The Man Cave is Alive Again! Not So Sure About BP.

2 Jun

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It’s shameful how I’ve treated the Man Cave lately. More than two weeks have passed since my last post. Two weeks! And for that I am sorry guys. But I do have some good excuses, so please forgive me.

During my absence a barrage of activities have been going on in my life. My family vacationed to Collville, WA (Farthest-Town-From-A-Major-U.S.-Airport Capital of the World!), I began production of my film, and (I’ll admit) participated in some notorious Summer non-productivity.  But, as good as that all sounds, I’ll have to fill you in later. I came to WRITE! — Write some meaningful Man Cave stuff!

The specific issue I wanted to discuss was The British Petroleum (BP) Deepwater Horizon Oil Spill.

First, I want to emphasize the severity of this matter. Domestically, concerns have permeated into various market sectors. The restaurant, shipping, tourism and energy industries have all negatively responded to the now “Largest Oil Disaster In History” Gulf Coast spill. Oil residue was discovered at beach resorts across the Gulf rim, and was sadly televised washing into Florida’s tender marshlands. Shipping liners are having to circumvent expansive oil slicks, critically slowing down shipment time of essential products into the US. Restaurants have worries about the quality of  their ingredients as the fishing industry has now come under scrutiny. But the most heavily hit sector, bar none, is energy. And that is what I would like to talk about today.

Last week, President Obama called for an immediate moratorium to be placed on all offshore drilling operations in the Gulf of Mexico. Because of his announcement, companies with large exposure in the offshore drilling space (most notably Anadarko Petroleum and Transocean) began to experience significant market pressure. These company’s operations have come  close to a complete halt because of Obama’s initiative — drastically limiting their potential profits for 2010.  Investor response to this news sent some stock’s prices reeling. Understandably, instigator British Petroleum was one of the largest sliders, pulling back 38% in the 44 days since the spill’s discovery.

The President’s ambitious strategy was not the only event pressing oil equities lower. Failure by BP to adequately respond to the vast leakage and pollution seeping into the Gulf of Mexico also has governments, environmental agencies, and traders concerned. Over the weekend, British Petroleum was unsuccessful in the first counter-measure procedure, the  “topkill” approach. This method involved pumping a thick, mud-like, substance into the spill’s crevice. Earlier today, news broke that the second contingency plan, the “cap containment system,” has also failed. This was an attempt by BP to saw off the split portion of the petroleum pipe, create a level and hollow opening, then hopefully lower a cap over the opening to seal the system. Unfortunately, the saw-blade severed before it completely finished cutting through the metal petroleum pipe. The recurrence of failure has left engineers scratching their heads for a quick and effective solution. Interestingly, I saw that THE James Cameron was consulted to provide ideas for spill containment. Cameron was contacted because of his underwater filming/remote vehicle expertise, which he developed during the production of his film Titanic. Engineers believe his unique knowledge of the underwater environment could arise better methods of  counteracting the spill. I wouldn’t doubt it, after watching Avatar, I feel like this guy can do anything!

My real disappointment is the fact British Petroleum had no clear contingency plan prepared for an issue of this proportion. It is simply unacceptable for an established, blue-chip, petroleum giant like BP to not foresee and have a solution prepared for an underwater drilling accident. Strong companies have safety-nets (contingency plans) in place for almost every potential liability. It’s hard being completely prepared for any disaster of this magnitude, but, I feel in this specific circumstance, BP is at fault. They are in the deep-sea drilling business, its not the craziest idea that an underwater oil rupture might happen!

Owners of BP’s stock, I wish I could provide you with an optimistic outlook, but I don’t think the near-future looks too bright for BP’s shares. I think any proposed solution will be hard to implement at the extreme pressure and depth occurring at the spill’s opening (roughly 5,000 feet below the ocean surface). A guest on CNBC today claimed that oil might continue to pour out of the broken system until December! DECEMBER! Think about the quantity of pollution, waste, and lost revenue if another 6 months were to pass without mitigation! Scary.

Analysts speculate BP may lose upwards of $20 Billion trying to end the melee in the Gulf.

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One Response to “The Man Cave is Alive Again! Not So Sure About BP.”

  1. basement bar ideas May 23, 2013 at 10:56 PM #

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