StanCollender'sCapitalGainsandGames Washington, Wall Street and Everything in Between



BP

Defending BP

14 Jun 2010
Posted by Andrew Samwick

Against one charge (and one charge alone).  From today's Washington Post:

The company's position is that it will pay for claims directly associated with the oil in the gulf. The Obama administration, however, ratcheted up the potential scope of BP's liability last week when Interior Secretary Ken Salazar told Congress that the administration wants BP to pay for the lost wages of oil industry workers affected by the moratorium on deep-water drilling. White House press secretary Robert Gibbs, responding to questions from reporters, affirmed Salazar's position: "The moratorium is a result of the accident that BP caused. . . . Those are claims that BP should pay."

On this one charge, I don't think BP should have to pay.  The moratorium was caused by the government imposing a moratorium -- that was the government's choice, not BP's.  BP is responsible for the damage BP causes, not the damage that other deep-water rigs might cause, so it should not be held liable for costs associated with preventing that hypothetical damage.  Why does this matter?

Posted by Pete Davis
At 9:45 p.m. CDT April 20, the BP Deepwater Horizon oil platform exploded in fire, and at 2:45 p.m. EDT May 6 the Dow dropped 1,010 points. The Senate Energy Committee grilled oil executives this morning, and House Financial Service grilled regulators and exchange officials this afternoon. What did we learn from this?
 
  1. We're not sure what happened. Automatic systems failed in the Gulf, and automatic computer equity trading systems spun out of control, but, so far, the exact causes are not known.



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