With the new estimates on oil gushing into the gulf, currently at 4300 to 24,300 barrels a day, more economic impact studies are being released on the BP Deepwater Horizon disaster. Spillonomics estimates currently range from $29 billion to over $70 billion in direct costs for the spill and clean up. A study on the spill's economic impact on Florida estimates losses at $11 billion and 195,000 lost jobs. There are 2.8 million jobs associated with tourism alone in the gulf region. The fishing industry in Louisiana is estimated at $2.4 billion.
Earth Economics estimates the Mississippi Delta to be worth $330 billion and $1.3 trillion and provides an economic annual benefit of $12-$47 billion per year.
There is now a residential real estate estimate of a 10% decrease in gulf coast property values as a result of the spill. These losses alone are estimated at $4.3 billion dollars.
Meanwhile the U.S. coast guard is giving BP a 48 hour moratorium to increase oil capture capacity. I'm not sure how one gets a ship to move faster in water, but needless to say there is politics and then there is engineering, logistics and safety. You hang in there engineers and geeks. We get how hard this is through spillcam.
Insurance costs for deep water oil rigs increased 50%. Moody's also said the spill can increase borrowing costs for state and local governments. Gas is estimated to increase $1.65 per gallon on just the costs of the oil spill, to a whopping $4.37.
Below is a Dylan Ratigan video clip which shows just how tied in BP stock is to pensions and retirement accounts, otherwise known as TBTF 2.0.
Below is the cliff of BP's stock price, having lost $80 billion in value. BP's last quarterly profits were $6 billion.
Mexico is now planning on suing BP for damages. Forget there is another entire country out there in the gulf? In the United States there are already 130 lawsuits filed in connection with the oil spill.
The 1990 Oil pollution act costs $1000 per barrel spilled but $3000 per barrel is the company responsible is found negligent. These fines are currently capped at $75 million but there is a bill in the House of Representatives to repeal the cap on these fines. Of course our sociopathic Wall Street is busy adding up the tab, banking on BP reducing their actual costs of course, and issuing a screaming buy on the stock.
Consider this post the oil open thread.
Comments
Finally taking pressure readings on the spill
I find this hard to believe this wasn't one of the first things they would have done.
But now they are deploying sensors to get a pressure reading on the oil.
I guess they could lower them inside one of the vents, but of course the vent would probably have an increased pressure read...
But bottom line is what were these people thinking to not measure the flow and pressure to get an accurate reading?
All of these metrics affect relief wells!
$20 billion escrow fund demanded
The Obama administration wants a $20 billion dollar escrow fund from BP, which sent it's shares further in the tank. The Oil Drum has some additional cost calculations from the ban on deepsea offshore oil drilling.
On the other hand, another disaster is way more costly than the above.
BP gives a technical overview to increase capacity
It's a large pdf, here, and there is a mention of a lot of risks. It's clear they are at least trying to prepare for a hurricane, which frankly sounds more prudent than simply trying to get politicians off of their backs immediately. I hope NOAA is completely wrong, but they predicted a huge number of hurricanes.
They are also putting pressure readings and sensors into the cap and it's clear watching spillcam this is yet another implementation bitch, but they clearly need that.
Engineers are wondering why they didn't plan for more relief wells. Those puppies cost $100 million each to drill.
hmmm, new attempt to take oil from BOP Choke line
They are going to try to pump up additional oil/gas temporarily through a choke line attached to the damaged BOP to increase the flow.
hmmmm, that sounds scary. There are so many variables and while some bloggers made a huge deal of ruptured well disks, which I noted a long time ago, why people assume everything down there is known, stable, just find and dandy is ridiculous. The damn thing blew up, the damn 5 story BOP failed. it's damaged, there is something wrong with this and nobody even knows what that is.
Again, this is not to say BP is not evil, of course they are, but the engineering of this, from which all things flow, is nasty and having politicians or even management tell engineers what to do, can lead to disaster. Think NASA Challenger and O-rings.
Begging the question
But the fundamental point with BP, and the vast majority of other companies, is exactly WHEN has engineering had any input into anything?????
From BP's ripe history, it would appear very little to never. A union shop, with sound engineers running things, would have had multiple contingency plans in place in such circumstances, as well as have taken pressure readings from the get-go.
engineers vs. executives
Considering how much of the world, from national security to billions in profits is completely dependent upon Science and Technology, this is a fundamental issue of these people trying to make money off of engineers all the while screwing them over not only in terms of money but in terms of power.
China, on their economic policy committee, almost all of them have an engineering background....so while the U.S. is stuck on stupid, flaying their arms around on a host of things, China is busy engineering an economic global takeover.
I just read the latest which will come out in the hearing. BP is so negligent, so beyond the pale stupid, just ignoring physics and technical realities. They blew up those guys, bottom line, plus all of this was so avoidable and that's with the technology they had, not even what they should have.
But this goes to a host of things. Stupid crap which just now the U.S. is figuring it out....which I wrote up so many times...uh, sending your R&D in engineering overseas will guarantee sabotage and industrial espionage..lo, behold, they are finding all sorts of code bombs, worms etc. in various COTS hardware components which are now made overseas.
Duh. It's not just BP, this is rampant.
Well, BP has at least ONE engineer!
Well, at least BP had one engineer!
But I disagree with you --- they've gotten it all figured out in this country.
Look at Richard Clarke, the former National Security Director for the Clinton Administration (when they transferred the most sensitive and classified military technology to China) and the Bush Administration (when they transferred the most sensitive and classified military technology to China).
