Washblog

So before we go any farther I figured I'd let you know that we did get that letter from John Napier over the weekend, and to tell you the truth, we're not really sure John understands exactly what's going on over here.

Now it turns out that it was some company called BP that's been out there in the Gulf of Mexico operating the oil rig that blew up, killing eleven people and leading to that uncontrollable geyser of oil that you may be hearing about, and our dear Mr. Napier worries that when we say we're angry with BP, we're being anti-British.

If anyone should see John, would you please let him know that nothing could be further from the truth?

I promise you, you would be hard pressed to find one single solitary American getting up this morning, seeing the live feed from the oil leak on TV, and thinking: "That BP is scandalously representing Britain, and for that I hate the British".

I'll tell what we are thinking, though, is that as bad as this situation is, BP's been making it a lot worse by, time after time, being either amazingly unaware of or brazenly dishonest about what's been going on.

Remember back in May when BP said they were capturing 5000 barrels of oil a day with their new containment procedure--while still claiming on the very same day that the total amount of the leak was 5000 barrels a day, even though anyone who could look at the image from the leak could clearly see with their own two eyes that what BP was saying could not possibly be correct?

I don't know how far the word's gotten out over there yet, but now even the "Daily Mail" (not the "Guardian", for God's sakes... but the "Daily Mail") says it looks like BP guessed low on the amount that's leaking into the Gulf by somewhere between 15,000 and 35,000 barrels a day...which, to us, looks like either incredibly bad guessing or an incredibly bad effort to deny how bad things really are.

You'll love this, United Kingdom: BP continues to insist that there are no underwater "plumes" of oil in the Gulf, even though the people on the scene measuring them, and the US Government agency mapping them, say there are.

The BP position, as I understand it, rests on the definition of "plume"...and when you consider that Americans still make fun of Bill Clinton, to this very day, for basing his impeachment defense on what the definition of "is" is, you shouldn't be too surprised if we treat BP precisely the same way for doing the same thing.

This isn't the first disaster for BP in this country, either. You may not remember, but just about five years ago BP blew up a refinery in Texas, killing 15 workers, and just afterward had another major spill, this time in Alaska.

The US Government levied an astonishingly large £53 million fine against BP in 2009 for not fixing the problems that led to the 2005 refinery disaster.

That puts the five-year casualty total for BP at way too many people dead, two habitats wounded, and one refinery in critical condition.

If you think that's bad, United Kingdom, it now looks like BP just made up the spill response plan that they would be putting in place now...if they had been telling the truth about their ability to execute the plan in the first place.

Now if you put all that together...don't you think somebody's ass needs to be kicked? Mr. Obama does, and we find that a refreshing change from Mr. Bush, who would have likely done a "heckuva job" himself in the same situation.

Mr. Napier wanted us to know that we're personalizing this a bit too much; he reminds us that:

"If you compare the damage inflicted on the economies of the western world by polluted securities from the irresponsible, unchecked greed and avarice of leading USA international banks, there has not been the same personalized response in or from countries beyond the US. Perhaps a case of double standards?"

John, babe...if you think we're lacking in "anger personalization", perhaps you've never actually heard of the Tea Party? I know the "Daily Mail" has, and I'm surprised you missed it.

Perhaps you missed the left-leaning protesters in San Francisco that want to put the CEOs of banks in jail, or the protesters in West Virginia, of all places, or in Boston?

Perhaps you don't think there's a reason to take it a bit personally when someone kills a couple of dozen people or so in some sort of preventable accident or another, but over here, whether it's a mine operator or BP, we do take it personally.

Trust me, there's no double standard: ask almost any American and they'll tell you they'd be equally happy to see either a Wall Street or a BP executive forced to spend several years in a really tiny jail cell with someone who has a prior record of doing disturbing things to small forest creatures.  

OK, United Kingdom, now here's a chance for you to do the Company a favor: BP announced just a couple of days ago that they have no earthly idea why their stock price might be going down.

With just the least little effort, we could fix that problem right away.

If any of you might be in London, and don't mind making a local call for me, would you kindly ring up BP corporate headquarters at +44 (0)20 7496 4000, and when they answer, just let them know that the stock price is going down because of the oil leak and what it's doing to the perception that BP will be as profitable in the future as they had been in the past?

I'm sure they'd be so appreciative of the assistance that they might even give you a cool BP hat or something just for helping them out--I know I would, if I were BP.

Anyway, I'm hoping this will clear up some of Mr. Napier's questions, but before I go, I have to ask you about something:

They tell me that BP stock is a huge part of the UK's investment portfolio; and that lots of pension funds are dependent on the stream of revenue BP dividends represent.

So dependent, in fact, that there is a great hue and cry over the possibility that BP might not be able to pay a dividend to its shareholders.

So here's what I was wondering: in the US, if a company in which you were invested suffered a loss that might reach beyond £30 billion, it's supposed to have a negative impact on the stockholders. It's almost certainly going to affect any potential dividend distribution, and a company like that might find itself taken over by a stronger competitor.

Doesn't it work that way in the UK?

I'm sorry that those folks got caught in a bad investment, and maybe the UK Government wants to extend some sort of assistance to those affected; nonetheless I can't understand the legal logic behind the proposition that cleaning up the mess that BP caused and the payment of compensation claims based on BP's reckless actions should have a lower priority than the distribution of income to stockholders.

To put it as simply as possible: lots of players in the UK markets were happy to accept the profits from this investment, despite the risks, and now it's time to accept a loss. That's how investing works; and if no one else has told you that by now, well...welcome to investing.

And while UK pensioners are worried about losing some income, American workers--thousands of them--are worried that they'll be out of work for months, and maybe years, with no income at all, except for that provided by BP...unless they go broke and can't pay.

So that's what's been going on here since I wrote you last, and I hope you do get a chance to call BP about that whole stock going down thing, so they know, and I hope you don't think we're in any way upset with Britain at all, `cause we are truly not.

British Petroleum, however, is a different story; and based on the record we feel that our anger is entirely justified...but that would have been just as true if it had been Chevron or Anadarko or any other deepwater driller--just as it was true for Exxon after the Exxon Valdez incident two decades ago.

Anyway, I have to go now, but I'll try not to wait so long before I write again; and I hope BP is able to contain this stuff before it begins washing up on your beaches, which, believe it or not, is a distinct possibility.

As always, your friend,

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