A Different Take on the BP Oil Spill
Here's something that caused me to chew on it for a while. It made me pause to consider that we live in a country where a gallon of milk is more expensive than a gallon of gas, and we still have a tendency to fret about the price. Hoe much does our concern about the price of the commodities we use affect the companies that produce them and how they accomplish their goals? Are we willing to pay more for a safer environment?
This is an excerpt from a very provocative article about Corporate responsibility and the demands of the market. It was posted at "Don't Eat the Fruit", a blog about how Christianity is affected by technology.
If we’ve ever complained about rising gas prices or the cost of air travel, we are participating in the world that drives companies like BP to cut costs. We want them to. We need them to. We don’t really want to know what BP is doing as long as it keeps our vehicles fueled and our computers powered. Not unlike Al Gore, who talks about the environment from the comfort of his personal jet, we love to talk about BP’s problems while consuming the product they provide at every opportunity.
You can, and should, read the entire article here.
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I like what Travis said. Look at BP's profit margin before you say that they were forced by demand to cut corners.
ReplyDelete"BP's ability to reduce operating costs by 40% over the course of 2009 also contributed to annual and quarterly profits.[16] For 2009, BP reported earnings $16.58 billion, down 22% from 2008. Annual daily production for 2009 increased approximately 4% from 2008 averaging 3.98 mboe/d. Tony Hayward, the CEO of BP, attribute the rise in production to superior production performance from its wells and rigs and the relative low damage to rigs during hurricane season.[17] The refining and marketing unit earned $15 million before interest and taxes, which was much lower than Wall Street expectations of $571 million. For 2009, the average refining margin was $1.49 per barrel compared to $5.20 in 2008. http://www.wikinvest.com/stock/BP_%28BP%29
Yes, they were down, but .... 16.58 billion and you can't fix your rigs? It's just bad business.
Very wise, grasshopper. But still, the profits are what the stockholders demand. If the profits fall, the stockholders shout and the value of the company declines. How many of us have oil companies on our retirement funds? How many of us have considered adding them? Even if we're not directly involved, we are indirectly because we demand a lower cost of living, forcing companies to restrain costs in order to remain attractive to investors thus remaining viable and competitive. Whichever way you cut it, we are part of the problem.
ReplyDeleteMay I beg one more point -- we are not so much the problem as we are what keeps these companies in business. Creative solutions have been employed for a much longer time, in business, than BP has been around. The push and tug between supply and demand is what drives the free market, and forces companies to become better, or to go under. Can't operate safely and ethically? Send your executives back to school. Management is highly compensated to be able to run their company competitively, efficiently, and effectively. It's their job to weigh the concerns of both their investor and their consumer, and then to produce accordingly.
ReplyDeleteAbsolutely correct. My point is that we should not be so fast to vilify BP for doing what they have done so well in the past; produce profits. All was well as long as BP was raking in the cash. Eveyone was OK with it. Now, many of the smae people that benefitted so highly from their efforts are quick to condemn them. Self righteousness is a result of a fallen world. All I intended was to get us to think a little deeper about the factors that drive such a situation and realize that we may just be a part fo the problem. Maybe all fo us are not....but I think more of us are, more than we realize.
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