Seeing Through BP's Muck

A few facts are visible through the oily mess of BP's Gulf well blowout.

• The estimates of how much oil has been pumped into the Gulf of Mexico started with BP saying less than 1,000 barrels a day was flowing. But that was when they were able to keep outside experts far away. By late April the government lowballed the number at 5,000 barrels, a number the government clung to for weeks. By May independent experts had raised the estimates to over 20,000 barrels a day. Using computers to calculate the visible flow from the pipe a more reasonable number exceeds 50,000 barrels a day, 2 to 3 million gallons a day.
• At a conservative 100 million barrels, to date, and Clean Water Act fines of $1,100 per barrel, BP faces civil penalties of $110 billion. BP's net worth, their Enterprise Value, is $132 billion. (What's funny here is that reporters, lacking access to calculators, have been under reporting the potential fines.) Okay, I screwed up the math. The actual numbers, to date, is about 3 million barrels leaving a base fine of $3.3 billion. BP can pay that out of petty cash. Gallons, barrels, who can keep it all straight?
  
• BP claims they are collecting 15,000 barrels of oil through their cap. Since snipping the pipe increased the oil flow by 20% (about 10,000 barrels a day) they are doing a little better than breaking even.
• Talk about raising BP's liability cap is blue smoke, a meaningless political show. Any effort by Congress will be overturned by the Supreme Court (ex post facto law).

Prediction: When all is said and done, the government will conspire with BP to lower the "official" estimate of the oil spilled to about one-tenth of the actual amount. BP will pay a fine that equals a couple of quarters of dividends. The liability cap of $75 million will remain in place, most of that going to the families of the men killed in the initial explosion and fire. BP will survive this oil spill far better than the fishermen and tourist industries of the Gulf. Adm. Thad Allen will retire from the Coast Guard to an executive suite in the oil industry (not with BP).