Letter to America

Dear America,

I am writing to say how much all of us in the UK are grieving for the damage being done to livelihoods, wildlife and the environment by the oil spill in the Gulf. We understand your anger, fear and sense of helplessness as the oil gushes into the ocean and nears your shores. Rest assured none of us here in the Uk wanted this and all wish strongly that the companies concerned can soon cap the well fully and start to restore normal conditions. None of this is the result of actions or inactions by the British people or government. The spill resulted from activity by global and US companies in the Gulf under supervision and regulation by the US authorities.

I understand your President keeps referring to British Petroleum, as if the Uk was seeking some kind of macabre revenge for the long ago War of Independence which you won rightly and magificently. We share no such feeling. Let me explain. The company concerned is BP. It is a global multinational, with more of its employees and assets in the USA than in the UK. It has global shareholders, with as much of its stock owned by American individuals and Pension funds as owned by British interests. Many of its Directors and senior managers are American. One of its principal forerunners was British Petroleum, but it has changed and grown out of all recognition since those days. It has been a large operator in the USA for many years and has been a pioneer of oil exploration in new and hostile territories to seek to meet US demand for petroleum products. In the Gulf it was using an American drilling company and American service companies to seek oil in very deep water.

I am sure BP is doing all it can to stop the flow and clean up the mess. It needs to do so for your sake and for its own sake, as its own profits and prospects will be much improved as soon as it has succeeded in closing down the well and then in cleaning up the spill. I am sure it is fully motivated to do so. It will not take more hostile action by US government to get it to achieve this. The US government should remember that if it moves unfairly against BP shareholders it is moving unfairly against many US holders as well as against foreign holders. US shareholders will be no keener on losing their dividends than overseas holders.

There does need to be a proper investigation into what went wrong and then decisions can be made about what actions companies and the regulators should take to make such a disaster less likely in the future. Before we know what each of the relevant companies did and who was responsible for what error or misjudgement, it would be unwise to rush to take action against any of the participants in this tragedy. BP itself has not sought to avoid responsibility, nor should it. BP was,not, however, alone in this bad accident.

Like you I just want to see the oil flow controlled and the final clean up begin. Before that is dealt with the rest is just words, or actions that could make it more difficult.

Yours sincerely

John Redwood

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26 Comments

  1. Posted June 11, 2010 at 7:43 am | Permalink

    Tony Blair started off like Obama: Superman!!!
    In our case, he (amde claims -ed) about the Gulf War with the dodgy dossier and agreed behind our backs with George W to join in. Then Dr David Kelly mysteriously died. That was when we lost confidence in him.
    In Obama's case, this oil spill shows the chip on his shoulder. He is, when all is said and done, an international person with sad memories of the break up of Empire (encouraged by the Americans in 1945). Part of the charm was his skin colour. (words left out) He is quite a long way from, say, Grant or Truman.
    He is now revealed, after all, as just a career politician from the Chicago machine with just a dash of American University Professor.
    So what did we expect?

  2. Posted June 11, 2010 at 7:48 am | Permalink

    Well said.

    A US Shell executive (ex or current) suggested BP get a fleet of tankers to sweep the Gulf pumping polluted sea water in and filtering out the oil from their discharges. Worth a shot Mr President?

    • Posted June 11, 2010 at 11:50 am | Permalink

      McBurney: ""Gulf pumping polluted sea water in and filtering out the oil from their discharges."

      Would you believe environmental regulations prevent that. 'Just in case the tankers discharge some oil into the gulf'.

  3. Posted June 11, 2010 at 8:16 am | Permalink

    It is to the credit of BP that they have assumed all the responsibility and blamed no other.
    The way Obama is behaving, it is like blaming Toyota customers for buying a car in which the accelerator got stuck down. It is conveniently not mentioned that Toyota built the car in the first place.
    The rig was owned and operated by Americans and BP assumed the operators would act responsibly. Am I expected to go to the Toyota production line to make sure my new car is built safely?

    • Posted June 11, 2010 at 9:09 am | Permalink

      ColinD. Please note that of the 8,000 Toyota cars recalled for accelerator problems, only 3 had a 'potential' problem and 1 had an actual fault. (The idiot with the fault panicked and forgot to carry out the obvious actions – apply the brake, put the car in neutral and bring the car to a halt, after which switch the ignition off!). Toyota has had 4 recalls in the last 2 years across all models, while Mercedes has had 40! Citroen has had 33! Don't believe all the hype you read in the papers. Toyota is one of the world's most reliable cars and all the other reliable ones are also Japanese/Korean.

      Don't forget, Obama has mid-term elections coming up. When Americans wake up to the fact that 'British Petroleum' is actually 39% owned by Americans, Obama might have a bit of a shock!

