The Sovereign State of BP - Down for the Count?


Michael Collins

British Petroleum has operated as though it were a sovereign state since its inception. When they blew the well at their Macondo Prospect in the Gulf of Mexico, it never occurred to them that they would have to take orders from anybody. But that may change largely due to their inability to stop the flow of oil after nearly sixty days of gushing.

President Obama was clear in his speech last night. If any entity is going down as a result of the catastrophe, it will be BP. Today, Obama meets with BP's Chairman of the Board, Carl-Henric Svanberg, and the man he told the chairman to fire, Chief Executive Officer Tony Hayward.

Two sovereign states will collide. The outcome is a foregone conclusion.

BP's Global Reign

British Petroleum began under another name in the oil rich section of Iran. Britain's William Knox D'Arcy convinced Iran's leader to grant an exclusive concession for the tidy sum of £20,000 in 1901 ($16 million current). BP grew on Iran, infecting its politics and economy to assure that the flow of oil never stopped.

By 1953, Iran's new democracy had a movement and leader that lost tolerance for BP's strangle hold on Iranian oil. The government nationalized BP assets. Undeterred by the will of the Iranian people, the company was the beneficiary of the British secret service-CIA staged Operation Ajax; a not-so-covert plan that deposed Iran's duly elected Prime Minister, Mohammed Mossadegh, and installed a puppet regime.

Iran's emerging democracy was assassinated in the service of BP oil assets and income.

There was just one hitch in the post-coup arrangement with Iran. The Shah's government got 50% of the take and BP no longer had a monopoly. They had to share the concession with U.S. oil companies, thus ending their exclusive control of Iranian oil.

Mohammad-Rezā Shāh Pahlavi, the Shah, was firmly in power as Iran's King of Kings. The Shah had the glory but not the legs to survive. He was eventually deposed in 1979 by the Iranian Revolution.

It's fair to say that the 1953 coup to maintain BP interests in Iran authored the current chaos in that country and the threat that its thugish rulers pose to Iranian citizens and the rest of the world. It's no wonder that President Obama cited this coup and an outrage in his 2009 Cairo speech; a little contrition at the shared expense of the special relationship with the Great Britain.

BP Regents Meet the President of the United States

BP's chairman must have been shocked when President Obama first summoned him to the White House for today's meeting. He'd been so respectful of the company's prerogatives in handling the mess they created. By all rights, they should have had nothing to do with the fix. The created the problem in the first place. In addition, their record in two other major disasters in the past five years hardly qualified them to drill anywhere.

President Obama's options are vast. BP is drilling within what's called the exclusive economic zone of the United States. That zone extends 200 miles off shore for nations with coast lines. Operating within that zone requires observation of the controlling nation's rules and regulations. As weak as those safeguards may have been, they will be tightened to extract whatever political capital the administration may need.

The president is well within his bounds by national and international law to apply all the pressure he wants.

Feel the Heat

The rapid demise of the president's popularity and power has not escaped his attention, nor will it be tolerated by his team trained in hardball Chicago politics. It's one thing to foul up the Gulf of Mexico. It's another to threaten those who control the world's most valuable political franchise. But that's exactly what BP's arrogance and incompetence did.

The president doesn't need to cast off his corporate-friendly cloak to know what to do here. At the very least, BP must appear to go down. In reality, an ever more demanding public wants revenge, not just for BP's crimes, but for the collective looting of the Treasury by Wall Street and the big banks.

BP and it's senior management are useful scapegoats to mollify public discontent and satisfy the cries for justice, no matter how loosely related to that aim BP's punishment might be. Their stock is down, they face the loss of $20 billion to start, and the damage to their already poor reputation could make room for gains by U.S. oil giants. There is little love for BP among that group as evidenced by the scathing findings on BP's Texas explosion. The report was produced by a team headed by James Baker.

The public needs a villain. Since no one in power will take on the real villains, crony capitalism and Wall Street fraud, BP will have to do.

