The libertarian's guide to externality costing. What do we do about the oil spill?

So I don't think I'm saying anything controversial by saying that the US Chamber of Commerce (CoC) owns the Republican (probably at least as much influence as unions on Democrats) party. So of course, the ultra free marketeers CoC are whining about fairness and want government money for BP.
US Chamber of Commerce CEO Tom Donohue who said he opposes efforts to stick BP, a member of the Chamber, with the bill. "It is generally not the practice of this country to change the laws after the game," he said. "Everybody is going to contribute to this clean up. We are all going to have to do it. We are going to have to get the money from the government and from the companies and we will figure out a way to do that."
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If that ain't corporatism, I don't know what is folks. But thank god nobody's taking him seriously. Which makes this quote after a meeting with the CoC sort of suspect?
"I think the people responsible in the oil spill--BP and the federal government--should take full responsibility for what's happening there," Boehner said at his weekly press conference this morning.
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Your GOP Senate Minority Leader, currently the highest ranking Republican in American politics. Let's get these guys back in power pronto!
 
Senators Menendez, Nelson & Lautenberg introduced legislation on May 13 to lift the cap on economic damages from $75M to $10B. At the urging of Senator Reid, they've since modified that to remove the cap altogether.

They've asked unanimous consent to pass that bill at least four times, and each time the Republicans have blocked it (May 13, 18 & 25, then again on June 8). Murkowski and Inhofe have objected. Senators Vitter and Sessions have introduced legislation that would raise the cap on damages to four times the last quarter's profits or $150M, whichever is greater. So, in this case, $20B (assuming BP's 1Q10 profits were $5B). Dems aren't biting. Vitter also tried to lock in a solution specific to this spill, again without Democratic support. I think you'll soon see a strong and unified Democratic message on this issue, and on the need to pay claims quickly.
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Keep suckling at the teat, Republicans.
 
Let's pretend Big O bends over for BP. What next?

Vote the Republicans back in, vote more Democrats in, threw votes away on third parties or something else?
 
[quote name='thrustbucket']Wow that's tragic. Someone should do something. Oh wait....[/QUOTE]

The only thing that could be done would impose some sort of embargo against "blood oil", but oil is far more fungible than diamonds.
 
[quote name='thrustbucket']Wow that's tragic. Someone should do something. Oh wait....[/QUOTE]
No worries man. The market will sort it out.
 
[quote name='speedracer']No worries man. The market will sort it out.[/QUOTE]

Sadly it has to in situations like these. There is no governing body, no matter how much dictatorial power it has, to fix problems like this. If an asteroid slammed into a country, the reaction would be similar; no government is prepared to handle it.

We've grown government faster and bigger in the last 5 years than all my life time combined and they still have nothing they can to do with this crisis but scratch their heads, send lawyers, and talk tough. Maybe it's ok to just admit that there are some crisis that government, nor anything or anyone, is well equipped to handle?

Unless, you propose, that if we just grow government more, maybe make a global government with teeth, they could fix problems like this? Only time will tell - I think we'll live to find out.
 
[quote name='Strell']Did you seriously just compare asteroids to the oil industry? We're not all part of a giant Michael Bay film.[/QUOTE]

Yes, he did.

It would be nice if we were part of a MB film. I could understand the incoherence of most societies.
 
http://www.wwltv.com/news/gulf-oil-...Quality-Along-Coastal-Louisiana-94202149.html
Take Hydrogen Sulfide, commonly known as swamp gas: a normal level in the air for it ranges from 5 to 10 parts per billion (ppb). At monitoring station in Venice, on May 2, the levels recorded were 30 ppb. The next day, May 3, the reading was nearly 40 times that, at 1,192 ppb. The day after that, May 4, it dropped down to 46 ppb, before rising on May 5 to 1,010 ppb.
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http://www.fox11online.com/dpps/gre...s-complaining-of-flulike-symptoms-jgr_3396834

Long-term, low-level exposure may result in fatigue, loss of appetite, headaches, irritability, poor memory, and dizziness. Chronic exposure to low level H2S (around 2 ppm) has been implicated in increased miscarriage and reproductive health issues among Russian and Finnish wood pulp workers,[11] but the reports have not (as of circa 1995) been replicated.

