Who Is In Charge Here (My Coast Guard, They Sent Me A Letter)?

Here is a baffler from the Times on the Gulf Oil Spill:

Coast Guard Toughens Oversight of BP’s Effort
By HENRY FOUNTAIN and CLIFFORD KRAUSS

With oil continuing to leak Wednesday from a runaway well in the Gulf of Mexico despite BP’s success in capturing some of the flow, a top Coast Guard official ordered the company to come up with a plan “to ensure that the remaining oil and gas flowing can be recovered.”

In a letter to Doug Suttles, BP’s chief operating officer for exploration and production, Rear Adm. James A. Watson, the on-scene coordinator of the unified command that is overseeing the response effort, gave the company three days to provide plans for “parallel, continuous and contingency collection processes.”

Among the requirements, Admiral Watson wrote, are that any new method to contain the leak be devised to reduce disruptions from hurricanes, when the full flow of oil would once again spew into the gulf.

What - the Coast Guard thinks BP ought to have a plan?  This is Day 52 of this debacle - a plan seems like a terrific idea, but what have we been doing so far?

I presume that this request is really intended to document the BP approach and lay the foundation for future litigation but still, why publicize the lack of oversight up to now?  And is this litigious approach really the best way to find a solution to a complicated engineering problem?  Will it really be helpful to read their Miranda rights to the BP engineers and then ask for their best ideas?

The Times returns to the possible scandal I noted a few days back - we don't know how much oil was flowing from the leak before the riser pipe was cut as part of the latest capping attempt and we don't know how much oil is flowing now, but we have a suspicion that the flow rate has increased dramatically and we wonder who approved all of this:

The letter came amid continuing questions about how much of the leaking oil was being captured by BP’s latest containment effort, a cap that was lowered over the top of the well last week, and whether the company could be collecting more but had failed to provide enough surface equipment to handle it.

BP said it captured about 15,000 barrels of oil on Tuesday, which it has said is about the daily limit that its collection ship, the Discoverer Enterprise, can process. But video feeds from the seabed continued to show oil billowing out from under the cap, and company officials reiterated that there was no way of knowing how much was coming from that source or from several vents atop the cap that remain open. Some experts have said the amount could be very high and that the leak could have been made far worse by the containment effort.

At his May 27 press conference Obama assured us that he was in charge:

But make no mistake: BP is operating at our direction. Every key decision and action they take must be approved by us in advance.

And now the Coast Guard is sending BP letters.  Gosh, I hope they at least used the Post Office Express mail service for overnight delivery.

CAN'T WAIT TO READ THE PLAN:  Tim Dickinson wrote a devastating account of Team Obama's effort in the Gulf, which included this detail on a past BP plan (p. 2):

Nowhere was the absurdity of the policy more evident than in the application that BP submitted for its Deepwater Horizon well only two months after Obama took office. BP claims that a spill is "unlikely" and states that it anticipates "no adverse impacts" to endangered wildlife or fisheries. Should a spill occur, it says, "no significant adverse impacts are expected" for the region's beaches, wetlands and coastal nesting birds. The company, noting that such elements are "not required" as part of the application, contains no scenario for a potential blowout, and no site-specific plan to respond to a spill. Instead, it cites an Oil Spill Response Plan that it had prepared for the entire Gulf region. Among the sensitive species BP anticipates protecting in the semitropical Gulf? "Walruses" and other cold-water mammals, including sea otters and sea lions. The mistake appears to be the result of a sloppy cut-and-paste job from BP's drilling plans for the Arctic. Even worse: Among the "primary equipment providers" for "rapid deployment of spill response resources," BP inexplicably provides the Web address of a Japanese home-shopping network. Such glaring errors expose the 582-page response "plan" as nothing more than a paperwork exercise. "It was clear that nobody read it," says Ruch, who represents government scientists.

I bet they read this new plan.  Assuming the BP lawyers are crazy enough to release a document, that is.

Comments

[Danube of Thought]

It develops that the administration deliberately lied in the course of announcing its offshore drilling ban.

[Sink the Bismarck.]

My Baby's In a Bottle.
===========

[Somebody missed a bet. Quick Rahm, send someone a Polar Bear's Head.]

Hmmm, Cold water mammals. Might one be a Poley Bear?
===================

[The world has gone mad. Maybe just from plain fear.]