Beginning to see a pattern here?? And, Clarke than writes a book complaining about (the obvious?) this, while claiming the very same corporations -- who offshored the technology and jobs to China -- are also worried about Internet security and the Chinese.
What's wrong with this picture?
these idiots offshore outsourced passport security chips
ya know the chips on the passports supposedly to help with "tamper proof". These idiots awarded the contract to an unsecure plant in Thailand. They claimed no one in the U.S. could do it. That is B.S. There are all sorts of FABS around the U.S., many closed down. Oh gee, they might have had to retool but I sincerely doubt no U.S. company bid on that or they couldn't dig out a U.S. company.
Just beyond pathetic!
doesn't this story seem so unreal?
Over and over again. Corporations pour billions into "PR" and "marketing" and "messaging" and "media" and of course corporate attorneys writing really shitty NDAs and so on...
but when it comes to the engineering, the integrity of a product, from finance to oil to cell phones....
corners are cut.
The Real Cyber Threats are Yet to Come.
US Government finally figured out the 2007 ChiCom hack. It was alleged to be an upload from a USB flash from a sneeker network inside the Pentagon.Every major agency was compromised. ChiComs must have found out how many stooges they are dealing with. Then there was the spectacle of US Commerce Guttierez gettingt his laptop hacked while on a trade visit to Beijing.
Next comes the electric cars which will upload all their charging data into
the electric grid. GM will use OnStar Nissan will share this probably. So what happens when many of the chips or subsystems come from our friendly neighbor in the East? Chinese Electrics cars will upload their data, using their algorithms on their chips. Can you think of a better way to stage a Trojan? Warren Buffet is the biggest cheerleader for China's Electric vehicle.
Burton Leed
BP collection ship CAUGHT FIRE
This is why politicians and pundits should NOT control trying to stop an oil disaster. The press release is lightning caused the fire but the reality is they are sitting in a sea of volatile oil, on top of a well that originally blew up, they are burning off massive amounts of gas on these ships and the area has extreme ship traffic.
They supposedly have it out but this is scaring me to death. What do they not get that the original blow out was due to bypassing safety due to pressures "from above".
why does the spill rate keep rising?
This is really bad news. There is sand and problems in the well, reservoir as well as the damaged BOP, which are eroding the well casing and increasing the amount of oil that can get through.
As mentioned previously, it's just BP lowballing or being in denial, the flow rate is a moving target and is obviously increasing.
Even worse, instead of putting the captured oil in a tanker to be processed, they are going to burn a lot of it off.
That's stupid because it represents millions, daily, that could be sold to offset costs.
It's not like America magically stopped needing oil when this happened.
Harakiri!
What's good for the Goose should be good for the Gander. We have Congress telling oil executives as well as bank executives to commit suicide. It's happened twice now. I'm sure the response is "not without my bonus"!
But it begs the question, why isn't Congress being asked to do the same thing? They have royally screwed this country over and over again, so how come they are not asking themselves, along with corporate executives to "fall on their swords".
Just absolutely beyond the pale, what's wrong with these people. Yet when it comes to bonuses, you can bet those won't be stopped.
BP is downgraded to one step above junk. There is now a lot of talk about BP bankruptcy. I would not be surprised for it would protect them from creditors.
BP also hired ....our friend, Goldman Sachs to guard against hostile takeovers.
35,000-60,000 barrels per day
The oil spill rate estimate (official) was raised CNN.
I know really suspect the well itself along with the BOP is deteriorating. If you have looked at spillcam over time, the flow itself has visually increased, it's not constant, static....
which is super, super bad news.
Oil Drum
Posters on the Oil Drum tried to discredit the estimate of the Purdue Professor who said it was 70,000 barrels a day saying that size well does not exist in the GoM.
Even now there is an effort there to say the flow cannot be that high. Funny a couple of posters are saying that their eyes say its not that high. Of course when someone says the flow is still tremendous based on what someone sees coming out still the answer is that you cannot go by what you see.
They are losing credibility there by the hour.
eh
at least it's technical. I'm not sure. I went and read about various wells and that is one hell of a gusher even at 100,000 barrels in comparison to most.
I never did find the publish max capacity, before "blow out" of that well.
But I do believe the erosion analysis and an expect also said the flow rate is not static. I did see other experts also say it isn't a constant, static, especially with damage erosion and the "new" of the well because the pressure changes.
Eyeballing it the flow has changed but obviously, looking at a 2D image doesn't say much, but it sure seems to be more intense, after the cap.
I really fear the well casing is collapsing.
Bottom Line
The professor from Purdue has been vindicated and the 'experts' at the Oil Drum are too arrogant to admit it. I don't call that 'eh'.
here comes CDSes on BP, now at 35% prob of default
I just love these friggin' gambling chips. The credit default swaps on BP are now at 35% probability of a total default. That's just great. Now who is gonna make money when BP goes down? It's not the U.S. or the gulf region.
25,000 barrels per day
is the current burn & capture rate on the spill. They are waiting on ships to arrive to increase capacity (a clearly very stupid thing to not plan for early on).
BP CEO Hayward demoted
It's not clear exactly if he was demoted, taken out of the spotlight or what, here is the story.
I guess BP thinks, as usual, it's all about lawyers and public relations, nothing about engineering, safety, and toxic sludge pouring into the gulf of Mexico.
we're never going to find out the truth
or get anywhere with improved safety, methods and regulation.
Right now we have corporations pointing fingers, obviously to avoid liability. With the beyond belief games going on, obviously over liability, lawsuits...
the fact they have black shit spewing into the gulf, destroying the Earth seems almost secondary.
I am beginning to despize public relations and attorneys.