$1,100,880,000 Before Lunch

The context for the liabilities BP will incur with the gulf cleanup must start with the other end of the equation. The world produces nearly 1,000 barrels of oil every second. If those barrels were physically stacked up, the pile would grow taller at the rate of 2,000 miles per hour. This is the primary reason why 80% of the world's oil resources are nationalized and controlled by governments, and most of these governments are controlled by RAVS (Russians, Arabs, and Villains that Smoke).

Given the probable inputs to the equation -- what does the BP output side potentially look like? The output equation has three variables. The first variable is the direct costs of plugging the well and cleaning up the pollution. The best estimate on this particular part of the equation is $40 million a day for a year. This works out to $14.6 billion. BP will probably attempt to tag minority partners and subcontractors with a portion of this -- BP may end up paying something in the $10 to $11 billion dollar range.

The second variable is associated with the fines. Penalties under the Clean Water Act are based on the number of barrels deemed spilled, and range from $1,200 to $4,300 a barrel, depending on the extent of which the leak is the result of negligence. Given the current estimates (and this has been a considerable source of debate and confusion - - maybe for good reason or maybe not) - - the bill for this might reach $17 billion.

The last variable is associated with compensation for lost economic activity, lost federal, state and local taxes and damages to the environment. This is the $20 billion fund that BP voluntarily setup. This is probably too low - - lost tourist and fishing dollars in Alabama, Louisiana, Mississippi, and Florida alone might reach hair-raising figures in the the $15 to $30 billion range.

The high figure on the output side of the equation could run in the $60 billion range - - Carl Sagan type money. But keep in mind the RAVS and oil companies will generate revenue of approximately $1,100,880,000 before I have lunch today.