Monday, June 14, 2010

Ruminations on BP

I wonder what the United States government response will be to lines of questioning regarding well-head and safety inspections, should BP end up in a trial.  We've got NYC crane inspectors, the SEC, the IRS, and now these guys from the Department of the Interior, a dubious list that doesn't paint the efficacy of public inspection in a favorable light, good thing the average salary + benefits of a public sector worker has reached record spreads against the private labor pool.

All that aside, I do not believe there exists any legal basis for the United States to litigate BP, a British company, should the worst case scenario arise, but haven't seen any good news coverage of the fact.  Part of this assumption lies in the fact that I believe Obama is attempting to try the Company in the court of public idiocy rather than keeping his cards close to the vest.

From the beginning BP came out and indicated that they would assume all costs for the remediation of the spill.  In spite of this, Obama and the hippies started saddling the company with operational demands ranging from cancelling dividends to escrowing funds, all while shutting in other GOM development, one of the sources of funds with which to pay these demands.  Yes, the tripartite base of tail-wagging-dog politics:  over-react, accuse, deny supports a pyramidal top ... disenfranchisement by hypocrisy.  We saw that disenfranchisement last week with John Napier penning a decidedly "back the fuck off" toned open letter saying what most normal free-thinkers, here and abroad, feel.  Quoted from Sky News, here (bolded text mine, for emphasis):
Dear President Obama,
Please forgive this open letter but your comments towards BP and its CEO as reported here are coming across as somewhat prejudicial and personal.
There is no doubt that BP, as a UK PLC, is totally committed to do everything possible to contain the oil leak and meet all its obligations in the USA.
The existing CEO is the best person to deliver that effort and has made that personal commitment and made himself available in the USA.
In your words, "he has taken the heat" and not hidden in his office. The real response has been total. You could argue a poor PR performance, but BP are not alone in that.
There is a sense here that these attacks are being made because BP is British.
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 personalised response in or from countries beyond the US.
Perhaps a case of double standards? Deep sea oil exploration was pushed forward as part of a USA oil security strategy as have a number of foreign policy initiatives in key areas in the world where we are standing shoulder to shoulder.
Whilst we all recognise the seriousness of the situation there is a need to put some balance back into the situation.
Many of us applauded your promise of a new approach to politics, USA foreign policy and world leadership.
Both you and the CEO of BP are caught up in the resolution of issues dealing with the emerging risks of strategies that you did not necessarily determine.
The immediate issues are very challenging but are best solved working together in a more Statesman like way.
The leak may take time to fix, and it will be, but Afghanistan and Iraq will take much longer.
We can all agree that the first and absolute priority is to stem the leak. Perhaps the second one is to ensure the reputation of the Presidency outside the USA is seen as objective, balanced, able and capable of taking the heat when under pressure.
We liked the Obama we saw at your election, can we have more of it please.
Yours sincerely,
John Napier
The one group of comments I received from a lawyer centered around CISG law.  However, England never became a participating member in CISG.  Therefore, if we don't witness more humble rhetoric from the top, I doubt that there's anything that the US can do with BP aside from seizing their local assets.  And then what, selling same to others for quarters on the dollar, and having the government assume leadership of the clean up operations?  More inefficient, ineffective government, great ... The cost to BP of America doing so may be under review anyway, but given the escalation in forcefulness from political leadership, their hand may be forced.  The risk of BP doing so poses a great systemic risk to our "recovering" economy and could force them to cozy up to other nations, further alienating us to outside countries, and reducing fuel to our "engine of growth."

I believe that the United States has already caused nations like China (yuan peg, carbon emissions), Germany (debt spending over fiscal conservatism), and mainland Europe (sovereign debt raids) to question Western Financialism and its harbor.  Hastening skepticism with loud-mouthed Cowboy Diplomacy benefits no one, and the stink of desperation hovers over news coverage in each political article published over the last four months.

Here's hoping against hope that sensibility stages some miraculous resurrection in the minds and mouths of political leadership in these trying times.  In keeping with hope, though, hedges.