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"A Bidding War For Recovered BP Oil: Why Not A Carrot Instead Of A Stick?"

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Headlined to H2 6/12/10

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Everyday we awaken to more disheartening news about the BP oil spill. BP executives attempt to appear sympathetic about this disaster, saying that they will "make it right". A common theme is emerging: initially, BP executives describe things in the most positive light, stating "minimal effect on the environment" and later: "Now that the cap is in place, a trickle of oil remains"".


BP Oil Spill Flickr etiennecoutu's photostream

Then external observers, including scientists and engineers, provide a very different assessment. The initial flow rate was far more than that initially described by BP, and the amount of oil "trickling" from the cap is hardly a trickle more akin to periodic geysers.

Blame is being assigned broadly, to BP itself to federal regulators to President Obama. The "$75 million liability limit" has been given much attention; now it is recognized that liability and damages will likely be in the billion dollar range.

BP's CEO has indicated that they will pay investors well over $10 billion this year in dividends for shares in the company, so a $1 billion penalty would be a relative "slap on the wrist" in response to this environmental disaster.

I keep thinking about the oil that has been recovered from the spill and how much can be recovered in the future. BP has reported that 14,800 barrels were recovered on June 7, and that proceeds from the sale of the captured oil will be donated to a new wildlife fund. This gesture may be well intentioned, but the impact will likely be minimal. At $72 per barrel, the recovered oil on June 7 represents a bit over $1.0 million.

Corporations must be profit-driven in order to survive and thrive, to be able to reward their investors and they must evolve to respond to changing markets and consumer needs. Instead of using a "stick" as a response to this disaster, why not use a "carrot"? In my opinion, this recovered oil is the most valuable oil in the world. If released into the environment, the cost is far beyond financial value; the dispersed oil taxes our future through lost jobs, public health risks and unborn wildlife. If BP viewed recovery of this oil as a means towards increasing profits, it is likely that they will invest more resources into efficient recovery and in accomplishing the recovery as quickly as possible.

As a consumer, how much would you pay for the recovered oil? Perhaps this precious commodity could be offered for bidding to the highest payer. Imagine a bidding war amongst the world's most wealthy individuals, with the prize being to not only claim that you are driving the recovery of the environment in the Gulf, but are a major player in driving profits of BP itself and the petroleum industry. Ultimately, BP could use these additional profits to support environmental preservation and research into alternative renewal energy sources. Yes, BP does invest in alternative fuels, but use of these profits would have special significance.

This approach may seem radical, but our economy is replete with examples of highly sought-after commodities garnering huge profits. We know that commodities can have a vast range of value, depending upon availability and emotion of the buyer. Consider unique pieces of art, that highly rated bottle of wine from a bygone era, that collectible automobile. The oil from a land-locked safely secured well may be considered as a "two buck Chuck" bottle of wine, but recovered oil from the BP spill is comparatively a $2,000 bottle of Mouton Rothschild.

Who would like to make the opening bid?

 

Jeffrey H. Toney is Dean of the College of Natural, Applied and Health Sciences at Kean University and is a Trusted Author at OpEdNews. He received a B.S. in Chemistry at the University of Virginia and an M.S. and Ph.D. in Chemistry at Northwestern (more...)
 
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Who believes that this idea could actually have a ... by Jeffrey Toney on Saturday, Jun 12, 2010 at 5:38:00 AM
... and tar and feather him on Times Square. This ... by aberamsay on Saturday, Jun 12, 2010 at 7:07:32 AM
When this nation has been attacked in the past, sa... by PrMaine on Saturday, Jun 12, 2010 at 7:37:56 AM
Absolutely - this should be treated seriously. I a... by Jeffrey Toney on Saturday, Jun 12, 2010 at 8:21:09 AM
...INSIDE JOB, meaning perpetrated by US governmen... by aberamsay on Saturday, Jun 12, 2010 at 8:57:30 AM
I agree with you that there are reason to think th... by PrMaine on Saturday, Jun 12, 2010 at 9:20:20 AM
A catastrophe of this magnitude is never an accide... by aberamsay on Saturday, Jun 12, 2010 at 10:01:30 AM
Just as the U.S. government is composed of many pe... by PrMaine on Saturday, Jun 12, 2010 at 11:17:49 AM
4 tonnes per square centimeter, not cubic of cours... by aberamsay on Saturday, Jun 12, 2010 at 11:55:58 AM
But what I really don't get is why people like Kev... by Jeff Poster on Saturday, Jun 12, 2010 at 9:26:02 PM
My proposal was intended more to handle future oil... by PrMaine on Sunday, Jun 13, 2010 at 6:33:48 AM
Many of them seem to have a pre-conceived viewpoin... by Margaret Bassett on Saturday, Jun 12, 2010 at 10:49:44 AM
Thank you for your encouraging comment, Margaret. ... by Jeffrey Toney on Saturday, Jun 12, 2010 at 11:15:45 AM
Isn't that the root cause of the problem?For today... by Bob Gormley on Saturday, Jun 12, 2010 at 11:18:11 AM
...of the oil industry is the only viable and plau... by aberamsay on Saturday, Jun 12, 2010 at 12:12:33 PM
Corportion only understand their purpose which is ... by Philip Dennany on Saturday, Jun 12, 2010 at 4:10:49 PM
permitting BP to deduct all of the money they spen... by Richmond Gardner on Saturday, Jun 12, 2010 at 7:26:40 PM
This article was cited by the Wall Street Journal ... by Jeffrey Toney on Monday, Jun 14, 2010 at 9:06:16 AM
Ranked as Top 50 Most Commented Articles on OpEdNe... by Jeffrey Toney on Sunday, Jul 11, 2010 at 9:27:11 AM