  4. Posted June 11, 2010 at 8:48 am | Permalink

    War of Independence ? Illegal terrorist rebellion against legitimate authority surely?

    But seriously, the drilling and extraction was of course carried out by sub-contractors as Lord Tebbit points out

    • Posted June 11, 2010 at 10:04 am | Permalink

      Well said Mr Fairney (not somebody I agree with very often).Why did the American Rebels feel they should n't pay tax when they had to be expensively defended against the Indians they had annoyed?The Boston Tea Party was got up by rich contraband tea smugglers.

  5. Posted June 11, 2010 at 9:26 am | Permalink

    "Which you won, rightly and magnificently'

    If the Comte De Grasse were alive today, I think you'd have a hell of an argument!

  6. Posted June 11, 2010 at 9:37 am | Permalink

    While the drilling, etc. was carried out by contractors there is always someone on the rig known as the 'Company Man' (dayshift and nightshift) who is there to represent the Operator (BP in this case) and has ultimate responsibility. He makes reports to the beach, liases, chairs all rig meetings, etc. There will be a few other BP people on the rig as well but only a handful.

    Blaming Americans for the spill because it is an American rig is as shortsighted as blaming BP. It was an accident and the safety features, regulations, and safety tests performed on these rigs are extremely onerous but, unfortunately, these things happen from time to time.

    Hopefully some safety lessons can be learned at the end of it all to reduce the risk even further but you'll never remove the risk.

  7. Posted June 11, 2010 at 9:41 am | Permalink

    JR: "… to seek oil in very deep water."

    Seems to me the morotorium on drilling in the shallower water of the continental shelf imposed by the US government has directly contributed to the situation.

  8. Posted June 11, 2010 at 9:59 am | Permalink

    As Obama has decided to attack the BP senior management, I think they should respond like-for-like.
    What about BP suggesting that they will pay the same level of compensation to the Americans as the American Company, Union Carbide, paid to the Indians after the catastrophe killed in excess of 2000 people and left many more diabled, ie nothing.
    Seems that America is adopting my Mum's old saying, "Don't do what I do, do what I say"!

  9. Posted June 11, 2010 at 11:39 am | Permalink

    I think you hit the nail on the head with this letter.

  10. Posted June 11, 2010 at 1:07 pm | Permalink

    If you want to see the difference between the powers of a HoC Select Committee and its US equivalent, have a look at:-
    http://energycommerce.house.gov/index.php?option=

    Particularly, the initial technical report on the oil spill; released by the committee:-
    http://energycommerce.house.gov/documents/2010052

    I suggest the latter will form the script outline for the inevitable movie.

  11. Posted June 11, 2010 at 1:41 pm | Permalink

    And the most important point is that it is Americans who cannot do without cheap oil – hence the ever more elaborate and risk-laden ways of gettiing it to them from their own seas.

  12. Posted June 11, 2010 at 1:58 pm | Permalink

    Well said, John — and I say so as one of your American fans since '95!

  13. Posted June 11, 2010 at 2:09 pm | Permalink

    I assume that if any US Government scientist/engineer had had a solution to capping the leaking oil field any sooner then they would have told BP and BP would have done it. As, presumably, they haven't then the US admininstration can hardly complain that BP have failed so far.

  14. Posted June 11, 2010 at 2:25 pm | Permalink

    Best article for ages, congratulations. What a pity the Leader and his Foreign Secretary cannot make these points to the President. There does, i'm afraid appear to be a lack of backbone in both when it comes to defending the UK position.

  15. Posted June 11, 2010 at 5:30 pm | Permalink

    I fear you're wasting your breath JR.

    If you go onto the comments at the New York Times website, where clever Americans with passports hang out, you will see they are actually having a sensible debate (some of it Partisan, Bush's or Obama's fault etc) about energy, regulation etc and no one is spouting anti-British rhetoric. Some are cheesed off with BP, but they do have a bad safety record over there and these people have a point.

    There's votes to win in the deep South and elections coming up. These are the sort of folk that tuned into the God channels in late 2002 to watch sermons like "God don't Give Big Oil to Foolish People" and 'Fiery Combat is Good in the Eye's of the Lord".

    If you have a good google around and find the forums these guys hang out in you will find a bunch of people ranging from 'end of the world is nighers' quoting the Book of Revelations to angry folk who want an eye for an eye (or in this instance, confiscating BP from the shareholders).

    I'm sorry, but it has to be said, these people are just morons and not worth trying to debate anything with.

  16. Posted June 12, 2010 at 10:10 am | Permalink

    Some misleading comments from the BBC: Peston claimed that "The overwhelming financial benefit from the operation of the rig accrued to BP and its shareholders."

