Toxic Tony or Toxic Townie

I am back from a business trip to Basel Switzerland. Unlike Alfalfa I flew in a commercial jet and I did not buy carbon offsets as I generally live my life in a green way. While in Switzerland I did keep up with the news on the Bayou Polluter and was saddened to see that the underwater robot had a mishap with the top hat and that for some hours the well was hatless and the blowout was in its full fury. The video of the full fury of the blowout is like a horror film and the main actor and super villain is Toxic Tony. BP may have removed Toxic Tony as their face of the disaster and he may never be seen again but like the shower scene from Psycho, him saying during an interview “I want my life back” is indelibly marked in my brain.

I know many of my readers wish I could drop the BP disaster and move on, but the disaster is only in its beginning stages and will haunt us like the film Psycho for years to come. It was reassuring to witness the many bicycles and filled trams that are used by folks in Basel to get around. Also there is a ferry that crosses the Rhine by using only the flowing force of the river. This ferry has been in operation for over five hundred years and it crosses the river by being tethered to an elevated guide wire above the river. The boat has a rudder system that creates a vector force that is perpendicular to the river and the pulleys on the guide wire simply let the boat slide across the river. The tethering to the guide wire also prevents the boat from drifting down the river. A bunch of high school kids were on the ferry with me and had folded paper boats that they let drift from the ferry as we crossed the Rhine. I estimated that the flow of the river was about 8 feet per second or about 5 miles per hour. The river was about 200 feet wide and the trip across took about two minutes. Hence using the vectoring effect of the rudder system we were able to use the 8 feet per second current to gain a velocity of about 1.5 feet per second in a perpendicular direction. This ferry ride that cost one Franc sixty cents was really priceless in how it opened my mind to how ingenious humans are and how five hundred years ago folks used the force of rivers for transport as well as mechanical power for such activities as milling grain.

Many of the private cars in Basel are small and many are diesel. Yet many of the vehicles only had a driver and no passengers. The freeways leading into the city have long traffic jams. Universally people are willing to inhale the exhaust fumes of others to “enjoy” the freedom and flexibility of motoring in their own vehicle. In this way we are all Toxic Townies. We live in cities and towns that offer public transport and bicycle lanes yet we fire up the internal combustion engines to provide us the assurance of a convenient ride home.

Next week Tesla will have its IPO and sell stock to some folks who believe this company’s business plan. The Wall Street bankers and the Sand Hill Road VCs are rubbing their hands taking in the money of thermodynamically impaired investors. In fairly short order Tesla will waste this money as well as the half billion dollars from the US government and the traffic jam on the 880 freeway past the old Toyota plant in Fremont California that Tesla will take over will still be bumper to bumper. The average Joe and the average Jane don’t really care about oil blowouts and global warming, they just want to get where they are going and naively believe Tesla or Obama will answer the call of the concrete jungle by producing an all electric car that is affordable. The politicians just worry about the upcoming November elections and the half billion won’t be gone by then. Toxic Tony does not need to worry he can sail a boat and spend the rest of his life in the lap of luxury getting his life back. The zombies stuck in traffic are just too lost to know how their lives are wasting away. I will write blogs that a few will read and once in a while I will take a ride on a river propelled ferry and wish for all of humankind to wake up from their toxic nightmare.

The New Face Of BP

Finally the board of BP got bored with the nincompoop CEO and have relieved him of his duties to be the spokesperson for the blowout in the Gulf. Getting him off the air was about as good as getting Helen Thomas of the air. Maybe Helen can go down to the gulf and tell the Cajun fishermen they should return to Arcadia from whence they came. It is actually quite amazing how folks with a high IQ and a good education can show their true insensitive colors.

The congress having got a taste of blood when Tony Wayward spent seven hours ducking questions, now wants to revoke BP's license to do business in the USA. As much as I have very little love for the company this is taking the blow out too far. I asked for 20 big boys in an escrow account and that will suffice for now. I received an email that claimed that the Russians had cause to sabotage the BP oil rig and that the accident was no accident but an act of sabotage. While there is a slight chance that the Russians did sabotage the rig, there is much more likelihood that bad engineering, poor operations, and rushing to completion caused the event.