  • 0.00047 ppm is the recognition threshold, the concentration at which 50% of humans can detect the characteristic odor of hydrogen sulfide,[12] normally described as resembling "a rotten egg".
  • Less than 10 ppm has an exposure limit of 8 hours per day.
  • 10–20 ppm is the borderline concentration for eye irritation.
  • 50–100 ppm leads to eye damage.
  • At 100–150 ppm the olfactory nerve is paralyzed after a few inhalations, and the sense of smell disappears, often together with awareness of danger.[13][14]
  • 320–530 ppm leads to pulmonary edema with the possibility of death.
  • 530–1000 ppm causes strong stimulation of the central nervous system and rapid breathing, leading to loss of breathing.
  • 800 ppm is the lethal concentration for 50% of humans for 5 minutes exposure (LC50).
  • Concentrations over 1000 ppm cause immediate collapse with loss of breathing, even after inhalation of a single breath.
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http://en.wikipedia.org/wiki/Hydrogen_sulfide#Toxicity
 
[quote name='Strell']Did you seriously just compare asteroids to the oil industry? We're not all part of a giant Michael Bay film.[/QUOTE]

My dad has astroids, cant sit on the toilet some days..
 
Good thing BP didn't cut corners, could have made this a lot worse.

http://news.yahoo.com/s/ap/us_gulf_oil_spill

In the design of the well, the company apparently chose a riskier option among two possibilities to provide a barrier to the flow of gas in space surrounding steel tubes in the well, documents and internal e-mails show. The decision saved BP $7 million to $10 million; the original cost estimate for the well was about $96 million.
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Oh wait, they did.
 
I feel as if the Obama administration is doing as close to nothing about the oil spill as it possibly could. Lets not even mention the beginning of the incident because absolutely nothing was done then. But in the past few days all they have done is requested that “a faster plan” be devised to siphon the oil. I understand that this is obviously a big issue and would take a lot of technology and work to be fixed but nothing can be done unless the Obama Administration actually required BP and tightened their leash. Big business and government are getting way to cozy with each other.

http://www.nytimes.com/2010/06/14/us/14spill.html?pagewanted=1&ref=gulf_of_mexico_2010
 
I'm getting a little annoyed at people comparing this to the handling of Katrina. It is actually the responsibility of FEMA and the corp of engineers to handle emergencies and their prevention. FEMA dropped the ball on handling the aftermath and the army didn't adequately build protection for the area.

However, the government is not equipped to handle an oil spill, and never has been that i'm aware of. No one could have handled this much better, we're basically at the mercy of BP because if we don't work with them, nothing will get done. The only other option I suppose would be to hire private companies to handle it or ask a foreign government for help, and although I wouldn't be against asking for help, the U.S. never seems to like asking a foreign government for assistance. Wasn't it the Dutch who already offered help only to be rejected?
 
[quote name='speedracer']Remember the good old days of 20,000 barrels a day? Revised to 35-60,000 barrels.[/QUOTE]

Reminds me of when gas prices first started shooting up and people got happy when it was sub three dollars. "2.49? Gosh, I can eat this month!"
 
Its unfair to blame Obama for an oil company accident, similar to blaming Bush for everything in terms of Katrina; this creates a culture where government is responsible for everything. - Ron Paul

When Ron Paul is coming out to defend the government, you know shit's out of hand.
 
Not responsible for everything, just everything that goes wrong. If something works out then the credit should go to private business.
 
In the last week of May, the MMS and the Coast Guard got together in Louisiana for a technical review to understand what the hell happened. Testimony quoted below is from Mark Hafle, the BP's senior drilling engineer on Deepwater and John McCarroll of the MMS.
"Don't you think for that size casing, you set up your Halliburton cementer for failure, especially when you had a loss return zone (where drilling mud was seeping into the earth) below the hole?" McCarroll asked.

"I believe it's a sound engineering practice," said Hafle, who bristled at some of the questions about the well design and the choice of a new, foamy nitrogen-infused cement.

"Personally, I would not want to try to attempt that," McCarroll responded.

The exchange grew testier before McCarroll backed off.
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Mark Hafle testified in Kenner that he and his team believed they had worked in concert with a contractor to come up with the safest possible design for encasing the well with cement and steel tubing so that "all the concerns had been addressed."

"No one believed there was going to be a safety issue on that cement job," he said. "All of the risk had been addressed. All the concerns had been addressed. We had a model that suggested that if executed properly, we would be able to get a good cement job on this string of pipe."
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From today. Surprise!
But now, e-mail messages released by congressional investigators paint a different picture of Hafle's confidence in the troubled well.

They show Hafle expressed concerns in the week before the April 20 disaster on the Deepwater Horizon oil rig, calling the Macondo well 5,000 feet below that rig "a crazy well."
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A computer model Gagliano ran on April 15 showed the BP plan would cause problems with the cement while the Halliburton suggestion would have reduced the chances of gas escaping.
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Hafle also testified May 28 that his bosses at BP never had any plans to run a test of the well cement's strength and integrity called a cement bond log. A lawyer for rig owner Transocean confronted Hafle by saying that The Times-Picayune had reported May 19 that a team from Schlumberger was on the rig ready to do the cement bond log until BP sent them home about 11 hours before the accident. Hafle reseponded by saying, "I believe that's inaccurate."

But again, Hafle was contradicted by the records released by congressional investigators. Records from the cement bond log contractor, Schlumberger, backed up the original Times-Picayune account.

