By Glynn Wilson –
On the eve of a major portion of the trial against the oil and equipment companies responsible for the largest and worst environmental disaster in history in the Gulf of Mexico nearly three years ago, apparently the Obama Justice Department has entered into a settlement agreement with British Petroleum to dismiss further penalties on crude oil recaptured during the disaster, potentially cutting the oil giant’s liability and fines under the Clean Water Act by between $900 million and $3.5 billion, depending on how the final math works out in court.
Concerned over the safety of BP’s current and future operations in the Gulf of Mexico, however, Gulf Coast organizations, along with national and international supporters, are demanding that BP be assessed the maximum Clean Water Act fines possible under current law and that the federal government aggressively move forward with a fully transparent and public trial.
The volume of oil spilled into the Gulf has been a matter of legal dispute, depending on estimates of flow rates from the leaking Deepwater Horizon which blew up in April of 2010 and spewed oil into the Gulf until July.
The Obama administration’s report on the blowout of the Macondo well, which killed 11 people and sank the Deepwater Horizon drill rig, says the amount dumped into the Gulf came to 4.9 million barrels. BP contends the amount was “at least 20 percent” less than that, and the company claims it captured 810,000 barrels out of the water with container vessels.
So if those numbers hold up in court, the civil penalties levied in the case would only apply to 3.1 million barrels and that would reduce BP’s Clean Water Act fines by 16.5 percent.
“These issues are extremely complicated as a technical matter, and there is still further analysis to do,” Rupert Bondy, BP’s group general counsel, said in a statement. “But it is clear, based on our analysis so far, that the government’s public estimate is simply wrong and overstated by at least 20 percent.”
Billions of dollars are riding on the case. Under the Clean Water Act, the federal government can impose fines of as much as $1,100 a barrel or, if BP is found to be grossly negligent, as much as $4,300 a barrel.
New Orleans federal court will be the scene for the case on Monday when BP will try to defend itself against charges of gross negligence. The size of the spill will be the subject of the second phase of the trial, beginning in September.
More than 45 organizations have signed a letter protesting the settlement, which was to be delivered to Department of Justice officials on Wednesday. Signatories range from small local grassroots organizations to larger international groups.
“Justice for the Gulf and all the communities BP has devastated demands full transparency and complete accountability,” Aaron Viles, Deputy Director of the Gulf Restoration Network, said in a statement issued in response to the settlement agreement. “We need to learn the lessons of this disaster and demand more of the industry while restoring the ecosystem BP and their colleagues have threatened.”
Referring to economic and environmental restoration efforts, BP claims “no company has done more faster” in response to an industrial accident.
But Mississippi resident and advisor to the Gulf Coast Fund for Community Renewal and Ecological Health, Derrick Evans, offers a different perspective.
“No other company has done more harm faster — or for longer — than BP did with this disaster,” Evans said. “Within a few short days of the explosion, an enormous amount of oil gushing from BP’s uncontrolled well smothered gulf coast marshes, beaches and estuaries, sickened local residents, and crippled the gulf’s once healthy and bountiful domestic seafood industry. Local residents saw a fast and thorough public relations campaign. We did not see a fast or thorough response to the actual disaster.”
In addition to the Gulf of Mexico blowout, BP has been plagued in recent years by systemic, egregious and unaddressed safety issues leading to other disasters, including Prudhoe Bay, Texas City, and other deadly incidents.
According to a Center for Public Integrity report, BP accounted for 829 of the 851 willful violations among all refiners cited by OSHA between June 2007 and February 2010.
Citing ongoing safety concerns and aiming to reduce the possibility of another repeat disaster by BP, signatories strongly believe citizens of the Gulf Coast and the entire nation deserve a full disclosure of events leading up to the Deepwater Horizon incident, as well as an extensive and transparent assessment of the disaster’s full impacts.
“The guys out there on that rig knew something was very wrong. They tried to tell management the rig was in danger, we have emails showing BP higher-ups ignored those pleas for help,” said Cherri Foytlin, South Louisiana mother of six and wife of an oil worker. “Profit and corporate greed were more important to BP than the lives of our fathers, sons, brothers and neighbors. Eleven men paid with their lives. We will never be able to prevent future disasters if we don’t know the full and complete truth about what happened. We demand a full trial and complete disclosure,”
Also in the news on the BP Gulf Oil Disaster this week, apparently a federal judge in New Orleans approved a $1 billion partial civil settlement with Transocean Ltd. and its subsidiaries, which owned the Deepwater Horizon drilling rig. U.S. District Judge Carl Barbier approved the settlement just days before the beginning of the first phase of the civil trial against BP, Transocean and other responsible parties.
Houston-based Transocean had already agreed to settle the civil environmental charges, and pleaded guilty to criminal charges for violations of the Clean Water Act.
U.S. District Judge Jane Triche Milazzo approved the $400 million criminal fine and five-year probation period required by that settlement last week.
Federal investigators determined in a March 2011 report that the accident occurred when a drill pipe got trapped and buckled in the blowout preventer, a column of equipment on the Gulf floor a mile below the Deepwater Horizon that was designed to block the flow of oil and natural gas to the surface. The report determined that a series of rams, valves and shearing blades that were supposed to shut off gas flowing upwards had failed. The gas continued through a riser pipe to the floor of the drilling rig, where it exploded.
When the rig sank two days later, the riser pipe connecting the well to the surface dropped to the Gulf floor, and oil and natural gas spewed uncontrolled into the ocean.
Transocean agreed that it was negligent in its operation of the rig and drilling of the well, but not at the same level as BP, whose officials directed Transocean workers to ignore signs that gas was escaping from the well through cement that had been used to plug its flow.
A separate Coast Guard investigative report released in April 2011 placed a greater share of the blame on Transocean, saying “numerous systems deficiencies, and acts and omissions by Transocean and its Deepwater Horizon crew” and the company’s lack of a safety culture helped enable the gas blowout. Transocean disagreed with the Coast Guard findings, but set aside $2 billion for claims related to the disaster.
The $1 billion civil fine is the largest civil penalty ever levied under the Clean Water Act. Under the Restore Act approved by Congress last year, 80 percent of the money is to be directed to coastal and economic restoration projects along the Gulf of Mexico. The other 20 percent, or $200 million, goes to the federal treasury. About a third of the money is likely to be spent in Louisiana.
Transocean will pay $400 million, plus interest, within 60 days, and another $400 million plus interest within a year. The final $200 million is to be paid within two years.
The company also has agreed to implement a variety of measures for all drilling operations in U.S. waters, including the Gulf of Mexico, to improve its safety performance and prevent a future accident, including safety audits of rig operations, and an annual independent audit of the company’s compliance with the consent decree.
Transocean also must adopt procedures to allow its employees to stop work — without fear of reprisal — on rigs, vessels or facilities, or decline to perform an assigned task, when an employee perceives a significant risk or danger, including loss of well control, spill, blowout or loss of life.
The company must also certify that blowout preventers used during drilling are properly inspected and certified as working, and create a public Website focusing on the Deepwater Horizon accident and the company’s safety that will be updated at least annually. It should include sections on the lessons learned from the accident, a summary progress reports on the company’s compliance with the consent decree, summaries of incidents where workers were injured and lost work time, a list of all incidents where Transocean subsidiaries violated the consent decree, and any corrective actions and penalties that were assessed, and a list of all oil spills that reach federal waters resulting from the actions of a Transocean subsidiary, including the name of the facility, and the location, cause and volume of the spill.
© 2013, Glynn Wilson. All rights reserved.