Read this story from the Associated Press on BP’s recent settlement for damages relating to its 2010 disaster in the Gulf of Mexico and related criminal charges. (Nov. 15, 2012)
NEW ORLEANS — A day of reckoning arrived for BP on Thursday as the oil giant agreed to plead guilty to a raft of criminal charges and pay a record $4.5 billion in a settlement with the government over the deadly 2010 disaster in the Gulf of Mexico. Three BP employees were also charged, two of them with manslaughter.
The settlement and the indictments came 2½ years after the drilling-rig explosion that killed 11 workers and set off the biggest offshore oil spill in U.S. history.
The settlement includes nearly $1.3 billion in fines — the biggest criminal penalty in U.S. history — along with payments to entities inside and outside government. As part of the deal, the BP will plead guilty to charges related to the deaths of the 11 workers and to lying to Congress.
“We believe this resolution is in the best interest of BP and its shareholders,” said Carl-Henric Svanberg, BP chairman. “It removes two significant legal risks and allows us to vigorously defend the company against the remaining civil claims.”
Also, BP rig workers Robert Kaluza and Donald Vidrine were indicted on federal charges of manslaughter and involuntary manslaughters, accused of repeatedly disregarding abnormal high-pressure readings that should have been glaring indications of trouble just before the blowout.
In addition, David Rainey, BP’s vice president of exploration for the Gulf of Mexico at the time, was indicted on charges of obstruction of Congress and making false statements. Prosecutors said he withheld information from Congress that indicated the amount of oil spewing from the blown-out well was greater than he let on.
Rainey’s lawyers said the former executive did “absolutely nothing wrong.” And attorneys for the two rig workers accused the Justice Department of making scapegoats out of them.
“Bob was not an executive or high-level BP official. He was a dedicated rig worker who mourns his fallen co-workers every day,” Kaluza attorneys Shaun Clarke and David Gerger said in a statement. “No one should take any satisfaction in this indictment of an innocent man. This is not justice.”
The settlement, which is subject to approval by a federal judge, includes payments of nearly $2.4 billion to the National Fish and Wildlife Foundation, $350 million to the National Academy of Sciences and about $500 million to the Securities and Exchange Commission. The SEC accused BP of misleading investors by lowballing the amount of crude spewing from the well.
“This marks the largest single criminal fine and the largest total criminal resolution in the history of the United States,” Attorney General Eric Holder said at a news conference in New Orleans. He said much of the money will be used to restore the Gulf.
BP reported Tuesday that fourth quarter profits grew 30 per cent to $5.6 billion US, up from $4.3 billion a year earlier.
The company also said it was resuming dividend payouts for the first
time since the Gulf of Mexico well disaster and announced plans to sell
off almost half of its U.S. refinery business.
The facilities for sale included the Texas City facility where 15
workers died in a massive explosion in 2005. BP was fined $87 million in
2009 for failing to correct safety hazards at the facility.
BP said high oil prices were still not enough to avoid a full-year
loss of $3.7 billion, its first since 1992. It earned $16.6 billion over
the full year in 2009.
The company also raised to $40.9 billion its estimate for the overall cost of the spill.
The charge covers the cost of the explosion aboard the Deepwater
Horizon rig, which killed 11 workers in April, as well as plugging the
well and cleaning up the southern U.S. coast.
BP said the final total “is subject to significant uncertainty.”
The company suspended dividends following the Macondo well blowout in the Gulf of Mexico in April.
It will now pay out seven cents per share, or about $1.25 billion
over all. That will be half the amount paid in the fourth quarter of
“We believe now is the right time to resume payment of a dividend to our shareholders,” said Chairman Carl-Henric Svanberg.
“We have chosen a prudent level that reflects the company’s strong
underlying financial and operating performance but also recognizes the
need to fully meet our obligations in the Gulf of Mexico and to maintain
BP did not say how much it expected to gain from the sale of its U.S.
refineries, which it hopes to conclude by the end of 2012, but said it
would honor all its obligations stemming from the Texas City disaster.
Cleanup winding down
company said it also hopes to sell the Carson refinery near Los Angeles
along with its marketing business in southern California, Arizona and
“2011 will be a year of recovery and consolidation as we implement
the changes we have identified to reduce operational risk and meet our
commitments arising from the spill,” said BP Chief Executive Bob Dudley.
“But it will also be a year in which we have the opportunity to reset
the company, adjusting the shape of our business, and focus on growing
value for shareholders.”