It should get ugly very soon. But BP will lose. They have to. There are much more important issues, however.

How much longer will the citizens of the United States have to tolerate a political system that is rigged to make winners of losers, install followers posing as leaders, and transfer wealth from nearly everyone to the those very few in gated communities. There's never a spill of any kind there that isn't cleaned up promptly.

END

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Michael Collins June 16, 2010 - 3:04am
( categories: USA: Presidency )

if Obama doesn't punish BP, he's a corporate shill. If Obama punishes BP, he's a corporate shill, he's just pretending not to be to since this disaster is tanking his poll numbers.

There seems to be a small problem with that analysis (besides the obvious). His poll numbers dropped during the health care debate, but in fact they seem to have stabilized since this crisis began.


"The best-informed man is not necessarily the wisest. Indeed there is a danger that precisely in the multiplicity of his knowledge he will lose sight of what is essential."

- Dietrich Bonhoeffer

Escher Sketch June 16, 2010 - 3:48am

Since I didn't mention you in the article, I presume that your nastiness reflects a notion that you feel attacked when Obama is criticized or, perhaps, that any criticism of Obama is so outrageous, you must invoke attack mode to defend him. I'm writing about politics and also making a comment on the larger picture. Don't have a cow.

Here's Obama's problem.

When you're running for reelection and your numbers drop below 50%, you're in huge trouble. Since this presidency, any presidency, is a a nonstop campaign, these numbers are troubling, particularly the very high negatives. Also the right/wrong direction numbers are not at all helpful for a "hope" based presidency.

Also, this is has to be troubling to the WH.

6/9-14/10 (Very deepest/somewhat deepest feelings
"Felt angry that the leak is being fixed so slowly" 54%/20% = 74%

"Wondered whether the government could really help you if you became a victim of a disaster" 30%/16% = 46%
PollingReport

People want action. If Obama produces it, that's good for him. If BP has to take a pounding, that's fine too from the president's perspective. It's a matter of political survival.

Michael Collins June 16, 2010 - 4:25am

if my tone was cranky, Michael. Sorry.


"The best-informed man is not necessarily the wisest. Indeed there is a danger that precisely in the multiplicity of his knowledge he will lose sight of what is essential."

- Dietrich Bonhoeffer

Escher Sketch June 16, 2010 - 12:23pm

:)

Michael Collins June 16, 2010 - 9:41pm

But in reelections is personal approval ratings, as in favorability rating, that are the guide, not necessarily job approval. His personal approvals remain strong and have barely changed since last August, almost a year ago. He still sits at 53.5%.

And ES is right, this event has not had a particularly negative effect on Obama's favorability at all, its still very high.

Scotjen61 June 16, 2010 - 12:31pm

I totaled "very" and "somewhat" positive and negative in the NBC poll over time. That's what the graph represents. It's interesting. Obama's positive favorability and job approval numbers are about the same. His negative favorability is 5 to 7 points less than his job disapproval rating. That's where he can come back. There's also an average 13% neutral favorability for this period, another area of opportunity. If he comes through on the environment, as per his speech last night, achieves real justice in the financial scandals, and does something for the vast majority, he's got a shot. If not, so long Mr. President.

Michael Collins June 17, 2010 - 3:13am

It took Obama 60 days to come out say things that would have sounded about right if they'd been said 45 days earlier. But at this point one would have to have been living in a cave to be soothed by that terrible speech. One would have to have missed all the information that's come to light about BP (with the blessing of the USG) cutting every damned corner it could find. One would have had to be ignoring the fact that as much time and energy have been spent by BP and the USG to limit knowledge of the true extent as have been spent trying to actually do something about it.

And since members of the well-informed electorate know that Obama was briefed about the true extent of the problem within a day or so of the blowout, we're going to have a hard time believing the tripe stitched together for this speech.

Of course he's a corporate shill. You don't get elected POTUS without being a corporate shill. And if i'm reading Michael's piece right, the end result of all of this will be the regular people taking it on the chin...which is a valid conclusion to reach given that events have not turned out otherwise for decades.

