Tuesday, June 8, 2010

BP: The war at home

It took an old hand at disaster recovery to put the environmental nightmare asphyxiating the waters of the Gulf of Mexico into its now necessary perspective. “This is a long campaign, and we’re going to be dealing with this for the foreseeable future,” Adm. Thad Allen said.

“We’re adapting to an enemy that changes,” said Allen, the national incident commander for the Gulf recovery effort, in a Monday interview with the New York Times. “As the spill changes, we need to change.”

For all the offhand talk about how to introduce the U.S. military into the situation arising from the Deepwater Horizon explosion the night of April 20, these invocations of military metaphor probably make the most sense. Allen’s strategic assessment puts the oil spill on a par with our terrorist adversaries, and calls on Washington to give up thinking outside the box.

With tarballs washing up on Pensacola Beach in Florida, and containment efforts pretty much unsuccessful, it’s clear the oil spreading in the water is no respecter of boxes — or skimmers, or tankers or millions of feet of sandbags and boom. While Admiral Allen may have been speaking in the context of terrorism, he was certainly speaking in the context of war, a long twilight struggle this nation is fated to deal with for years to come.

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BP is already in that combative mode of thought. Building on the defensive crouch you’d expect from a company now vilified around the country, and certainly around the Gulf, the British conglomerate has engaged in aggressive damage control. In a crafty move, BP purchased sponsored links from Google and Yahoo!, and the search algorithms for any use of the phrase “oil spill” or its variations. Typing those words even with variations — oil spill Exxon Valdez, oil spill Ixtoc — in a random Google search redirects you to a page that starts with the BP Web site, where the company line is thoroughly articulated.

It gets more insidious than that. Call up a wire story about the spill; even before the story itself loads, a BP banner ad is the first thing to appear on the page several seconds before the story you were looking for. BP can’t get its robot-controlled arms around the hydrocarbons hemorrhaging from the floor of the Gulf; this is clearly BP’s first and sweeping bid to at least control the flow of information.

That’s a wasted effort. With an array of cameras offering a 24/7 view of the spewing wellhead, this disaster is immune to PR spin. So too are the heart-wrenching images of waterfowl breathing their last in the waters that seemed to suddenly betray them. Maybe that explains a June 3-6 poll by The Washington Post and ABC News, finding that 65 percent of Americans want criminal charges brought against BP; 50 percent of self-identified Republicans want the same.

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President Obama, no stranger to enemies of his own (the political kind) grappled early with the scope of the disaster, its growing implications making it difficult to put a rhetorical frame around both the catastrophe and the government’s response to it. There may be no bigger challenge to creating talking points than a literally moving target like this. To many of his observers of all political persuasions, Obama’s sound procedural approach came across as indifferent, bureaucratic cool. Conservative author S.E. Cupp hit it Friday on Fox Business’ “Imus in the Morning”: “He hasn’t quite taken the right temperature of the room on this.”

In an interview with Matt Lauer broadcast this morning on NBC’s “Today” show, Obama reset the presidential thermometer with a refreshing streetwise candor. Answering his critics, the ones who’ve accused him of being in BP’s pocket and AWOL from a front-and-center stance on the disaster, Obama said:

“I was down there a month before most of these talking heads were even paying attention to the Gulf. A month ago I was meeting with fishermen standing in the rain … and I don’t sit around just talking to experts because this is a college seminar. We talk to these folks because they potentially have the best answers, so I know whose ass to kick.”

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For BP, that ass kicking will be a slow and costly process, an oil-and-water torture that amounts to a tort lawyers’ full employment act. The math is daunting: If BP’s spill is found to be a result of gross negligence — quite likely given its past history of accidents — the company faces a fine of $4,300 per 42-gallon barrel of oil leaching into the Gulf. The National Oceanic and Atmospheric Administration has estimated that upwards of 19,000 barrels a day is leaking from the well head; today, the 50th day of the disaster, that puts BP’s federal liability at just over $4 billion.

But a scientist with the Flow Rate Technical Group, the federal panel responsible for measuring the size of the spill, told McClatchy on Monday that the actual rate of flow into the Gulf may be 100,000 barrels a day — an amount that apparently dovetails with BP’s own worst-case estimates. "In the data I've seen, there's nothing inconsistent with BP's worst-case scenario," said Ira Leifer, an associate researcher at the Marine Science Institute of the University of California-Santa Barbara.

That estimate yields a federal liability of more than $21 billion. Which doesn’t even include the claims of shrimpers, fishermen and tourism industries seeking to recoup lost earnings. That estimate’s come to another $14 billion. And even that amount largely preceded the drift of the spill into Florida. Tarballs have even been reported washing up on the Texas shoreline.

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With a disaster like this at the literal whim of the currents, and the first of the season’s hurricanes yet to show up, it’s no wonder why even Wall Street is hedging its bets on BP’s future. The company faces a disaster that's every bit as liquid as it thinks it is. Today, BP shares closed at a new 52-week low of $34.15 a share. There’s been ominous talk of bankruptcy and takeover.

“BP’s brand is permanently tainted,” said Robert Bryce, a senior fellow at the Manhattan Institute, told The New York Times on Monday. “… BP will spend the coming decades circling the drain, mired in endless litigation, its reputation irreparably damaged, and its finances weakened,” said Bryce, author of “Power Hungry: The Myths of ‘Green’ Energy and the Real Fuels of the Future.”

With its recent actions, BP recognizes the stakes. And the company understands its new role in the public eye, a role hinted at by Admiral Allen, shouted from the rooftops in the WashPost/ABC News poll, screamed by residents of the Gulf:

Despite our dependence on it, and maybe because of that dependence, oil is the new enemy, its producers increasingly portrayed as a new kind of enemy combatant. BP’s hearing it now from all corners: This means war. Thus enlightened, the company has girded for battle. In their eyes, everyone from Washington to ordinary American netizens is now on the other side of the castle walls.

Image credits: Bird on the beach, East Grand Terre Island, La.: MoveOn.org. BP logo: BP plc. BP stock chart: Oil on the water: Via The Huffington Post. Yahoo! Finance. BP protest sign: Wesley Bland via The Huffington Post.

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