It's clear that just the economic impact of the Gulf oil spill will be monumental. The administration has said that BP will be held accountable for those impacts, required to pay for the clean up, but also for the damages suffered by businesses and individuals in the Gulf region. As the spill continues and the possibility of damages extending out of the Gulf into the Atlantic and up the East Coast presents itself, the value of those damages rises to mind boggling numbers.
An interesting question arises: can BP cover those costs? I'm guessing the answer is no.
BP claims to have already paid out over $1 billion, though the spill hasn't ended and the plume hasn't found it's final resting place. Now that it appears that the oil plume could find it's way out of the Gulf and up the Atlantic costs, it's reasonable to assume that total costs are increasing algorithmically every day that the well head remains uncapped.
At some point, BP, like any other good corporate entity, will decide that shareholder value will be served by bailing out. There are signs that this is already happening. The head office is spinning American operations off, and a planned shareholder dividend is going ahead, just when you think they'd be hanging onto cash. And the rest of the oil exploration industry is taking a cue, threatening to take their rigs elsewhere.
Rep. Charlie Melancon (D-LA) slammed oil companies in a phone call with MSNBC this afternoon: "I'm hearing some of the companies saying 'I'm shutting down, I'm getting my equipment and I'm going to Nigeria, or I'm going somewhere else.' "
It looks to me that it's time for the US government to step in and make sure that assets sufficient to cover the costs are retained. Freezing cash and physical assets seems like a good starting point. Looking beyond the corporate veil also makes sense. At least to me.