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BP Doesn't Deserve a Liability Cap

Cold Highway

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The first element in the mix is a no-nonsense liability system that fastens full responsibility on the parties who run dangerous operations, no excuses allowed. Accordingly, we have to be especially wary of statutory caps on tort damages, including the current law, under which, in the case of the oil industry, the "total of liability . . . with respect to each incident shall not exceed for an offshore facility except a deepwater port, the total of all removal costs plus $75,000,000." That $75 million is chicken feed. Fortunately, the law removes that cap if the incident was caused by "the gross negligence or willful misconduct" of any party, or its failure to comply with any "applicable Federal safety, construction, or operating regulation."

If we had this in place, Im willing to bet that BP wouldve been more careful

Richard A. Epstein: BP Doesn't Deserve a Liability Cap - WSJ.com
 

Erod

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Or, with their stock plummeting, they could file bankruptcy and walk away altogether. Careful what you wish for.
 

dontworrybehappy

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That's right. You keep beating the kid down the street with his own bat eventually he'll just take it and go home and then viola.....no more game.
 

NolaMan

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Hoplite

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Frankly, I dont see why there's a limit on the damages. BP made a mistake due to their own sloppiness and they need to rectify that, to take responsibility for their error. If that mistake costs them their business, then so be it. It's not our job to clean up other people's messes, especially when they are capable of cleaning it up themselves.

If this was a regional company that had maybe 10-20 million dollars to their name, ok, that I can see. They couldnt possibly even begin to cover the damages. However BP is a multi-national corporation with annual gross profits in the hundred of billions of dollars, they can afford to rectify their mistake.
 

NolaMan

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Frankly, I dont see why there's a limit on the damages. BP made a mistake due to their own sloppiness and they need to rectify that, to take responsibility for their error. If that mistake costs them their business, then so be it. It's not our job to clean up other people's messes, especially when they are capable of cleaning it up themselves.

If this was a regional company that had maybe 10-20 million dollars to their name, ok, that I can see. They couldnt possibly even begin to cover the damages. However BP is a multi-national corporation with annual gross profits in the hundred of billions of dollars, they can afford to rectify their mistake.

Gross profit is irrelevent, what matters is their net profit. BP is going to pay for the damages, but thinking it will be a walk in the park for them is somewhat foolish in my opinion.
 

Erod

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Gross profit is irrelevent, what matters is their net profit. BP is going to pay for the damages, but thinking it will be a walk in the park for them is somewhat foolish in my opinion.

Especially with Obama and company more focused on "creating policy" to detroy oil companies than fixing the immediate problem. If Obama drives BPs stock down to the nub, its ability to pay may vanish. I wonder if this crisis is more an opportunity in Obama's mind than a catastrophe.

Meanwhile, Russia, Venezuela, China, Mexico, etc, are increasing drilling in the gulf.
 

jujuman13

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Frankly, I dont see why there's a limit on the damages. BP made a mistake due to their own sloppiness and they need to rectify that, to take responsibility for their error. If that mistake costs them their business, then so be it. It's not our job to clean up other people's messes, especially when they are capable of cleaning it up themselves.

If this was a regional company that had maybe 10-20 million dollars to their name, ok, that I can see. They couldnt possibly even begin to cover the damages. However BP is a multi-national corporation with annual gross profits in the hundred of billions of dollars, they can afford to rectify their mistake.

Obviously you have NOT followed YOUR OWN argument through to it's logical end.

If BP go broke/out of business, the Government of the US will ineviatbly have to pay for the clean up.
If the above were to happen then those who are due compensation might eventually get paiid a few cents on the Dollar.
It is in everyone's interest to keep BP alive and solvent and in business and profitable, BECAUSE THEY WILL THEN BE ABLE TO PAY CLEAN UP, COMPENSATION, FINES AND ALL OTHER COSTS.
Now which part of that do you fail to understand
 

obvious Child

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Gross profit is irrelevent, what matters is their net profit. BP is going to pay for the damages, but thinking it will be a walk in the park for them is somewhat foolish in my opinion.

Because...

A drop in a large bucket | Philadelphia Inquirer | 06/19/2010

The only forseable problems BP is going to have is getting license to operate as long as a Democratic Adminstration or Congress stay in power, thus expect large amounts of money to flow to Republicans come November. The capacity of oil firms to drag out actually paying and then getting lines of credit to cover their annual costs is well proven. This won't significently hurt them especially considering their net cashflow. Right now, BP looks like a real value stock considering the irrational behavior playing out on its stock price.
 

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Obviously you have NOT followed YOUR OWN argument through to it's logical end.

If BP go broke/out of business, the Government of the US will ineviatbly have to pay for the clean up.
If the above were to happen then those who are due compensation might eventually get paiid a few cents on the Dollar.
It is in everyone's interest to keep BP alive and solvent and in business and profitable, BECAUSE THEY WILL THEN BE ABLE TO PAY CLEAN UP, COMPENSATION, FINES AND ALL OTHER COSTS.
Now which part of that do you fail to understand
If, in paying for the damage that they've caused, BP goes broke then we will have still paid a significant portion of what will be needed and what assets remain can be siezed and sold to further compensate and clean with the federal government covering the rest. To me, that seems better than expecting the federal government to pick up the tab and then HOPE that BP will make enough to pay it back or that they will even pay it back at all.

