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Halliburton admits Gulf data charge
Halliburton Energy Services has agreed to plead guilty to destroying evidence in connection with the 2010 Gulf of Mexico oil spill, the US Department of Justice has said.
Federal officials said that a criminal information charging Halliburton with one count of destruction of evidence was filed in federal court.
Halliburton has agreed to pay the maximum fine, be on probation for three years and continue to co-operate with the government’s criminal investigation, said the news release, which did not specify the fine amount. The Texas-based company has also made a voluntary 55 million dollar (£35 million) contribution to the National Fish and Wildlife Foundation.
Halliburton was oil giant BP’s cement contractor on the drilling rig that exploded after a well blow-out, killing 11 workers and spilling millions of gallons of oil into the Gulf.
Around May 2010, the company directed a programme manager “to run two computer simulations of the Macondo well final cementing job using Halliburton’s Displace 3D simulation programme to compare the impact of using six versus 21 centralisers”, the news release said.
Halliburton recommended to BP the use of 21 centralisers in the well, but BP decided to use six instead, said the news release. The simulations indicated there was little difference between using six and 21 centralisers, but the programme manager “was directed to, and did, destroy these results”, federal officials say.
Similar evidence was destroyed in a subsequent incident in June 2010, said the Justice Department.
The news release said: “Efforts to forensically recover the original destroyed Displace 3D computer simulations during ensuing civil litigation and federal criminal investigation by the Deepwater Horizon Task Force were unsuccessful. In agreeing to plead guilty, Halliburton has accepted criminal responsibility for destroying the aforementioned evidence.”
The plea agreement and criminal charge both arise from a criminal investigation by the Deepwater Horizon Task Force. Halliburton and BP have blamed each other for the failure of the cement job to seal the Macondo well.
During a trial, BP asked a federal judge to sanction Halliburton for allegedly destroying evidence about the role that its cement slurry design could have played in the blow-out. The company announced in April it was trying to negotiate a settlement over its role in the disaster.
BP Knowingly Poisoned Oil Cleanup Crew
Do you remember the Deepwater Horizon disaster of 2010? It was all over the news for months and months… and then seemed to simply disappear from the media once BP announced they’d stopped up the gushing oil well.
Whistleblowers are claiming that’s no mistake — and in a recent report from the Government Accountability Project, cleanup crew members have painted a sinister picture. To obscure the true amount of oil spraying into the Gulf on a daily basis, they say, BP immediately began unleashing huge amounts of dispersant. Over 1.84 million gallons of the stuff.
The problem? The dispersant used by BP, a chemical called Corexit, is known to be highly toxic to humans. Exposure can cause a laundry list of symptoms, including kidney and liver damage, seizures, memory loss, and even cancer.
Not only were as many as 47,000 workers potentially exposed to this dangerous chemical, but former oil cleanup crew are reporting that BP intentionally withheld information on how to safely handle Corexit and failed to provide any sort of protective gear to workers.
One maid tasked with cleaning a mixture of seawater, Corexit, and crude oil from the floors of BP’s “floating hotel” for workers was told the dispersant was “as safe as Dawn dishwashing liquid.” But within days of exposure, she found herself coughing up blood suffering from nonstop headaches. Her symptoms only continued to get worse with time, transforming into uncontrollable muscle spasms, a severe loss of short-term memory, and even random swelling of her leg that would come and go.
Cleanup workers on the water claim they were literally hosed down with Corexit by planes overhead during the day. When they complained about the caustic fumes and asked for respirators and protective clothing, supervisors threatened to fire them.
Even government-contracted scientists are reporting health problems from Corexit exposure. One diver, Steve Kolian, was part of a team assigned to assess the impact the spill might have on surrounding marine life. He claims that officials from the National Oceanic and Atmospheric Administration assured him that it was perfectly safe to swim in Corexit-treated water — and suggests the agency may have been collaborating with BP to downplay the toxic effects of the dispersant. In the years since the spill, he’s experienced painful skin rashes and peeling, dizziness, nausea, bloody stools, and cognitive issues.
The GAP report is filled with similar stories — and, in the end, concludes that the use of Corexit to clean up the spill has been more harmful to human health and marine life than the crude oil alone would have been. In light of the report, GAP and its partners in the Gulf are demanding that the EPA ban Corexit from use in future cleanup efforts. They’re also trying to establish medical treatment programs to help the thousands of people now suffering from what they’re calling “BP Syndrome.”
Want to know what you can do to seek justice for the workers BP poisoned with Corexit? Read the full GAP report here, and then sign the petition to ban Corexit for good.
via Whistleblowers: BP Knowingly Poisoned Oil Cleanup Crew – Greener Ideal.
What BP Doesn’t Want You to Know About the 2010 Gulf Spill
The 2010 Gulf of Mexico oil spill was even worse than BP wanted us to know.
