Just in case anyone is curious how these people really think……….
Let’s talk about BP… Some of the world’s top value investors have begun to buy shares of BP based on their estimates of what the Gulf cleanup will cost compared to the enormous cash flows of the company (roughly $30 billion annually, pre-tax). Our friend Whitney Tilson, one of the most respected value-oriented hedge fund managers in New York, even says that BP won’t have to cut its dividend. We doubt Tilson is correct about the dividend, but he makes a few excellent points about the scope of the disaster in contrast to the media hype about the spill:
• It’s a horrible accident, but unlike what Matthew Simmons says, you don’t really have to clean up the entire Gulf of Mexico. “The Gulf of Mexico is huge, covering 615,000 square miles and containing 660 quadrillion gallons of water,” Tilson wrote in an e-mail to me this morning. “Let’s compare this to the amount of oil Deepwater Horizon has been leaking. Most estimates are in the 12,000-20,000 barrels per day range, so let’s take the high end and also assume that this continues until mid-August, meaning four months since the accident.
“Let’s also assume that the cap captures no oil (the latest reports are that it may be capturing most of the oil, but let’s be conservative). 20,000 barrels/day x 120 days x 42 gallons/barrel = 100.8 million gallons of oil released. 100.8 million divided by 660 quadrillion is one gallon of oil for every 6.6 billion gallons of water in the Gulf. That’s the equivalent of roughly one-millionth of an ounce of oil in a typical bathtub full of water.”
• It has happened before, and it wasn’t the end of the world. “PeMex’s Ixtoc oil well [1979] was far worse than the Deepwater Horizon well: 140 million gallons of oil poured out of the Mexican well… After four months, an oil slick had covered about half of Texas’s 370-mile gulf shoreline, devastating tourism.”
• It’s nothing compared to Kuwait. During the first Gulf War, 10 times as much oil spilled into the Persian Gulf, which is one-sixth the size of the Gulf of Mexico. And what were the long-term consequences? Tilson cites a 1993 UNESCO study that reported “little” long-term damage was done to the environment. “Half the oil evaporated, a million barrels were recovered and 2 million to 3 million barrels washed ashore, mainly in Saudi Arabia,” he said.
Beautiful begger;
now let’s use the new & updated numbers of 2-2.5 million gallons per day and Mr. Benoit Mandelbrot’s Fractal geometry……….Would probably scare all those who think this is as Tony says………..
“The Gulf of Mexico is a very big ocean. The amount of volume of oil and dispersant we are putting into it is tiny in relation to the total water volume.”
—BP CEO Tony Hayward
Tony needs to take a permanent vacation as head of BP. I suspect he is only staying on until they can come to some resolution, then they can fire him and his successor can come on with a clean record to “save the day,” without actually having to address this issue.
Pardon my cynicism - I work with executives every day…some are better than others…
Large volumes of extremely toxic chemicals, petroleum and dispersants, have been released. Some of the “constituents” of these are lethal to marine life in parts per BILLION OR TRILLION, not just ppm that folks are more familiar with. It is NOT just the impact of tars on beaches that reflect a problem.
In actuality, the companies may PREFER folks focus on the impact on pelicans, rather than the vast array of aquatic organisms at risk.
cfimeiatpap almost 14 years ago
Just in case anyone is curious how these people really think……….
Let’s talk about BP… Some of the world’s top value investors have begun to buy shares of BP based on their estimates of what the Gulf cleanup will cost compared to the enormous cash flows of the company (roughly $30 billion annually, pre-tax). Our friend Whitney Tilson, one of the most respected value-oriented hedge fund managers in New York, even says that BP won’t have to cut its dividend. We doubt Tilson is correct about the dividend, but he makes a few excellent points about the scope of the disaster in contrast to the media hype about the spill: • It’s a horrible accident, but unlike what Matthew Simmons says, you don’t really have to clean up the entire Gulf of Mexico. “The Gulf of Mexico is huge, covering 615,000 square miles and containing 660 quadrillion gallons of water,” Tilson wrote in an e-mail to me this morning. “Let’s compare this to the amount of oil Deepwater Horizon has been leaking. Most estimates are in the 12,000-20,000 barrels per day range, so let’s take the high end and also assume that this continues until mid-August, meaning four months since the accident. “Let’s also assume that the cap captures no oil (the latest reports are that it may be capturing most of the oil, but let’s be conservative). 20,000 barrels/day x 120 days x 42 gallons/barrel = 100.8 million gallons of oil released. 100.8 million divided by 660 quadrillion is one gallon of oil for every 6.6 billion gallons of water in the Gulf. That’s the equivalent of roughly one-millionth of an ounce of oil in a typical bathtub full of water.” • It has happened before, and it wasn’t the end of the world. “PeMex’s Ixtoc oil well [1979] was far worse than the Deepwater Horizon well: 140 million gallons of oil poured out of the Mexican well… After four months, an oil slick had covered about half of Texas’s 370-mile gulf shoreline, devastating tourism.” • It’s nothing compared to Kuwait. During the first Gulf War, 10 times as much oil spilled into the Persian Gulf, which is one-sixth the size of the Gulf of Mexico. And what were the long-term consequences? Tilson cites a 1993 UNESCO study that reported “little” long-term damage was done to the environment. “Half the oil evaporated, a million barrels were recovered and 2 million to 3 million barrels washed ashore, mainly in Saudi Arabia,” he said.
cfimeiatpap almost 14 years ago
Beautiful begger; now let’s use the new & updated numbers of 2-2.5 million gallons per day and Mr. Benoit Mandelbrot’s Fractal geometry……….Would probably scare all those who think this is as Tony says………..
“The Gulf of Mexico is a very big ocean. The amount of volume of oil and dispersant we are putting into it is tiny in relation to the total water volume.” —BP CEO Tony Hayward
http://www.pbs.org/wgbh/nova/fractals/mandelbrot.html
http://motherjones.com/blue-marble/2010/06/bp-still-playing-dumb-about-size-gulf-disaster
CorosiveFrog Premium Member almost 14 years ago
cfimeiatpap; your first post sounded like something HQ would say;
Motivemagus almost 14 years ago
Tony needs to take a permanent vacation as head of BP. I suspect he is only staying on until they can come to some resolution, then they can fire him and his successor can come on with a clean record to “save the day,” without actually having to address this issue. Pardon my cynicism - I work with executives every day…some are better than others…
Dtroutma almost 14 years ago
Large volumes of extremely toxic chemicals, petroleum and dispersants, have been released. Some of the “constituents” of these are lethal to marine life in parts per BILLION OR TRILLION, not just ppm that folks are more familiar with. It is NOT just the impact of tars on beaches that reflect a problem.
In actuality, the companies may PREFER folks focus on the impact on pelicans, rather than the vast array of aquatic organisms at risk.