If we front the money and BP goes under...what are we going to have to show for it?
 

washunut

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Because...

A drop in a large bucket | Philadelphia Inquirer | 06/19/2010

The only forseable problems BP is going to have is getting license to operate as long as a Democratic Adminstration or Congress stay in power, thus expect large amounts of money to flow to Republicans come November. The capacity of oil firms to drag out actually paying and then getting lines of credit to cover their annual costs is well proven. This won't significently hurt them especially considering their net cashflow. Right now, BP looks like a real value stock considering the irrational behavior playing out on its stock price.

Also let's remember that if BP wants to play hardball, this is the problem of BP America not the total company. They could spin this company off as it's own entity and let Obama use it as a punching bag all he wants.

Something Americans need to consider. When does this corporate bashing and extra legal taking of assets turn off foreign investment into the U.S. Without which we would not be able to afford the lifestyle we are living on a credit card.
 

Guy Incognito

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Something Americans need to consider. When does this corporate bashing and extra legal taking of assets turn off foreign investment into the U.S. Without which we would not be able to afford the lifestyle we are living on a credit card.

Doesn't it ever occur to anyone that that lifestyle is the problem?
 

washunut

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Doesn't it ever occur to anyone that that lifestyle is the problem?

Not to say I do not think we have excesses, but in a free society who is to say how others should live their lives.
 

DrunkenAsparagus

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BP screwed up, and all this liability cap does is encourage risky behavior.
 

Hoplite

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BP screwed up, and all this liability cap does is encourage risky behavior.
I agree. If a company thinks they can make more money off of a risky move than it'll cost to clean up or fix, there's no reason NOT to do it. Especially if they know they'll only have to pay a certain amount
 

ashurbanipal

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I think it's worth pointing out that, even though BP is mostly responsible for this mess (apparently), we ourselves also share some of the blame. If oil companies followed all applicable regulations to the "T", oil would be more expensive to produce. At a guess, based on nothing more than my own familiarity with the industry, gas prices would gain 25%-50%. We would all be shouting at the oil majors to lower prices and quit "gouging" us.

Government regulators who let gross negligence slide were responding as much to that pressure as they were to pressure from the oil companies.
 

dontworrybehappy

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I think it's worth pointing out that, even though BP is mostly responsible for this mess (apparently), we ourselves also share some of the blame. If oil companies followed all applicable regulations to the "T", oil would be more expensive to produce. At a guess, based on nothing more than my own familiarity with the industry, gas prices would gain 25%-50%. We would all be shouting at the oil majors to lower prices and quit "gouging" us.

Government regulators who let gross negligence slide were responding as much to that pressure as they were to pressure from the oil companies.

As much as I'd like to believe this I want a link or I'm going to call this baseless speculation.
 
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j-mac

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I agree. If a company thinks they can make more money off of a risky move than it'll cost to clean up or fix, there's no reason NOT to do it. Especially if they know they'll only have to pay a certain amount


Then we should allow for more drilling in shallow waters, and on land. Right?


j-mac
 

Boo Radley

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Then we should allow for more drilling in shallow waters, and on land. Right?


j-mac

Better to work faster at an alternative, as that is where the future is. ;)
 

the makeout hobo

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I'm still not sure why the federal government should spend a dime cleaning up BP's mess.
 

j-mac

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Better to work faster at an alternative, as that is where the future is. ;)


I have no problem with liberals working on their alternatives, never have. However, the reality of the situation today is that this nation, and the world's economic engine runs on fossil fuels, and petroleum based products.

When the call was to drill ANWAR you Joe, argued that it would take ten years to see any of that oil. Yet, you are willing to cripple the nation in favor of unproven technologies that experts say will take at least ten years to become even remotely viable, that is if they ever do?

What about the mean time Joe? huh? What are we supposed to heat our homes with? What are we supposed to get to work in? Do you even realize just how much of your life is tied to oil?


j-mac
 

Boo Radley

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I have no problem with liberals working on their alternatives, never have. However, the reality of the situation today is that this nation, and the world's economic engine runs on fossil fuels, and petroleum based products.

When the call was to drill ANWAR you Joe, argued that it would take ten years to see any of that oil. Yet, you are willing to cripple the nation in favor of unproven technologies that experts say will take at least ten years to become even remotely viable, that is if they ever do?

What about the mean time Joe? huh? What are we supposed to heat our homes with? What are we supposed to get to work in? Do you even realize just how much of your life is tied to oil?


j-mac

I don't recall arguing that. I think you get confused sometimes and mix arguments together. I argued that digging up a little bit of Alaska would be like using a little bit of a church for prostitution and selling drugs. ;)

However, we have not put all our efforts into seeking an alternative, and if we do, we don't need to be as risky as we've been. Not that oil will go away right now, but that we are capable of doing other things sooner, thus eliminating the huge need sooner. Your side actually slows us down on that.
 

Boo Radley

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I'm still not sure why the federal government should spend a dime cleaning up BP's mess.

Because it has to be cleaned up and BP is not likley to do it all. We'll see, but I suspect BP will fall short.
 
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