In Baja Mexico last week, I watched as brown pelicans, finally off the endangered species list, enjoyed a carefree existence diving for fish. Meanwhile, their oil-soaked relatives an ocean away, struggled, uncomprehending, with the inability to fly at all.
I think it's time for the American public to just seize the assets of British Petroleum. The administration has been far too cautious in dealing with these wolverines of the petroleum industry. How else do you describe a company that, according to the New York Times, accounted for 97 percent of the flagrant violations in the refining industry?
This company had had 760 "egregious and willful" violations - compared to 8 at the next two companies tying for second place. The company paid the highest fine ever imposed by the Occupational Safety and Hazard Administration ($87 million) after 15 employees died in an explosion in 2005. Throw in the ousting of its previous CEO for a sex and blackmail scandal, and you have a company whose directors looked the other way while the company ran amuck.
The civil penalties we can impose are $4,300 PER BARREL in the event of gross negligence. We now know that there are 25,000 barrels spewing from the well and that some estimates are as high as 60,000. The fine alone is estimated to be as high as $250 million per day. On the 100th day of leakage the fines will be over $25 billion. That's before we add up the claims of waitresses, oil service workers, BP gas station franchisees, fishermen, - all of us directly or indirectly when we consider the lost income taxes.
Oil companies are capital intensive. For the number of people involved, the value of the capital equipment and tangible assets constitute a high percentage of the total value. This is not one of those industries where, "all your assets walk out the door at 5 p.m." In the case of BP, there is a great deal we can seize (or put in escrow) to secure what the American public will be ultimately be owed. BP stockholders will be wiped out. Bondholders could also lose everything, and Wall Street is already anticipating this if the exploding cost of credit default insurance on BP bonds means anything.
The president's argument that BP is better alive than dead is a canard of the first order. Most of the same people would just keep working, but with adult supervision. We U.S. taxpayers would keep the profit to settle claims, and slowly but surely we would sell off the assets over time.
The fact that someone besides BP has a right to those assets is pretty clear already, so steps should be taken now to secure them. We should move against BP as quickly as we dispatched Timothy McVeigh after the Oklahoma bombing. This should never be another 20-year process where we get duck-walked through the legal system like the Exxon Valdez case that dragged all the way to the Supreme Court. In the end, people received next to nothing compared to what they had lost.
What's to like about any of this? Well, it's a wake-up call for the move to electric cars and alternative energy as quickly as possible. As we speak, formerly mothballed nuclear plants in Oregon and Washington are coming online. We need a Marshal plan to get us to the tipping point, and the money for it, as a start, can come from America's sale of BP's assets.