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BP's Oil Cleanup Efforts Falling Short - More Worried About PR And Liability

Chris Matthews asks former Shell Oil Executive John Hofmeister about how things are going with the cleanup of the oil in the Gulf and whether this sup
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Chris Matthews asks former Shell Oil Executive John Hofmeister about how things are going with the cleanup of the oil in the Gulf and whether this supertanker that is going to be skimming the oil off of the surface of the water is working or not.

Hofmeister: Well there's two different ways to use the supertanker and one is skimming which we apparently the results over the weekend were inconclusive because of the wave action. And you could understand why it needs a still body of water if you're going to do skimming off the surface. The part that hasn't been used yet is called the "suck and salvage" method where you're actually putting pipes down into the water and sucking oil out of the water once and for all. It's suck, salvage and separate and that hasn't been tried yet. It's been discussed for over two months, still hasn't happened. I'm glad to see the supertanker and the skimmer out there but I'd rather see more supertankers with the suck and salvage method as well.

He goes on to say that the Saudis have never admitted to using the technology. The footage they're showing is the same footage Dylan Ratigan used when he talked to Super Suck International director Francois Vorster about his company's solution for cleaning up the oil. Even if the Saudis aren't admitting they've used it, it's not like the United States government isn't aware the technology exists. There's lots more in that post on the technology and a couple of articles from Esquire Magazine. on Hofmeister's efforts go get the government to consider using the tankers and what they would cost BP.

Environmental lawyer and Ring of Fire radio host Mike Papantonio goes on to explain why BP has no interest in actually cleaning up the oil with that method and gives us some bad news on the escrow fund BP set up. He says that BP hasn't securitized the fund. BP's Bob Dudley told PBS in an interview on July 1st that they're going to securitize the fund. So what's the hold up? Pap thinks they're still looking at filing bankruptcy and are more worried about their PR campaign than containing and capturing the oil.

Full transcript below the fold.

MATTHEWS: Welcome back to HARDBALL.

Well, it‘s day 78 of the oil spill disaster and still no good news. Tar balls have now hit Texas, and a huge converted super tanker—it‘s called A Whale—there it is—has been deployed in the Gulf to skim up oil. But, so far, it‘s hard to tell if this behemoth skimmer is any match for the oil.

John Hofmeister is president and—former president, rather, of Shell Oil, and Mike Papantonio has filed a class-action lawsuit on behalf of fishermen, oystermen and others businesspeople down there affected by the Gulf spill.
John, let me ask you this.

How are we doing on your theory? Weeks ago, if not months ago, in the midst of this horror, you have been recommending that we get a skimmer in there, a big oil tanker to go in there and start skimming up the oil off the surface.
Is it working, this big whale we have got out there?

JOHN HOFMEISTER, AUTHOR, “WHY WE HATE THE OIL COMPANIES: STRAIGHT TALK
FROM AN ENERGY INSIDER”: Well, there‘s two different ways to use the supertanker. And one is skimming, which we see apparently the results over the weekend were inconclusive, because of the wave action.

And you can understand why it needs a still body of water if you‘re going to be skimming off the surface. The part that hasn‘t been used yet is called the suck and salvage method, where you‘re actually putting pipes down into the water and sucking oil out of the water once and for all. It‘s suck, salvage and separate.
And that hasn‘t been tried yet. It‘s been discussed for over two months, still hasn‘t happened. I‘m glad to see the supertanker and the skimmer out there. But I would rather see more supertankers with the suck and salvage method as well.

MATTHEWS: Is that suck and salvage the Kevin Costner method?

HOFMEISTER: That‘s—yes, but it‘s a much larger scale. Kevin Costner‘s product is fairly small, does so many barrels per hour.

This would be big supertankers that have multiple pipes hanging off the sides sucking simultaneously.

MATTHEWS: Yes, we‘re looking at it. Well, it looks like it‘s working in this depiction. But do you know if it‘s ever been proven to work on a large scale, like we have in the Gulf now, with 60,000 barrels a day, having accumulated over the 78 days?