As for his poll numbers, isn't that one of the biggest problems with American politics? Governing for poll numbers is not leadership. Further it probably reflects the fact that so much time and energy has been spent masking the true extent of the disaster as it does how well the Obama administration has handled the actual disaster.

Lex June 16, 2010 - 9:18am

My presumption is that you think "Obama is doing the best he can under the circumstances" and that for certain specific actions "Obama never promised (not) to do that." Is this the case? That is, is this your working hypothesis to explain Obama's behaviour in office so far? If this is correct, then may I ask how you would disprove this hypothesis? On this surface, this looks unfalsifiable to me. What you seem to have is not an explanation, but an ex post facto set of excuses to defend any sort of behaviour.

Let me clarify: other people (I'll single out Stirling Newberry) have predicted that this Administration would be essentially Bush-lite. And they can point to a number of specific instances where this prediction has matched up with reality on everything from civil liberties violations to the favorable treatment of corporations and business groups. For example, if the Administration tries to prosecute a whistle blower for leaking information during the Bush era - despite Obama's "look forward, not backward" policy - this would count as a confirmed prediction.

Now that I've made myself clear, what would have to happen to make you discard your hypothesis that "Obama is just doing the best that he can"? Anything? Bear in mind that this has to be something that members of the public such as you or I have the possibility of seeing.

====================================================================
“He deserves death.”
“Deserves it! I daresay he does. Many that live deserve death. And some that die deserve life. Can you give it to them? Then do not be too eager to deal out death in judgement. For even the very wise cannot see all ends.
====================================================================

ScentOfViolets June 16, 2010 - 11:40am

In brief, if Obama doesn't punish BP, he's a corporate shill. If Obama punishes BP, he's a corporate shill, he's just pretending not to be to since this disaster is tanking his poll numbers.

There seems to be a small problem with that analysis (besides the obvious). His poll numbers dropped during the health care debate, but in fact they seem to have stabilized since this crisis began.

By the way, I'm having some trouble spotting just exactly what the problem is with this analysis. Could you elaborate? I've looked at this three or four times now and still can't see the flaw. Thanks.

====================================================================
“He deserves death.”
“Deserves it! I daresay he does. Many that live deserve death. And some that die deserve life. Can you give it to them? Then do not be too eager to deal out death in judgement. For even the very wise cannot see all ends.
====================================================================

ScentOfViolets June 16, 2010 - 11:45am

the "heads I win, tails you lose* nature of the proposition. It supports a predetermined conclusion by supplying an identical motivation for diametrically opposed behaviours.


"The best-informed man is not necessarily the wisest. Indeed there is a danger that precisely in the multiplicity of his knowledge he will lose sight of what is essential."

- Dietrich Bonhoeffer

Escher Sketch June 16, 2010 - 12:20pm

Color me dense, but how is this a "heads I win tails you lose" proposition?

ScentOfViolets June 16, 2010 - 12:31pm

but I have heard that Britain considers BP too big to fail. And the United States considers Britain too big to fail.

I did inhale.

Don June 16, 2010 - 8:32am

The "too big to fail" daisy chain. BP is big and they have a dreadful history. Time for them to go screw themselves. They're directly responsible for the mess in Iran (along with Ike) with the coup. Iran was developing into a democracy. Crony corporatists can't stand that. The riff raff (us) can't be allowed at the table.

Michael Collins June 16, 2010 - 11:44am

We do live in interesting times. Twenty or ten or five years ago it might have been the case the BP would emerge from this relatively unscathed, just as Exxon did with the Valdez spill. But I suspect that certain Very Serious People are very seriously taking to heart the notion that the Age of Cheap Oil is almost over. Since looking out for #1 is what it's all about, they have no doubt considered the dreaded option "N", by which I mean "Nationalization". In this century of curtailed expectations, the big question will be who controls a number of dwindling yet vital resources, and while some might opine that corporations and governments are effectively merged into one entity, or will be soon, that position is debatable. In any event, the question of who has control, government or corporations is certainly significant. A future in which governments nationalized corporations to control vital materiel would certainly look different - at least in form - from one where corporations controlled these resources outright. What we're seeing with BP could be the first shot across the bow in this struggle.

