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A company more profitable than Apple and Google put together
- Thread starter Axemantitan
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So these people, with more money to spare than almost every company, didn't want to pay a little for better disaster prevention. What greedy douchbags.
Most companies are the same - with just a single-minded focus on the bottom line and nothing else.
That's why I feel they need to be more regulated. Trusting them to do the right thing just doesn't work; it encourages companies to roll the dice with safety issues.
Hi everybody!! I am the angel of reality, here to waken you all up to it.
Don't get me wrong, BP made mistakes and have not been as quick to react as they should have been, but having the US President meltdown and talk smack does you no favours in this situation.
- 40% of BP shareholders are American and have been profiting off BP for decades.
- The oil rig in question was built by an American company, your own ****** workmanship caused this to happen.
- And let's not forget how UCC caused the worst ever industrial disaster in Bhopal, 1984.
Don't get me wrong, BP made mistakes and have not been as quick to react as they should have been, but having the US President meltdown and talk smack does you no favours in this situation.
That's true. But most companies don't risk destroying the Gulf of Mexico when they consider their bottom line profit. These dudes really should have done more to ensure this type of thing didn't happen.
Agreed. Another point you might want to make is that the safety equipment to prevent these leaks was from the US. Maybe it's part of the 2nd point you made but it's probably worth highlighting.
Just a few thoughts....
a) As long as corporations are legally required to maximize shareholder value, then the majority will cut as many expenses as possible. You can be certain that BP had calculated exactly what the probabilities of a blow-out were, and the subsequent costs of cleaning it up. They bet, they lost. I suspect they are also finding out their clean up cost costs assumptions were a little low.
b) People, Americans especially - but not uniquely, base their buying decisions on price. If BP had put in place relief wells on each and every off-shore rig (this could have happened to any one of the many many off-shore rigs) the cost of these relief wells would have meant higher prices. And people would have bought their gas from a cheaper provider who was not drilling relief wells.
c) This is the role of Government. To adequately legislate rules, to inspect for compliance, and if required to compel compliance. Oil companies, any oil company, has no attachment to the well-being of the Gulf - they exist to maximize profits.
I think when all is said and done, when they look at the other off-shore rigs it will be become apparent that it was just a matter of time before one of the several large oil companies was dealing with a disaster. BP merely got unlucky.
The small nugget of good news is that off-shore drilling has been shelved indefinitely in places around the world that were still rig-free. No politician is going to risk their election chances with the Gulf disaster still going on. The Canadian west coast and arctic areas thank you, BP - you've managed in one month what decades of lobbying had been trying to accomplish.
a) As long as corporations are legally required to maximize shareholder value, then the majority will cut as many expenses as possible. You can be certain that BP had calculated exactly what the probabilities of a blow-out were, and the subsequent costs of cleaning it up. They bet, they lost. I suspect they are also finding out their clean up cost costs assumptions were a little low.
b) People, Americans especially - but not uniquely, base their buying decisions on price. If BP had put in place relief wells on each and every off-shore rig (this could have happened to any one of the many many off-shore rigs) the cost of these relief wells would have meant higher prices. And people would have bought their gas from a cheaper provider who was not drilling relief wells.
c) This is the role of Government. To adequately legislate rules, to inspect for compliance, and if required to compel compliance. Oil companies, any oil company, has no attachment to the well-being of the Gulf - they exist to maximize profits.
I think when all is said and done, when they look at the other off-shore rigs it will be become apparent that it was just a matter of time before one of the several large oil companies was dealing with a disaster. BP merely got unlucky.
The small nugget of good news is that off-shore drilling has been shelved indefinitely in places around the world that were still rig-free. No politician is going to risk their election chances with the Gulf disaster still going on. The Canadian west coast and arctic areas thank you, BP - you've managed in one month what decades of lobbying had been trying to accomplish.
Of course, the risks are far higher in the oil industry than in most others. Which is why I think that industry should be more closely monitored.
IMO, regulation is better for preventing tragedies; litigation for pointing the finger of blame afterwards.
I would much prefer to see BP's CEO Hayward fielding questions from petrochemical, or environmental engineers. I can't see anything constructive being achieved by congressmen & senators poking him with a stick on live TV.
The time for the congressmen to act isn't now, pointing the finger of blame. The time for them to act was months/years ago, in setting safety regulations for the oil companies to follow.
My guess is BP just took the same shortcuts that other oil companies do; the difference is they got lucky, BP didn't.
Chevron Drilling Oil Well in 8,530 Feet of Water, Says it Doesn't Need Relief Well
Now there will be an even deeper well off the Canadian East Coast.
