White House sends BP a $69 million bill

[frigidmagi]

CNN

The Obama administration has sent a $69 million bill to BP for the U.S. government's efforts to help deal with the energy company's oil spill in the Gulf of Mexico.

The current $69 million bill accounts for 75% of what BP owes to date, and the company has until July 1 to pay the full amount, an administration official said Thursday.

The Obama administration will bill BP regularly for costs related to the spill, according to the Deepwater Horizon Unified Command, which is the government and industry task force managing the spill response.

"As a responsible party, BP (BP) is financially responsible for all costs associated with the response to the spill," the task force said.

The bill was also sent to Transocean, Andarko, Moex Offshore and QBE Underwriting, a copy of the bill obtained by CNN showed.

Included in the bill sent to BP was a $29 million charge for Federal agencies to operate ships, aircraft and boats to monitor environmental damage and another $29 million charge for the activation and deployment of the National Guard, an administration official said.

BP owes $7 million for removal operations and other environmental assessment efforts and $4 million for the Department of Defense's removal efforts and operation of ships and aircraft.

The money received from BP will help to regularly replenish the $1.5 billion Oil Liability Trust Fund that covers damage costs associated with oil spills, according to the statement.

BP's leaking oil well in the Gulf of Mexico has been gushing an estimated 19,000 barrels a day since April 20. Earlier this week, the company said its latest efforts to cap the leak -- the biggest in U.S. history -- had failed so far.

"The administration expects prompt payment and will take additional steps as necessary to ensure that BP and other responsible parties, not American taxpayers, pay all of the costs associated with the BP/Deepwater Horizon Oil Spill," the statement said.

The bill obtained by CNN said companies should "expect additional billings as other response costs are finalized" and warned that if BP did not pay in full, interest would be applied.

I support this.

[Stofsk]

I'd rather see the people responsible for this disaster brought up on criminal charges.

[B4UTRUST]

My only concern about this is that in turn BP will pass these 'cost savings' onto us, the consumer to recoup their losses. So it'll end up that whatever BP loses and has to pay out, the public will pay.

[The Minx]

All in all, I think $69 million is a low figure for this level of disaster, but it's better than nothing at least.

My only concern about this is that in turn BP will pass these 'cost savings' onto us, the consumer to recoup their losses. So it'll end up that whatever BP loses and has to pay out, the public will pay.

If they try to do that too much, their consumers will move to their competitors instead, and I bet quite a few of them are doing that already. Industry can only get away with moving the costs over to the consumers if they're a monopoly, or if all suppliers are hit equally (such as when new taxes are placed on them).

[The Cleric]

Oil is too interconnected for boycotting gas stations by brand to have much of an effect.

[Dark Silver]

The fact that BP will simply sell their unsold product to other gas stations - means that it won't hurt BP's bottom line.

Also, boycotting a gas stationd doesn't hurt the oil company - instead it hurts the people who own the gas station. THEY have to buy the gas from the gasoline production plants with their own money, before they can resell it to you by stringently controlled pricing policies laid out by the government.

So Boycotting BP gas stations doesn't hurt British Petroleum, it hurts the station owners.

[The Minx]

Can the gas station owners not buy gas from other providers, or are they somehow bound by contract to stick with a specific one?

[Jason_Firewalker]

Can the gas station owners not buy gas from other providers, or are they somehow bound by contract to stick with a specific one?

From what I understand from my pal who works at a pump stop as an Assistant Manager, they are required to purchase first from their brand if their brand has any in local area before they can buy from other supppliers, but that may just be Circle K specialty stations

[B4UTRUST]

Well it would make sense. If you're a BP station I would expect your gas to come from BP instead of say Exxon. If you're an Exxon station I expect you to have Exxon gas. Same with any brand, really.

[The Minx]

It makes sense if the station is owned by the company (and then the losses of the station are the company's losses too), but if its an independent station, you'd think they should be able to do business with anyone. :/

[frigidmagi]

The equipment as I understand it comes from BP (or the company whose logo is on the gas station) part of the contract is bluntly that they are required to buy their gas from BP.