ScentOfViolets June 16, 2010 - 12:08pm

Getting at BP legally to pay for its mistake is going to be very interesting. BP, like all big multi nationals have several layers of corporate firewalls in place to limit liability. BP North America is a separate entity from BP’s other worldwide operations. There is probably a separate BP corporation formed for this deep-water exploration. The one overriding thing that these type of corporations pay close attention to is limiting exposure to liability. Too bad BP did not use the systematic attention to detail in its drilling risk assessment that BP uses to legally limit it’s liability.

Legally breaking the corporate veil to gain access to the vast profits of BP is going to be interesting.

Personally, I would love to see BPs corporate veil pierced by a criminal indictment, opening up many possibilities for access to BP assets. In addition, pull BP’s incorporation. Break BP in North America.

"There are two types of folk music:
quiet folk music and loud folk music.
I play both."

Dave Alvin

Peter C June 16, 2010 - 8:53am

That's my approach to most of these "show downs" with the corporate giants. It's like Mr. McMahon writes the script for the fat cats. But with Obama's presidency on the line, he may appeal to his survival instincts and throw them under the bus. Not a bad idea.

It love to know what Exxon and Shell think of this. When BP screwed up in Texas City, James Baker and Co. laid them out. May be time for BP to surrender some territory. It's a zero sum game with "peak oil" and all;)

Michael Collins June 16, 2010 - 11:46am

not survive this ordeal.

It would not surprise me at all. It's historic sovereign position within the context of its past is likely the result of BP having once been owned and operated by Britain. Today it is a private company. The United States has not given up anything. There is nothing but hyperbole in that notion.

Scotjen61 June 16, 2010 - 10:00am

Yeah, at 36 i'm terribly threatened by a president who's traveled less than me and speaks fewer foreign languages than me. Worse, he's black and even though i grew up in classrooms that were 50% African American i'm threatened by his race.

Your rationalizations are getting worse and worse, man.

Here's a fucking news flash. The US already is a police state, with a young, black, cosmopolitan president who deems it to be his god-given right to assassinate American citizens whensoever he chooses.

I cannot and will not speak for others, but i have no desire to see due process upended and all the other bullshit you're trying to foist on me. I want my Bill of Rights back and if Obama and his cracker-ass "progressive" supporters don't want to give it back to me then fuck 'em. Dig?

I want some god-damned realism injected into the debate and i could give a shit less about the political fortunes of the Democratic Party or the President's polling numbers. I want to know why we're spending trillions to fight pointless wars for the sake of domestic politics against an enemy that nobody can define. I want to know where the Democratic Party gets off shitting on the working class over and over and over and over again while pretending to be its protector. But i'm not looking for a dictatorship of the proletariat by any stretch of the imagination.

But you go ahead and keep foisting the bullshit on everyone who isn't towing the line to your satisfaction.

Lex June 16, 2010 - 10:42am

To sink Exxon after the Valdez incident?
Shall for the Nigeria delta?
Chevron for the Mess in Peru?

There's much anger, because everyone wants to blames "someone else"

"The fault dear Brutus, lies not in out stars, but in ourselves."

Looked in your garage lately? Can you see the problem?

Synoia June 16, 2010 - 10:43am

... it just cracked my Laptop screen.

quax June 16, 2010 - 11:09am

Presidents then?

And I absolutely agree. We are a culture of waste, waste of every natural resource. The problems are all in our garages. Absolutely true. We have to move from a culture of waste to a culture of sustainability, renewable and clean.

It is the ONLY answer, and the change we need today. The personal is the political. Something folks in the 60s did understand, and we have lost that somewhere along the way.

It is not in the least stale, it is the cornerstone.

