On Setting Things Straight, Or, An Open Letter To The United Kingdom

Dear The United Kingdom,

I just wanted to take a minute to say hello and to see how things have been for you lately, and to maybe bring you up to date on a bit of news from here.

Well, right off the bat, we hear you have a new Conservative Prime Minister and that his Party and Nick Clegg and the Lib Dems are in partnership, which I’m sure will be interesting; you probably heard that us Colonials are again having Tea Parties, which has also been very interesting.

I have a Godson who’s getting married this September, so we’re all talking about that, and I hear Graham Norton was even better than last year at hosting Eurovision, despite the fact that it’s…frankly, it’s Eurovision.

Oh, yeah…we also had a bit of an oil spill recently that you may have heard about—and hoo, boy; you should see how the Company that spilled the oil has been acting.

So before we go any farther I figured I’d let you know that we did get that letter from John Napier over the weekend, and to tell you the truth, we’re not really sure John understands exactly what’s going on over here.

Now it turns out that it was some company called BP that’s been out there in the Gulf of Mexico operating the oil rig that blew up, killing eleven people and leading to that uncontrollable geyser of oil that you may be hearing about, and our dear Mr. Napier worries that when we say we’re angry with BP, we’re being anti-British.

If anyone should see John, would you please let him know that nothing could be further from the truth?

I promise you, you would be hard pressed to find one single solitary American getting up this morning, seeing the live feed from the oil leak on TV, and thinking: “That BP is scandalously representing Britain, and for that I hate the British”.

I’ll tell what we are thinking, though, is that as bad as this situation is, BP’s been making it a lot worse by, time after time, being either amazingly unaware of or brazenly dishonest about what’s been going on.

Remember back in May when BP said they were capturing 5000 barrels of oil a day with their new containment procedure—while still claiming on the very same day that the total amount of the leak was 5000 barrels a day, even though anyone who could look at the image from the leak could clearly see with their own two eyes that what BP was saying could not possibly be correct?

I don’t know how far the word’s gotten out over there yet, but now even the Daily Mail (not the “Guardian”, for God’s sakes… but the “Daily Mail”) says it looks like BP guessed low on the amount that’s leaking into the Gulf by somewhere between 15,000 and 35,000 barrels a day…which, to us, looks like either incredibly bad guessing or an incredibly bad effort to deny how bad things really are.

You’ll love this, United Kingdom: BP continues to insist that there are no underwater “plumes” of oil in the Gulf, even though the people on the scene measuring them, and the US Government agency mapping them, say there are.

The BP position, as I understand it, rests on the definition of “plume”…and when you consider that Americans still make fun of Bill Clinton, to this very day, for basing his impeachment defense on what the definition of “is” is, you shouldn’t be too surprised if we treat BP precisely the same way for doing the same thing.

This isn’t the first disaster for BP in this country, either. You may not remember, but just about five years ago BP blew up a refinery in Texas, killing 15 workers, and just afterward had another major spill, this time in Alaska.

The US Government levied an astonishingly large £53 million fine against BP in 2009 for not fixing the problems that led to the 2005 refinery disaster.

That puts the five-year casualty total for BP at way too many people dead, two habitats wounded, and one refinery in critical condition.

If you think that’s bad, United Kingdom, it now looks like BP just made up the spill response plan that they would be putting in place now…if they had been telling the truth about their ability to execute the plan in the first place.

Now if you put all that together…don’t you think somebody’s ass needs to be kicked? Mr. Obama does, and we find that a refreshing change from Mr. Bush, who would have likely done a "heckuva job" himself in the same situation.

Mr. Napier wanted us to know that we’re personalizing this a bit too much; he reminds us that:

“If you compare the damage inflicted on the economies of the western world by polluted securities from the irresponsible, unchecked greed and avarice of leading USA international banks, there has not been the same personalized response in or from countries beyond the US. Perhaps a case of double standards?”

John, babe…if you think we’re lacking in “anger personalization”, perhaps you’ve never actually heard of the Tea Party? I know the "Daily Mail" has, and I’m surprised you missed it.

Perhaps you missed the left-leaning protesters in San Francisco that want to put the CEOs of banks in jail, or the protesters in West Virginia, of all places, or in Boston?

Perhaps you don’t think there’s a reason to take it a bit personally when someone kills a couple of dozen people or so in some sort of preventable accident or another, but over here, whether it’s a mine operator or BP, we do take it personally.

Trust me, there’s no double standard: ask almost any American and they’ll tell you they’d be equally happy to see either a Wall Street or a BP executive forced to spend several years in a really tiny jail cell with someone who has a prior record of doing disturbing things to small forest creatures.

OK, United Kingdom, now here’s a chance for you to do the Company a favor: BP announced just a couple of days ago that they have no earthly idea why their stock price might be going down.

With just the least little effort, we could fix that problem right away.

If any of you might be in London, and don’t mind making a local call for me, would you kindly ring up BP corporate headquarters at +44 (0)20 7496 4000, and when they answer, just let them know that the stock price is going down because of the oil leak and what it’s doing to the perception that BP will be as profitable in the future as they had been in the past?

