BP to pay for problems in the Gulf

This article discusses the price of $4.5 billion that BP will have to pay for being guilty of issues concerning the Gulf. I think this article does a nice job of showing that there are social issues involved in processes that may not be seen in the beginning. BP already has to pay $4.5 billion, but that is not everything they will have to pay. It is estimated that BP could pay up to $21 billion.

 

http://www.nytimes.com/2012/11/16/business/global/16iht-bp16.html?_r=0&hp=&adxnnl=1&adxnnlx=1353010166-A+qdSHnRvkprK58psASkgQ

Comments

The Big New Push to Export America’s Gas Bounty

This is an interesting New York Times article about Excelerate Energy, an American natural gas company, that is hoping to create a large export terminal and contribute to the United State’s entrance into the global market as a seller of natural gas. This article discusses several key concepts that we have discussed in class including the basic ideals of supply and demand as well as how price can be deceptive when externalities are not factored in.

The United States is able to extract natural gas from the ground via fracking at a reasonably  “low” cost (without factoring in the multitude of external costs such as water contamination, health issues, increased traffic and other such impacts on local regions). The U.S. would then be able to sell this natural gas on the global market, where the price is extremely high due to huge global demand and gas shortage. As the stated in the article “The wide price disparity between American and global markets has energy giants like Exxon Mobil and BP eager to sell cheap American natural gas to foreign buyers to cash in on robust global demand.” It appears to me that these externalities are not being factored in by American energy companies. Would the United States still be able to make such a huge profit on selling this “cheap” natural gas to the global market if they took externalities and social cost of this gas extraction into account? Do the external costs outweigh the potential benefits of becoming an international exporter of natural gas?

http://www.nytimes.com/2012/10/24/business/energy-environment/excelerate-energy-aims-to-be-a-leader-in-natural-gas.html?_r=1&ref=businessspecial2

Comments (1)