Project Katrina

Via the always wonderful Mother Jones:

We’re not there yet. Today, Representatives Ed Markey (D-Mass.) and Lois Capps (D-Calif.) wrote a letter to National Oilwell Varco (NOV)—the company that provided the data display systems used by the drilling crew to monitor the well—demanding that the company hand over key information to the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, the independent commission formed by President Obama to investigate the disaster. The information locked away in NOV’s vaults could help the commission recreate the computer displays that engineers on the Deepwater Horizon were looking at just seconds before the rig exploded.

Unfortunately, NOV is declining. In their letter to the company, Markey and Capps cite their difficulties with NOV as a big reason why the commission needs the authority to issue subpoenas—a privilege it doesn’t currently enjoy. The House passed a bill co-sponsored by Markey and Capps (by a vote of 420-1) giving it that power earlier this year. But Senate Republicans stymied any further progress.

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Without subpeona power, the spill commission is toothless. Markey and Capps are using NOV’s heinous stubbornness to hammer that point home, and are lucky to have gotten their bill out the door in a Democrat-controlled House. But it’s not going anywhere in the Senate. Realistically, though, it doesn’t seem as though Democrats would have the legislative capital to burn on empowering the commission anyway. That’s too bad.

You got to be shitting me. According to the New York Times BP is starting to float the idea that if Congress keeps them from drilling new wells in the Gulf of Mexico, it might not be able to fulfill its commitment to “make this right.”

[A]s state and federal officials, individuals and businesses continue to seek additional funds beyond the minimum fines and compensation that BP must pay under the law, the company has signaled its reluctance to cooperate unless it can continue to operate in the Gulf of Mexico.

Now it needs to be clear at this point BP says it will honor its pledge for a $20 billion fund for damages and fines, $100 million for rig workers idled by the moratorium, and $500 million to research the effects of the Deepwater Horizon disaster. But it is equally as clear they are going to attempt to scare lawmakers, with velied threats they won’t be able to honor their comittments, if they are not allowed to continue to drill whereever and whenever they want.

What is so important to note here is that in the last Fortune 500 rankings BP was the fourth largest corporation in the world, with profits—profits, not revenue—of $16,578,000,000. So it is laughable that not allowing BP to drill any new wells would even remotely hinder their ability to pay.

The Washington Post reports:

The “blowout preventer” from BP’s Macondo well—which infamously failed to prevent this summer’s spill—has begun its transition from sub-sea equipment to federal evidence.

The 450-ton device was removed Friday afternoon from the Gulf of Mexico floor and attached to a long section of pipe that will be used to haul it 5,000 feet to the surface, according to a statement from retired Coast Guard Adm. Thad W. Allen, the federal government’s point man on the BP oil spill.

The FBI and multiple other Federal investigators are waiting on the shore for the device to arrive, where it will undergo the mechanical equivalent of an autopsy. The results should be interested.

Today the New York Times has a somewhat detailed look “behind the scenes” highlighting the tension between BP executives and government employees as they tried to cap  the well.

But interviews with BP engineers and technicians, contractors and Obama administration officials who, with the eyes of the world upon them, worked to stop the flow of oil, suggest that the process was also far more stressful, hair-raising and acrimonious than the public was aware of.

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Looking back, administration officials said that they became concerned that BP could not handle the crisis and that at crucial junctures the company made serious errors of judgment. “There was an arc of loss of confidence,” said Interior Secretary Ken Salazar. “I was not comfortable they knew what they were doing.”

Those on the industry side saw it differently. “The only benefit I see is they actually challenged us to a level of detail and communication,” Mark Mazzella, BP’s top well-control expert, said of the government scientists who stepped in to supervise the effort. “They didn’t offer anything that changed anything we actually did.”

A decision by Energy Secretary Steven Chu to turn to BP’s competitors for advice was viewed as an insult by many at the company, said a technician who insisted on anonymity because he was not authorized to speak about the matter.

I expect as time passes we’re going to see more and more of these type of stories and I expect it was much, much worse then this initial story indicates.

In a deal negotiated last month, BP officials promised President Obama the company would pay $5 billion annually over the next four years into an escrow account for damages. Ken Feinberg, who was appointed to administer oil spill claims out of the escrow fund, has said he “hasn’t been able to start writing claims checks” because BP PLC has failed to deposit any money into the $20 billion fund it promised to create:

Feinberg, who was appointed to administer oil spill claims out of the fund, said he doesn’t have the authority to force BP to deposit the money, but his hands are tied until it does. “I don’t want the checks to bounce,” he said.

The day after the escrow account’s establishment in June, BP CEO Tony Hayward told Congress that BP is “unwavering in our commitment to fulfill all our responsibilities” and the company “won’t stop spending until the job is done.”

