Saturday, June 12, 2010

BP Royalties, Fine reductions and US responsibility to other countries

I have not addressed the BP spill thus far, but, I was having an interesting discussion with hubby on why BP and the government could have been lowballing the estimated barrels per day leaking out of the massive spill.

Two possible reasons for this.
Royalty reduction and Fine reduction

Came by this information via another blogger, who hijacked our country, and it is pretty good stuff!

West Virginia Democrat Nick Rahall, in a letter to Holder this week, asked that the Justice department take “legal action to recover damages owed to the United States for lost royalties.

The issue of royalties has largely been left aside in the flurry of congressional action since the spill. When a company drills in U.S. waters, it signs a lease with the government and pays royalties for the oil it draws from the ground. Rahall says that the government’s lease with BP stipulates an 18.75% royalty.
An 18.75% percent royalty. On the oil it draws from the ground.
Not how much BP actually keeps and or sells. The royalty is on the quantity extracted from the ground

The challenge will be to figure out precisely how much oil has spilled, and thereby how much money the government lost as a result of the spill.

“Although there is no precise figure for the amount of oil and gas flowing from the well, recent government estimates indicate that at least 500,000 barrels of oil and hundreds of millions of cubic feet of natural gas have been lost"

Therefore if BP and the government low ball the figure leaked, BP with the help of the government can avoid paying how much money????
How much in royalties, that quite frankly the US is going to be in desperate need of.

Let's get to fine reduction

According to the linked article their is a fine under the Clean Water act of $4,300 a barrel .
Again, the reason for lowballing estimates of leakage is obvious.
5,000 barrels? 10,000 barrels? 12,000 barrels?
Look at the difference in fines on a daily basis?
$21,500,000.00 daily or $43,000,000.00 daily or $51,600,000 daily

BP has had a vested interest all along in misleading how much oil they were taking, to avoid paying royalties.

Taking this all a bit further to some additional information-
Once this oil contaminates other shores...will there be lawsuits against the US government along with BP?
Is it possible that US could be sued based on the fact they did not enforce the necessary standards surrounding the oil extraction? Safety standards for example?

How lax was the scandal-ridden Minerals Management Service's oversight of offshore drilling?

I am of the mind, that the US better get all they can from BP in the way of royalties and fines, they will need every penny.

4 comments:

  1. Fines? Lawsuits? It really doesn't matter one wit. The worst environmental disaster of humankind has happened. It is still happening. Accountability for such a thing cannot be attained. Period. It certainly cannot be measured in dollars and cents. A small gesture towards a token of accountability would be to see a rope around the necks of every oil lobbyist, every oil company exec, every politician who voted in favor of drilling in the Gulf of Mexico. I'm sorry for being so morbid, Penny. My anger is all-consuming these days what with Israel's recent murderous behavior in international waters..

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  2. Partially I agree, but try as I might somehow I just don't think that a rope would be sufficient, after-all dead is just that Dead, be it death from a rope,gun or a needle. It's just not enough. No the punishment for these and other crimes against life itself must be truly horrendous and for some reason I just can't seem to come up with anything that would be
    suitable.

    Perhaps the Romans had the right idea, when dealing with Criminals and Jews,(pardon me for repeating
    myself) Yuh know the hungry Lions and Tiger thing in the coliseum. Just think of the spectacle, the roar of the crowd as these vermin would be forced to battle wild beasts and Each Other unto death just to gain one more day of life for themselves and for their families. Yes I think that it should be a family thing.

    My goodness just think of the Blood, the Gore the thumbs down. Yes I think that would do the trick, and it could even replace American Idol, Monday night
    football , baseball, and even the World Cup yes I think that would do it and it would be an event that the whole family could enjoy, sitting in front of the television , father and son making friendly wagers as to which Jew/criminal would be the first to fall, gutted like a fish, or eaten like the shithouse rats that they are by BIG CATS.

    Heavens it just makes me feel all Warm and Fuzzy just thinking about it.
    Anyone for some Hot dogs, popcorn, peanuts and a nice cold beer?.

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  3. Brian, while I agree totally no dollar amounts will ever suffice, ever.

    Companies like BP need to be hit hard, where it hurts, and that is in the pocketbook.

    They live by the almighty dollar, let their love of it be the boulder that crushes them.

    I have home confiscation in mind, stock options, pensions all of it.
    Same for the politicians, pay gone, pension gone, homes gone.

    But, I hate like hell to see taxpayers bail another multinational scum corporation!

    They have already bailed the banks, and that was ridiculous

    They can live in the conditions they have forced the vast majority of people on this planet to live.
    From hand to mouth, so they can worship at the alter of their god, greed and the dollar.

    No apologies for being morbid necessary.

    I would additionally like to see them floating about in the oil filled waters for a while, tethered together, getting that filth all over their skin.....

    I guess then it would be time for a burn?

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  4. Silverfish, gruesome.

    People would probably eat it up.

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