BP and the Obama Administration came to an agreement that BP would put $20 billion in an escrow account as partial payment for the damages this Gulf oil spill caused – and certain Republicans have screamed “shakedown”. But given the following:
BP and the Republicans have reluctantly agreed to the proposition that BP should pay for all of the damages.
Initial estimates of the damages are around $40 billion.
These estimates were based on evaluation of the amount of oil leaking into the Gulf that have been subsequently shown to be far below reasonable estimates of the amount of oil leaking into the Gulf.
If we take the decline in BP equity value since the oil spill began as the market’s best guess of how much BP will ultimately pay, then the market’s price tag is closer to $100 billion.
Let’s say that you and I have a disagreement as to how much I owe you with you claiming the amount is $100 and me claiming the amount is only $40. If I choose to hand you a twenty dollar bill today with the agreement that we’d settle on the rest tomorrow, could I then scream to the police that you shook me down? Probably not – but that is what certain Republicans are effectively claiming.