BP's Worst Case Scenario

How bad could things get? BP's liabilities could engulf its cash on hand and the company could lose up to a third-of its U.S. sales. Things could get ugly:

The company's Gulf-spill liabilities could reach $40 billion, Bloomberg News said. The oil giant has already spent about $1.6 billion toward cleaning up the spill and set aside another $20 billion. Meanwhile, BP's poor safety record could justify banning the oil giant from doing business in the U.S., Representative Bart Stupak said Thursday, citing a five-year string of accidents and deadly disasters at BP-operated facilities. Analysts and lawmakers say they believe the company could lose control over oil fields, refineries, and pipelines all over the United States, costing it upwards of one-third of its sales. "Setting up the fund was a nice pro-active approach by BP," one oil industry analyst said, "but in reality it's going to take a decade for them to recover and regain public trust in this country." Particularly after BP CEO Tony Hayward's performance before Congress Thursday, when he was accused of stonewalling. At the opposite end of the corporate ladder, there seems to be no reprieve for some people on the Gulf Coast. Due to the moratorium on deepwater drilling, more than 50,000 oil rig workers' jobs are at risk--especially if the ban goes into 2011.

This is all horrible news for the company, but I don't see Congress or the American people treating the company differently on account of Hayward's "stonewalling" performance. First, punishing somebody for stonewalling Congress is like punishing a baby for crawling. Second, very few people watch Congressional testimony who aren't paid to watch Congressional testimony. Third, that BP's CEO is a cad isn't evidence that the company shouldn't be trusted, it's just evidence that the CEO is a cad.

Now this is evidence that the company shouldn't be trusted...

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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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