BP Oil Disaster- Lies and Statistics
Nearing the 2-month anniversary of the BP Oil disaster, let's evaluate the current situation. BP initially claimed that 5,000 barrels per day were leaking, and recent estimates have been increased to about 40,000 barrels per day - every day for nearly 60 days now.
Every effort that BP has made to stop the flow has failed - proving that they had no viable plan to manage such a scenario. At this point the company's most likely successful solution will be to wait until August before another oil well is drilled which can relieve the pressure of the first.
Rather than create a solution for the problem, BP executives have focused on trying to talk their way out of the problem. BP has guaranteed to clean up the mess - which is clearly a lie. If with all their resources they can't stop an oil leak within a two month period - they will never have the competence or capability to actually clean up a layer of oil covering the bottom of the ocean floor. One of two things will happen first - either BP will enter bankruptcy protection, or they will lawyer they're way with the US government to limit its liability to a nominal amount following the path of Exxon after the Valdez spill in 1989. Unfortunately, in either case the living plants and animals of the Gulf will pay for it with their lives.
Energy expert and peak oil visionary Matt Simmons concurs, and is warning that the disaster is far worse than the media is projecting. He was recently quoted by Fortune in stating "They have about a month before they declare Chapter 11. They're going to run out of cash from lawsuits, cleanup and other expenses. One really smart thing that Obama did was about three weeks ago he forced BP CEO Tony Hayward to put in writing that BP would pay for every dollar of the cleanup. But there isn't enough money in the world to clean up the Gulf of Mexico. Once BP realizes the extent of this my guess is that they'll panic and go into Chapter 11."
The implications of the leak to the environment, economy, and political system are immense. The aftermath will likely be a halt to deep sea drilling in the Gulf of Mexico and potentially globally for the foreseeable future. This couldn't have happened at a worse time and will exacerbate the production decline of oil leading to an even more severe. The next time oil prices reach $150, supply shortages will likely be curbing industrial growth - putting a very real constraint on the global economy.
Because it takes a large amount of energy to produce real assets, the long term effect will an increase in the accumulation of hard assets such as gold, silver, and other collectibles.