I’m no economist, and I don’t have an MBA. But I can tell you this about the recent speculation that BP could go bankrupt over the Gulf Oil Spill. Not a chance. Here’s why:
- BP’s daily profit (not sales… profit) still exceeds what they’re spending on the spill cleanup efforts. Last year alone they made $17 Billion. As my wife puts it: “That’s not even a real number”.
- Although BP’s stock may be tumbling, two sad truths exist: a) This whole oil spill will be out of the public consciousness in a matter of weeks after the cleanup is finished. b) Stock prices tumbling may anger investors, but BP still has vast amounts of assets they could sell to cover the cost of paying those affected by the spill and the cleanup efforts.
- America along with the rest of the developed world is still addicted to oil. The total amount of oil leaked by the disaster in the gulf so far is essentially equal to the amount Americans consume in a single day. We will not stop buying petroleum products from BP. Period. Despite valiant efforts by some organizers to put together a boycott BP movement.
- Without sweeping and controversial legislation from Washington, DC., there will be no stopping BP from ignoring most claims made by local residents, families and fisherman. The power paradigm is such that corporations hold more power than individuals, groups, organizations or even States. BP will not be forced to pay one penny more than is politically necessary.
- Estimates for the total cost of the disaster are $15 to $40 Billion. Stop giving dividends to shareholders and BP can cover that in 1-2.5 years. By then the whole thing will be in Americans’ distant memory and the consumers will be back to doing what they do best: consuming.
Image credit: Treehugger
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