The Dead Zone (or, BP and the Oil Well That Keeps on Giving)

[Ser Clegane]

why spend PROFIT money on making sure accidents like this wont happen?

I mean, what logical reason could it EVER be to spend some extra cash to prevent a catastrophe like this, when you can earn more money if you don't.

One compelling reason might be that the catastrophe is going to cost BP more money than the investment for the safety measures would have been.
Avoiding to lose ~30 billion EUR in market cap. over a couple of weeks might be another good reason.

[Kadagar_AV]

One compelling reason might be that the catastrophe is going to cost BP more money than the investment for the safety measures would have been.
Avoiding to lose ~30 billion EUR in market cap. over a couple of weeks might be another good reason.

Haven't studied economics much, have you?

Imagine you are a company for a second or two, you have two options:

1. 1% chance of something bad happening costing you 50% profit.
2. Not care about that and save 5 billion that could have prevented it.

From a economic perspective, you would be crazy to go with option A. After all, 99 times out of 100 you would go 5 billion more plus.This is very much the American way of thinking. And yes, economy is better of for it!

However, as a Comnadian, I would argue that economic value might not be the only factor. As if you have a 50 companies, you have a 50% chance of a disaster.

[Ser Clegane]

Haven't studied economics much, have you?

I assume in addition to being a language teacher, history teacher, ski instructor and special forces fighter you also studied economics?

Let's just say that I am not entirely unfamiliar with economics and the relevant industry.

Imagine you are a company for a second or two, you have two options:

1. 1% chance of something bad happening costing you 50% profit.
2. Not care about that and save 5 billion that could have prevented it.

From a economic perspective, you would be crazy to go with option A. After all, 99 times out of 100 you would go 5 billion more plus.This is very much the American way of thinking. And yes, economy is better of for it!

The problem with your argument is that you entirely made up the numbers. Your assumption for option A are not even close to reality in this case.

[Strike For The South]

Wow BP just capped a well 1.5 miles underwater and did it in record time.

Good show boys.....I mean you really shouldn't be drilling there in the first place but good show none the less

[Lemur]

Wow BP just capped a well 1.5 miles underwater and did it in record time.

Not to be pedantic, but if one mile = 5280 feet, and the well is ~5000 feet down, how does that make 1.5 miles? Not that working under a mile of water isn't plenty horrible, but still.

[Strike For The South]

Not to be pedantic, but if one mile = 5280 feet, and the well is ~5000 feet down, how does that make 1.5 miles? Not that working under a mile of water isn't plenty horrible, but still.

oppppsssssss....kilometers

[Vladimir]

oppppsssssss....kilometers

Strike is converting to metric.

[Lemur]

oppppsssssss....kilometers

Hey, are you the guy who lost that Mars probe?

[Louis VI the Fat]

oppppsssssss....kilometers

Oh, gosh dangit. Texans use miles, sheesh. You'll give our swapping accounts away if you post in metric.

[Kadagar_AV]

I assume in addition to being a language teacher, history teacher, ski instructor and special forces fighter you also studied economics?

Let's just say that I am not entirely unfamiliar with economics and the relevant industry.



The problem with your argument is that you entirely made up the numbers. Your assumption for option A are not even close to reality in this case.

In Sweden you cant have only one subject, you need two. I picked history and Swedish. We have conscription in Sweden, my army time thus def should not be something to marvel at, did my 15 months (officer program) plus some UN service, but that kind of comes with the officer program. This was some 10 years ago though, but then I have been helping out with training the Nordic Battalion. Only in summer though (and some winter programs), as in Sweden ,you have 8 weeks summer vacation as a teacher, might as well do something useful. Ski instructing has always been part of my life (works great when you work as teacher too, as the weeks you have off in the winter are the weeks they need extra ski instructors!). Economy I studied extra in the evenings, as well as psychology. Why? Because I spent a whole lot of time skiing instead of studying, so to fill my required hours to get cash from the state for studying, I needed to study double hours the months I did do my studies to make a living.

Sorry for being all defensive, but this is third time in a month or so I have been accused of lying about my background. Am getting rather tired of it. If you look at what I just wrote, you will notice that there are no miraculous feats that brought me to where I am.

May I also add that I took offense to your post. I challenged your post, you challenged me. Not only is it insulting, but it is below what I would have expected from the men in red.



AS TO YOUR (actual) POINT, yes I entirely made up the numbers. It was a mathematical example with no bearing on real life situations. I never claimed anything else, and I thought that was obvious from what I wrote.

The point in the example I made still holds true though. No?

[Ser Clegane]

I challenged your post, you challenged me. Not only is it insulting, but it is below what I would have expected from the men in red.

