Short Term Thinking

As if we haven't already figured it out yet the NYT offers more proof that BP was ever more concerned with the bottom line than the possibility of a massive disaster.

Internal BP documents, including an e-mail message calling the well drilled by the Deepwater Horizon a “nightmare,” show a pattern of risky choices made to save time and money in the weeks before the disastrous April 20 blowout, according to a letter sent to the oil  company by the leaders of a House committee on Monday.
The leaders of the House Committee on Energy and Commerce cited five areas in which the company had made decisions that “increased the danger of a catastrophic well,” including the choice for the design of the well, preparations for and tests of the cement job and assurances that the well was properly sealed on the top.
Taken together, the documents offer the strongest case yet that BP bears much of the responsibility for the catastrophic explosion that killed 11 workers and the still-unchecked leaking of millions of gallons of oil into the Gulf of Mexico.

Included in the bad decisions, obviously driven by short term thinking, that led to the disaster:

1. BP saved $7 to $10 million by using a cheaper -- but less reliable -- method to complete the well casing. The so-called "tapered string" meant the well had less capacity to resist upward pressure caused by gas bubbles.

2. BP ignored advice from Halliburton to deploy devices that would have given the well additional stability because they would have taken too long -- 10 hours -- to install.

3. BP did not fully circulate drilling mud which would have created better conditions for doing cement work. The reason: fully circulating the drilling mud would have taken 12 hours.

4. BP did not run a comprehensive test on the cementing job even though its own engineers had grave concerns about the quality of the cement work. Again, the reason was time: the test would have taken 12 hours.

I read somewhere that is was costing BP about a million a day to run the drilling operation on the Deepwater Horizon so if my math serves me they might have saved as much as 11 million or so with these decisions. That's not chump change in anybody's books but when you look at the long view and the results of those decisions they were monumentally dumb and no one can claim ignorance since all of these decisions went against the prevailing 'best practice'.
We've seen the result of short term thinking when it was done by the fat cats on Wall Street and  by Bush and Cheney. They, most regrettably, have not suffered the consequences of their actions but maybe BP will. And yes, I feel sorry for all the investors who will lose money but by the same token they were more than happy to cash the checks when BP was violating safety rules and common sense. Even if this disaster should bankrupt BP there are plenty of other players to step in and fill the gap and just maybe this will be a lesson learned by both big oil and the government. I am sorry to say that I don't think this will be the case. All of the 'small government 'drown it in the bathtub' types and 'free market', self regulating harpies will just keep on marching us all to hell.