The Free Will of British Petroleum
Wednesday, June 16, 2010 12:49:35 PM
BP is a firm. A firm exists to earn profit. BP will do what it must do to earn a profit. This is not designed, commanded, or decreed, but evolved. Firms evolve to best fit their environment, and in an environment where they can buy off government officials to grant them categorical exclusion and then cut corners on safety, they will do so. To blame BP is like blaming a plant for not growing “correctly”, it is retarded.
The department of the interior, which was tasked to oversee the environmental protection of the gulf of mexico, granted BP a “categorical exclusion”, which is usually done for things like hiking trails and outhouses. BP gave the Obama campaign more money than any other candidate in the 08 elections. This is obviously not conclusive evidence of a kickback, but it is a possibility, especially since BP was granted what is basically a factory in the middle of the ocean an environmental blank check.
If someone were to bribe you, pay say $10,000 to come onto your $3 million lake, to explore for oil without any inspection of their exploration device, would you agree? I certainly would not.
But lets say you’re charged with “regulating” a community lake, which you do not own. The oil prospector then comes in to look for oil, but offers you $5,000 to not have his equipment inspected. Would you agree then? Your salary may only be something like $50,000 a year to keep the community lake in order.
It costs a certain amount to build and refit equipment to where it is safe. Dirty and dangerous is cheap. Lets say it costs $10,000 to prospect for oil with dirty and dangerous equipment, but $30,000 with clean and safe equipment. On top of this, the owner of the lake charges $5,000 to prospect, but demands the clean and safe equipment.
Thus inspecting with the clean and safe equipment costs $35,000, while inspecting with the dirty and cheap equipment costs $15,000. The difference is $20,000. To the oil prospector it makes no difference whether he uses the dirty or clean equipment. He haggles with the lake owner to see how much he would have to pay to use the dirty equipment, and it becomes clear that the oil prospector would have to pay the owner of the lake MORE than $20,000, and so it makes more sense to use the clean and safe equipment.
But if the lake isn’t owned by one man, but by “the community”, and this community assigns a regulator, then this regulator is much more willing to put the value of the lake at risk because it isn’t HIS lake - he owns say 0.1%, assuming there are 1000 people in the community. And so a bribe of $5,000 would be worth the risk for him. And the regulator would have all of the assurances, “look, we’ve done this a million times before, trust us, nobody will know.”
On April 2 2010, in a speech in South Carolina, Obama said:
”Even during Katrina, the spills didn’t come from the oil rigs, they came from the refineries onshore.” - and then he said something about the oil rigs being technologically advanced.
It is MY OPINION that Obama was repeating some of the propaganda given to him by BP to secure the bribe.
But again, we should expect BP to do things like this. BP did not develop in a free market economy, in all of the countries BP is in the economy is POLITICAL.
I contend that on a total market, the only way firms will be able to earn profit is to cater to consumer demand, and that it would be unprofitable for firms to engage in behavior like this. And that there is a way to have a system of private property with oceans - though obviously it wouldn’t work the same way land does. But that is a topic for another post.