HOFMEISTER: Well, the only story I have heard is one that‘s denied in the Persian Gulf. It‘s denied by Saudi Aramco—or Saudi Arabia—I‘m sorry.
And I don‘t know if that took place or not. With the closed media over there, some things happen you never know about. But it‘s alleged that there was a major spill, that this method was used, and that it worked.

MATTHEWS: Well, let‘s go to Mr. Papantonio.

You‘re an attorney for the people hurt down there. What is your sense of the efforts of BP so far to try to clean up this mess? Are they trying as hard as the people care they are trying to do this job of getting this collected that is coming out still every second at the rate of 60,000 barrels a day?

MIKE PAPANTONIO, ATTORNEY FOR FAMILIES SUING BP: Chris, to put that in perspective, this supertanker has the capability of sucking up 21 million gallons a day.

Let‘s compare that to BP‘s P.R. flotilla that, in 10 weeks, has been able to get a whopping 28 million gallons. There‘s a reason for that, Chris. Right now, you have Tony Hayward on a whirlwind tour around China, Libya, wherever he can go to raise cash for this company.

The reason he‘s doing is because he wants this company to look more attractive. You have to understand, this is a company that—you had Moody‘s and Fitch‘s drop their bond value to just above junk value. So, what are they doing to us? What does that mean to us on the coast?

Here‘s what it means. They‘re cutting back. Rather than bringing any of these supertankers like John was talking about 10 weeks ago, Chris, like you were talking about 10 weeks ago, they have tried to put on a P.R. scam to where they put 1,000 people on the beach with a shovel and a bag and make it look like they really care.

Here‘s what‘s really happening. They put have dispersants on the oil. It sinks to the bottom. And you know what? The oil doesn‘t come up for another year. BP has a very clear plan here, Chris. It is to amortize their—amortize their cleanup costs over 10 to 15 years, rather than doing it in 18 months, which is...

(CROSSTALK)

MATTHEWS: Well, that‘s another word—that‘s a fancy word for postpone, right?
PAPANTONIO: Exactly. They want to spread it out. They want to spread it out.

(CROSSTALK)

MATTHEWS: Justice denied—justice delayed—I mean, you‘re the attorney here. Justice delayed is justice denied. Is that what‘s going on here?

They‘re going to let this mess sit out here in the bottom of that Gulf for years because it‘s good economics for them? That‘s what you‘re saying. And do you have any evidence to back that up? Do you have any evidence to back up that charge?

(CROSSTALK)

PAPANTONIO: The evidence—yes, the evidence is this. The evidence is clear.
We know that a supertanker can take 21 million gallons a day and it can keep it from getting to our beaches. What they‘re counting on is, let it come to the beaches. They don‘t care about Pensacola. They don‘t care about Mobile. They don‘t care about the coast, because all they want to do is put people with a shovel and a bag out there to make it look like they‘re a caring, compassionate company.

And, really, all it is, is cost-benefit analysis.

(CROSSTALK)

PAPANTONIO: Bottom line, they care about cash. That‘s what this whole thing is about.

MATTHEWS: I‘m going to go back to John and then come back to you, Mike.
There‘s a word out there—I got it over the weekend—that maybe this talk of $10 billion in escrow is just talk at this point, that the law states under that this company only has to pay out $75 million, under the law, under the statutes. That hasn‘t been changed. This side deal with the president that was done sort of extralegally, if you will, has no binding legal power.

Do we have any evidence, John Hofmeister, that BP is going to pay out anything like $10 billion to the claimants that are represented in some part by—by Mike?

HOFMEISTER: I think that BP is very concerned about losing their license to operate in the U.S. And the U.S. is one of the most—one of the richest sources of future earnings growth for BP as a company. So, I think there is a moral commitment, as I understand the White House deal that I think, it‘s $20 billion, Chris, that the $20 billion set aside $ 5 billion a year for four years is—

MATTHEWS: Is that legal?

HOFMEISTER: No, it‘s not legal—it‘s not a legal agreement that I know of. But it‘s a moral commitment. And I don‘t see them backing away from it if they want to continue to operate in the U.S.