As another year draws to a close, news outlets the world over are running down their lists of best and worst (fill in the blank) and biggest news stories of 2010. In the latter category, recent issues still fresh in our minds like WikiLeaks, the European debt crisis, the Heathrow fiasco, and the Chilean miners are likely to figure prominently. But make no mistake, 2010 was unquestionably the “Year of the Oil Spill.”
I wasn’t alive in 1962 at the time of the Cuban Missile Crisis, so I can’t begin to imagine what people felt during those 13 days of Cold War terror. But in my lifetime, the blow-out of BP’s Deepwater Horizon oil well in the Gulf of Mexico is the single scariest event we’ve experienced. If you think that’s overstating things, let me explain.
Some would point to the financial crash of 2008, or 9/11, for that matter, as the most traumatic events in our recent history. But in neither case did we face such a fundamental threat to the planet itself, and thus our collective survival upon it. The BP tragedy saw us staring both literall and figuratively into the abyss.
It is thus a testament to our 24-hour news cycle, tabloid-saturated, overworked, short attention spanned society that we have largely already forgotten the sense of sheer powerlessness and intense fear that gripped the world in the months of the Gulf crisis. It is with good cause that Gore Vidal uses the term “the United States of Amnesia.”
I certainly have not forgotten what it was like to hear the daily reports tracing the dramatic upward arc in the scale of the disaster – from 1,000 barrels a day to 100,000 billowing into the Gulf; not ten days but over 3 monthsto stem the flow(of course there is no real end to the damage, much of it hidden beneath the surface by way of illegal, toxic chemical dispersants)…The exasperation of seeing, for a time at least, no way out of the whole sordid mess. Various increasingly far-fetched solutions – such as the much-parodied golf ball “junk shot” – left us wondering, “Is this really the best they can come up with?!”
We steadily came to realize that we could not trust one iota of what the mainstream media, the US government, and, most of all, BP, were telling us. We found ourselves sifting through youtube videos and purported “experts” on the fringes of the blogosphere, just to cobble together our own sense of what was really happening. Your yoga instructor or coworker were as likely to know the truth as was Katie Couric. Maybe this thin could never be stopped…Would it flow into the Gulf Stream, spreading its deathly red-black ooze all the way to Europe’s shores, destroying the whole Atlantic Ocean in the process?
All the while, a slew of breathtaking images poured forth –
the oil-soaked sea birds, the multi-coloured slicks, captured from helicopters by the likes of National Geographic, that spread for hundreds of miles over the horizon.And the live web-cam producing the single most iconic image of the year: that spewing underwater geyser – a constant, undeniable visual reminder of the havoc being wrought before our very eyes.
On it gushed, as ecosystems and livelihoods were lain waste. Economic damages ranged from $20 Billion and way up from there. The world’s best experts, one of its largest corporations, and its mightiest government all seemed powerless to stop it (while the CEO of BP produced a string of appalling soundbites that would have been comical if they didn’t highlight such a tragic disconnect with the widespread suffering his company was causing). These gut-punching images brought us face to face – in a way we hadn’t perhaps experienced since the Exxon Valdez, 21 years earlier – with the dirty business upon which we’ve all become so dependant.
But it wasn’t just the BP catastrophe that made 2010 the year of the oil spill. Far from it.
Enbridge – the pipeline company currently proposing to pump over half a million barrels a day of Tar Sands bitumen across the heartland of BC, into supertankers on our North and Central Coast – had three major spills of its own, in Michigan, Illinois, and New York State. The massive explosion of a tanker terminal in Dailan, China, produced some of the most graphic images – of any nature – ever recorded. The Boston Globe’s website carried a jarring reel snapped by a Greenpeace photographer that made the Gulf shots seem like Bob Ross canvases by comparison.
The Gulf itself played host to a second rig explosion – lost in the shuffle o the BP fiasco. A collision between an oil tanker and heavy bulk carrier i the Malacca Straight, off the coast of Singapore, caused a leak of 15,00 barrels of crude oil. In September, disaster was narrowly averted when tanker carrying 9 million litres of diesel fuel ran aground in the Canadian arctic.
Incidents in Mexico, the Middle East, and elsewhere exposed other vulnerabilities for fossil fuel supply lines – namely, crime and terrorism Thieves attempting to siphon off oil were blamed for the explosion of a Mexican pipeline that took 28 lives, while a Kurdish separatist grou claimed responsibility for the bombing of two pipelines in Turkey – on carrying natural gas, the other oil.
