Unrest in the Middle East is the predominant reason given for this rise in oil prices. With the recent disaster in Japan, that country’s oil consumption has plummeted, which should tend to lower oil prices a bit, but apparently that hasn’t happened. Still others say the government’s ban on offshore drilling in the Gulf of Mexico following the BP oil spill and its effect on the environment has led to the increase in oil prices.
Could it be that you and I are paying for the price of both the BP oil spill cleanup as well as the billions of dollars it is costing to pay all the claimants who have suffered losses in its wake?
Most of us I’m sure felt some degree of retribution upon hearing that BP would have to pay a fine for every day the oil spill continued and that the company would have to pay individuals and businesses who filed claims as a result of their losses from it. That seems like a reasonable price to pay.
Months have passed, and the news has been swamped with blow-by-blow coverage of the unrest in the Middle East. Updates on the BP oil spill have taken a backseat to all of the other, more sensational headlines of rebellion and civil discord elsewhere in the world.
The American people have been focusing on the potential government shutdown, which further pushed the oil spill news to the back burner. This fact is generally disregarded until you go to fill up the family trucks with your favorite octane level gasoline and are sent into apoplectic sticker shock at the price of that tank of gas. You don’t need banner headlines to realize that the price of gasoline is going to put a severe dent in your pocketbook.
Let’s look at the facts for a moment. BP estimated that anywhere from 1,000 barrels of oil per day up to 14,000 barrels of oil per day spilled into the Gulf of Mexico. BP would be liable for anywhere from $37 million to $1.5 billion a day in fines to the federal government as a result. The Supreme Court set a cap of $75 million on the oil company liability. Some representatives have called for the cap to be lifted and a new $10 billion cap be put in its place, but as yet nothing in this regard has been done. What’s your best guess as to when that new cap will be enacted?
I thought so.
You are a prospective oil well owner. At that rate of spillage and fines, how long will it take you to pay off those fines? How are you going to pay them? You are going to pass the cost to your consumers, of course. You, as the owner of BP oil, are not going to pay one red cent of those fines, cleanup costs or anything else. Good old John Q. Public is going to pay them and probably more.
When was the last time you saw an oil company go out of business for any reason? It just isn’t going to happen. Not only that, but BP will write off all those fines and expenses and will probably end up not paying any income tax as well.
Gulf residents will be suffering the effects of this oil spill forever. Many will never recover from their loss and many more will probably never be fully compensated for their losses. That doesn’t even begin to touch on the environmental disaster that has and will occur for decades.
Are you upset about this oil spill and its costs? Think about it the next time you fill’er up.
Larry Wilson is a 50-year resident of Sparks and a retired elementary school teacher. He can be reached at email@example.com.