Fox News business analyst tells its viewers that BP does not have $20 billion to put in escrow -- so where will this money come from ?

Editor's notes: according to Fox Business News advisors, the best guess as to how much is readily available to BP for the much touted $20 billion escrow fund is less than 9 billion. The obvious question, then, is this: where does the rest of the money come from?

First, BP has agreed to suspend the next three quarters' worth of dividends, including the current quarter. We have been told that this quarter's dividend offering is $10.1 billion. Turns out that this is not true. Apparently, it is closer to 2.6 billion dollars (2nd quarter dividends). Obviously, the 3rd and 4th quarter profits will be less. Understand that the oil giant has lost 40% of its market value in the last few weeks. That loss will effect future dividend pay-outs. In addition to the the estimated $5 billion available in the three quarter payments being diverted to the escrow account, there is the intention to sell off some 10 billion dollars in assents. Of course, the $10 billion evaluation is BP's estimate and not the actual value of the sale of these assets. We may find that this "$10 billion" estimate is worth only $2 or $3 billion, total. What if BP sells to others in a prearranged agreement, and buys these assets back at a later date when they can do so "under the radar?" (a related article is an AP story found here.)

What will surely be under-reported is the fact that this escrow account will grow to $20 billion over the course of the next 4 years. It is not going to happen "over night" as it should. The sad news in this reality is the fact that payback to the desperate folks in the Gulf will take place, in the final analysis, long after they have lost their incomes and gone elsewhere.

Obama's refusal to act with a sense of urgency in this matter, is either a part of his plan to embellish the crisis and then legislate his way out of that crisis OR , he is grossly incompetent. Take your pick.

So much for the $20 billion escrow. The disturbing truth is that Obama's moratorium on drilling will more than off-set any serious benefit derived from the escrow totals. Understand that the damage to the Gulf is NOW. The escrow total will not be fully funded for several years, building at the rate of $5 billion per year.
Let's put that into context.

Sources in the Gulf estimate that the moratorium will cost more than 25,000 oil related jobs (immediately) and another 80,000 jobs for those who earn their living from fishing/clamming and the tourist industry (vendors, eateries, hotels, conventions and the like.) Loss of income with these numbers in mind could run more than $5 billion -- the amount of the escrow funds, first year.

Add to this concern the actual cost for clean-up. In an article in the NY Times, the estimate for the clean-up is set at between 15 and 23 billion dollars.

The long term penalty to the Gulf Region is even worse. The deepwater oil rigs and the companies who own them, will go elsewhere. Understand that Obama's moratorium, stated as a six month event in this article, is actually presented as "at least six months" by the Administration. In those two words, "at least," is the real problem. It could be a year or 18 months. As long as this ambiguity remains, the long term threat to the region grows.

In short, this crisis is anything but settled. Obviously the "leak" persists and seems to grow worse each week. The clean-up estimates cannot possibly be accurate in view of the fact that no one knows how much oil is being spewed into the Gulf waters. First, they told us it was 40,000 gallons a day; then 200,000; 320,000; two weeks ago they were talking about a million gallons a day and yesterday, just before Obama's speech, estimates were released that put the oil loss at 2.2 million gallons per day. Before they have get a lid on this beast, we are looking at 200 million gallons of oil lost into the Gulf waters. On May 30 of this year, Midknight Review wrote this: "We could be talking about 200 million gallons of oil spilled into the Gulf waters by election day. 2. Midknight Review has predicted $4.00 per gallon at-the-pump gas for more than a year. Our country has been there before." Before this is over, the incompetence of the Obama administration is will established without debate. Anybody miss Jimmy Carter, yet ? --- jds.
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