Particularly insidious, DoT, in light of your link, is this administration's call for BP to indemnify all the workers laid off by this ban.
==============

[bio mom]

Recopied from the thread below:
I have heard from people who know more than I do about such things that the BP lawyers from day one have had a plan to split the company into two or three separate units, walling off most of the assets from the one they will continue to call BP and that will take the financial and legal hits that are coming. The other unit/s will be "taken over" by other oil giants and all will share in the eventual profits of the new larger oil companies. Something like that. I would have felt some resentment about this earlier in this saga but observing the overreaching and tyrannical behavior of this administration, I am no moving more and more to the B.P. side.

[Danube of Thought]

I don't know a lot about bankruptcy law, bio mom, but I think that if BP proceeded as you have described the "takeovers" could be treated as fraudulent conveyances, and creditors would be able to pursue the conveyed assets.

[It's becoming slapstick.]

Poor fella, he wants to seize BP but only just before they cap it, and know one can tell him when that will be. That's whose ass he wants to kick, the one holding information from him.
================

[Melinda Romanoff]

I disagree, DoT. It would be standard operating procedure for the Board of Directors to prepare for litiginous assault by preparing something similar to the "good bank/bad bank" strategies used under the RTC.

If they didn't plan then they would be held as negligent, now a days.

Just my tuppence.

[Even cubic mile ones?]

Slapstick, and the Chinese and the Russians and the Brazilians are laughing there asses off at the spectacle. Do you think a coupla tarballs would bother them?
====================

[Danube of Thought]

But how would the bankruptcy court react, Mel?

[FeFe]

Will it really be helpful to read their Miranda rights to the __CIA agents__ and then ask for their best __gathered intelligence__?

[Slipping on all the oil.]

Good heavens, 'know' for 'no' and 'there' for 'their'. It must be all the hilarity.
============

[OK, where is that spade? Relax, for the garden.]

Don't cry for me, Venezuela.
==============

[Thomas Collins]

Congrats to Mel and all other ChiTown area JOMers on the Blackhawks winning Lord Stanley's Cup. See LUN.

[Old Lurker]

Perhaps BP will show the spine lacking among the GE Bondholders last year. Had those folks said hell no, then Obama might not think now that all private enterprise assets are his for the taking and the giving out.

BP should pay out no more and no less than is eventually demanded of it by the fair application of existing law. The moment it starts rewriting real law "to seem like good guys", they, and we, are lost.

[Old Lurker]

I meant GM...not GE or course. Sorry

[Danube of Thought]

I think management has a duty to the shareholders not to pay out more than the law specifies. No cakes and ale at shareholder expense.

[Melinda Romanoff]

OL-

Clarice pointed to Mitch Daniel's piece on the joys of crony capitalism, specifically writing about Chrysler's debt. The GM debt, as I recall, involved Rattner making more than mild threats to all involved.

His piece in the Journal, yesterday, was particularly hypocritical.

[Quick, sell NBC before they nail us there.]

Patience, OL, GE all in good time. Another one of those 'too big to fail' companies smack dab in the forefront of the AGW paradigm. They are directly analogous to BP.
=======================

[Melinda Romanoff]

TC-

You will be happy to know that it will be an All-Chicago sports day on Friday. Scroll to the bottom of the story. Crosstown is baseball related, BTW.

[Old Lurker]

It actually was GE I was thinking about last week, Kim, when we talked about "Rent Seeking" public companies feeding at the political trough. As BP is learning, the Rent Seekers eventually get turned upon.

[Old Lurker]

It's the "Maybe he will eat me last" concept.

[What's good for General Motors, is good for the USA.]

When they came for the GM bondholders, I wasn't one of them.
=======================

[Danube of Thought]

Heritage explains how these clowns are making matters worse in the gulf.

[Tom Maguire]

But how would the bankruptcy court react, Mel?

What court? BP has a big stake in Alaska but I assume they have other stuff around the world and possibly beyond the reach of a US judge.

[I vote both.]

That's pretty damning from Heritage, DoT. Once again the question is: Incompetent or malicious?
===============

[Danube of Thought]

What court?

Bio mom's premise was that assets would be conveyed and that a remaining company called BP would be left holding the bag. That means bankruptcy, and the bankruptcy court could reach the conveyed assets. No?

[DebinNC]

Rear Adm. James A. Watson, the on-scene coordinator of the unified command that is overseeing the response effort, gave the company three days to provide plans for “parallel, continuous and contingency collection processes.”

This ultimatum sounds like kick-ass by proxy, since Obama's own macho act failed so spectacularly. So what happens after three days if the demands aren't met?

[Janet]

Hot Air linked to a video ad for Glenn Beck's upcoming book. I don't know anything about it, but the video is powerful. It uses Rudyard Kipling's poem "The Gods of the Copybook Headings". I love that poem. Here is a great old post on it by Wolf Pangloss.