I’m sure they’d be so appreciative of the assistance that they might even give you a cool BP hat or something just for helping them out—I know I would, if I were BP.

Anyway, I’m hoping this will clear up some of Mr. Napier’s questions, but before I go, I have to ask you about something:

They tell me that BP stock is a huge part of the UK’s investment portfolio; and that lots of pension funds are dependent on the stream of revenue BP dividends represent.

So dependent, in fact, that there is a great hue and cry over the possibility that BP might not be able to pay a dividend to its shareholders.

So here’s what I was wondering: in the US, if a company in which you were invested suffered a loss that might reach beyond £30 billion, it’s supposed to have a negative impact on the stockholders. It’s almost certainly going to affect any potential dividend distribution, and a company like that might find itself taken over by a stronger competitor.

Doesn’t it work that way in the UK?

I’m sorry that those folks got caught in a bad investment, and maybe the UK Government wants to extend some sort of assistance to those affected; nonetheless I can’t understand the legal logic behind the proposition that cleaning up the mess that BP caused and the payment of compensation claims based on BP’s reckless actions should have a lower priority than the distribution of income to stockholders.

To put it as simply as possible: lots of players in the UK markets were happy to accept the profits from this investment, despite the risks, and now it’s time to accept a loss. That’s how investing works; and if no one else has told you that by now, well…welcome to investing.

And while UK pensioners are worried about losing some income, American workers—thousands of them—are worried that they’ll be out of work for months, and maybe years, with no income at all, except for that provided by BP…unless they go broke and can’t pay.

So that’s what’s been going on here since I wrote you last, and I hope you do get a chance to call BP about that whole stock going down thing, so they know, and I hope you don’t think we’re in any way upset with Britain at all, ‘cause we are truly not.

British Petroleum, however, is a different story; and based on the record we feel that our anger is entirely justified…but that would have been just as true if it had been Chevron or Anadarko or any other deepwater driller—just as it was true for Exxon after the Exxon Valdez incident two decades ago.

Anyway, I have to go now, but I’ll try not to wait so long before I write again; and I hope BP is able to contain this stuff before it begins washing up on your beaches, which, believe it or not, is a distinct possibility.

As always, your friend,

fake

Comments

let's pass this one around:

with any luck, bp will have even more trouble at home, rather than less.

"...i feel that if a person can't communicate, the very least he can do is to shut up." --tom lehrer, january 1965

I say old chap...

Earl of Dorkshire here. Good of you to write. I shan't bandy about the maypole with you. Much as we regret the unfortunate oil debacle off your Cajun shores, BP is too big to fail. I should think you'd understand this given your own government's shenanigans to save Wall Street at the expense of your commoners.

New legislation is being proposed (BARFE - British Assets Reserved For England) similar to your TARP. We can't have our pensioner's grubbing for Bangers and Mash simply because your beaches are fouled and a few birds are oily. So...cheerio, old boy...and good luck.

Stan Bozarth

a nod is a good as a wink to a blind horse...

...i always say, and if the uk government wants to bail out bp, well, good on you!

"...i feel that if a person can't communicate, the very least he can do is to shut up." --tom lehrer, january 1965

my intended thought was not that the UK

would bail out BP, but that they might, looking at the consequences of a BP meltdown, legislatively limit BP's liability. Extradition of assets...or something to that effect. This is a political hot potato.

And, I truly have no idea what anyone will do...just pondering.

Stan Bozarth

based on what i've seen...

...it's estimated that a typical uk investor or retiree receiving £15,000 in stock dividends this year could lose about £300 from this--and you know what, that's part of the deal, and if bp sent them an extra £300 next year i'm guessing they wouldn't give it back.

"...i feel that if a person can't communicate, the very least he can do is to shut up." --tom lehrer, january 1965

Some food for thought on the oil spill

America gets a great deal of its gasoline from the oil that is realized from the deep water drilling in the gulf. The companies that drill there have been doing so for eons and from what I have seen, there haven't been big spills or a horrible impact to the environment in that region in our world or to the people in that area that depend on the sea for their livelihood and so forth.

Now, we have seen a massive oil spill because of a terrible thing happening on one of the oil rigs. It is an anomaly, of sorts, if you look at the many years that oil has been extracted from the sea there. The environmentalists have made the oil companies go farther and farther out in the Gulf to drill and to find their resources. I am not sure that BP or any other company would be able to guarentee that there would not be a disaster of this sort. I do wonder why they did not have something in place to squelch this kind of disaster, but in reality, there is much to consider when we look at this situation.

I am not here to defend BP. I am here, however, to say that this is not something that anyone wouldn't have believe could or would happened. We are a nation that makes decisions based on political correctness and nicities. BP went into the deep water because it was disallowed to go into shallow water. It is a company that is in the business to supply oil to America and the rest of the world. It has to stay within the required parameters given it. I want for wind and solar and any other source not oil-driven to be our primary source for energy, but oil currently is that source. BP is just a company working to provide that. Most certainly they are culpible in this spill. Most certainly they should realize the majority of the pay-outs for those they affected. But, we as a country and we as a government should be there to help in this disaster and to make sure those affected aren't devastated by their losses. If we can "bail out" large corporations in the free market, we can "bail out" the people affected by this disaster and not just turn a blind eye to our citizens because of politics and so forth. We must help our citizens in the Gulf and we should do it now and deal with BP later. These families affected need help and they need help now.

well, that's one way to look at things...

