Facing enormous reparation costs because of the disastrous spill in the Gulf, BP, the company that Americans love to hate, has lost close to half its market value — a hefty $82 billion — since the April 20 rig explosion. As a result, the rumors are flying: Will there be a takeover, a merger or even a bankruptcy?
Journalist Andrew Ross Sorkin, author of Too Big to Fail, in an e-mail message to The Fiscal Times, said he hopes BP won’t file for bankruptcy, but adds, “It is no longer unthinkable. Even with all the cash BP has, you have to imagine the liabilities will pile up. I imagine they will be in court for decades like Exxon was. The issue for BP won’t be solvency, but could be liquidity. If the company has to pay out $40 billion – that’s the Credit Suisse estimate, and my guess is it could go higher – it will have to find the cash from somewhere. I’m not sure it could get a loan or sell assets quickly enough.”
So far, BP has paid out about $50 million in damages, mostly to boat operators, fishermen, shrimpers, oystermen and others whose livelihoods have been severely compromised. Total bill so far for BP, including cleanup costs: $1.25 billion.
Meanwhile, according to new research from two teams of scientists appointed by the government, the gushing well is probably spewing out some 25,000 barrels of oil a day. But the latest tally could be anywhere from 53 million to 64 million gallons or more, according to new reports. Economist Sean Snaith, of the University of Central Florida, told the Miami Herald that the Sunshine State’s economic costs could top $10 billion if reams of sludgy, ugly oil were to mar the shores.
As the disaster grips the country, Americans are coming forward with innovative strategies — some proven, some not — to help with the clean up. Here’s a roundup of a few of those ideas.
Costner's Cause
Actor/director Kevin Costner has invested some $24 million of his own cash in a stainless steel centrifugal machine that separates oil from seawater. On Thursday, satisfied with tests of his method, BP signed a letter of intent to deploy 32 units of the machine to help with the cleanup. The machine comes in five different sizes, of which the largest, a V-20, can separate 210,000 gallons of oil from water a day, said Costner's business partner John Houghtaling. It sits on the back of boats, at harbors ports, or oil rigs.
“[The] machines would be like fire extinguishers for the oil industry, to be kept close at hand wherever oil and water have the opportunity to come into contact,” Costner said in a hearing before the House Science and Technology Energy and Environment Subcommittee this week. After the 1989 Exxon Valdez oil spill, Costner began funding a team of scientists to develop this technology. In 1999, he teamed up with his scientist brother, Dan, to found the company Ocean Therapy Solutions, which produces the machines.
Bring on the Bacteria
Naturally occurring bacteria already live in the Gulf of Mexico and are known to multiply exponentially at oil spill sites. Some scientists say it can help, including those at the German Research Center for Biotechnology, who found that a microbe called Alcanivorax borkumensi can break down oil molecules. Now, some groups, like the Colorado-based Spillfighters, run by Brent Tuttle, suggest applying lab-generated versions of the microbes to clean up the spill.
Owner of a marketing company by day, Tuttle is working with university scientists and vendors who produce these microbes to implement a plan and urge President Obama and BP to adopt it; the method was used in the Exxon Valdez cleanup effort. “Other countries, when they have an oil spill, don’t pull dispersants off the shelf. They pull the microbes off the shelf,” Tuttle told The Fiscal Times. He says that unlike dispersants, the microbes are harmless and leave the water clean and safe for wildlife shortly after they’re applied. He says a series of vendors have already harvested these microbes. “It’s already in nature, so all we’re doing is transplanting it from other countries that have more of it into the spill.”
Hair Apparent?
“Together we’re orchestrating a phenomenal mobilization to help the Gulf!” Matter of Trust, a San Francisco-based charity, claims on its website. Just how is it helping? The group collects hair, fur, fleece and feathers from salons, groomers, pet owners and others, and with the help of volunteers, stuffs the hair into donated nylons and ties them securely. These booms are then shipped to multiple warehouses on the Gulf coast and donated to official cleanup teams.
Just how viable are these booms? Dr. Ian MacDonald, oceanographer and professor at Florida State University, told The Fiscal Times, “I think any boom is better than no boom, and right now there aren’t enough booms.”
The Young and the Ambitious
She holds the record for being the world’s youngest professor, but can she plug the oil leak? Twenty-one-year-old engineer Alia Sabur, a native of New York City, has created a straightforward plan, which she laid out in a diagram on CNN. She wants to insert a small pipe encased by deflated car tires into the larger broken oil pipe, and then fill the tires with hydraulic fluid to seal off the pipe. Though she presented her solution to BP executives, she has not yet heard a response from them.
With additional reporting by Jennifer DePaul.
Image credits: Ocean Therapy Solutions and Matteroftrust.org.
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