"The poem reminds the reader constantly that old wisdom is still wise and true even if we have lost faith in it,... "

[Rick Ballard]

A bankruptcy court might get BP America's assets but BP America doesn't own any of BP's reserves. I may be mistaken but I've always understood that one of the main purposes of establishing subsidiaries was to limit liability. Consolidating assets of subsidiaries for financial reporting purposes does not make them susceptible to claims by creditors of other entities does it?

[glasater]

OT but this for DOT--

Angle +11 over Reid--according to Rasmussen.

[Rob Crawford]

It uses Rudyard Kipling's poem "The Gods of the Copybook Headings". I love that poem.

Same here. That poem is terrifying and heartening at the same time.

[Melinda Romanoff]

DoT-

Depends on the judge.

[Danube of Thought]

I may be mistaken but I've always understood that one of the main purposes of establishing subsidiaries was to limit liability.

I think that's generally true. I know, for example, that Royal Dutch/Shell for decades has gone to elaborate lengths to keep its assets (and its constituent companies) out of the reach of US jurisdiction with the exception of Shell Oil in Houston.

My point was simply that whatever of BP's assets are reachable today would remain reachable after a reorganization of the kind Bio Mom described.

[Rob Crawford]

Terrifying:

And that after this is accomplished, and the brave new world begins
When all men are paid for existing and no man must pay for his sins
As surely as Water will wet us, as surely as Fire will burn
The Gods of the Copybook Headings with terror and slaughter return!

(Doesn't the phrase "When all men are paid for existing and no man must pay for his sins" sound like leftist social policy?)

[Melinda Romanoff]

BP is an ADR, which is a bit harder to hit.

[hit and run]

DoT:

The opening of that piece:

Five weeks ago Escambia County officials requested permission from the Mobile Unified Command Center to use a sand skimmer

They named the organization responsible for coordinating this whole mess MUCC?

What's next a center for Mobile Intervention and Recovery Efforts?

[hit and run]

Supposed to be, DoT:
Heritage explains how these clowns are making matters worse in the gulf.

[Chicago Cabbie, he.]

Ol' Pete Barbara used to talk of the 'Clipboard Brigade'.
=======================

[Mustang0302]

OT: Gov't Motors Bans "Chevy" ...

...under penalty of an asskicking!

[Danube of Thought]

Could be that being an ADR makes them harder to hit, Mel; I really don't know. Again, my only point is that BP can't make anything tougher to reach by reorganizing in anticipation of bankruptcy.

[Melinda Romanoff]

I understand, but it tells me they wouldn't file anything here at all.

[Danube of Thought]

If they can't satisfy their obligations (judgments or otherwise) any two or more creditors can force them into bankruptcy court whether they want to be there or not.

Sure hope some bankruptcy specialist will weigh in on this at some point.

Might fine news, Glasater.

[Danube of Thought]

*mighty*

[Clarice]

Holder, that genius, will have some problems litigating this, considering his boss's claim:

But make no mistake: BP is operating at our direction. Every key decision and action they take must be approved by us in advance.

[Jane]

Anyone have a link to DOT's WSJ piece showing the administration lied that does not require a subscription?

[BB Key]

DoT & Mel,
You might be interested in the phony 'Corporate Governance' answer that Gibbs gave yesterday when asked why O had not talked to BP CEO Hayward.(see Michael Shear at WaPo 44).

[Melinda Romanoff]

BB Key-

Ranted on that last night, but thanks.

DoT-

And I have now amply demonstrated why I am not a lawyer with my size 12 mouth.

[Neo]

“Three days after the explosion of the Deepwater Horizon in the Gulf of Mexico, the Dutch government offered to help.

It was willing to provide ships outfitted with oil-skimming booms, and it proposed a plan for building sand barriers to protect sensitive marshlands.

The response from the Obama administration and BP, which are coordinating the cleanup: “The embassy got a nice letter from the administration that said, ‘Thanks, but no thanks,’” said Geert Visser, consul general for the Netherlands in Houston.

Apparently, so did Norway.
The excuse is that foreign ships are not permitted to do this type work in U.S. waters, due to the union protecting federal Jones Act. Oddly, after Katrina George Bush suspended the Jones Act to permit foreign vessels to aid in the recovery effort.
For want of a union, we lost a Gulf.

[Melinda Romanoff]

Neo-

By the 2nd week of the leak, 13 countries had come forward. All were turned down.

Dian Chu covered this yesterday.

[Neo]

Given the fact that 13 countries had come forward and all were turned down, does this mean that President Obama does believe in "American Exceptionalism" ?

