Q. Is there any law limiting the damages paid out by an oil company?

A. The Oil Pollution Act sets the liability limit for economic damage claims
at $75 million, but BP blew past that number long ago and has said it will
pay all legitimate claims. Last week, BP and the White House announced that
the company was creating a $20 billion fund to take over payment of economic
damage claims. The fund will be run independently by Kenneth R. Feinberg,
who also administered the settlement fund for 9/11 victims and others.

Q. Have any lawsuits been filed against BP or other parties?

A. More than 200 lawsuits have been filed against BP and other companies --
and some of those suits are class actions involving hundreds and even
thousands of plaintiffs. Commercial fishermen, shrimpers, vacation home
rental agents, dive shop owners, seafood processors, state and local
agencies and anyone whose income could be affected by the spill are weighing
in.

Whether they continue to pursue their claims in court or opt for the more
predictable settlement from Mr. Feinberg's fund is one of the issues we will
all be watching.

Q. How in the world will the courts deal with all of those lawsuits?

A. The suits are likely to be consolidated by the federal courts through a
process called multidistrict litigation. A seven-judge panel appointed by
the chief justice of the Supreme Court of the United States meets regularly
to determine which cases should be consolidated and how.

The industry has asked that the cases be consolidated in Houston; the
companies' headquarters are there, and, not coincidentally, it might be a
relatively friendly environment. The various lawyers for the plaintiffs have
requested that the cases be consolidated across the Gulf Coast, with the
Louisiana trial bar pushing hard for New Orleans -- not coincidentally, a
place where anger over the spill runs high.

BP and the Oil Industry

Q. Is BP wealthy enough to pay for the economic and environmental costs of
the spill? Or is the company at risk financially?

A. The price of BP stock has plummeted by more than 50 percent since the
April 20 accident, from just over $60 a share to below $30. But BP remains a
very wealthy company; last year alone it earned $17 billion, and it ended
the year with more than $8 billion in cash. It has operations all over the
world that generate income, and with oil at over $75 a barrel, the prospects
for revenues remain strong.

Most experts believe the company will survive, despite anticipated losses
from penalties and claims mounting to tens of billions of dollars.

Still, uncertainties remain, especially if the runaway well is not plugged
by the two relief wells now being drilled, which was expected to be
completed by late August. That could mean months more of heavy damages, and
more and more claims.

Q. Who owns BP stock? Mostly Britons?

A. BP is owned by investors all over the world. BP estimates that about 40
percent of their shares are owned by British investors, and nearly as much
by American investors. Another 10 percent are owned by other Europeans, and
the remaining 10 percent by investors from other countries outside Europe.
Since much of the stock is owned by mutual funds, it is not easy to
determine the exact percentages of the nationalities of its owners. Suffice
it to say, many Americans and Britons depend on BP dividends.

Q. Are lots of ordinary people whose mutual or pension funds are invested in
BP going to be adversely affected? Or are most such funds widely
diversified?

A. There are certainly some mutual funds and pension funds that will be
affected on both sides of the Atlantic. Nebraska's retirement fund, for
instance, reportedly will lose $1.3 million each quarter that BP suspends
its dividend. The erasure of about $100 billion in BP stock value has
translated into big losses for several funds. The California Public
Employees' Retirement system has lost more than $284 million in value,
Bloomberg News reported.

Q. Will other oil companies benefit from BP's woes, or will they all be
negatively affected?

A. Some companies may benefit in the future. When companies decide to invest
in big projects, they often look for partners to share risks and expenses.
BP may be seen now as less reliable, giving a new competitive edge to Exxon
Mobil and Chevron, for instance, when smaller companies like Anadarko are
looking for a partner with deep pockets.

But at the moment BP's woes are shared widely, especially among companies
that would like to drill more in the Gulf of Mexico. The current drilling
moratorium will hurt the majors and service companies. Oil companies will
almost certainly face more regulatory hurdles and safety expenses in the
future.

Q. Will the spill or the offshore drilling moratorium affect oil or gas
prices?

A. The moratorium on drilling in the gulf should not have an impact on oil
or gasoline prices over the short term. For one thing, a well that is being
drilled is not a producing well; each drilling operation takes a year or
more before production commences. For another, oil production is still high
in the gulf by historical standards as a result of a wave of drilling in
recent years.

Oil is a world commodity, and its price is affected by many factors
including the strength of the world economy, which drives demand. However,
if the moratorium were to go on for years, it would eventually have an
impact on oil supplies as older wells became less productive. That could
affect prices, unless lost production is replaced by new production
somewhere else.

Philanthropy

Q. Is any organization coordinating charitable donations?

A. Several Web sites are compiling places to donate money, time and
resources. The Greater New Orleans Foundation is focused on charities that
help fishermen and their families in Louisiana. The National Wildlife
Foundation and the Humane Society of the United States are taking donations
to help wildlife on the coast.

Perspective

Q. Is this the nation's worst oil disaster ever? Its worst environmental
disaster ever?

A. It is probably neither. If your criterion for the worst oil disaster is
the greatest volume of oil leaked, then the Lakeview Gusher of 1910 released
at least twice as much oil into a semi-desert area of California as this
leak has released so far. This leak is without question the worst oil
disaster at sea in United States history, but it does not yet match the
volume of an Mexican oil-well blowout known as Ixtoc 1, also in the gulf, in
1979-80.

As for worst environmental disaster ever, this one so far does not come
close to matching the human impact of the Dust Bowl of the 1930s, which
prompted one of the largest mass migrations in American history, with
perhaps a half-million people abandoning the Plains. But that said, the
damage is accumulating as the spill drags on. It seems likely to wind up as
one of the worst American environmental disasters, if not the worst.



Jeff Snyder, SysOp - Armageddon BBS  Visit us at endtimeprophecy.org port 23
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