Oil Slickonomics
by ilene - May 14th, 2010 1:52 pm
Oil Slickonomics
(Parts 1 – 3, including update)
Courtesy of David R. Kotok, Chairman & Chief Investment Officer, Cumberland Advisors
Oil Slickonomics – Part 1 (May 2, 2010)
“At its current leak rate of 5,000 barrels of oil per day, the spill could surpass the size of the 1969 Santa Barbara spill by next week. If the leak cannot be contained, it could exceed the size of the 1989 Exxon Valdez oil spill off Alaska by mid June.” Paul Harrison, Environmental Defense Fund
Three scenarios lie ahead. They rank as bad, worse, and ugliest (the latter being catastrophic and unprecedented). There is no “good” here.
The Bad.
Containment chambers are put in place and they catch the outflow from the three ruptures that are currently pouring 200,000 gallons of oil into the Gulf every day. If this works, it will take until June to complete. The chambers are 30-foot-high steel configurations that must be placed on the ocean floor at a depth of one mile. This has never been done before. If early containment is successful, the damages from this accident will be in the tens of billions. The cleanup will take years. The economic impact will be in the five states that have frontal coastline on the Gulf of Mexico: Texas, Louisiana, Mississippi, Alabama, and Florida.
The Worse.
The containment attempts fail and oil spews for months, until a new well can successfully be drilled to a depth of 13000 feet below the 5000-foot-deep ocean floor, and then concrete and mud are injected into the existing ruptured well until it is successfully closed and sealed. Work on this approach is already commencing. Timeframe for success is at least three months. Note the new well will have to come within about 20 feet of the existing point where the original well enters the reservoir at a distance of 3.5 miles from the surface drilling rig. Damages by this time may be measured in the hundreds of billions. Cleanup will take many, many years. Tourism, fishing, all related industries may be fundamentally changed for as much as a generation. Spread to Mexico and other Gulf geography is possible.
The Ugliest.
This spew stoppage takes longer to reach a full closure; the subsequent cleanup may take a decade. The Gulf becomes a damaged sea for a generation. The oil slick leaks beyond the western Florida coast, enters…
There will be blame
by ilene - May 14th, 2010 12:56 pm
So my Comedy Central break last night was about the oil geyser in the Gulf of Mexico, and whether anyone’s actually responsible, followed by Jon’s report on the big banks’ winning sprees, and a call for a nut based economy, and then an interview with Ian Bremmer on the derivative market and the end of capitalism. That was refreshing! – Ilene
Jon Stewart’s Daily Show
There will be blame
As BP comes up with new solutions for the oil spill by scrambling letters, the government tries to figure out how it happened.
The Daily Show With Jon Stewart | Mon – Thurs 11p / 10c | |||
There Will Be Blame | ||||
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Ian Bremmer
Ian Bremmer believes that America has to defend its free market principles to succeed in the world economy.
The Daily Show With Jon Stewart | Mon – Thurs 11p / 10c | |||
Ian Bremmer | ||||
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Hoarders
The big banks make money by taking the bailout money we gave them and lending it back to the government with interest.
The Daily Show With Jon Stewart | Mon – Thurs 11p / 10c | |||
Hoarders | ||||
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Full Daily Show episode here.>>