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Triple Crunch Log                                                                                                            

filming via “Titanic”, now says: “Over the last few weeks I've watched, as we all have, with growing horror and heartache, watching what's happening in the Gulf and thinking those morons don't know what they're doing.”397

Hayward says BP is looking for new ways to manage “low-probability, high-impact” risks such as the Deepwater Horizon oil rig accident. His company is using equipment not much different from the time of Ixtoc spill. The gas blowout was a “one in a million” hit, Hayward professes.398

BP’s reputation has “fallen off a cliff” to an all-time low. So says Covalence, an organisation that tracks the ethical reputation of large companies. BP a grade E, its lowest, in a ranking used by some ethical investors, and not just because of the spill. Working conditions have fallen.399 BP has gone from 7th place to 26th place among the 31 energy sector peers in Covalence rankings. It is now 558th of 581 across all the companies ranked.  Another five companies still come out lower, amongst BP’s sector. Worst is Halliburton, at 580th out of 581 companies, across all sectors.400

Fitch downgrades BP from AA to AA+ assaw gets stuck in latest effort to contain the spill. 401 BP's survival is now openly discussed in the City. It has lost a third of its value (equating to £44bn) since the Deepwater Horizon explosion. 402

US firmly rebuffs proposal by Matt Simmons, Russians and others of a nuclear blast in the Gulf to stop the spill. Decades ago, the Soviet Union reportedly used nuclear blasts to successfully seal off runaway gas wells. “It’s crazy,” an anonymous senior government official says. A senior Los Alamos scientist, also anonymous: “It’s not going to happen. Technically, it would be exploring new ground in the midst of a disaster — and you might make it worse.”403

A boycott BP campaign is creating a buzz on the internet, with more than a quarter of a million sign-ups on Facebook. BP forecourt logos are being smeared with mud. And 40% of BP’s business is in the US. The US interior secretary, Ken Salazar, has warns that BP's “life is very much on the line.” John Kilduff, an energy analyst turned hedge-fund manager at Round Earth Capital, tells CNBC television: “It's questionable whether they can continue to do business in the United States.” The company's market value has dropped from $122bn to barely $80bn. Dan McGinn, a communications expert at TMG Strategies, says corporates can cover from PR disasters. The worst sin, he says, is not necessarily the accident itself but a sense of gross incompetence, a perception of cruelty or veneer of sheer arrogance. “If it comes across that you not only don't understand but don't care about the consequences of your actions, that's unforgivable to Americans.”404

EDF lobbying watered down last government’s effort to make nuclear industry pay for waste. The Brown government originally planned to charge the industry a high, fixed, disposal levy tied to the amount of nuclear waste it produced. The government envisaged responsibility for the waste transferring to the state only once the waste had been disposed of, at least 110 years from the start of a reactor's operations. In March, the Labour government published revised proposals that made significant concessions on both issues, and documents now released under the Freedom of Information Act show that EDF lobbied hard for this on the grounds that investment prospects would be impaired.405

EC to probe the acrimonious nuclear power joint venture between Areva and Siemens after the German company revealed previously undisclosed “non-compete” clauses. At the time it signed up to the JV in 2000 Siemens didn’t think a nuclear renaissance would happen, but now it does, and wants to work with the Russians, not the French.406

3.6.10. BP elects to go ahead with $10bn shareholder payout, despite US senators’ requests not to. Hayward will hope to appease City investors by promising in a conference call with analysts to stick with BP's dividend policy, saying he is confident the company can pay for liabilities resulting from the Deepwater Horizon rig explosion – up to $60bn according to latest analysts’ estimates – as well as rewarding investors. BP's dividend is vital for the pensions of millions who depend on payouts from profitable companies to boost their retirement funds. Shell and BP accounted for 25% of the total dividends of £50bn paid in the UK market last year.407

Paying the dividend would be a mistake, Nils Partley argues in the Guardian. “The problem is not that BP cannot afford its dividend ….it would be bone-headed for BP to parade its financial armoury while oil is still belching from the seabed. That is so even when you consider that the bulk of the final bill will be payable only after the lawyers have done their work, which could be several years from now. ….at a moment of crisis, one calculation overrides others: don't make more enemies if you don't have to. BP shareholders' long-term interests would be best served by making a short-term dividend sacrifice.”408

Obama vows to rescind “billions of dollars” in 'Big Oil' tax breaks by the end of the year. The White House’s cosy relationship with the oil industry is over, he pledges.409

EIA cuts its prognosis for global oil supply: just 92 mbd by 2020. In 2007 it forecast 118 million b/d by 2030. The forecast has fallen every year since, to 2010’s 104 million b/d by 2030.  Supply increases about 0.6% a year from 86 million b/d in 2011 to about 92 million b/d in 2020, which is a bit over 500,000 b/d per year, or essentially flat (for all liquids, not just crude oil).410 Steven Kopits of Douglas Westwood notes that EIA has gone “hardcore” on peak oil. Through 2020, even though China would be expected to hit its stride for increased oil demand, the EIA sees no year in which liquids production will increase by even 1%.411

Climate talks resume in Bonn with “barely a whimper.” “Little has changed since Copenhagen, says the FT. On Climategate: “The furore was overblown, according to the investigations that have thus far reported into the matter, and the central science of climate change remains unchanged, experts say. But the public perception of climate change science has certainly been damaged.” “The oil spill - the worst environmental disaster to hit America, according to President Barack Obama - could yet be the most important thing to happen to the public discourse on climate change.”412

Vince Cable admits U-turn on early public spending cuts, and falls into line with Tories on UK budget deficit. Early spending cuts will be offset by support for economic growth, such as pressure on banks to increase lending to small firms, the creation of new apprenticeship schemes and an overhaul of regulations to make life easier for businesses, he says. For banks, he sees three priorities – separating retail and investment banking, resolving the question of a levy on the banks to reflect the fact the taxpayer is providing insurance, and ensuring that banks' lending agreements are being honoured.

Regulators appalled as JP Morgan found to have mixed its own money and its clients’ money. This failure to keep segregated accounts – among many other ills – would actually restrict clients' access to their cash in times of financial disaster. The FSA fines JPM £33m, the biggest it has ever imposed by the Financial

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