Monday, August 23, 2010

BP (NYSE:BP), Government Relationship Too Cozy?

Now that people have time to sit back and digest the overall scenario surrounding the BP (NYSE:BP), some are raising questions as to whether or not the relationship between BP and the U.S. government was too cozy.

Others feel like the government should have been much tougher on them, but I don't see how that could have constructively helped in any way.

The time for toughness is later when things are settled down and the disaster under control. To attack and bully when people are attempting to take care of the issue makes no sense whatsoever.

Who was going to stop the flow of oil other than BP, and who could afford to do that other than a very small number of companies in the world.

The idea of the government using taxpayer dollars when taxpayers are already outraged over out-of-control government spending wasn't an option.

As far as communication, how could that happen unless they were close enough to communicate immediately concerning conditions as they unfolded?

If BP, and possibly others, are to pay for the mess, the only way they can do it is if they survive. Insurance money wouldn't cover it, and if they were pushed too hard they could go the bankruptcy route, and everyone would have lost.

This is simply one of those times where the accident demanded the circumstances to be what they were, and the closeness between the U.S. government and BP a necessity.

Even now when people are question the $20 billion escrow fund to pay claimants, questions are being raised as to the parameters included with it. But BP doesn't have a central bank like the government, where they can print money and have generations of the future hopefully be able to pay for it.

There are limits, and those limits demand parameters. There's no way of getting around that; at least if we want BP to be able to pay as much as possible and take care of those directly related to the incident.

3 comments:

Anonymous said...

20 BILLION is being cozy? I would hate to see what your definition of being tough is.

jonathan said...

What about the time Esso caused ten times this amount of damage off the cost of Nigeria and no body did anything??

Anonymous said...

As they stated in the column, BP needs to continue in business as if they are/were forced to go bankrupt, then everyone would loose. It's in the best interest to keep BP alive and healthy.