(CROSSTALK)

MATTHEWS: John, are they going to change the statute and raise the cap and what can be grabbed from that company or not?

MIKE PAPANTONIO, ATTORNEY FOR FAMILIES SUING UP: Let me tell you this: we‘re kidding ourselves about the $20 billion. You know what I learned last week in a meeting up in New York with the people who are in charge of trying to distribute this money?

The money is not even securitized as we sit here. If this company were to move to bankruptcy tomorrow, there‘s no security interest that the U.S. government has in that money.

Secondly, $20 billion has not been escrowed. There hasn‘t been money escrowed at this point at all.

So, as we sit here and it‘s kind of like having a shiny thing out there, Chris—the shiny thing is making us believe that BP is on top of this financially. But you ask the question: is this money securitized? And they‘re going to tell you, no, because that‘s what they told me last week. They told eight major law firms that are involved in the litigation.

I looked across the table and I asked the man directly, is this money securitized? The answer was no. The air went out of that room because we know—

MATTHEWS: That‘s right.

PAPANTONIO: -- when you talk about moral obligations with a company like this, it‘s meaningless. It is absolutely meaningless.

MATTHEWS: Let‘s keep working on that one because I want to make sure from a TV point of view, if we have any belief at all that the moral obligation holds water.

Let‘s go to this question of the relief well effort.

John, based upon your expertise, do you have confidence that the relief well which we‘re told of today in the wire services, it‘s a week ahead of schedule -- have you any assurance that it‘s going to reach target and going to relieve this problem by mid-August, as they claim it will by BP?

HOFMEISTER: No assurance, Chris. But it‘s got to be tried.

They‘ve tried every other option. They‘ve got to try this option.

And they‘ll try right through to the second well—second relief well. If that doesn‘t work, then they‘re back to what do we do now. And I think that‘s when we‘re into a serious question of imploding the well at that point.

They‘re talking about siphoning the oil through a pipeline and making use of it, but I just don‘t see that happening in the time frame. I don‘t think the American people can stand more months of this gushing. I think imploding the well, if the relief well doesn‘t work, is a better option.

MATTHEWS: And the assumption is that the pipe down there, that the well is solid enough if you jam it at that point where they intersect—we‘re looking at it right now—the relief well intersects the initial well. If the well is solid enough at the base down there it will hold, right? That‘s the assumption. It won‘t blow apart down there, below that line.

HOFMEISTER: That‘s the assumption and that‘s why I‘m not giving it a very—I mean, I‘ve given it—I hope a 50/50 chance at least. But there has to be something for the cement to hold onto. And if the casing has been destroyed, if the outside of the casing is actually a channel flowing oil, then they‘re really in bad shape. And I don‘t know how they get enough cement pressure unto it to make it stick.

MATTHEWS: And what happens to the responsibility of this company, Mike—and you‘re litigating this thing—what happens to this responsibility, if we‘re looking at 60,000 barrels a day, hard to imagine. Not just 78 days, but perhaps going into the hundreds of days—because nobody knows when the pressure is going to equalize down there, when it‘s going to stop flowing naturally out of that hole. No one knows that yet.

PAPANTONIO: Chris, I‘ll tell you, there‘s no—at this point, there‘s no way to put a projection on this. And this is what bothers everybody. Look, if this goes bad, you‘re talking about 2 billion-- 2 billion gallons of oil moving into this Gulf.
Now, if that happens, there is no—BP has no plain. Hayward can do his world tour. He can go to China, Libya and Saudi Arabia, and ask for cash. They‘re not going to be around.

And I got to tell you something: people are not paying enough attention to that right now. I‘m already hearing on the coast where the company is meeting with bankruptcy lawyers at the same time that they‘re telling everything—telling us everything is OK.

MATTHEWS: Well, the fascinating news is that the stock value of BP has gone up today. So, that‘s what‘s happening economically with that company. Who can figure?

Thank you very much, John Hofmeister. It‘s always great to have you pushing with us. We really rely on you, sir.

And, Mike Papantonio, just as true with you.

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