According to the Federal Government the Deepwater Horizon well gushed up to 2.6 million gallons a day.  That is the equivalent of more than 19 Exxon Valdezes. Of course, for months BP insisted it was only 5,000 barrels a day (less than one tenth the actual amount). Well the new government estimate means BP is liable for a $17.6 billion fine—$4,300 for each barrel of oil, less the 800,000 barrels directly siphoned from the wellhead.

At its height, BP’s leaking well gushed 62,000 barrels of oil a day, the federal government said Monday in a revision of its figures that reveals how far off initial estimates turned out to be. The government and BP initially offered estimates of the leak at 1,000 and 5,000 of barrels a day shortly after it began in late April, eventually reaching an estimate of between 35,000 and 60,000 barrels a day after several revisions. The new estimate Monday by federal scientists means 4.9 million barrels of oil likely were released by the well before it was temporarily capped last month. BP hopes to complete an operation this week that will permanently seal the ill-fated well.

With those type of dollars in play is it any wonder BP was low-balling the size and scope of the spill.

Over the weekend, news broke that three months after his oil company’s rig set off the largest oil spill in American history, BP CEO Tony Hayward would be stepping down. In his resignation statement, Hayward stressed that, “BP will be a changed company as a result of” its oil spill in the Gulf. Yesterday morning BP Chairman Carl-Henric Svanberg went on CNBC to celebrate Hayward’s performance at BP:

SVANBERG: Tony Hayward has done a great job for the company through his almost thirty years and he has done it very well, greatly as a CEO. He has driven the company’s performance and developed the company in many, many ways. He has also led an unprecedented response in the Gulf of Mexico. But it became obvious to him and to us that in order to rebuild our position, in order to rebuilt our brand and reputation, we needed fresh leadership and that is why we are doing the change.

Not only didn’t Hayward get shit canned, it did a “great job for the company” and will receive a £600,000-a-year ($930,000) pension when he leaves the firm in October. Kind of makes you wonder doesn’t it.

The costs to BP for poisoning the Gulf of Mexico will actually lower the company’s taxes by billions of dollars, and BP “may be able to get a refund for taxes paid in previous years.” If BP’s cleanup costs reach $60 billion, as Merrill Lynch & Co. estimates, the company will be able to deduct almost $20 billion over time they would have had to pay in taxes.

In addition to billions in subsidies, the company has received $10 billion in federal contracts from the American taxpayer in the last ten years. BP spokesman Steve Rinehart told Bloomberg News that BP will deduct the $3.5 billion already spent on cleanup efforts and any future expenses:

Taxes are paid on profits. If our profits are down due to increased expenses such as the cost of responding to this spill, then it follows that our tax bills will be lower as a result.

BP cannot write off future government fines and penalties, including criminal fines, but it can write off punitive damages that are awarded by courts, according to a report by Center for American Progress tax expert Sima Gandhi.

A former BP contractor has come forward to denounce the “cutthroat individuals” running the oil disaster response. On Friday, contractor-turned-whistleblower Adam Dillon told New Orleans television station WDSU he was fired “after taking photos that he believes were related to the use of dispersants and to the cleanup of the oil.” As a BP liaison, he had rebuffed reporters’ attempts to observe cleanup operations in Grand Isle, LA, in June, before being promoted to the BP Command Center near Houma, LA. At the command center BP manages the private contractors running practically every aspect of the spill response. Dillon, a former U.S. Army Special Operations soldier, “has lost faith in the company in charge”:

There are some very great, hardworking individuals in there. But the bottom line is just about money. There are some very cutthroat individuals. They’re not worried about cleaning up that spill as it is. . . .

I will never have loyalty to this company. I will always have loyalty to my country. And my country comes first. What this company is doing to this country right now is just wrong.

Before he was fired, Dillon was “confined and interrogated for almost an hour.” WDSU’s Scott Walker will air more of his interview with Adam Dillon on Monday night.

BP CEO Tony Hayward has flown to Abu Dhabi today. Rumors are it is to raise funds and secure new investors from the region as his company’s stocks continue to plummet:

BP’s embattled CEO flew to the wealthy emirate of Abu Dhabi to meet officials amid speculation the oil giant is looking to raise cash to cover clean up costs from the Gulf of Mexico oil spill.

Chief Executive Tony Hayward arrived in the Emirati capital Tuesday and would be staying “a couple of days,” BP spokesman Andrew Gowers said. He would not say whether Hayward planned to sit down with the region’s powerful investment funds, which have provided needed cash to Western multinationals in past times of crisis. “He’s visiting partners as he does from time to time. He’s conducting normal business,” Gowers said.

The Financial Times writes that an “official in the Gulf familiar with BP’s discussions” said “there have been communications between the group and investors in the region since the oil spill in the Gulf of Mexico, describing them as an ‘immunisation strategy’ as BP looks to its future.” Additionally, the Saudi paper “Al-Eqtisadiah reported Wednesday that a delegation of Saudi investors was headed to London to discuss an acquisition of up to 15 percent of BP.”