Louisiana deep oil drilling disaster

[Ed Jewett]

Latest Key Developments


Independent Oil & Gas Producers Sue Subsidiaries Of The Goldman Sachs Group, Inc. and British Petroleum For Conspiring With SemGroup To Defraud Them
Monday, 17 May 2010 12:45pm EDT

More than 80 independent Kansas, Oklahoma and Texas oil and gas producers announced that they have filed lawsuits alleging that The Goldman Sachs Group, Inc. subsidiary J. Aron & Co. and British Petroleum subsidiary BP Oil Supply Company conspired with SemGroup to defraud them and convert millions of dollars worth of the producers' crude oil and gas that was delivered to SemGroup prior to the company's 2008 bankruptcy. In addition to BP and J. Aron, ConocoPhillips, Plains Marketing and numerous other oil and gas companies are named as defendants in lawsuits that were filed in Kansas and Oklahoma state courts. The lawsuits for the independent producer plaintiffs say they are owed millions of dollars for the crude oil and gas that the defendants took from SemGroup just as margin calls were rapidly driving the energy company toward its Chapter 11 filing in July 2008. The complaints allege that Goldman Sachs and J. Aron exploited their multilayered relationship with SemGroup in which they were the company's investment banker, offering agent, lender, and trading partner to take possession of the independent producers' oil and gas in violation of numerous state laws of Kansas, Oklahoma, and Texas.



http://www.reuters.com/finance/stocks/ke...ymbol=GS.N


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May 19, 2010

Media ignores Goldman Sachs' ties to Corexit dispersant

In a recent New York Times’ article “Less Toxic Dispersants Lose Out in BP Oil Spill Cleanup”, journalist Paula Quinlan questions why BP is using the 100 % toxic, 54 percent effective dispersant Corexit to clean up the oil when twelve other dispersants proved more effective in EPA testing.

BP spokesman Jon Pack defended the use of Corexit, which he said was decided in consultation with EPA. He called Corexit "pretty effective" and said the product had been "rigorously tested."

"I'm not sure about the others," Pack said. "This has been used by a number of major companies as an effective, low-toxicity dispersant."

BP is not considering or testing other dispersants because the company's attention is focused on plugging the leak and otherwise containing the spill, Pack said. "That has to be our primary focus right now," he said.

Nalco spokesman Charlie Pajor said the decision on what to use was out of his company's hands. He also declined to comment on EPA comparison tests, saying only that lab conditions cannot necessarily replicate those in the field. "The decision about what's used is made by others -- not by us," he said.

Quinlan only looks at part of the picture. She associates BP’s investment in Nalco and oil industry representation on the board as the main reasons that Corexit was used instead of Dispirsit, which EPA testing shows to be twice as effective and a third less toxic. Yes, BP is hedging its losses with the profit it will make with its investment in Nalco, but who else benefits?
Follow the money...and the money goes to Goldman Sachs and friends. Instead, Quinlan (or her editor) goes after Exxon.

Critics say Nalco, which formed a joint venture company with Exxon Chemical in 1994, boasts oil-industry insiders on its board of directors and among its executives, including an 11-year board member at BP and a top Exxon executive who spent 43 years with the oil giant.

"It's a chemical that the oil industry makes to sell to itself, basically," said Richard Charter, a senior policy adviser for Defenders of Wildlife.

In defense of the oil industry, it makes financial sense that Exxon and BP were the initial investors in this type of dispersant. It’s not surprising that oil executives sit on the board. I am not defending the toxicity of their product, the integrity of their board members or the likely Halliburton-stye billing process that will kick in when BP decides it is no longer responsible for the impact of the “very, very modest” oil blowout that is already twice as large as Exxon-Valdez and is far more devastating economically and let the bankrupt US Treasury cover the bills. (To be fair, BP has accepted full responsibility and within days of the accident and without a court order, BP gave the states of Louisiana, Florida, Alabama and Mississippi each $25 million to help with the immediate damage.)
But BP’s investment in Nalco is the token diversion. The real players are Goldman Sachs and their fellow Sexually Inadequate Masters of the Universe, the Blackstone Group and Apollo Management.
From Nalco’s website:
2003
USFilter and Ondeo Nalco enter into a strategic partnership providing equipment, chemicals and service to industrial customers.

The Blackstone Group, Apollo Management L. P. and Goldman Sachs Capital Partners buy Ondeo Nalco.

Nalco Company, a recognized symbol of strength around the world, unveils new logo.

Never mind item three, the logo change executives consider one of the three most important events in Nalco’s 2003 history, hence its prominence on the Nalco corporate history webpage. Look at item number two.

If for no other reason that Goldman Sachs is newsworthy, I think that their $4.3 billion purchase of Nalco in 2003 would be worth mentioning, especially in light of their short trade on TransOcean. The shorts are another missing item in the business section of The Times, as is any information on Goldman’s role in the 9-11 put options on American and United for that matter. “All the lies that are fit to print...” on their banner would be more apropos. Seems someone is treating the demon children at GS with kid gloves.

While the article has some weaknesses, the publicity should help ebb the use of the more toxic dispersants as BP succumbs to more public pressure as more and more people become informed as to the dangers of dispersants.

`Bruce Gebhardt, president of the company that manufactures Dispersit, U.S. Polychemical Corp., said BP asked for samples of his company's product two weeks ago. Later, he said, BP officials told him that EPA had wanted to ensure they had "crossed all their T's and dotted all their I's" before moving forward.

Gebhardt says he could make 60,000 gallons a day of Dispersit to meet the needs of spill-containment efforts. Dispersit was formulated to outperform Corexit and got EPA approval 10 years ago, he said, but the dispersant has failed to grab market share from its larger rival.

"When we came out with a safer product, we thought people would jump on board," he said. "That's not the case. We were never able to move anyone of any size off the Corexit product."

He added, "We're just up against a giant."

My guess is that within days of the New York Times article appearing in print, BP will order Dispirsit from U.S. Polychemical Corp., if only to limit further negative publicity on the use of dispersants. Possibly the information on the health risks associated with dispersants will cause employees at the contamination site to demand a safer alternative.

As for Goldman Sachs, I find it interesting that they have such a large stake in Nalco. It might be just another coincidence, like their short on TransOcean. I also question why the article singles out Exxon, which helped found the company that was bought out by Goldman Sachs, Apollo and the Blackstone Group. Why are the profits that Goldman Sachs is receiving from the sale of these toxic dispersants not part of the article? How much will GS lose if BP stops using Corexit? Is this not more relevant than Exxon?


Video of the underwater oil plume. The blowout continues despite the insertion of the tube. The force is incredible.


Video at link:
http://www.picassodreams.com/picasso_dre...rsant.html