...and here's another:

we have not been drilling in deep water for eons.

we only began serious exploration of the outer continental shelf (ocs) during the 1990s, and i'm not sure that you can find a rig on the ocs that's more than 10 years old.

now i hear a number of people--including bp, in their official documents--claiming that this was a disaster that could never have been predicted...but that's a bunch of hooey.

it's really not that hard to predict that if you don't properly cement a wellhead, it's going to fail--and that was exactly the argument that the transocean and halliburton reps were apparently having with bp reps just before the rig failed.

i would strongly encourage you to visit this site, where you can see, in its entirety, the testimony given to the coast guard and dhs investigators on may 27.

as to "helping the people now": we can do that, but in order to do so we need to put money in the "disater relief fund", which is the government account from which these things are paid.

at the moment, there is almost no money in that account, and before we could extend any help, we need to fix that problem. if you take a look right here you can find a more detailed discussion of the law as it relates to responding to this event.

"...i feel that if a person can't communicate, the very least he can do is to shut up." --tom lehrer, january 1965

Wrong

BP went into the deep water because it was disallowed to go into shallow water.

BP can and does run shallow-water rigs, but they went deep because a) they're one of the few companies that can afford to, and b) deepwater (Gulf) operations tap into a really old and massive field, guaranteeing a return on investment.

It's real convenient to place the blame on environmentalists and/or the government, but it's the "free market" you claim to love that drew them to deepwater drilling.

to be even more precise...

...what actually happened was that lease sites that were narrowly drawn so as to exclude the outer continental shelf (ocs) were drawn to include the ocs in later lease sales--and for bp, that meant the shallow water leaseholdings they were acquiring now included the right to also drill in deep water.

"...i feel that if a person can't communicate, the very least he can do is to shut up." --tom lehrer, january 1965

"eons"

That meant, of course, a while. But, if you wanted it to mean something else, then, well, okay.

I can go "here" and check out "this site" and see what they present.

I personally care to just believe what is in my heart of hearts and not have some site tell me things put in a way that makes it look one way versus some other way.

Thank you for your information on where the money should and could come from to help these people, though. I do appreciate that. I hope it gets there and does help them.

i'll tell you why...

...i made that differentiation: we have been drilling off the louisiana coast since the the late 1940s, which kind of is eons, but we've only been doing deepwater drilling for about 10 years, which obviously gives us a whole lot less experience out there.

the rules for drilling haven't really changed since we began to make that transition, and that seems to be a big part of the problem.

the reason i want you to visit that site is because it's the video record of the official accident investigation, and it will allow you to hear sworn testimony from people who were actually on the rig just before it blew up, which, if you're trying to get a handle on what happened here, is pretty good information to have.

"...i feel that if a person can't communicate, the very least he can do is to shut up." --tom lehrer, january 1965

we have more information:

it turns out mr. bush only allowed drilling on the ocs in 2008--which means we actually have less than two years' experience with deepwater drilling.

"...i feel that if a person can't communicate, the very least he can do is to shut up." --tom lehrer, january 1965

to add to the conversation...

...there is an agency called the congressional research service that does what it sounds like it does, and it prepares reports for congress on just about any issue under the sun, and the reports are of excellent quality--and you're paying for them already, as an american taxpayer.

the website secrecy news will point you to some of those reports in their occasional emails, and i'd encourage you to visit them and sign up for the emails.

the last email they sent me included links to reports on not just the oil spill, but also "deferred examination of patent applications: implications for innovation policy", "democratic reforms in taiwan: issues for congress", and "detection of nuclear weapons and materials: science, technologies, observations".

it's really good stuff, and if you want some excellent insight as to how things work, this is a great resource.

"...i feel that if a person can't communicate, the very least he can do is to shut up." --tom lehrer, january 1965

Yes, Fake

Thanks you for the site.

hey...

...it's our government, and the more we know, we better we can run things.

"...i feel that if a person can't communicate, the very least he can do is to shut up." --tom lehrer, january 1965

I don't quite understand

While BP (British Petroleum) is headquartered in London, it is not quite fair or accurate to call it a "British" company, any more so than it is accurate to call General Electric an "American" company.

Arthur Jensen (played by Ned Beatty) summed it all up pretty well in his explanation to Howard Beale (played by the late Peter Finch) in the 1976 classic "Network." Finch won the Oscar for Best Actor posthumously for his "mad as hell and I'm not going to take it any more" role.

You have meddled with the forces of nature, Mr. Beale...

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The measure of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little. - FDR

to me, bp is a brit company...

...because the company is based in london, the london stock exchange is "home court", bp will run to uk politicians as the last resort when they need to be saved...and, most important of all, there's a real big proportion of the profits going back to the ol' uk.

"...i feel that if a person can't communicate, the very least he can do is to shut up." --tom lehrer, january 1965