The holy land is becoming more holey. A massive natural gas field has been discovered off the Mediterranean coast of Israel and the development of this field will be able to supply three quarters of Israel's energy needs for forty years. This made me go back and read an article I wrote in January 2005 for the oil and gas journal Hydrocarbon Processing. The title of my article was "What to do if you have gas". I kind of like the title as it was funny. The article actually provides governments and policy makers with a road-map of the various alternate uses of natural gas and how to maximize the value added to the natural gas in terms of industrial or energy usage of the gas. I have a pdf copy of the article if a reader wants to read it just comment below and I will send you a copy.

The world should use natural gas over the next fifty years to wean ourselves off of coal and oil. The other BP, Boone Pickens, an oilman I admire for his savvy, has been touting his plan to use compressed natural gas in vehicles as a substitute for oil. I am certain that Israel will use some of the natural gas as a transportation fuel. No doubt some of the gas will be used to generate electricity in state of the art combined cycle power stations that are now approaching 60% overall thermal efficiency. When James Watt invented his first steam engine he was happy to have an engine with a thermal efficiency of 2%. I have long said that our best path forward is to use less energy, deploy more efficient machinery, and use nuclear and natural gas to fullest extent possible. I do believe, solar, wind, geothermal, and bio-fuels can supply a small fraction of the energy and they too should be deployed but the heavy lifting will be done by natural gas and nuclear. Israel will be known as the land of milk and honey as well as natural gas. Helen Thomas and Tony Hayward will be known for what they truly are. Nincompoops!

Red Coat Petroleum RCP

I watched and listened to the President speaking to us from the oval office. I am not his biggest fan but I think he has finally got it right on how to handle BP, the company I shall now refer to as RCP or Red Coat Petroleum. RCP also means Ruined Coast Petroleum or Really Crappy Petroleum. Enough about the Pommies! The rest of BO's speech was pure nonsense on how the US will invent renewable energy to replace the fossil fuels. Reminds me of old W and his Hydrogen nonsense. Come On let's get real and face the fact we have to stop using so much energy. Our problem is not the fuel it is how we use the fuel! Like I said before there is nothing like an old fuel and fossil fuels are very old. I am working on how the US can reduce energy consumption by 20% in three years. First we need the massive carbon tax equal to $100 per ton of CO2 or $1 per gallon of gas. Second we need to reward citizens that carpool or take the bus or the train. Third we need to insulate homes, offices and businesses. Fourth we need to turn down the thermostat in winter and turn it up in summer. Fifth we need to impose import duties based on carbon emissions associated with these imports. Sixth we need to tax vehicles based on their MPG. Hummers and SUVs should be taxed at $20,000 a year and the Prius at zero. Please Mr. President while you are keeping your left foot on the neck of RCP please help us remove our right feet from our accelerator pedals.

BP and the war of 1812

The war of 1812 ended in 1815 with the battle of New Orleans. Old Andrew Jackson did kick some ass in that final battle of the war that is called the second American Revolution. Our side lost 8 men and the Red Coats lost 800 men. Almost 200 years later we have a president who speaks of kicking ass down there on the Bayou. Well Mr. President you have my permission to really sock it to BP. Twenty big boys to start in an escrow account will be a good opening bid. This mess will take years to clean. I don't feel any sorrow for the shareholders or managers of BP, greed and lies has been the basis for their operation since the inception of this company as the Anglo Persian Oil Company (APOC) in 1909. Twenty billion dollars in an escrow account for the cleanup of the polluted sea and shore should make the APOC sweat a little. I prefer the name APOC to BP. It simply means Another Polluting Oil Company. So what if the other Six of the Seven Sisters will hang APOC out to dry when they all appear before Congress saying BP is the bad apple and they are all pure as the driven snow. The blog below addresses how the Great Green Sharks are ready to devour BP.

The Great Green Sharks of the Mexican Gulf

Interesting article today on Yahoo about the big oil companies eating one of their own


By Ayesha Rascoe

WASHINGTON (Reuters) - Top competitors are expected to distance themselves from BP Plc (LSE:BP.L - News) on Tuesday as normally clubby oil industry executives gather for a Capitol Hill grilling on the worst oil spill in U.S. history.

With the mid-term congressional elections looming, U.S. lawmakers summoned top executives from Big Oil -- including BP -- in what is likely to be a heated showdown on the safety of drilling in the deep waters off America's coasts.