Sorry, but corporations and corporate officers are not legally required to maximize shareholder value, however, they are required to act in the best interest of the corporation. They aren't the same and its precisely why some public companies have been able to engage in green initiatives though those green initiatives may cost the company slightly more. Many suggests that corporations should and usually do focus on maximizing shareholder value, however, corporations are absolutely not obliged to break the law, ignore regulations, or engage in risky behavior in order to accomplish that goal.
Regardless, maximizing shareholder value doesn't mean taking unnecessary risks that save a few million as BP's decision did. In fact, BP's shareholder value would have been enhanced significantly had they spent the $7 million or whatever to take the extra precautions instead of having a catastrophic failure of the well. Taking shortcuts and ignoring regulations are all contrary to maximizing shareholder value anyways.
President Obama's response and cheap populism is so unprofessional and causes more damage to American taxpayers than it is obvious now.
A strong BP can handle the situation better and can pay out more dividends to US pension funds, letting alone paying all sorts of taxes to Federal and non-Federal budgets.
This is an absolute low-point for Obama and bullying at a monumental level.
A strong BP can handle the situation better and can pay out more dividends to US pension funds, letting alone paying all sorts of taxes to Federal and non-Federal budgets.
This is an absolute low-point for Obama and bullying at a monumental level.
Actually they were partying with the regulators.
They pretty bribed the regulators to look the other way so they don't have to be inspected / follow existing safety regulations.
Now, some of you who brought Obama into this thread, that discussion is better for the PRSI thread, not the open thread.
They pretty bribed the regulators to look the other way so they don't have to be inspected / follow existing safety regulations.
Now, some of you who brought Obama into this thread, that discussion is better for the PRSI thread, not the open thread.
Long Post - read with beverage in hand, eh?
Quote:
Originally Posted by snberk103
a) As long as corporations are legally required to maximize shareholder value, then the majority will cut as many expenses as possible. You can be certain that BP had calculated exactly what the probabilities of a blow-out were, and the subsequent costs of cleaning it up. They bet, they lost. I suspect they are also finding out their clean up cost costs assumptions were a little low.
First of all, let me state that personally I believe that corporations should spend more time and money being responsible to the communities they exist in, and to the globe in general. However, I also recognize that corporations also need to pay attention to the legal frameworks they work in, and to their shareholders. Every couple of weeks or so there is a story in the business news of investors suing a Board of Directors because they feel that their "shareholder value" is not what it should be, based on decisions by the BofD. Admittedly, most lawsuits are unsuccessful, but the BobDs are always needing to think about shareholder value.
Shareholder value should not be maximized by cutting corners, and breaking rules. But we don't know that BP was cutting corners and not breaking rules. We know that they have been accused of shoddy practices, but in the light of the gulf disaster it is easy to believe the worst of BP. It has yet been proven in a court of law (where witnesses and evidence can be cross-examined) that they were not following the existing rules.
So, for argument's sake, lets say that BP was following the existing rules. Then the debate becomes, should they have done more? And if they should have done more, how much more? How much extra precautions would have been enough? Should the risk have been decreased by 10%, 25%, 70%, 95%? Because they can never ever guarantee 100% that an accident wouldn't have happened. And remember, whatever measures they might have taken on the Deep Water Horizon would need to be taken on every other off-shore rig. (I found a reference on a CBS site that there are 3500 offshore rigs in US Coastal waters, 79 being deepwater. These are in total, and not necessarily BP rigs. There will be many many more in non-US waters that would impact the US coast should an accident happen.)
If BP starts spending more than they have to on safety measures, those costs are either passed on to consumers, who will likely choose to buy their gas elsewhere - not caring about who spends what on safety measures. Or BP can choose to cut back on exploring for and bringing to market new oil fields (but in a business that deals in a finite resource, not bringing new fields to market is guaranteed to marginalize BP in the long term). Or they can choose to not pay dividends to shareholders. Which risks being sued by pensioners and pension funds because BP is spending more than they have to (and more than their competitors) to lessen the hypothetical risk (because if the extra safety measures might have prevented the blow-out).
To eliminate all risks of an uncontrolled blow-out in the coastal waters remove all off-shore rigs. Any off-shore drilling entails some risk of an uncontrolled spill, even if it was a very small chance. But then again, the chances of the Deep Water Horizon blowing up were very small too.
And finally, while there is one school of thought that corporations need to be more socially responsible, it is not the only way of thinking. The quote below is responding to the pure-market driven philosophy of companies, and shows that there is still a wide spectrum of what is considered acceptable by different people.