And those are just the big ones. A cursory study of the business of oil, gas, and coal exploitation and use reveals a litany of small-scale – bu nevertheless environmentally significant – pipeline leaks, tailing pond malfunctions, and myriad problems with the extraction, refining transportation, and burning of fossil fuels. They’re all just standar externalities – part of the cost of doing business, born by the planet, whil corporations reap record profits.
Many people – and pretty much every mainstream media outlet in the world – have failed to connect the dots, thus missing the lesson to be
learned from these very visible disasters in 2010. They see them as isolated incidents, rather than part of a larger systemic problem.
The truth is, none of these disasters is an “accident” – rather they are manifestations of an until now largely theoretical concept known as “Peak Oil.” They bring us face-to-face with the real-world implications of this phenomenon. This is what happens when you’re scraping the bottom of the barrel for fossil fuel energy, which Barack Obama himself aptly referred to as “dirty, dwindling, and dangerous.”
Offshore wells like the Deepwater Horizon are being drilled at greater depths today, as easier sources dry up, presenting far greater operational and environmental risks.
The Alberta Tar Sands and their Venezuelan Orinoco counterpart are among the dirtiest and most capital and resource-intensive oil (or bitumen, rather) sources in the world.
Natural gas fracking is a relatively new and enormously damaging process, with severe impacts on our aquifers we’ve barely begun to grasp while we plough forward with new projects.
So long as we remain dependent on fossil fuels (which looks at this point to be a long time – as long as we can, that is), there will be ever-increasing BP blow-outs, pipeline leaks, and tanker crashes. Despite the assurances of the likes of Enrbridge that we have nothing to worry about with their new proposed projects, we have now seen irrefutable evidence, in gory, high-definition detail, of the inability of human beings to eliminate the risks that attend these operations.
My wish for the New Year is that these powerful images remain indelibly burned in our consciousness. I, for one, will continue to draw upon them in my work – not to score cheap emotional points, but to ensure they serve their purpose, namely, helping us to make better decision regarding our exploitation and use (and hopefully lack thereof) of fossil fuels going forward.
One of the highlights of my 2010 was spending several weeks amid BC’ Great Bear Rainforest, traveling the very coastline Enbridge wishes to se plied by the world’s largest oil tankers. Having witnessed and documente firsthand the rugged terrain, navigational hazards, and extreme weathe along that stretch of coast – one of the most perilous on the planet – the mere contention that the company could guarantee the safety of thes shipments, or their ability to clean them up should they occur is, simpl put, so preposterous as to be insulting.
So it is heartening to see the lessons of the Exxon Valdez, BP blow-out and pipeline leaks being deployed in the battle to stop Enrbridge in BC With the recent passing of a federal motion(albeit non-binding, at this stage) for a North Coast tanker ban that would effectively kill that project were it made into legislation, and a growing coalition of First Nations, conservationists, and citizens standing together against the project, it appears we may be learning something after all.
So here’s hoping that 2011 is the year of conservation, clean energy solutions, and beginning to seriously confront our dangerous addiction to fossil fuels. Clearly, that’s naively idealistic – but we’ll always have February through December to be cynical about the future.
Article by Kate Sheppard in Mother Jones. “EPA administrator Lisa Jackson acknowledged that the impacts of using dispersants underwater and in large volume are largely unknown… Two days later, Jackson directed BP to switch to less-toxic dispersants, but BP said it hadn’t found the alternatives suitable and continued to use Corexit.” Read article
“West Coast oyster farmers are fielding calls from farmers on the Gulf of Mexico as the work begins to replace the shellfish breeding beds damaged by the massive oil spill.
“But while shellfish farmers in the Pacific Northwest are anxious to help, they say they have little to offer.
“Climate change has wreaked havoc on seed oyster hatcheries on the west coast, leaving no extra capacity to send to the Gulf shellfish farmers who are looking at totally rebuilding their stock following the explosion April 20 of BP’s Deepwater Horizon oil rig.”
“For weeks residents had been subjected to a barrage of pep talks and extravagant promises coming from Washington, Houston and London. Every time they turned on their TVs, there was the BP boss, Tony Hayward, offering his solemn word that he would ‘make it right’. Or else it was President Barack Obama expressing his absolute confidence that his administration would ‘leave the Gulf coast in better shape than it was before’, that he was ‘making sure’ it ‘comes back even stronger than it was before this crisis’.
“It all sounded great. But for people whose livelihoods put them in intimate contact with the delicate chemistry of the wetlands, it also sounded completely ridiculous, painfully so.”