The top executives from Exxon Mobil (NYSE:XOM - News), Chevron (NYSE:CVX - News), ConocoPhillips (NYSE:COP - News) and Royal Dutch Shell (LSE:RDSA.L - News), can be expected to turn on BP, whose survival as an independent company is increasingly being questioned.

Industry officials are expected to loudly vouch for safety at their own operations and their superior abilities to handle an incident akin to the BP disaster that has caused millions of gallons of oil to spew into the Gulf since April.

"They have to explain how they're different from BP. Not only in operations, but in cleanup," said one oil industry source familiar with what the company executives will express at the hearing.

BP America head Lamar McKay will be on the hotseat on Tuesday but on Thursday BP chief executive Tony Hayward will make his first appearance at a congressional hearing since the Deepwater Horizon accident.

Both hearings present a significant risk to BP and to the future of U.S. offshore drilling, as lawmakers begin to consider legislative options to address the massive Gulf oil spill and to possibly increase the penalties companies will face.

With spilled oil ravaging the Gulf Coast and now hitting Florida, the fallout from the accident is growing, putting the Obama administration under pressure to take action.

President Barack Obama could call for energy legislation and new oil safety provisions when he addresses the nation on Tuesday. The next day he will meet BP Chairman Carl-Henric Svanberg and press him to set up an independently managed fund to pay damage claims.

At the hearing, lawmakers and investors will be looking for any sign from oil executives that BP may have cut corners or not followed generally accepted industry practices.

"If they say that, it would definitely be damaging for BP," said Evgeny Solovyov, analyst at Societe Generale in London said.

With BP facing ballooning damages, the company's shares have fallen more than 40 percent on concerns it may not be able survive the Gulf disaster. Its future may hinge on legislative and regulatory decisions going forward.

"When the company goes before Congress, it's going to be sort of like when Goldman Sachs went before Congress a few weeks ago," said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut.

"It's going to be full of drama; it's going to be ugly for BP officials and there's probably not going to be a lot gained from the experience," he added.

Senate leaders have called on BP to make a $20 billion initial deposit into a fund to pay liability claims. Some lawmakers have also called on BP to suspend its dividend.

All of the oil company heads will undoubtedly face intense questioning about their ability to prevent or contain similar rig accidents at the Tuesday hearing hosted by a House Energy and Commerce subcommittee.

The panel's chairman, Massachusetts Democrat Edward Markey, is an especially tough critic of so called Big Oil.

Although BP is taking most of the heat now, the whole industry has felt the effects of the Gulf oil spill, with a six month moratorium on deepwater offshore drilling and tighter safety rules.

One company has been in this spot before. ExxonMobil's Valdez oil spill in Alaska some 20 years ago was the focus of the anti-oil drilling movement, until BP came along.

Exxon Chairman Rex Tillerson and the other executives are likely to caution lawmakers not to make hasty decisions on changing regulatory oversight for the offshore industry, while making the case their practices are safe.

(Additional reporting by Tom Bergin, Leah Schnurr and Tom Doggett; Editing by Russell Blinch and Cynthia Osterman)

Bafana Petrol or British Predator

Green Machines all over the globe are organizing a protest today against the British Predator. Nancy Pelooka the speaker of the house is now in on the act. Hard to say if BP is worse than NP but both have had a ton of cosmetic surgery. Old Nancy Plastic may donate some Botox to BP as it has been demonstrated in test tubes that Botox eats oil. I am feverishly writing my essay to the US House of Representatives on energy policy. This will be completed by month's end.

I did a calculation yesterday that if we deploy concentrated solar thermal power generation stations the added cost of generating power amounts to a cost of $500 per ton of carbon dioxide saved. My essay will show that alternate energy such as PV or concentrated solar impose a levy of between $500 and $1,500 per ton of CO2 saved. Surely we could simply pay the average Gringo $500 per ton of CO2 they save and they will find ways not to waste energy. The average gringo drives 15,000 miles a year and uses 750 gallons of gasoline in so doing. This amounts to 7.5 tons a year of CO2 just from the miles driven. I am sure if we came up with a reward of $1,000 a year if one saved 2 tons of CO2 emissions we would get off of our overweight behinds and walk or cycle to the store. I would rather give the money to the average Joe or Jane than give it to Alfalfa for one of his thinning hair brain schemes. Talking about the gory details, the Big Tipper's daughter is also get rid of a husband of many years.

