BP’s incentives are obvious. A deep-sea oil well costs hundreds of millions of dollars to drill, so the company prefers to bumble through never-before-tried recovery efforts than destroy its investment. Furthermore, BP is probably hedging its bets—if it loses this well, lawmakers will likely ban it from drilling there again. In other words, if BP loses the well, it loses both the enormous sunk costs of drilling it and the expected cash flow from all the remaining oil. Thus, even in the midst of this crisis, BP appears to be just as concerned with protecting its shareholders as with stopping this catastrophe.This is probably dead-on, and it annoys me to no end. Time to force BP to pull the plug on this whole operation and shut down that well immediately, using whatever means necessary.
Monday, May 17, 2010
I had not looked at it ...
... from this perspective.
Subscribe to:
Post Comments (Atom)
Posts
2 comments:
that's just depressing... and frustrating.
Well, there's the rub. Oil companies do, infact, design wells to be shut down, and they have been decommissioning and capping well in the shallow part o ft he Gulf for nearly 20 years. But that decommissioning is designed to occur in an orderly fashion, with all the well parts on the sea floor in working order.
Leaving all that aside, there's always BP's insurance to consider . . .
Post a Comment