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British Petroleum Settlement, Phase One

 

The Deepwater Horizon, April 21, 2010 (AP-Coast Guard photo)

 

Thirty-one months ago, the Gulf of Mexico exploded. Eleven workers on the Deepwater Horizon well died, along with untold numbers of sea birds, aquatic mammals and fish. Entire industries were shut down, hundreds of thousands were put out of work and the oil just kept gushing and gushing and right wingers kept complaining that President Obama wasn’t doing enough to stop it, like he should have been able to whip out his Superman suit, swim down there and cap that well with his heat vision.

The Federal government has finally come to a settlement of the legal issues surrounding the BP disaster, and there were layers of legal issues.

First is the death of those eleven men. The government has decided that they would not have died if the men in charge of the well had followed proper procedure and heeded the warnings concerning the integrity of the well seal. Well site leaders Robert Kaluza and Donald Vidrine were negligent in their handling of the safety tests and are being charged with manslaughter. David Rainey, BP’s vice president of explorations, is being charged with lying to federal investigators over his calculations of the flow rate from the broken well head. The flow rate was vastly understated because the flow rate would be used to calculate BP’s liability under the Clean Water Act.

BP PLC agreed to plead guilty to 11 felony counts of misconduct or neglect, one felony count of obstruction of Congress and one misdemeanor count under the Migratory Bird Treaty Act and another under the Clean Water Act. The eleven deaths are being prosecuted under the Seaman’s Manslaughter Act and there is charge of obstruction of Congress for lying about the flow rate of the leak. BP has been assessed $1.256 billion in criminal fines, along with$2.4 billion to the National Fish and Wildlife Foundation, $350 million to the National Academy of Science, and $500 million to the Securities and Exchange Commission. The $4.5 billion settlement is just for the criminal liabilities and does not cover the civil penalties under the Clean Water Act, billions of dollars in claims by states, businesses, fishermen, property owners and individuals. It will be paid over a period of five years. BP’s profit in the third quarter of 2012 was $5.5 billion.

A federal judge in New Orleans is examining a proposal for a $7.8 billion settlement for the civil claims from 100,000 businesses and individuals. Unless an acceptable settlement in reached for the civil claims from both individuals and the government, Attorney General Eric Holder said the trial planned for February will go ahead.

BP shares on the New York and London stock markets were almost unchanged after release of the settlement news.

During the course of the disaster, some of us learned more about oil drilling and the Gulf of Mexico than we ever wanted to know.

Did you know that most countries that have off-shore drilling require the drilling of two wells at the same time? One of them is just a little behind the first one and is a relief well. If, as happened at the BP well, something goes catastrophically wrong, the relief well can quickly be aimed at the exploratory well and the “mud” poured down to cap the exploratory. With a parallel relief well, capping a failed well can take less than a week. It took 15 weeks, from April 24 when the destroyed blowout preventer was discovered and the gushing oil found until August 5, to seal the Macondo well. If we had the same laws as Sweden, only 280,000 barrels of oil would have flowed into the Gulf, instead of the over 4 million that befouled that vital sea.

Of course, drilling two wells cost more and heaven forbid America should do anything that will cost an oil company more money. We’re too busy giving them enough tax credits and subsidies that we end up paying them to extract our oil and sell it for hundreds of billions of dollars a year.

 

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