Just FIX It!

So here is how for-profit companies work (for better or for worse), they determine a good to produce or a service to provide and then they make every effort to do so in a way that creates profit. For those of you who do not function daily in a business setting profit is income - expenses. So to achieve the optimum profit such a company would have to maximize income and minimize expenses, right? It is a fine balancing act in a “free” market economy, you can’t charge $4345.78 for a loaf of bread, the guy down the street is selling bread for $2.49 a loaf, and if it costs you $1.78 to bake the bread you can’t sell it for $1.77 either. In a competitive environment cost cutting becomes a key to remaining in business. So, why in the world would an oil company who has the best and brightest business minds on the payroll decide to build a floating city out in the middle of the ocean in order to extract oil? A floating city that is exposed to hurricanes and all the hazards and unpredictability of the open ocean. If you think it is because they have to because that is where the oil is, you are wrong. Decades ago oil companies developed very complex drilling techniques that allow for horizontal drilling, it was done to maximize production out of a single well, but the technique would allow a rig close to shore drill in to a well out at sea. It would be safer and more importantly (for the oil company), it would be cheaper. So why the floating uber-expensive city?

The answer to why a company would spend millions of dollars just to make production more difficult baffled me when I first heard the details of the spill in the gulf. I am responsible for a automotive repair facility (a garage) we fix cars and trucks inside and I would not buy a million dollar elevator just so that I could have my crew fix vehicles on the roof ... it’s not the business way. The business way is how much can we get out of how little, not how little can we get for how much. That’s why there are layoffs, someone decides that a reduction in payroll expense outweighs the loss of production ... and sometimes the someone is right.
So oil companies just decided to drill for oil in the most expensive way possible, in a manner that is rife with risks and peril?
Regulation.
They have to. If they could oil companies would set up shop in the shallows and still drill a mile deep, but they cannot. Regulation forced them out to sea, forced them to buy three different $500,000 emergency shut off valves (that were never tested in the field until the Horizon disaster), forced them to build floating cities, forced them to pay higher wages, buy helicopters to supply the rigs ... forced them to take risks. So it looks like “mistakes were made” and I’m not trying to say that it is the regulation’s fault that the valves failed, that the rig burned and sank, I’m not trying to say that I want to take my kids to the beach and look out and see hundreds of oil rigs ... don’t misunderstand me. But also know that if they could BP would build their drilling site ON the beach and drill from there, I don’t want them to, but they didn’t chose to drill a mile deep in the ocean, they bought and installed the valves that the regulation told them would prevent a disaster like the spill they cannot stop now, all three failed.
Over the past 42 days BP has spent hundreds of millions of dollars trying to stop the flow of oil, and they have failed at every turn, I am not an oil company apologist, I’m not even a “free market” economics apologist, and of all the oil companies BP is one of my least favorites for an entirely different reason. It has become a balancing act, like so many businesses. Consumers demand oil and oil related products, they demand that they can purchase them at low prices, they demand there be no adverse environmental impact from their mining or use, and they demand not to see any part of that mining or the refining process. The oil company is left to extract oil and make it magically appear in the gas pump with out anyone noticing.
Deep sea rigs operate every day without failure, so we must assume that SOMEONE on this drilling platform is at immediate fault for the disaster (let us not forget the men who died the day the rig burned), we all share in the guilt of forcing them to work in the most difficult circumstances, consumers are at fault, government is at fault and big oil is at fault.
So, now that the blame game is out the way ... let’s figure out how to stop it and clean it up!
I, for one, am not comforted by a speech telling me how terrible oil companies are and how the government is going to “make them clean it up”. Someone needs to resurrect Robert Oppenheimer and Edward Teller and get this thing fixed. Then give me the speech.