Excuse me, but this:

Haven't studied economics much, have you?

is certainly far from challenging the content of my post but is simply questioning my background without you knowing anything about it.

From the "men in red" perspective this remark of your has only been one in quite a number of similar remarks in the past weeks (and which derailed threads several times) and you should not be surprised that other members regularly get annoyed by your posting style. (happy to further discuss this via PM)

On topic:

AS TO YOUR (actual) POINT, yes I entirely made up the numbers. It was a mathematical example with no bearing on real life situations. I never claimed anything else, and I thought that was obvious from what I wrote.
The point in the example I made still holds true though. No?

The point does not hold true if the claim you originally made very much depends on the actual numbers

The point is that the cost for the safety measure in question (500k USD per rig as mentioned in on of the linked articles) in entirely neglectable compared to the profits of BP (~100 USD billions if you just add up the last 5 years) and to the damage that has been caused.
This is not an issue of cost savings, but (assuming that the equipment in question could have made a difference) an issue of poor risk assessment/management.

[Lemur]

This is not an issue of cost savings, but (assuming that the equipment in question could have made a difference) an issue of poor risk assessment/management.

I, for one, blame the Paleozoic and the tertiary period of the Cenozoic. It's all their fault for having continents of lush vegetation and oceans of zooplankton that turned into coal, gas and oil. Damn you, Paleozoic! Damn you all to hell!*

Early reports of the blowout mentioned a methane bubble that shot through the system and blew out pretty much everything. Haven't seen that mentioned lately, so I've no idea if that was valid info or early speculation.




*Of course, if you subscribe to the abiogenic petroleum origin theory, this is moot.

[gaelic cowboy]

Methane is very prevalent in the gulf I suspect it may have been a factor

[Kadagar_AV]

Excuse me, but this:

is certainly far from challenging the content of my post but is simply questioning my background without you knowing anything about it.

From the "men in red" perspective this remark of your has only been one in quite a number of similar remarks in the past weeks (and which derailed threads several times) and you should not be surprised that other members regularly get annoyed by your posting style. (happy to further discuss this via PM)

On topic:


The point does not hold true if the claim you originally made very much depends on the actual numbers

The point is that the cost for the safety measure in question (500k USD per rig as mentioned in on of the linked articles) in entirely neglectable compared to the profits of BP (~100 USD billions if you just add up the last 5 years) and to the damage that has been caused.
This is not an issue of cost savings, but (assuming that the equipment in question could have made a difference) an issue of poor risk assessment/management.

Spoiler Alert, click show to read: 

The "haven't studied economics much, have you?" was as you say not very polite, I beg your forgiveness. However, you kind of brought a gun to a fist fight (I questioned your economical knowledge, you questioned my person). Let us however move on and leave that behind, shall we?

As to the point, you kind of strengthened my point.

Poor risk assessment? I do think a company that profit (your numbers) ~100 USD billions over 5 years do not make bad risk assessments. Gambling ones, sure! The US economy thrive on it. Gambling is, as I said in my previous post, not bad if you have the odds on your side. And as I said, the numbers I used was only to make an example that the average Orgah gets. The example still holds true though.

500k USD on the stockmarket is HUGE, I have totally forgot what company it was, but when X airline removed one olive in their salad the stocks went way up.

To summarize: Your standpoint is that a global company such as BP did a bad risk assessment. My point is that they did the logical choice given the factors at hand.

My second point is that the factors at hand would be different in Comnadia than the US, thus very possibly altering the risk assessment.

[Ser Clegane]

500k USD on the stockmarket is HUGE

You are kidding - right? Please feel free to alsó provide the airline example you mention - perhaps with real numbers instead of a mathematical example.

I stick with the poor risk assessment - be it the lack of (relatively cheap) equipment or the inability/unwillingness to enforce proper safety procedures (see Xiahou's post)

[Crazed Rabbit]

500k USD on the stockmarket is HUGE,

Wow, just wow.

BP has several refineries in the US, each one of which process 100,000 barrels of oil per day or more. Each barrel costs about $75; that's at least $7,500,000 million spent per day at least in each refinery on oil alone.

Haven't studied economics much, have you?

I have. You're wrong and Ser Clegnane is right; the immense cost of the cleanup will provide a very compelling reason to invest in good equipment.

Now, back to politics - I have read that this rig was allowed to operate without complete review under Obama's administration. And that the federal government is reviewing permit applications from Louisiana to put up oil barriers, instead of just issuing them. So there's the possibility of legitimate blame for Obama. But the responsibility lies with BP.

CR