Until BP’s CEO says “we will spare no expense to rectify this problem”, he might as well be whistling Dixie.

He won’t say it, of course, because every BP stock analyst in the world is looking for a reason to change their recommendations from “hold” to “sell”.

But he might as well say it, because we will soon be spelling “British Petroleum” with the letters “E-N-R-O-N.”

There are a lot of us who are a little perturbed by the president, even though he is doing all the right things, because for the vast majority of Americans, the visceral triumphs the logical six days a week and twice on Sundays. We are still unaccustomed to a president who can think in multiple dimensions without waving a victory flag every time he makes a decision. We will grow up in time.

There are many of us who are incensed by British Petroleum, even though they are doing all the right things, because for just about every living American, there is nothing we despise more than a guy who throws a rock through a window by accident, and then says “window? what window? I don’t see any window.”

But there is a special place in an oil fire hellhole that should be reserved for our modern media, who have decided to use the British Petroleum oil spill catastrophe as an exercise in browbeating the White House into some sort of submissive posture. Who pout because the president doesn't have enough press conferences to suit them, even though no journalist in modern history has developed the ability to ask a question of our nation's top politician in way that will make him say anything he doesn't want to say, or disclose any facts he doesn't want to disclose that they can't get by simply doing some goddamn research and filing a blizzard of Freedom of Information Act requests.

These are some of the headlines at Real Clear Politics pundit aggregator today:

Black Water Rising - Evan Thomas and Daniel Stone, Newsweek
Once More, With Feeling - Maureen Dowd, New York Times
Obama's Fascinating Job Description - James Taranto, Wall Street Journal
James Carville's Rage - Ruben Navarrette, San Diego Union-Tribune
Tough on Oil: Obama Tries to Assure Public - Pittsburgh Post-Gazette

Not one of these organizations has even dared to breathe the obvious – this oil well blowout will cost BP tens of billions of dollars to deal with this from a environmental, regulatory, and legal standpoint. In case you don’t read well, or are prone to gloss over stuff you read that doesn’t suit your own personal narrative, THIS OIl WELL BLOWOUT WILL COST BP TENS OF BILLIONS OF DOLLARS.

Furthermore, aside from the potential, non-deductibility of any punitive damages should they be assessed as a result of any legal proceeding, the costs and expenses incurred are tax deductible. This effect raises the previously indicated range of gross costs which are being discounted to $65 billion-$85 billion. While such a range for the ultimate, pre-tax range of gross pre-tax costs and liabilities associated with the incident is not inconceivable, it represents a level of such costs which we consider to be extremely unlikely.

Notwithstanding both the indemnification clauses contained in the applicable contracts with drilling and oil-service providers as well as BP management statements indicating that all clean-up costs and "legitimate damage claims" will be paid by the company, we believe that a number of lawsuits will nevertheless be filed, primarily by BP, against the various service contractors involved in the Macondo well.

We make no representation regarding the outcome of such litigation although the reported evidence of problems with certain components of the blowout protector (BOP), prior to the incident, does lend a degree of legitimacy to such litigation and to the potential nullification of the applicable indemnification clauses. The likelihood, however, of potentially protracted litigation suggests that a sizeable portion, if not the majority, of any environmental costs and claims are unlikely to be actually paid for least several years from now. Present value considerations, therefore, suggest that the previously referenced $65 billion-$85 billion range of undiscounted, pre-tax, costs is even larger, perhaps by as much as 20%-30%, if timing factors are taken into account.

BP's comparatively strong balance sheet provides the company, in our view, with sufficient financial flexibility to fund up to $20 billion in spill-related expenses and claims without having to either meaningfully curtail the company's capital program or to consider a dividend reduction. Exclusive of any such liabilities, but inclusive of a projected $9.1 billion 2010 base funds flow shortfall, we project a year-end 2010 net-balance-sheet debt ratio of 25%.

BP Bashing Looks Overdone Barron’s

There is nothing like a stock analyst who wants to beat the pack in making a call, but I think this guy’s followers might need to step back for a second before loading up on BP shares. Even though Benchmark predicts $65-$85 billion range of estimated costs, they have already hedged their guesstimate by advancing the idea that their estimates could be off by as much as 20-30%, which puts them in the same ballpark I’m in – a $100 billion dollars.

Except that my number is the low end of what I think will ultimately be the bill for this gruesome national saga.

If the government treats BP the way government contractors treat the government, by billing them at cost plus rates for materials, machinery, manpower, and communications costs, you could easily add another 50 billion dollars to the total.

A $150 billion dollar hit will do more than put a hole in BP’s balance sheet – it will collapse the entire enterprise.

The larger question is, even though BP’s executives aren’t worth saving, is the company and its tens of thousands of employees worth it? BP paychecks feed families all around the world, including many who live in the Gulf Coast area. 99% of the people who work at BP have little or no authority in how many corners the company cuts, or how many safety regulations they ignore.

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