[Dark Silver]

If you open up a gas station, and you don't want to fork out a massive amount for the storage tanks, delivery system, site prep, etc etc - but you want to assure people you have a quality product (something they recognize) you make a deal with one of the big oil company's Gasoline Production branches.

They help subsidize the site prep and install of all the equipment, and help by giving you most of the necessary equipment, while you brand and promote their product in your store and storefront. The BRANDED gas stations have to obtain their product from the local distribution center for that brand of gas - they are not even allowed to go and get gas from elsewhere if they run out, unless the production facility will be unable to supply the fuel for sometime.

Now, once the contract is up, you can renew, or swap to a different producer (the equipment is now all yours), and redo all the signage, etc etc. Or you could go "independant" but you fail to obtain the "name brand" gas that you did before.

Ever wonder why most self-serve Gas Stations have all those drinks, and snacks and other things on the inside? Goverment pricing regulations say that you HAVE to sell any gas you buy from the producer, at no more than a 2cent profit per gallon to the customer. There is literally no money to be made at all in the selling of gasoline alone. The store's money all comes from selling those "extras".

[The Minx]

OK, that makes sense. Still, call me cruel, but I'm reluctant to not have them pay for all of this even if some of the cost goes to gas station owners. Perhaps it would be more useful to get at the execs themselves, especially if the blame can be pinned on specific ones.

On that note: Link

Rig survivors: BP ordered shortcut on day of blast

(CNN) -- The morning the Deepwater Horizon oil rig exploded, a BP executive and a Transocean official argued over how to proceed with the drilling, rig survivors told CNN's Anderson Cooper in an exclusive interview.

The survivors' account paints perhaps the most detailed picture yet of what happened on the deepwater rig -- and the possible causes of the April 20 explosion.

The BP official wanted workers to replace heavy mud, used to keep the well's pressure down, with lighter seawater to help speed a process that was costing an estimated $750,000 a day and was already running five weeks late, rig survivors told CNN.

BP won the argument, said Doug Brown, the rig's chief mechanic. "He basically said, 'Well, this is how it's gonna be.' "

"That's what the big argument was about," added Daniel Barron III.

Shortly after the exchange, chief driller Dewey Revette expressed concern and opposition too, the workers said, and on the drilling floor, they chatted among themselves.

"I don't ever remember doing this," they said, according to Barron.

"I think that's why Dewey was so reluctant to try to do it," Barron said, "because he didn't feel it was the right way to have things done."

Revette was among the 11 workers killed when the rig exploded that night.

In the CNN interviews, the workers described a corporate culture of cutting staff and ignoring warning signs ahead of the blast. They said BP routinely cut corners and pushed ahead despite concerns about safety.

The rig survivors also said it was always understood that you could get fired if you raised safety concerns that might delay drilling. Some co-workers had been fired for speaking out, they said.

It can cost up to $1 million a day to operate a deepwater rig, according to industry experts.

Safety was "almost used as a crutch by the company," Barron said. He said he was once scolded for standing on a bucket on the rig, yet the next day, Transocean ordered a crane to continue operating amid high winds, against its own policies. "It's like they used it against us -- the safety policies -- you know, to their advantage.

"I don't think there was ever a plan set in place, because no one ever thought this was gonna ever happen," he added.

BP spokesman Robert Wine would not comment on specific allegations, saying the company has to "wait for the investigations to be completed. We can't prejudge them."

"BP's priority is always safety," he said.

Transocean, the world's largest offshore drilling contractor, said its top priority is safety.

"There is no scenario or circumstance under which it will be compromised," the company said in a written statement. "So critical is safety at Transocean that every crew member has stop-work authority, a real-time method by which all work is halted should any employee suspect an unsafe situation or operation."

The Justice Department has launched a criminal investigation into the massive oil spill that has spewed as much as 798,000 gallons (19,000 barrels) of oil into the Gulf of Mexico every day.

