Sunday, June 6, 2010

BP (NYSE:BP) and Growing American, British Strain

Comments from Obama and Democrats concerning the crisis with BP (NYSE:BP) is showing signs it could ultimately bring strains in the relationship between Great Britain and the U.S.

Obama has largely been given a free ride when saying he's going to keep his "boot on the neck" of Bp during the crisis, not even having a clue it's like saying he's going to keep his boot on the neck of the British people.

The American mainstream media and some of its Internet sycophants have been no better, as they rail against the company and CEO Tony Hayword, not even subtly referring to his being British being a part of the problem.

To some degree this has extended to the Obama administration itself, who the socialist, progressive press and Internet news sites continue to hammer on not showing enough anger in the situation. It's bizarre in that sense, as they try to manufacture emotion in a situation that needs calm and consistency to battle the results of the accident.

As far as bringing up the demeanor of Haywood as a negative because he has a personality which comes from the culture of Britain is ridiculous. It's childish, irresponsible and irrelevant to the situation.

In another clueless move from Obama, he chided BP for thinking of handing out their dividend to its shareholders, as if the Gulf of Mexico is all that BP has to focus on.

Obama screamed out on Friday. "Now I don't have a problem with BP fulfilling its legal obligations, but I want BP to be very clear they've got moral and legal obligations here in the Gulf for the damage that has been done."

It's makes no difference whether Obama has a problem or not with BP filling its legal obligations, as they must.

Again, to have Obama speak in this threatening tone without realizing he's affecting one of our staunchest allies, but more importantly the people of Britain who are so reliant on the success of BP and the dividends they pay out, speaks to his inexperience and lack of grace and class.

Rumblings are starting to emerge from Great Britain that the Obama administration and the press are going way too far and extreme in their response, and if that continues, we could see a full-fledged political battle between the two countries, as a lot more is at stake than those immediately effected by the tragic accident.

This doesn't mean that isn't important, just that the overall picture needs to be looked at and not the usual ethnocentric viewpoint Americans have a habit of maintaining.

Why this is a real possible outcome is for two reasons. First, some media outlets and politicians have responded in a way viewed by the British as politically motivated, and there can be no doubt about it as mid-term elections come closer it is.

This has resulted in very personal attacks which are directed at the British indirectly, but taken as very direct and personal.

It's one thing to attack the facts and reasons behind the accident, it's another to make personal attacks in a way to denigrate and cause humiliation and resentment.

Concerning the anti-British rhetoric, some of the first responses from the Brits is coming, as Vince Cable, the Business Secretary, said concerning the rhetoric that it's "extreme and unhelpful."

With the way of the laid-back British, from an American point of view that is like yelling and saying they need to step back and stop the vicious words coming out of some politicians and media outlets.

Second and most important, is the financial stakes a huge number of British have invested in BP. I'm not talking about institutions here, I'm talking about pension funds that rely on BP heavily to meet their needs.

Concerning the exposure of British retirement funds to BP, close to one in every six British pounds coming from dividends is from BP.

In other words, the pressure on the British leadership and British people is extreme, and the negative attacks is setting up a potential showdown that seems to be at a germination stage, but if it takes off could get very public and ugly if the press and politicians don't quit their outrageous remarks and behavior which is made for the purpose of angering the public and taking attention off of the many failures and outrages associated with the Obama administration and Democrats.

Even some Republicans who should know better have been taking advantage of the situation by talking down to the British in way so appeal to their constituents.

To me this is the side of the story that could explode if the perception or outright pressure is made for BP to bypass the stake the people of Britain have in the company in order to placate outrageous demands which aren't based in any reality but the future unknown.

For example, some Democrats have said BP shouldn't be allowed to distribute their dividend to its shareholders. The reasoning is they have no idea what the costs to BP will ultimately be.

So based on uncertainty, these Democrats want BP to take away all of this from the everyday British citizen and throw it at the Gulf situation.

I see the potential for this to get out of hand if talk and rhetoric isn't reined in by the politicians who are giving the media the fodder they need to continue their extreme attacks on BP.

It's also partly the politician's fault for listening to the news outlets who are trying to create news from their negative attacks rather than report the news as it is.

Either way, there is a potential storm brewing which if the United States isn't careful, could be a terrible diplomat problem built on not understanding the overall picture they're dealing with.


Anonymous said...

Dear Sir, I wanted to congratulate you on your article, it is the most well-rounded one I have come across. I have been watching the coverage of the Gulf of Mexico Oil spill and have been disamyed at the Obama Administration and the coverage in the US media, even on Bloomberg TV and CNBC. Why bother to announce a Presidential investigation into the disaster, and then not wait for its outcome, preferring instead to try BP in the court of public opinion. What of TransOcean and Halliburton? This is not the kind of action or commentary I would have hoped for or expected from Obama, and you are right to highlight that it is hurting Anglo-American relations - because it really is.

Lucretius said...

From information available, it appears that the initial leak was in the order of 12-19,000 barrels per day (estimate of the Flow Rate Technical Group). With severance of the riser the flow is believed to have increased by about one fifth. However, BP claim to be capturing 15,000 barrels per day, so the leak should now be less than 8,000 barrels per day. Thus if the relief wells terminate the spill within 90 days of the accident the total spill will not likely exceed about 1 million barrels, or about 160,000 tons.

That's a lot of oil to clean up, but with thousands of people and boats deployed in the effort it seems reasonable to conclude that Tony Haywood is correct in saying that the long-term ecological impact will be minor.

The question then arises, why has Obama turned the spill into a perceived national disaster and a reason for insulting the people with the responsibility for fixing the leak and cleaning up the mess?

Three possibilities come to mind: Obama is (a) attempting to divert attention from corruption or incompetence in the U.S. government's regulation of the oil industry; (b) working for the shorts and vultures who seek to destroy BP; and (c) aware that the spill is vastly larger than publicly acknowledged and has simply lost his head.