Scotjen61 June 16, 2010 - 12:03pm

... it won't work today either. The only way to get the masses to move off oil it to price them out of it and make more sustainable alternatives affordable. The latter can take many guises. Not the least of it higher density development and public transportation infrastructure.

Doesn't mean I don't applaud anybody who follows their idealism. More power to you.

quax June 16, 2010 - 1:14pm

What happened to your original comment about the pseudo-liberals and pseudo-conservatives? That's the one that i replied to at length.

Lex June 16, 2010 - 11:33am

On The Road

For better or worse, America is a nation on wheels. To get where they need to go, 90 percent of Americans say they usually drive, reporting an average of 87 minutes a day behind the wheel. For car commuters, it's an average of 100 minutes; for parents with children at home, an average of 104 minutes (compared with 77 minutes for people without kids at home). The average household owns two cars, trucks or sport utility vehicles -- and one in four owns three or more.

We don't need no stinkin, commie, socialist public transportation.

JT June 16, 2010 - 11:05am

I think BP profits will take a nick over the next year or two. Dividends will be cut back, but since corporate management looks after itself before stockholders, that won't bother them. Some top level executives will be forced out on diamond-encrusted platinum parachutes. But by then, the three-pronged counterattack will have built up enough momentum to succeed. First, time and neglect will have taken the spill off the front page (like, hey, we're fighting two wars but who cares?); second, we'll have gotten lots of stories about the need not to impoverish all those poor pensioners who hold stock in BP; third, the usual chorus of "a few bad apples" and the dangers of over-reaction will be in full-throated performance. Serious people will understand that you shouldn't hurt a major corporation.

nihil obstet June 16, 2010 - 11:29am

and probably the most...BP seems to go down, get smacked around etc. I agree that this is the drill in these situations. I see Obama pushed hard by a restive public, even if there are no demonstrations. He's at 49-50% negatives. That's not acceptable politically, which I think is where the motivation comes from.

Michael Collins June 16, 2010 - 11:48am

Not with the midterms coming up. This would explain why Obama is also traveling the country and giving speeches to groups who are unhappy with his signature health care legislation. IIRC, I heard a story on NPR yesterday that some Democrats are considering attacking HCR as a way to bolster their credibility with an increasingly skeptical public. Who was the idiot that gave this Administration advice to the effect that they could please two masters?

ScentOfViolets June 16, 2010 - 12:15pm

are comfortably at 46.5% right now per pollster.com

Scotjen61 June 16, 2010 - 1:04pm

(written I hope without insults)

"I can’t dive down there and plug the hole" - Barack Obama.

This is a sentence out of hell, for those of us who believe that government is there at least try to solve problems that individuals and private corporations can't solve. The oil is stil gushing out.

The number one priority is not cleanup, unlike what Obama said in his speech.

The number one priority is of course to stop the leak.

To me, every minute the oil continues to gush and the President is still in "we'll help in the cleanup and we'll punish the guilty" mode is a day when people stop believing that the government should have the powers it has - it strengthens the every man for himself tea party line.

Give BP an ultimatum- you have x days to plug the hole, or, to preserve the land and life of the United States, the Government will "take over" (not saying nationalize- we didn't nationalize Haiti).

Appoint a real czar, one whose name people know- though I hesitate to say Gore or Richardson- they're at least faces the public knows.
Internationalize formally the search for a solution.

Give a reward.
Ask for volunteers.
Move some national guard troops out of Iraq or Afghanistan and put them in this Gulf

Pretend it's 9/11 again really..

Just my two cents.


The origin of the universe has not as yet been shown to be a conspiracy theory

nymole June 16, 2010 - 1:24pm

but I suppose they would want the respirators that BP doesn't want to provide for fear of bad PR and probably don't want every ones ever present picture taking cell phones around.

Tina June 16, 2010 - 1:31pm

Gimme a couple of minutes......

eom.


The origin of the universe has not as yet been shown to be a conspiracy theory

nymole June 16, 2010 - 1:42pm

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