The world cup is underway and at least for a month we will have some relief and joy. I did read somewhere that BP was an official sponsor of the cup in South Africa and provided free fuel for some of the transportation of the teams. At least in South Africa BP stands for Bafana Petrol. The Bafana Bafana team does wear BP colors.


Here is the report on the global protest from CNN


New Orleans, Louisiana (CNN) -- Environmentalists plan to stage a worldwide protest against BP on Saturday as the petroleum giant takes hits from politicians and Gulf residents.
Worldwide BP Protest Day claims demonstrations will take place in more than 50 cities across five continents from Pensacola, Florida, to Christchurch, New Zealand.
"Let the world know YOU care," says a flyer on the group's Facebook page, which translates BP's initials to mean British Predator. "We need to let BP know that we are NOT okay with what they are putting in OUR oceans."
The protests come as politicians and Gulf residents slammed BP on Friday over its efforts to end the spew of oil into the Gulf of Mexico and make whole those who have been hurt.
"BP misrepresented what their technology could do," House Speaker Nancy Pelosi said Friday. "They misrepresented the amount of oil that was being spewed forth into the Gulf and continued to do so."
She was referring to Thursday's announcement by researchers that doubled estimates of how much oil has been gushing from the ruptured well: About 40,000 barrels (1.7 million gallons) a day may have escaped for weeks.

Pelosi said she met with President Obama on the matter and was pleased to hear that he had ordered the attorney general to look into whether there was negligence on BP's part.
"This is a matter of integrity," Pelosi said. "BP stated that they had the technology to drill deep, to prevent a blowout and that they had the technology to clean up, and none of these things happened to be a fact."
But the multibillion-dollar, multinational company found support for its efforts. In New York, that support came from billionaire Mayor Michael Bloomberg.
"The guy that runs BP didn't exactly go down there and blow up the well," he told a radio program. "And what's more, if you want them to fix it and they are the ones with the expertise, I think I might wait to assign blame until we get it fixed."
iReport: Share your views on the oil disaster
In London, England, a Downing Street spokesman said Prime Minister David Cameron spoke Friday with BP Chairman Carl-Henric Svanberg.
"The prime minister explained that he was frustrated and concerned about the environmental damage caused by the leak, but made clear his view that BP is an economically important company in the UK, US and other countries," the spokesman said in a news release.
"He said that it is in everyone's interests that BP continues to be a financially strong and stable company."
Svanberg, who is to meet Wednesday with Obama at the White House, "made clear that BP will continue to do all that it can to stop the oil spill, clean up the damage and meet all legitimate claims for compensation," it said.
British Deputy Prime Minister Nick Clegg appealed for a reduction in the vitriol that has gripped many observers. "I don't, frankly, think we're going to reach a solution stopping the release of oil into the Gulf any quicker by allowing this to spiral into a tit-for-tat political, diplomatic spat," he said.
That comment elicited no sympathy from Plaquemines Parish President Billy Nungesser. "Obviously, Nick hasn't been over here and touched the oil," he told CNN. "We get a tropical storm that brings that oil and lays it across coastal Louisiana, we're wiped out for the next 20 years. This community will be dead, and they're talking like we're being too tough?"
By law, the company is responsible for paying all the costs to stop the leak and clean the oil off the shore. That's likely to be the small bill: in the single-digit billions.
A bigger concern will be claims of economic damage from fishermen, hoteliers and other businesses who report losses. BP has said it will pay "all reasonable claims" but has been vague on what "reasonable" means.
BP said that nearly 42,000 claims have been submitted and more than 20,000 payments made, totaling more than $53 million.
So far, the cost of the response is $1.43 billion, it said.
Lawmakers want to make sure the company has enough money not only to remove the oil but to reimburse residents for lost wages and other damage to the economy.
BP has argued that the company has plenty of money to do both. Executives noted last week that BP had a cash flow last year exceeding $30 billion.
The government's response manager offered a new round of numbers as well on what it takes to clean a spill of this magnitude: an Exxon Valdez-like spill every few days that has now gone on for 55 days.
Coast Guard Adm. Thad Allen said that more than 25,000 people -- contractors, volunteers and members of the military -- were involved on the ground.
Some 3.8 million gallons of oil burned, he said. About 1 million gallons of dispersant has been used to break up the slick. That has taken more than 500 skimmers, barges, ships and aircraft.
Piecemeal efforts to slow the flow are continuing.
As early as Monday, BP plans to deploy "Q4000 Direct Connect," the company's name for a containment device secondary to a primary cap that was put in place over the leaking well last week.
Allen has said he expects that the Q4000 will be able to take an additional 5,000 to 10,000 barrels per day.
A second Transocean drill ship is expected to arrive in mid- to late June, bringing an added capacity of 10,000 barrels per day, the company said.
By mid-July, the current cap will be replaced with a larger device that will provide a tighter seal, the company said.
The cap will be connected to another manifold and hose system to a free-floating riser 300 feet below sea level. The hose attached to the riser will connect with the containment vessel on the surface, giving cleanup workers the option of disconnecting from and then reconnecting to the riser should the ships need to return to port in the event of a hurricane.
The riser would remain in place at all times. This system could contain up to 50,000 barrels per day, according to BP.
The ultimate containment plan would insert mud and cement 18,000 feet under the seabed, effectively stopping the flow of oil, the company said.
Two such wells, one of which would be a backup, are under way and are slated for completion in August.
Meanwhile, a delegation of U.S. senators traveled Friday to the heart of coastal Louisiana to assess the damage.
"Until you see if firsthand, until you really smell it, get a sense of it, you can't understand it fully," said Sen. David Vitter, R-Louisiana.
They were the latest in a virtual parade of officials from Washington to make the trip to the coast. Labor Secretary Hilda Solis was in the region Thursday, and Obama is scheduled to make his fourth trip next week.

