Could the Spill Sink BP?

First it was a question, said more like a whisper.  Surely BP will survive the spill?

The concept that such a corporate giant could be felled by one outrageous irresponsible act would have been unthinkable even a few weeks ago. But more and more people are asking could the spill sink BP?

Already the future of Tony Hayward, the company’s embattled CEO is in the balance. Paddy Power, the online bookmaker, has Hayward at only 8/11 to survive the year. That ain’t good odds.

BP’s friends on Capitol Hill, despite millions being spent on lobbying and currying political influence, are now as scarce as snow in Washington in August.

Yesterday, BP was accused of “burying its head in the sand” about the size of the spill, by Representative Edward Markey.

Markey’s criticism came after it had been revealed that huge underwater plumes of oil had been found in the Gulf of Mexico as big as 10 miles long, 3 miles wide and 300 feet thick in some parts.

“These huge plumes of oil are like hidden mushroom clouds that indicate a larger spill than originally thought and portend more dangerous long-term fallout for the Gulf of Mexico’s wildlife and economy,” Markey said.

Samantha Joye, a researcher at the University of Georgia who is part of the group gathering details about the spill argued “It’s clear I think now that this leak is a lot bigger. There’s much more material flowing out of this pipe than was previously expected or accepted.”

Joye also said BP’s use of about 28,000 gallons of subsea dispersants may be contributing to formation of the large deep- water plumes.  And that is not rocket science. Although the EPA finally approved the use of dispersants at depth last Friday, we still have no real idea of what the short-medium or long-term affect of this amount of oil and disperant will be.

Joye has said that “there’s a shocking amount of oil in the deep water, relative to what you see in the surface water. There’s a tremendous amount of oil in multiple layers, three or four or five layers deep in the water column.”

BP is resisting demands from scientists to use sophisticated measurements to finally work out how much oil is being leaked.

“The answer is no to that,” a BP spokesman, Tom Mueller, said on Saturday. “We’re not going to take any extra efforts now to calculate flow there at this point. It’s not relevant to the response effort, and it might even detract from the response effort.”

One reason BP does not want you to know how much oil is leaking is that it will aid the small army of lawyers who are now circling the oiled carcass of BP.

And their ranks include the likes of Erin Brockovich, Robert F. Kennedy Jr. and former partners of Johnnie L. Cochran Jr.

At least 88 lawsuits have now been filed against the oil giant since the disaster, with many famous law firms that have fought Big Oil, big tobacco and asbestos for decades.

Stuart Smith, a New Orleans lawyer, is suing on behalf of fishermen, the Louisiana Environmental Action Network and four large hotels, alleges that BP and others were “grossly negligent” in allowing the blowout to occur.

“I’ve been suing oil companies for pollution almost exclusively for 23 years,” Smith said. “And oil companies are the meanest, nastiest defendants in the country. They just don’t care; they have so much money.”

As rich as BP is, “if this well keeps leaking for three or four months, it’s Katie bar the door,” Smith said. “I don’t think they have enough money.”

And just as the litigation from the Exxon Valdez took two decades, so will BP’s.

Another lawyer suing BP, Mike Papantonio, who cut his teeth on asbestos litigation and is a partner in Florida-based Levin, Papantonio, Thomas, Mitchell, Echsner & Proctor, and who is 56, told the Washington Post, he expects to be retired before the litigation is all over said.  And although this might not be the biggest spill ever, the location means that “this will dwarf anything we’ve seen.”

What he is saying is that the Exxon Valdez happened in Alaska, and although it had a truely devastating effect on tens of thousands of people, this spill could impact far more people. Therefore the damages awarded could be much bigger.

The company will also probably face criminal proceedings from the US government, who are also seeking ways to extend corporate liability under the Oil Pollution Act of 1990 from $75 million to $10 billion.

Today, in one small bit of good news for the oil giant, BP has reported a small success in part to siphon off the oil.

But it could all be too little too late to save Haywood, who already looks to be a dead man walking.

It may already be too late to save BP itself.

Or if it does survive, it might be a minnow of its former self…