"You are so lucky. You have got Exxon. We take care of our problems." - Exxon public relations spokesman shortly after the Valdez spill.
Within weeks of the Valdez spill, Exxon set up a "claims program" to provide fishermen and others with relief payments. Exxon hired many local fisherman and residents to assist in spill clean-up, and spent $3.5 billion in clean-up costs without government coercion. Then, nothing.
"This was not our accident. This was not our drilling rig. This was not our equipment. It was not our people, our systems or our processes. This was Transocean's rig. Their systems. Their people. Their equipment." - Tony Hayward, Head of BP Group.
The truth is no one really knows how big the spill is or how big it is going to ultimately be. The source of the oil is a really long pipe that stretched from the semi-submersible drilling rig to the floor of the sea. This pipe broke away from the rig when it sunk and has been snaking along the sea bed like a open garden hose ever since. The pipe is equipped with "choke points", which are devices that are designed to control the flow of oil through the pipe. The integrity of these choke points are a big deal right now.
March 2005: The Texas City, Texas refinery of BP sustains an explosion that kills 15 workers and injures 170. An investigation discovers the company ignored its safety protocols and disabled its warning system. The company pleaded guilty to federal felony charges and was fined more than $50 million by the EPA. The Chemical Safety Board's report of the incident provided that BP's managers were stamped with a "cultural issue" that posed "an immediate hazard" to safety.
Cement is used to plug holes in the offshore drilling process. Sometimes cement is used to fill gaps between the outside of the well pipes and the inside of the hole drilled into the ocean floor. Other times cement is used to plug abandoned wells or wells that are between drilling and production. In all cases, the cement is pumped to prevent natural gas and oil from escaping a contained environment into a more volatile environment where it may violently combust.
First we were told the well was leaking 1000 barrels of oil per day. Then we were told the well was actually leaking 5000 barrels of oil a day.
Turns out, 5000 is still way too low. The Wall Street Journal reports today that, "Industry experts examining satellite data said they believe oil may be leaking at a rate of 25,000 barrels a day.... If that's the case, more than 9 million gallons of oil may already be sloshing through the Gulf of Mexico."
"It is of grave concern. I am frightened. This is a very, very big thing. And the efforts that are going to be required to do anything about it, especially if it continues on, are just mind-boggling."
- David Kennedy, National Oceanic and Atmospheric Administration.
In yesterday evening's newscast, ABC World News reporter Dianne Sawyer stated that, "A National Workers Memorial was dedicated near Washington, DC and on this day, we learn the Federal Government is about to launch a sweeping crackdown on dangerous work places." Sawyer noted that "thousands of workers are killed on the job every year." Another ABC reporter added that in 2007, there were "more than 5,400 Americans killed on the job," an "average of 14 a day." David Michaels, administrator, Occupational Safety and Health Administration said this: "I think there are a lot of irresponsible...
Efforts to stop the oil from spewing from the uncapped well that resulted from the April 20 explosion that sank the Deepwater Horizon do not appear to be working. The robot submarines haven't been able to cap the well. Experts are not "super optimistic" about the chances that the burn-off of already escaped oil will do much good. Birds, mammals and fish are in serious danger.
In the attached New York Times op-ed contribution piece, Bethany McLean (who was a co-author of "The Smartest Guys in the Room", which chronicled the Enron fiasco) outlines the players in the Goldman Sachs inquiry in a manner which is consistent with my series of posts that discuss the common threads of fraud. She mentions the marks, the enablers and the perverse financial incentive that led Goldman to favor one client over others.