Barak Petroleum

Interesting article at CNBC that BO could take away the US arm of BP. Worth the read.

Obama Could Bankrupt BP's US Unit: Investment Officer
Published: Thursday, 10 Jun 2010 | 7:33 AM ET Text Size
By: Patrick Allen
CNBC Senior News Editor

Having watched one of the most valuable companies in Europe lose nearly half its value in just over a month, investors are questioning at what point BP becomes a buy.


But some are worrying that US President Barack Obama's rhetoric could bankrupt the company's American arm.

Shares in the UK-listed oil major, which is battling to stop the environmental disaster in the Gulf of Mexico, are again falling in London after more tough talk from the Obama administration on funding the cost of the clean up.

Obama, who told NBC earlier this week that BP [BP 32.03 2.83 (+9.69%) ] CEO Tony Hayward would be fired if he had his way, is under big pressure to get to grips with a crisis that until now he has not been able to influence.

Pressure is growing on BP to cut its dividend and stop spending money on advertising, despite the firm’s assertion that it will be able to meet the costs of cleaning up without doing so.

This dynamic is the reason not to buy the stock, said Louis Gargour, the chief investment officer at LNG Capital. Gargour also warned that the risks of doing so far outweigh the potential rewards.

“Since his election President Obama has had very few successes. Under pressure from voters just months before mid-term elections, he needs one badly and BP offers him that chance,” he said.

This victory will be disaster for BP and those still holding the stock, Gargour said. “I believe they could try to bankrupt the US arm of BP and take it into public (state) control,” he added.

Investors have been asking at what point you can buy this story and questioning if when Hayward is forced to cut the dividend the stock would be a buy.

This is a binary trade and the potential upside is far smaller than the possible downside, according to Gargour. “If Obama bankrupts BP’s US arm you are sat on further losses of 60 percent, if BP gets lucky your upside gain could only be 20 percent, this is not the time to buy BP,” he explained.

Famous investor Jim Rogers, chairman of Rogers Holdings, told CNBC on Thursday he is not buying BP either. "I wouldn't judge it on price; I would judge it on time,” he said, meaning investors should get interested when the oil spill problem drifts away from the public eye.

"Eventually, this, too, will pass," Rogers said.

Nassim Taleb, the author of the “Black Swan” expressed reservations during an interview with CNBC on Thursday about the future of BP given the catastrophic fall in its market capitalization since the oil spill on April 20th.

He suggested that incentives in corporate culture are inherently flawed.

"Size is bad for companies," he said. "We shouldn't give a manager of a nuclear plant an incentive bonus. People are given bonuses to hide risk, to cut corners. The same thing happens with every large corporation. It permeates the entire economic system”

BP has enough cash and businesses outside the US to cope with whatever the US throw at it, Peter Sorrentino, a senior portfolio manager at Huntington Asset Advisors, told CNBC.

“They could walk away and say keep your pipelines and still be a major player on the global market,” Sorrentino said.