The High Cost Of Being Cheap

Edition #132 — Saturday, June 26

It's good that I'm late with my newsletter because I was inspired by a news story that I read today. What it revealed is a great and painful irony about BP's gigantic oil spill in the Gulf Of Mexico. The story states that over the weekend, BP's cleanup costs for the Gulf Oil disaster had risen to $100 million per day. Yes, that's right - PER DAY!

The irony? Well, that comes from the fact that this spill was largely caused by BP's urgency in returning the Deep Water Horizon rig to its owner, Transocean. The cost of renting the rig was $500,000 per day and they were already 32 days overdue, which translates to $16 million dollars over budget. And then there were the workers and testing, etc. From my reading of what is known, BP's fear of losing time and money inspired the careless choices that led to the disaster we now have before us. It was no accident for the risks were obvious.

So for anyone considering cutting similar corners in their life, consider the following lesson:

a) $500,000/day versus
b) $100,000,000/day, and no "end of days" in sight.

Which would you choose? BP obviously chose the second option and failed the test.

Yet I have faith. I believe that the Gulf of Mexico will heal itself, whether we are alive to see it or not. What is likely the biggest man-made environmental catastrophe ever (but for BP and US humility) will bring about much needed changes in dealing with corporate polluters and the role of government in ensuring better protection for the environment and not just for polluters. Transocean, by the way, is a Texas company now registered in Switzerland. Is it a) the mountain air? or b) the banking system? I choose the second option as well.

Kevin Costner's Ocean Therapy Solutions

There is also the emerging story of Kevin Costner and his Ocean Therapy Solutions. 32 of his machines have now been ordered by BP and will assist in the lengthy clean up of the Gulf. Here again is an irony, for Kevin is an actor and a musician, and yet it was his foresight and dedication that introduced the oil industry professionals to a new form of technology that none of them seemed to have had any use for creating themselves. Like Kevin said, they were acting like the days of oil spills were over. Not so.

Coincidentally, I had already been tracking oil spills earlier this year. Two months before BP's Gulf spill there was the massive 158,500 gallons of petrol and oil spilled into Italy's River Lambro which killed hundreds of birds. Kevin's machine should have been there to clean it up. After all, he was offering his technology to oil companies in the late 1990's already. But they ignored him and pretended they could handle it. Another spill occurred in April of this year when a Chinese-registered coal ship ran aground in a restricted area of the Great Barrier Reef. That ship also didn't have Kevin's Ocean Therapy machines onboard, only 950 tons of oil. Meanwhile, planes dumped dangerous chemical dispersants into the pristine waters below, the ones that were supposedly being protected...

The legacy of our handling of oil is pathetic, but hopefully this epic catastrophe will help to change all of that. After all, if it doesn't, then what more will it take?

Oil See You Later,
Roland Kriewaldt




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