When asked by MMS investigators whether there was an economic reason for how BP chose to set up the pipes that line the well hole, Hafle said: "I don't run the economics."

But the internal e-mails released this week show Hafle should have known that the company was considering economics in its design decisions. Morel sent Hafle a message on March 30 explaining BP's final design decision "saves a good deal of time/money."
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It looks like Schlumberger, Transocean, and Halliburton have the goods and it possibly was entirely BP's fault. This is huge for both their liability as well as BP's.

BP is in deep shit. It looks like everyone for real reals figured it out when Senior Engineer Dumbass from BP got to talking.

oil-company-cds.jpg
 
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[quote name='Strell']Did you seriously just compare asteroids to the oil industry? We're not all part of a giant Michael Bay film.[/QUOTE]

worst_case_scenario.png


Obvious.
 
If a baker in Chicago has an oven mishap which leads to a fire (a natural resource). A fire that manages to ignite the city in flames, where exactly does the baker's liability to the city end and a natural disaster begin?

Or do we hold the baker responsible for all damages 100%?

Or do we use Social Justice to say "hey, he's just a poor baker trying to make a living, it was an accident, cut him some slack?"
 
[quote name='thrustbucket']If a baker in Chicago has an oven mishap which leads to a fire (a natural resource). A fire that manages to ignite the city in flames, where exactly does the baker's liability to the city end and a natural disaster begin?

Or do we hold the baker responsible for all damages 100%?

Or do we use Social Justice to say "hey, he's just a poor baker trying to make a living, it was an accident, cut him some slack?"[/QUOTE]

We'll start with removing all of the baker's assets.

Then, we'll see how one oven caused 50 square miles to burn.
 
[quote name='thrustbucket']If a baker in Chicago stores enough gasoline to burn a 4 state wide area, intentionally avoids safety features and testing to save money, disregards the warnings of three different contracting companies, tells the governing body that it has a plan in case of catastrophic failure, and then has an oven mishap (whose occurrence is a direct result of disregarding said warnings, safety features, etc.) which leads to a fire (a natural resource). A fire that manages to ignite the city and neighboring 4 states in flames, where exactly does the baker's liability to the city end and a natural disaster begin?

Or do we hold the baker responsible for all damages 100%?

Or do we use Social Justice to say "hey, he's just a poor baker trying to make a living, it was an accident, cut him some slack?"[/QUOTE]
Fixed that for you.

An interesting question though. If only there was a way for our economic system to price in externalities, or "externality costing". I wonder if anyone has asked the question of how free market capitalism handles these so called "externality costs" or whether we just all pretend they don't exist and then socialize the costs when they do happen.
 
I was reading on the conspiracy sites that they'll never plug the well because there is a leak 1000 feet deep and that is why the top kill failed. I can't find the link, but, let's be honest, somebody crazy probably wrote it anyways.
 
[quote name='IRHari']Obama is certainly not carrying BP's water (& oil) for them, despite receiving campaign contributions from them.[/QUOTE]
Don't bother. If he had something worth saying, he would have said it.

Keep fucking that chicken, Joe.
 
[quote name='IRHari']Obama is certainly not carrying BP's water (& oil) for them, despite receiving campaign contributions from them.[/QUOTE]

What - you mean it's possible for a politician to act independently of the money they've had donated to them?

Weird.

Because that might mean Barton is just really disappointed with the way BP is being treated.

Woah.
 
I'm not saying correlation implies causation but I'm looking at it like this:

Obama receives BP $----->bashes BP

Barton receives BP $----->defends BP

Coincidence? I guess you've made your position clear on this. Sounds like naivety to me.
 
Nah, cause then I'd also have to argue that Obama is carrying BP's water (b/c of the campaign contributions) but that would be absolute bullshit. Because Obama is not carrying BP's water.
 
[quote name='IRHari']Nah, cause then I'd also have to argue that Obama is carrying BP's water (b/c of the campaign contributions) but that would be absolute bullshit. Because Obama is not carrying BP's water.[/QUOTE]

Then what does BP's contributions to Barton have to do with anything?
 
[quote name='IRHari']Nah, cause then I'd also have to argue that Obama is carrying BP's water (b/c of the campaign contributions) but that would be absolute bullshit. Because Obama is not carrying BP's water.[/QUOTE]

Somehow he got 20 billion dollars out of them without even a lawsuit, it is not enough but it is still a big deal.
 
I gather Barton figures that by being BP's knight in oil colored armor he might get some extra allowance next time.
 
[quote name='Clak']I gather Barton figures that by being BP's knight in oil colored armor he might get some extra allowance next time.[/QUOTE]

Any extra money they might donate would be offset by voter reaction. Not that I wouldn't put such a stupid political move beyond any politician...
 
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