BP oil spill update, 15 June 2010

It’s been a spectacularly bad few days for BP. Things looks set to get a bit worse. But they may yet turn out less than apocalyptic. Without shouting the odds, here’re some thoughts.

(1) In the White House and Congress, BP faces horrible criticism. If it really was cheapskate and keen on shortcuts which led to the disaster it will be fascinating to know why its regulators and contractors allowed this risk-taking.

(2) It is reported that various oil giants may swoop and buy BP. Presumably that’s because they think it’s under-priced at the moment, or at least has assets so good they outweigh its dreadful likely liabilities. Maybe other punters will think the same.

(3) We still have almost no idea how bad is the ecological damage caused by BP. The NOAA updates suggest a very small percentage of the vulnerable coasts have yet been hit, so far. The under-water damage is a matter of great (wild?) speculation.  I hate typing these words: I am ordinarily superstitious about anything which looks like discounting disasters.

(4) The US can undertake any energy rethinks it likes, as we all will, and it will still quite possibly want its own oil supplies. Deep sea drilling may well remain an option. This will, tangentially, produce an enormous pressure to scapegoat BP is a wildcard, out of line with industry practice, which can in any case be tightened.

(5) We are in the very early days of what will almost certainly be a ghastly political and legal process. One notices not merely how few people have said anything brave or even decent but also how few have said anything which can be proved wrong. Thad Allen seems an exception.