The rig workers have filed a negligence suit against BP, Transocean, oil field services contractor Halliburton and other companies involved with the deepwater rig.

"I've seen gross negligence, and this conduct is criminal," said Steve Gordon, the lawyer representing the men. "There's a crime scene sitting 5,000 feet below the water."

Brown, the rig's mechanic, had traveled with the rig from South Korea, where it was made nearly a decade ago. He had seen the mechanical crew get downsized over the years. Yet as the rig aged, the engines began having more problems.

"It became overwhelming," he said. "We couldn't keep up with the flow of it. ... We constantly over the years kept telling them, 'Hey, we need more help back here.'

"They pretty much just said, 'Well, we'll look into it.' "

About nine months ago, Brown said, he got an additional first engineer, yet the crew was still overloaded with work.

Even more alarming, the rig survivors said, was the amount of resistance the well was giving them. "We had problems with it from the day we got on," Matthew Jacobs said.

Nearly every day, Jacobs said, "we had problems with that well."

Barron said it was like an eerie cloud hung over the well being dug 5,000 feet into the sea.

"There was always like an ominous feeling," he said. "This well did not want to be drilled. ... It just seemed like we were messing with Mother Nature."

At times, the drill got stuck. Many times, it "kicked," meaning gas was shooting back through the mud at an alarming rate.

"I've seen a lot of gas coming up from muds on different wells, and the highest I've ever seen in my 11 years was 1,500 units. And this well gave us 3,000," Brown said. "I've never been on a well with that high of gas coming out of the mud. That was kind of letting me know this well was something to be reckoned with."

It all came to a head at 9:56 p.m., when the first of three explosions rocked Deepwater Horizon, 52 miles southeast of Venice, Louisiana, with 126 people aboard. Tiles fell from the ceiling, walls collapsed, and people ran for their lives. It reminded Matt Jacobs of the movie "Titanic."

"It looked like you was looking at the face of death," he said. "You could hear it, see it, smell it."

He scrambled to the lifeboat deck. Jacobs had been trained to fight fires aboard the rig. But when he looked at the flames shooting 150 feet into the air, he knew there was nothing they could do. "There is no way we can put that fire out," he thought.

Jacobs hopped in a lifeboat. He screamed for co-workers to jump aboard. A second explosion rocked the rig. The lifeboat, still suspended in the air, went into a free fall of about 3 feet.

"Here I am on a lifeboat that's supposed to help me get off this rig," Jacobs thought. "And I'm gonna wind up dying."

He bowed his head and prayed.

Now, 50 days later, the survivors are telling their stories. It's become part of their everyday lives. They can't shake what happened that day, even when they close their eyes at night.

"It's like being in a neverending nightmare," Brown said. "You dream about it. You see it in your sleep. Then, we wake up in the morning, and we realize it's not a dream. It's real. ... It doesn't end for us."

[B4UTRUST]

Got to love the "Safety is priority 1" bullshit. And really, that's all it is. I've heard that same line more times than I can count at both my current job and in the military. And every time safety got left by the wayside as soon as the mission needed to be done. Hell, I remember being brought out to a parking spot on the flight line in the middle of the night on a Saturday to do deployment checks on an aircraft. No tech guides, no manuals, no information on it and it was a plane that we had no books or training on at all. Totally new variation of a C-130 and I was the only one in the unit at the time who had a clue on what half the systems did or how they worked. And the next week I got to listen to our squadron commander and base commander tell us that tech guide usage is mandatory and safety is priority one. These same people ordered our QA personnel to completely ignore the plane being there or that there was one person in the middle of the night working on it (safety requires 2 people at all times).

It's all fucking lip service and paperwork to cover the asses of the higher ups so that when shit like this happens they can turn around, pull out their nice documents, point and say 'See? Here! The employees could have stopped this. They could have prevented this. They had the power. They chose not to. They're at fault, not us.'