Jun 1 2010
by Mike Mulvihill
BP sure has made a mess of things, literally as well as figuratively. Their continuous ineptitude from a communications standpoint is astonishing. But, it pales in comparison to the operational futility BP has displayed in stemming the flow of oil into the Gulf. Like Mary Shelley’s Victor Frankenstein, BP appears to be much better at creating a monster than at controlling its errant rampage.
I’d like to see the well squelched and, so far, BP hasn’t given any evidence they’re up to the task. But, I ran across a Robert Reich Memorial Day editorial on The Huffington Post that seems to be a prescription to make a bad situation even worse: a federal takeover of BP’s North American operations.
For the record, I like Robert Reich. I often agree with a fair amount of what he pontificates. But Reich is calling for the federal government to put BP under temporary receivership. In other words, take over BP’s operations in the Gulf of Mexico until the gusher is stopped. In Reich’s words, “This is the only way the public will know what’s going on, be confident enough resources are being put to stopping the gusher, ensure BP’s strategy is correct, know the government has enough clout to force BP to use a different one if necessary, and be sure the president is ultimately in charge.”
Reich also claims that if the government can take over giant global insurer AIG and General Motors, it should be able to take over BP’s North American operations to stop one of the worst environmental disasters in U.S. history.
I respectfully disagree. Government intervention is not a cure all. In fact, many would consider it to be the antithesis of a cure. While the U.S. government did prop up AIG and many other financial institutions, as well as a few big companies, the feds never dictated how to run their businesses. As President Obama has already stated on more than one occasion, BP knows a lot more about deep sea oil wells than the U.S. government. What the government knows how to do is to slow things down – we don’t need any more of that.
Colin Powell, on ABC’s This Week had a more plausible approach – put the military in control. But the current Chairman of the Joint Chiefs, Mike Mullen, noted one problem. The military may have the organization and deep sea equipment, but they haven’t a clue what to do. The oil industry has the technology, he said, not the military.
One approach the military does have the expertise to execute is to nuke the site. (Yes, seriously, that is an option.) Christopher Brownfield, a nuclear expert, in a Daily Beast editorial, talked about it last week. Apparently, the Russians have successfully used nukes at least five times to seal off gas well fires.
Short of a military led nuclear intervention, BP – or at least the oil industry – is our best hope. They have the technology and the know-how (what little there may be of it out there). And, they have the capital – according to the UK newspaper, the Telegraph, BP is spending $33 million a day in the Gulf but it also had reported cash flow of $7 billion in the first quarter and $14 billion of borrowing capacity. They will need all of that and some more when the final price tag for remediation in the Gulf Coast region is tallied.
It may be August before the only strategy that seems to have a high probably of working – drilling a relief well – is achieved. If the well flows unchecked until then, the breadth of environmental damage will go from unprecedented to cataclysmic. (Maybe the nuke idea isn’t so wacky after all.) As BP said in ads purchased in major cities across the nation this weekend, “this is their problem to fix.” Agreed, so let’s get on with it gentlemen.
Photo courtesy of Pan-African News Wire