Friday, July 30, 2010

BP (NYSE:BP) Says No to $25 Million Texas Cleanup Grant

If there's anything you learn about government, it's they can go through money faster and less efficiently than any other institution on the earth, so the decision by BP (NYSE:BP) to pay Texas for cleanup costs as they go, rather than through a $25 million grant, has the Lone Star state angry over the decision.

But taking Florida as an example, they went through $25 million in money targeted to marketing (provided by BP) so fast, that it wasn't much later they asked for another $50 million. Nice to set a budget taxpayers don't have to pay for.

The problem with politicians is they don't get the danger associated with the endless printing of money, which the Federal Reserve has been doing during the tough economic times, and so are treating BP as if they have a printing press of their own which they don't have to be accountable for.

BP now understands from their dealings with the governments, both state and federal, that they better be slower to throw their money around, or they'll end up having none.

That's at least part of it. On the other hand, BP has done that to the other Gulf states, but feel that Texas doesn't warrant the actions because of minimal damage so far on their coasts.

BP has promised they will pay for the clean-up cost as Texas has to perform them.

Most, if not all the Texas clean-up, is related to tar balls, which are very low maintenance and easy to handle. There also could be the desire by Texas to use the money as a sort of unemployment fund to get people off of assistance and working again.

It is also being discovered that the damage in the Gulf and the surrounding states isn't going to be near what it originally thought to be based on hype and theory, rather than any semblance of reality, as oil is being hard to find in the Gulf now that the well has been plugged.

So the costs for BP, from that point of view, could end up being much less than projected, as the oil seems to be being eaten by microbes, evaporating, and causing far less damage in the region.

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