1. Costs and Risk Assessment a. Given what you know about BP's history and the kind of work involved in deep water oil and gas drilling, what do you think would have been a reasonable estimate of the risk of a catastrophic disaster at Deepwater Horizon? A somewhat (barely?) educated guess is all I'm looking for. It may help to think about a range of probabilities. For example, 50% is dearly too high, while 0.0000000001% is clearly too low. Can you narrow the range even further? What if anything) justifies your decision to limit the range of risk? b. We have learned that BP refused to consider the possibility of a disaster in their deep water drilling operations. They had not completed any worst case analysis. They assumed that their blowout preventer would always function. Under oath BP officials admitted they were stunned by the disaster. Why do you think that BP refused to consider the possibility (however remote) of a catastrophic disaster in their deep water drilling operations? CA 2018 estimate suggests that BP's total expenses related to the Deepwater Horizon disaster have so far exceeded $65 billion. If BP had installed a remote shut-off device, the disaster would likely have been prevented. (For the sake of this question let's assume a counterfactual 100% success rate for a remote shut-off device to prevent disaster) This safety feature is required in Brazil and Norway to prevent catastrophic spills like the Deepwater Honzon disaster In fact, the U.S. Minerals Management Service (MMS) has considered mandating the use of remote switches since at least 2000, but the oil industry lobbied against it and in 2003 MMS stated "remote) systems are not recommended because they tend to be very costly. The estimated cost of a remote shut off device is $500.000, in light of only the information provided in this question and bracketing all other relevant considerations. What would have been the lowest probability of disaster that would have made it rational for BP to have installed the remote shut-off device? (Show your work such as it is