The BP Oil Spill Saga: Where Things Stand Now

bp explosionThe BP oil spill in the Gulf killed 11 workers in April, released nearly 5 million barrels of oil into the Gulf of Mexico and triggered multiple government investigations and an overhaul of the nation’s offshore drilling regulatory agency.

Federal scientists estimated in August that between 53,000 and 62,000 barrels spilled into the Gulf each day until the well was temporarily plugged in July. BP has contested those numbers, arguing that the figures are flawed. If the company prevails, it could reduce the size of its per-barrel pollution fines by billions of dollars, as well as what it may eventually have to pay to the government in lost royalties if the spill is found to be a result of BP’s negligence.

For its role in the worst environmental disaster in U.S. history, BP currently faces a civil lawsuit by the Department of Justice. BP’s well partners Anadarko and MOEX, rig operator Transocean and Transocean’s insurer have also been named as defendants in the lawsuit, which seeks to recover the government’s removal costs, economic losses, and environmental damages resulting from the spilled oil.

A criminal investigation is ongoing and could result in additional financial penalties. As the Blog of LegalTimes pointed out in a blog post, Attorney General Eric Holder has acknowledged that conducting parallel civil and criminal proceedings can be “a little tricky.” If criminal charges are filed, those per-barrel fines for Clean Water Act violations could come into play in addition to fines under the Refuse Act and the Migratory Bird Treaty Act.

BP has stated repeatedly that it will disregard a $75-million cap on its liability for economic damages — a limit set forth in the 1990 Oil Pollution Act. Although the Government Accountability Office has for years said that such liability limits are too low [8], Republican lawmakers repeatedly blocked attempts this summer to raise or lift the current limit.

We’ve reported that even before the deadly incident in the Gulf, officials at the Environmental Protection Agency had long considered debarring BP for recurrent misconduct and environmental crimes. It’s an option that is still on the table for regulators now — especially if the government’s investigations find that the company had a culture of carelessness and non-compliance.

If BP is convicted of Clean Water Act violations, the company would automatically face a lesser form of debarment that affects only the facility involved in the spill. In this case, it’s unclear whether this would mean the sunken Deepwater Horizon rig, a broader set of BP’s Gulf platforms, or whether it would include the company’s command center in Houston. In its most serious form, debarment would end the entire company’s business with the government and cancel BP’s billions’ worth of leases to drill on federal land — though as the New York Times has noted, contractors like BP often end up protected from such sanctions because of their size and the extent of the government’s dependence on them.

Tony Hayward, BP’s chief executive at the time of the spill, gained notoriety for saying, “I would like my life back,” predicting that the disaster’s environmental impact would be “very, very modest,” and asserting that his company was releasing a “tiny” amount of oil and dispersant relative to the size of the Gulf of Mexico. Hayward has since been reassigned and replaced by Robert Dudley, the British company’s first American CEO. BP’s public relations department has also seen a shakeup, with its chief press spokesman during the spill making his exit last month [15].

The spill also put a spotlight on an offshore drilling regulatory agency that for years had been riddled with scandals over ethical problems, improper handling of royalties and lax oversight of an industry with which it kept too-friendly ties. The offshore drilling agency was renamed the Bureau of Ocean Energy, given new leadership, and split into three separate divisions. However, the President’s own oil spill commission, a panel tasked with investigating the circumstances of the spill, has said that the changes do not sufficiently address [19] the agency’s conflicts of interest. It remains to be seen whether additional changes will be implemented to address these concerns.

Politically, the Obama administration’s position on offshore drilling has undergone a sea change. It recently announced that it would be rescinding an earlier plan to open up the eastern Gulf and the Atlantic coast to new offshore drilling. Those areas will remain off limits for at least another seven years.

Though the administration in October lifted a controversial temporary moratorium on new offshore drilling, pro-drilling Gulf lawmakers and the offshore oil and gas industry have criticized the revamped regulatory agency for slowing down the approval process for drilling permits. They’ve complained that the heightened review is burdensome and serves as a de facto moratorium.

Many questions remain unanswered about the long-term health and environmental effects of the crude oil and the unprecedented amount of dispersant, chemicals BP used to break down the thick crude. Both BP and the government have committed funding for continued study of these issues.

Study of the oil’s fate and its impact on the marine environment will likely continue for months and years to come, but many independent scientists have produced preliminary research seemingly at odds with a rosy government report and official statements in August that said that at least half of the oil released was “completely gone from the system” and the rest was being quickly degraded.

Eight months after the spill, the safety of Gulf seafood is still being debated among toxicologists, some of whom allege that the Food and Drug Administration’s seafood testing process is flawed, according to the New Orleans Times-Picayune. The FDA’s process does not certify that the products tested are free from contamination, but screens for contamination that reaches “levels of concern.” Cancer-causing chemicals found in crude oil have been detected in Gulf seafood, but according to the FDA have been found at levels that the agency considers to be safe.

Marian WangSeveral agencies are still investigating the cause of the oil spill. The National Oil Spill Commission, is due to issue a complete report of its findings to the President in January. The U.S. Coast Guard and the Interior Department have been conducting a joint investigation, and the U.S. Chemical Safety Board, a small federal agency that investigated BP’s Texas City refinery explosion years prior, continues to investigate the spill at the request of lawmakers on the House Energy and Commerce Committee.

Marian Wang

Republished with permission from Pro Publica

Published by the LA Progressive on January 3, 2011
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About Marian Wang -- Pro Publica

Marian Wang is ProPublica's first reporter-blogger. She previously worked for Mother Jones, where she spearheaded the magazine's social media strategy. Since graduating with honors from Northwestern University's Medill School of Journalism in 2007, she worked in Chicago as a freelance investigative reporter and blogger for The Chicago Reporter, Chi-Town Daily News, and ChicagoNow. She now lives in New York. She likes it a lot.

Find Marian on Twitter: @mariancw

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