[Clarice]

It means no one i his administration had the balls to waive the Jones Act during the incident.

[Danube of Thought]

Gallup: 44% approve; 48% disapprove.

[Danube of Thought]

I should think the Jones Act stuff--particularly Bush's waiver and O's inaction--ought to become big news.

[Over the Bounding Main.]

Maybe Obama ought to kick his own ass for yielding to union pressure not to waive the Jones Act. Or that he has such a crew no one suggested it.
==============

[Rob Crawford]

I should think the Jones Act stuff--particularly Bush's waiver and O's inaction--ought to become big news.

Should, but won't.

The press will bury it while continuing to praise The Won for his stern leadership, decisiveness, intelligence, and bravery.

(Or they'll wake up one morning to a mob on their front lawn.)

[The Ineptness of Arrogance.]

I think it has legs. The refusal of offers from people who had a stake of some sort(how much of BP is owned by the Dutch) resonates. Palin and Jindal ought to be able to keep it on the boil, even after the leak is stopped.
==========

[Wait'll that oil hits Iceland.]

Ruby, Ruby, Rubio, rub us up some rubber balls.
=====================

[Frau Donnerstag]

"Oddly, after Katrina George Bush suspended the Jones Act to permit foreign vessels to aid in the recovery effort."

The Asskicker-in-Chief was elected to be the Un-Bush. Now he is the unilateralist.I guess the KSS principle was not covered in Obama's Columbia and Harvard studies ...on the day he attended class.

[Frau Donnerstag]

Now, that he has started a study group (!), Cameron "corrects" remark about BP engineering morons.
LUN

Enlightenment through study! Our WH and Congress need *more* study groups, obviously.

[scott]

The whole time I've been wondering why nobody's cleaning up the oil, it never occured to me the reason is union rules. Unfortunately, it all makes perfect sense now. Disgusting really. I got your clean up right here pal.

Pauly Walnuts: "Yeah, I know Tone"

Tony Soprano: "No you don't! I just f**kin' told you!"

[Melinda Romanoff]

Frau-

What's a "study group"? Is that a Britishism?

[narciso]

I think you mean Shell Oil, Kim which is also
a party to the climate scam

[Rick Ballard]

One might suppose that BOzo's refusal to allow mitigation of damage will have some impact on the amount of liability assigned to BP. The Asskicksser in Chief appears to have as little knowledge of general liability as he does about liability in a rear end collision.

The Jones Act malfeasance should be considered a self administered rear ender on his part. He should be more careful - he might give himself a concussion.

[Danube of Thought]

some impact on the amount of liability assigned to BP

They'll be all over it like white on rice. And also on Holder's remarks Clarice quoted earlier.

[Clarice]

Those weren't Holder's remarks DoT--they were his client's (the Oman)

[daddy]

Just for my info:

Has anyone heard about damage from the spill to the Mexican coastline? I haven't.

And when are the Mexican initiated lawsuits coming? If they can now point to the US as refusing valuable foreign assets to limit the spill damage, what is to prevent them from bringing suit against Uncle Sam in some International Court?

Obviously IANAL, but it seems to me that that's the dog thats not barking in the night, but that ought to be barking.

[Melinda Romanoff]

and is why the stock is back up.

Ordinarily, I would say they own it, but now a days....

[Rob Crawford]

Has anyone heard about damage from the spill to the Mexican coastline? I haven't.

I'd be amazed if it's reached that far. The only places I've heard it reaching shore are Louisiana, Alabama, and Florida.

[Pagar]

"and is why the stock is back up."

"BP Debt to be rated as junk? Bond and derivatives market say yes."

Meanwhile the stock goes up today. Amazing!

[Danube of Thought]

Brian Wilson of Fox News is on the Jones Act issue.

[scott]

Good to see somebody reporting it. He's a good reporter too.

[Ranger]

So, while the Obama administration was claiming to have their boot on BP's throat, in fact it was the unions that had their boot on Obama's throat.

[Stephanie knows of a butt that could plug the damn hole]

"Never let a good crisis go to waste." Rahm Emmanuel

But sometimes the crisis wastes you...

Tis too bad that these fools didn't appreciate that oil spills at deep water depth don't respond to the "easy button" and that the political hay they thought they could make by putting their boots to the neck of "drill, baby, drill" would be drowned out by the futility of the whine to "plug the damn hole."

This administration deserves this karmic wasting. Democrats manipulated the last crisis in the gulf and the bayous, now the waters are exacting revenge. Bad juju, mon...

[Jane]

"karmic wasting"

Now that is a keeper!