The American Spectator

On the main site today I ruminate on the Gulf oil leak and BP’s inability (so far) to stop the gush, while speculating how heavy a hit the company may take financially. Today the Washington Post notes how Interior Secretary Ken Salazar expressed a similar view (BP’s “life is very much on the line here,”) but then the newspaper explains how the company may be too big to fail:

Even though most investors have soured on BP, driving down its stock price by 19 percent and wiping out $36.7 billion of its market value since the explosion, the business remains a behemoth. The company has a market value of $152.6 billion, bolstered by a global marketing network, a lucrative oil venture in Russia, a promising contract to boost production in a giant Iraqi field and scores of other large interests. It remains the largest oil producer in the Gulf of Mexico. Measured by revenue or assets, it is among the world’s five largest companies….

For now, at least, BP’s prodigious costs combating the oil spill in the Gulf are outweighed by prodigious profits.

Perhaps so, but I don’t think many are left without doubts. Watch this video (yes, produced by a clean water advocacy group founded by Robert F. Kennedy, Jr., but stunning nonetheless) and you can’t help but wonder if the massive and still-flowing leak outstrips man’s capability to clean it up in a reasonable time frame. BP’s ability to afford to clean it up plus pay damages to those who have been harmed by their mishap.

If the oil reaches the shores of the five Gulf states — or even if it doesn’t — the claims of economic harm made by the seafood and tourism industries alone will be enormous. And then on top of that there are the lawyers from Environmental Defense and the Natural Resources Defense Council…

Meanwhile, today the New York Times follows their weekend article on BP’s questionable safety record (Exxon’s better!) with an analysis of how technological advancement in drilling has far surpassed oil companies’ ability to address problems if they happen — especially a mile below the water’s surface:

Environmentalists are saying they tried to raise the alarm to Congressional committees that the industry had no way to respond to a catastrophic blowout a mile below the sea.

Local officials in the gulf are beginning to ask, “What was Plan B?” The answer, oil industry engineers are acknowledging, was to deploy technology that has not changed much in 20 years — booms, skimmers and chemical dispersants — even as the drilling technology itself has improved.

“They have horribly underestimated the likelihood of a spill and therefore horribly underestimated the consequences of something going wrong,” said Robert G. Bea, a professor at the University of California, Berkeley, who studies offshore drilling. “So what we have now is some equivalent of a fire drill with paper towels and buckets for cleanup.”

And finally this morning, as Money Online reports, the predictable is happening before the Senate Energy and Natural Resources Committee:

The three oil companies primarily involved in the Gulf of Mexico oil spill blamed each other Tuesday for the accident last month that left 11 workers dead and oil still spewing into the Gulf….

“Transocean’s blowout preventer failed to operate,” said Lamar McKay, chairman and president of BP America, according to prepared testimony….

“All offshore oil and gas production projects begin and end with the operator…in this case, BP,” said (Transocean chief executive Steven) Newman….

The well’s cementing was done by Halliburton. But Halliburton’s chief safety and environmental officer, Tim Probert, said responsibility also lay with BP.

“Halliburton, as a service provider to the well owner, is contractually bound to comply with the well owner’s instructions on all matters relating to the performance of all work-related activities,” said Probert.