"In a purely market-based view, companies are created simply to provide maximum return for shareholders. But this approach, advocated by economist Milton Friedman and others, has been made obsolete by new business/geopolitical complexities and government policies that encourage companies to take a role in social action, according to Wharton legal studies professor Thomas Dunfee" (Wharton Universia)
Quote:
Originally Posted by snberk103
a) As long as corporations are legally required to maximize shareholder value, then the majority will cut as many expenses as possible. You can be certain that BP had calculated exactly what the probabilities of a blow-out were, and the subsequent costs of cleaning it up. They bet, they lost. I suspect they are also finding out their clean up cost costs assumptions were a little low.
First of all, let me state that personally I believe that corporations should spend more time and money being responsible to the communities they exist in, and to the globe in general. However, I also recognize that corporations also need to pay attention to the legal frameworks they work in, and to their shareholders. Every couple of weeks or so there is a story in the business news of investors suing a Board of Directors because they feel that their "shareholder value" is not what it should be, based on decisions by the BofD. Admittedly, most lawsuits are unsuccessful, but the BobDs are always needing to think about shareholder value.
Shareholder value should not be maximized by cutting corners, and breaking rules. But we don't know that BP was cutting corners and not breaking rules. We know that they have been accused of shoddy practices, but in the light of the gulf disaster it is easy to believe the worst of BP. It has yet been proven in a court of law (where witnesses and evidence can be cross-examined) that they were not following the existing rules.
So, for argument's sake, lets say that BP was following the existing rules. Then the debate becomes, should they have done more? And if they should have done more, how much more? How much extra precautions would have been enough? Should the risk have been decreased by 10%, 25%, 70%, 95%? Because they can never ever guarantee 100% that an accident wouldn't have happened. And remember, whatever measures they might have taken on the Deep Water Horizon would need to be taken on every other off-shore rig. (I found a reference on a CBS site that there are 3500 offshore rigs in US Coastal waters, 79 being deepwater. These are in total, and not necessarily BP rigs. There will be many many more in non-US waters that would impact the US coast should an accident happen.)
If BP starts spending more than they have to on safety measures, those costs are either passed on to consumers, who will likely choose to buy their gas elsewhere - not caring about who spends what on safety measures. Or BP can choose to cut back on exploring for and bringing to market new oil fields (but in a business that deals in a finite resource, not bringing new fields to market is guaranteed to marginalize BP in the long term). Or they can choose to not pay dividends to shareholders. Which risks being sued by pensioners and pension funds because BP is spending more than they have to (and more than their competitors) to lessen the hypothetical risk (because if the extra safety measures might have prevented the blow-out).
To eliminate all risks of an uncontrolled blow-out in the coastal waters remove all off-shore rigs. Any off-shore drilling entails some risk of an uncontrolled spill, even if it was a very small chance. But then again, the chances of the Deep Water Horizon blowing up were very small too.
And finally, while there is one school of thought that corporations need to be more socially responsible, it is not the only way of thinking. The quote below is responding to the pure-market driven philosophy of companies, and shows that there is still a wide spectrum of what is considered acceptable by different people.
"In a purely market-based view, companies are created simply to provide maximum return for shareholders. But this approach, advocated by economist Milton Friedman and others, has been made obsolete by new business/geopolitical complexities and government policies that encourage companies to take a role in social action, according to Wharton legal studies professor Thomas Dunfee" (Wharton Universia)
Partying with regulators is not breaking the rules?
They got their friends to bypass their required safety check. That's not breaking the rules?
They got their friends to bypass their required safety check. That's not breaking the rules?
I'd be inclined to agree with you. The view of Obama, outside the US, is becoming increasingly negative with regards to his treatment of BP over this situation. His reference to the company as "British Petroleum" was a particular own goal.
It's certainly true that a strong BP can better handle the crisis. I'd imagine it's a governmental fear that a stronger BP would only strengthen the view of many Americans - not all, before some jump on me! - that the present administration has handled this in a "weak" manner.
Your getting a little hyper defensive. The only semi-valid point you could have made was number two, but then, even that was a half truth. Haliburton may have built the well/rig but they told BP the risks and BP chose the cheap path. Not that the blame game means much now, but lets at least get the facts straight.
http://online.wsj.com/article/SB10001424052748704026204575266560930780190.html
one exerpt in case you dont want to follow the link;
"Halliburton, the cementing contractor, advised BP to install numerous devices to make sure the pipe was centered in the well before pumping cement, according to Halliburton documents, provided to congressional investigators and seen by the Journal. Otherwise, the cement might develop small channels that gas could squeeze through.
"In an April 18 report to BP, Halliburton warned that if BP didn't use more centering devices, the well would likely have "a SEVERE gas flow problem." Still, BP decided to install fewer of the devices than Halliburton recommended—six instead of 21."