Appropriate punishment for BP

7 thoughts on “Appropriate punishment for BP”

  1. While I agree with the punishment, I doubt that’s going to happen.

    What I would LIKE to see happen is for the government to tell BP that they can no longer drill for oil on US land. Period. They had their chance, and they screwed it up. Or, if that’s too extreme and would prevent them from paying for the mess, then how about, “You can never drill on US soil again until the Gulf is completely restored to the state it was prior to the spill.” How’s that for cleanup incentive?
    I doubt we’ll ever see a permanent ban because we want their oil. But yes, it seems logical to forbid additional BP drilling until they fully restore everything. No matter what penalties might be imposed, I DO expect a complete clean-up and restoration. Unfortunately, I’ve seen reports that the Alaskan coast has yet to return to pre-Exxon Valdez conditions, with all the devastated species returned to pre-spill levels, etc.

    1. If I were head of BP, I’d tell the US government we were no longer able to trust it to honor it’s commitments and would therefore no longer produce, transport or sell petrochemical products to or in the USA.

      BP doesn’t depend on the US market, so why should it expose itself to the risks of doing business with a government that has no respect for the contracts it signs?
      I can’t quote the regulation, if there is one, that allows the U.S. government to raise the cap on damages in this case, in apparent violation of the ex post facto principle. If the Exxon Valdez is any example, court awards can ultimately be drastically reduced by the Supreme Court. However the damages are ultimately resolved, I suspect BP is far too greedy to pull out of the U.S. market. They would sustain huge losses in leaving behind their investments in time, money, exploration, mineral rights, etc., and I’m sure a lot of other oil companies would be quite happy to step in and pick up the slack (and profits).

      1. I think you’re right on every count including that a lot of other oil companies would be happy to step in and buy BP’s US based assets. Right now, BP’s offshore drilling rights (leases) might be a difficult sell, but I’ve no doubt that congress will come up with another incentive program amounting to an offer that oil other producers can’t afford to ignore.

        A sad truth is that there are numerous countries that are much less concerned with protecting the environment than the USA – for which BP could continue producing and even escalate it’s risk taking as well as it’s profit potential.

        Another even more sad truth is that the US government still doesn’t understand that the promise of future bailouts creates an incentive to take risks that would otherwise never have been considered. Arbitrary liability caps are a promise of future bailouts. This is just another iteration of the Freddie Mac, Fannie Mae and FDIC promises to save other institutions from the consequences of inordinate risk taking.

        It pains me to say it, but if I were in a business that depended on a government obeying the rule of its law and honoring it’s contracted commitments — I’d begin looking elsewhere.

  2. They should be made to clean the oil off the birds and animals who are affected. They need to see what they’ve done up close, and interact with it.

    And THEN they should be kicked overboard and made to swim through the oil.
    Yes, better to have them do something productive and enlightening before letting them swim for their lives. But swim they must.

  3. As long as you include all the bureaucrats, agency heads and legislators who conspired to limit BP’s liability to nothing more than a token amount, I’m all for dumping them all overboard. But you’d have to believe that the government cares more about BP’s profits than BP does to not see the reason BP took the inordinate risks that led to this disaster. If BP knew going in that their risks might negatively impact their potential profits by billions instead of mere millions, it would have totally altered their actions in a positive way. At least that’s my firm belief. The government being in bed with business… all business… is called corporatism. In every industry where the government is involved, we see the same results – inordinate risks, higher prices, less competition, malinvestments, unregulated black markets, more crime and an increase in the national debt.

    The president said yesterday that the government was on top of trying to control this disaster from the beginning – and yet the crimes we don’t see are worse than the crimes we see.

    Add to all that government incompetence – the unscrupulous notion that it’s ethical to alter a contract after it’s been accepted by both parties, and you see that congress is ready to change BP’s liability with what amounts to an ex post facto law negating the deal it made with BP which limited it’s liability to about 65 million dollars. The constitution means nothing. Instead of a nation of laws, we’ve become a nation of whimsical politicians with no technical or business acumen whatsoever.

    BP acted recklessly and deserves all the punishment we can legally muster, but the sole proximate cause of the disaster is pandering government corporatism. And it’s sickening.
    Happily my imaginary boat can be as large as necessary to accommodate all those deserving a ride and a swim. And if we start including the bureaucrats, it’s going to be a very large boat. My anger when I wrote the post, however, was focused on BP because it’s their well. And as negligent and deceitful as they’ve been, they are still the only ones in a position, literally, to cap the well.

    By the way, I’ve reserved a special place of honor in my boat for BP CEO Tony Hayward, whose pompous attitude particularly infuriates me.

  4. Well, the prosecution thing is interesting, but what laws have they actually violated?
    I don’t know that they’ve violated any. But I’ll bet there’s a ton of lawyers hard at work looking for some. (Never let an accident go unexploited.)

  5. Chris, BP has already been convicted of three environmental crimes in the past 10 years. It’s not like there’s no such thing as an environmental law with criminal penalties. In this case, not only were environmental laws broken, but there was gross negligence as well. BP violated it’s own safety rules and ignored warnings from its own contractors to save a couple days’ lease payments on the oil well. If you’re not familiar with the circumstances behind the accident (and you don’t seem to be judging from your questino), the Wall Street Journal has been covering it well.

    Also, I don’t know why punishing a white-collar crime should be considered “exploiting” the situation. We don’t have the same attitude towards assault, burglary, etc. What’s the difference? If you don’t want someone to commit a crime, you need to have a punishment to deter it. Some companies consider breaking the law a cost of doing business. They look at the penalties, they look at the upside, and they look at the chance of getting cost, and if the chance of getting cost times the penalty is less than the upside, they break the law. It’s just that simple and complete rational from their perspective. Decision makers in those companies need to know that a possible jail term for themselves personally is in the equation. They’ll weigh that a bit higher than a fine.

... and that's my two cents