A small point that struck me, as an old middle-management budgeteer, was:

An internal Alyeska email sent to employees in February said the company expects to save about $4 million by reducing its “real-estate footprint” in Fairbanks.

$4M over what period of time? They haven’t (intentionally) reduced staff, so there are no labor/benefit cost reductions. One does not need a particularly large office to accommodate 30 people — at 100 sq ft per person plus 50% for common area, that’s 4500 sq ft. A quick google suggests that lease rates are no worse than $3/sf/mo, so, very loosely, $162K per year. Even if you throw in $2K a month for power, heat, water, etc, you’re still below $200K per year.

So if the $4M savings is from abandoning a lease, the payback (without any NPV calculations) is 20 years. If it involves selling a property, what was BP doing with a $4M+ (’cause the $4M has to be PROFIT, not sales price) building for only 30 people? And, if it was, in fact some large building that had gradually emptied out, they could still sell it, and lease space for the 30 folks for less than $200K per year, see above. The saving from moving the people to Anchorage would still only be $200K per year (likely quite a bit less).

Possibly the announced saving actually comes from a larger amount of “RE footprint” adjustment, of which this is just a small part. In that case, the PR is extremely misleading. I’m sure we’re all shocked at that possibility.

The world spends $2 million *per minute* on oil consuming 1,000 barrels *per second*. But oil is fungible, that is to say it trades on an open market. Opec does not control the price, it controls a large fraction of the production which affects the price.

In a typical situation such as private production of oil, (read here BP) decisions are generally driven more by short term considerations of profitability than long term considerations especially when one of the major impacts of consumption is a totally externalized cost. Carbon dioxide. So taking a risky decision to cut a few corners and save a few million dollars ends up costing probably 100,000 times as much as might have been saved.

Something conservatives are very proud of is their firm belief in ‘social responsibility’ so long as those shouldering said responsibility are at the mercy of the markets. When it comes to multi-national corporations, not so much. The wild allegations of a government shakedown forcing poor helpless BP into putting up $20 billion in escrow to cover the damage they have inflicted on millions of people is, I think, sufficient testimony to why socialism is not just a good thing in specific cases, but an absolute necessity. There was a great hoopla about the ultimate crash of Enron and the illegalities they engaged in, including corrupting their all too willing accounting firms. I don’t recall every hearing of a singe California citizen or business being reimbursed one dime for the billions of dollars defrauded from them by Enron. Where did the money go?

Where did the money Madoff stole from people go? So what if he is in jail. Where is the money?

In a sense the castarophe of the GoM is a good thing, it provides an apt analogy. We are literally swimming in it, but it is our society, not just a body of water. On the one hand we have the water which is largely benign, and with it we have oil, which is not deadly to the touch, but over time very ugly. Society is similarly constituted, there is a vast majority, 270 million people roughly who live from pay check to pay check. Then there are roughly 30 million or so, but really only 3 million who are the creme de la creme who literally own everything else. That car you drive, that house you live in, virtually anything that costs more than a few hundred dollars is really owned by someone else, some bank, some lender, some usurious trader in coin.

I need to STFU but I want to make one more point. Suppose you have ‘owned’ your own home for roughly 20 years and suddenly you are laid off (a euphemism for fired) from your job. After some time being unable to find a new job that will pay your obligations, you miss a payment on your mortgage, then another, you are foreclosed by the lender, they evict you and sell the property at auction. Yet for low those 20 years you paid some portion of principle and hence had ‘equity’. But under forecloser the lender takes all. Your equity in the property is ceded by default. Does anyone here think this is fair?

Any takers? You pay the interest.

Clearly the gulf spill hasn’t cost them enough money yet for them to get the idea that stinting on inspectors and maintenance is a false economy, because so far it hasn’t been.

It’s just too bad that more of our irreplaceable environment has to be destroyed before corporations like BP are made to pay the actual cost of their negligence.

The consequences of causing environmental disasters have not been all that dire considering.

Nor have the consequences of financial disasters.

So long as the master of the universe can act with virtual impunity and fear no consequence
we are all indentured to the demands of the banks, brokers and politicians.