    The Macondo project pays royalties of 18.75% of revenue, regardless of profitability, to the US government. BP' share in the project is 65%: there is a 25% share owned by US oil company Anardarko (based in Houston), and the remaining 10% is owned by the well known Japanese consortium Mitsui. Federal Corporation tax is 35%, so if the oil could be recovered cost free, BP would get 65% of 65% of 81.25% of revenue – or 34.328125%, assuming no other tax liability, while the US government would get 18.75% + 35% of 81.25%, or 48.1785% of revenues. If costs are say 60% of revenue, then the sums work out as BP getting 65% of 65% of 21.25% or 8.978125%, while the US government gets 18.75% + 35% of 21.25%, or 26.1875%. Of course, the government also gets taxes on profits of suppliers, and income taxes on employees etc. as well.

    In short, which ever way you slice it, the US government was always going to get a larger slice of profit from the venture than BP. Perhaps that sheds an important light on their attitudes.

    Disclaimer: I have no connection past or present with BP, Anadarko or Mitsui, although I have some knowledge of the US Gulf oil province from work with others.

  17. Posted June 12, 2010 at 10:49 am | Permalink

    It is illogical to imply or suggest that BP and by implication the world wide oil industry is not doing all it can to a) stop the leak, b) prevent oil pollution, c) clean up the mess. I can assure you there are a good few senior executives and government scientists around the world desperate to know why the blow out relief valve failed. Why ? Because they are fitted to every oil platform in the world and there has never been a recorded failure! The potential implications of others failing will make the Gulf look like a garage oil spill. My life experience of America's presidents is that the clever ones, combined with a political system of non stop electioneering and a foreign policy conducted wholly in the interests of America's richest capitalists are nearly always a disaster for the rest of the world. It was Groucho Marx who said, "These are my principles. If you don't like them… I have others." He knew a thing or two about politicians did Groucho. I do hope Mr. Cameron is going to conduct some real diplomacy on the scrambled telephone line and tell Mr. Obama a few home truths. He shouldn't mind should he? After all, a real friend tells you how it really is don't they?

  18. Posted June 12, 2010 at 10:50 am | Permalink

    It really is outrageous that the land of the free, the home of the brave and the eternally vigilant champion of capitalist market forces is interfering in the lawful allocation of dividends to BP's shareholders. It sets an appalling precedent, especially for American multinationals. One can visualise the international corporate lawyers calculating their fees already and surfing the net for their new yacht, private jet or secluded island somewhere. O Tempora O Mores ____

  19. Posted June 12, 2010 at 1:52 pm | Permalink

    Just a humorous irreverant aside having just listened to the News Quiz on Radio 4!

    "When the Yanks wanted oil they used to have to invade another country.

    BP is now delivering it right to their doorstep!"

    You just can’t please some folk.

  20. Posted June 12, 2010 at 1:55 pm | Permalink

    SORRY – IN GIRLY FASHION WE FORGOT TO INCLUDE THE PUNCHLINE!

    "When the Yanks wanted oil they used to have to invade another country.

    BP is now delivering it right to their doorstep"

    YOU JUST CAN'T PLEASE SOME FOLK!

  21. Posted June 12, 2010 at 8:51 pm | Permalink

    Sir:
    I'm afraid you and other friends in Britain don't understand. Obama is out to wreak havoc on the oil business in general. BP having a British identity makes the company a doublely juicy target for the Chi Town Mob that runs the White House. Don't underestimate the ability of these people to be and play dirty. As an appalled American [Texan really] my best advice is to be firm and not take any bull off Obama or his henchmen. Just hope enough of the Yankees up North turn against him in 2012. You'll notice it wasn't the South that elected this dangerous clown. Beware of Obama, Britain—he's not your friend. We are; he's not.

  22. Posted June 12, 2010 at 11:03 pm | Permalink

    Facts about ownership of Macondo and US government royalty interest can be verified in this article:
    http://www.upstreamonline.com/live/article217090….

    They confirm the position discussed in my earlier post that the biggest beneficiary of the project stood to be the US government by the time you account for Federal Corporation Tax at 35%

  23. Posted June 15, 2010 at 12:24 pm | Permalink

    I did have high hopes for the new president when he came into office, but his behaviour and insistence in referring to BP as BRITISH petroleum is showing how discriminatory he is being and also incorrect as you have stated in your blog. This attitude and constant name calling will result in prejudice towards British people with whom so far they have had a very good relationship with so far. No one wants this situation it has resulted in a lot of financial heartache for the board of BP and let us not forget the people who died. we do not want to blame for disasters like this as the British people didn’t with Piper Alpha.
    I think the president should show some responsibility and not blame help put right after all the USA are involved financially and environmentally.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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