular circumstances of time and place," with which they alone are familiar, to arrive at a solution. The factory owner may be aware of an alternate foozle material that does not pollute the river, or the people downriver might know that the river is stinky anyway and that it's best to move. Regulators generally cannot take such specific knowledge into account in their drafting of edicts.

    Case studies have illustrated the resourcefulness of voluntary exchange in accounting for potential externalities. An oft-used example of a positive externality in economics is in the production of fruit trees and beekeeping. The growers of fruit trees provide a benefit to beekeepers: flowers. And beekeepers provide a benefit to the growers: pollination.

    The standard analysis, however, contended that neither party had an incentive to take account of the benefit to the other. Thus, there would be "too few" orchards and beekeepers. Economist Steven Cheung has studied these markets, however, and has found that the parties involved had accounted for the externalities quite well, contracting with each other to raise production to optimal levels.

    How did this libertarian twaddle pass without scrutiny? How does one compartmentalise and privatise the air or oceans? Even the river example is lame. And voluntary exchange leaves things wide open for abuse of power. Whether that power leads to the buying off of a poorer downstream community to pollute their river or the sexual harrassment of a worker as they keep their job, libertarianism leaves the powerless at the mercy and charity of the powerful. It's not surprising that the libertarians on here are what I'd consider powerful -well educated and well to do. You can't have truly voluntary exchange when the parties involved are terribly unequal - inequity of needs, inequity of resources, inequity of choice and opportunity.

    And the beekeeper/orchard example given that supposedly shows this all works fine and dandy is an ideal situation, where both parties benefit in the same direction. How would voluntary exchange work between a locust factory and an orchard, especially in the case where the factory is far wealthier than the apple grower. How d'ya like them apples?


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    #56
    ei.sdraob
    Closed Accounts Posts: 9,376 ✭✭✭ei.sdraob


    BluePlanet wrote: »
    Your question of how long it would take the US government to stop the leak?
    I don't know, my crystal ball doesn't answer.

    If they don't have a plan and/or expertise required then how the hell can they help? and not make the situation worse??

    BP admitted they made a booboo and are cleaning it up (even tho they dont have to if they followed the law to the letter)

    having oil spilling out is not exactly good for business or the image of the company


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    #57
    Laminations
    Registered Users Posts: 4,693 ✭✭✭Laminations


    And with regard to this thread, there should be some government oversight of the clean up and state resources should be offered and at the ready if needed (with BP getting the bill, not taxpayers) but BP have the expertise and should be left to clean up it's own mess, all the while being 'encouraged' to do so swiftly but comprehensively by the US government and international community


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    #58
    Eliot Rosewater
    Registered Users Posts: 3,745 ✭✭✭Eliot Rosewater


    BluePlanet wrote: »
    Your question of how long it would take the US government to stop the leak?
    I don't know, my crystal ball doesn't answer.

    One would presume that British Petroleum, a 100 year old oil company, would be in a better position to deal with an underwater drilling problem than the United States government.

    What do you think the US government is going to do: shoot Apollo 13 into the sea and hope that it manages to plug the leak?

    In your hasty bid to undermine libertarianism you've made the large mistake of comparing this kind of disaster to a one, like a hurricane, where raw manpower is the primary necessity. Oil drilling is a specialized field, and the solutions to this engineering problem are thus specialized too.


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    #59
    BluePlanet
    Registered Users Posts: 2,345 ✭✭✭BluePlanet


    Eliot Rosewater wrote: »
    One would presume that British Petroleum, a 100 year old oil company, would be in a better position to deal with an underwater drilling problem than the United States government.

    What do you think the US government is going to do: shoot Apollo 13 into the sea and hope that it manages to plug the leak?

    In your hasty bid to undermine libertarianism you've made the large mistake of comparing this kind of disaster to a one, like a hurricane, where raw manpower is the primary necessity. Oil drilling is a specialized field, and the solutions to this engineering problem are thus specialized too.
    But the problem is not limited to oil drilling.
    Cleanup requires massive manpower, a resource the State has in abundance.
    Better safety checks and regulation to mitigate against such disasters in future are also within the State's realm.

    I'd also like to add, that the State has access to far more specialised resources - particularly at NASA and the Jet Propulsion Labratory, than BP has.


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    #60
    ei.sdraob
    Closed Accounts Posts: 9,376 ✭✭✭ei.sdraob


    BluePlanet wrote: »
    But the problem is not limited to oil drilling.
    Cleanup requires massive manpower, a resource the State has in abundance.
    Better safety checks and regulation to mitigate against such disasters in future are also within the State's realm.

    I'd also like to add, that the State has access to far more specialised resources - particularly at NASA and the Jet Propulsion Labratory, than BP has.

    various US agencies are involved and are sending the bill to BP


    how would more regulation help? the rig had equipment to prevent this from happening
    but the blowback system failed to work in this case
    hence why its called an accident
    you could place a US Govt apparatchic/overseer on every oil rig but how would that stop mechanical failure?

    of course the state can ban offshore drilling and instead go and takeover oilfields in the middle east (oh wait) or just strange the economy with excessive oil taxes (like ireland)


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    #61
    BluePlanet
    Registered Users Posts: 2,345 ✭✭✭BluePlanet


    ei.sdraob wrote: »
    various US agencies are involved and are sending the bill to BP


    how would more regulation help? the rig had equipment to prevent this from happening
    but the blowback system failed to work in this case
    hence why its called an accident
    you could place a US Govt apparatchic/overseer on every oil rig but how would that stop mechanical failure?

    of course the state can ban offshore drilling and instead go and takeover oilfields in the middle east (oh wait) or just strange the economy with excessive oil taxes (like ireland)

    You are pre-judging the cause.
    The "blowback system" is only 1 line of defense.
    http://www.nola.com/news/gulf-oil-spill/index.ssf/2010/05/safety_fluid_was_removed_befor.html


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