“It’s as safe as Dawn dishwashing liquid.” That’s what Jamie Griffin says the BP man told her about the smelly, rainbow-streaked gunk coating the floor of the “floating hotel” where Griffin was feeding hundreds of cleanup workers during the BP oil disaster in the Gulf of Mexico. Apparently, the workers were tracking the gunk inside on their boots. Griffin, as chief cook and maid, was trying to clean it. But even boiling water didn’t work.
“The BP representative said, ‘Jamie, just mop it like you’d mop any other dirty floor,’” Griffin recalls in her Louisiana drawl.
It was the opening weeks of what everyone, echoing President Barack Obama, was calling “the worst environmental disaster in American history.” At 9:45 p.m. local time on April 20, 2010, a fiery explosion on the Deepwater Horizon oil rig had killed 11 workers and injured 17. One mile underwater, the Macondo well had blown apart, unleashing a gusher of oil into the gulf. At risk were fishing areas that supplied one third of the seafood consumed in the U.S., beaches from Texas to Florida that drew billions of dollars’ worth of tourism to local economies, and Obama’s chances of reelection. Republicans were blaming him for mishandling the disaster, his poll numbers were falling, even his 11-year-old daughter was demanding, “Daddy, did you plug the hole yet?”
Griffin did as she was told: “I tried Pine-Sol, bleach, I even tried Dawn on those floors.” As she scrubbed, the mix of cleanser and gunk occasionally splashed onto her arms and face.
Within days, the 32-year-old single mother was coughing up blood and suffering constant headaches. She lost her voice. “My throat felt like I’d swallowed razor blades,” she says.
Then things got much worse.
Like hundreds, possibly thousands, of workers on the cleanup, Griffin soon fell ill with a cluster of excruciating, bizarre, grotesque ailments. By July, unstoppable muscle spasms were twisting her hands into immovable claws. In August, she began losing her short-term memory. After cooking professionally for 10 years, she couldn’t remember the recipe for vegetable soup; one morning, she got in the car to go to work, only to discover she hadn’t put on pants. The right side, but only the right side, of her body “started acting crazy. It felt like the nerves were coming out of my skin. It was so painful. My right leg swelled—my ankle would get as wide as my calf—and my skin got incredibly itchy.”
“These are the same symptoms experienced by soldiers who returned from the Persian Gulf War with Gulf War syndrome,” says Dr. Michael Robichaux, a Louisiana physician and former state senator, who treated Griffin and 113 other patients with similar complaints. As a general practitioner, Robichaux says he had “never seen this grouping of symptoms together: skin problems, neurological impairments, plus pulmonary problems.” Only months later, after Kaye H. Kilburn, a former professor of medicine at the University of Southern California and one of the nation’s leading environmental health experts, came to Louisiana and tested 14 of Robichaux’s patients did the two physicians make the connection with Gulf War syndrome, the malady that afflicted an estimated 250,000 veterans of that war with a mysterious combination of fatigue, skin inflammation, and cognitive problems.
Meanwhile, the well kept hemorrhaging oil. The world watched with bated breath as BP failed in one attempt after another to stop the leak. An agonizing 87 days passed before the well was finally plugged on July 15. By then, 210 million gallons of Louisiana sweet crude had escaped into the Gulf of Mexico, according to government estimates, making the BP disaster the largest accidental oil leak in world history.
Yet three years later, the BP disaster has been largely forgotten, both overseas and in the U.S. Popular anger has cooled. The media have moved on. Today, only the business press offers serious coverage of what the Financial Timescalls “the trial of the century”—the trial now under way in New Orleans, where BP faces tens of billions of dollars in potential penalties for the disaster. As for Obama, the same president who early in the BP crisis blasted the “scandalously close relationship” between oil companies and government regulators two years later ran for reelection boasting about how much new oil and gas development his administration had approved.
Such collective amnesia may seem surprising, but there may be a good explanation for it: BP mounted a cover-up that concealed the full extent of its crimes from public view. This cover-up prevented the media and therefore the public from knowing—and above all, seeing—just how much oil was gushing into the gulf. The disaster appeared much less extensive and destructive than it actually was. BP declined to comment for this article.
That BP lied about the amount of oil it discharged into the gulf is already established. Lying to Congress about that was one of 14 felonies to which BP pleaded guilty last year in a legal settlement with the Justice Department that included a $4.5 billion fine, the largest fine ever levied against a corporation in the U.S.
What has not been revealed until now is how BP hid that massive amount of oil from TV cameras and the price that this “disappearing act” imposed on cleanup workers, coastal residents, and the ecosystem of the gulf. That story can now be told because an anonymous whistleblower has provided evidence that BP was warned in advance about the safety risks of attempting to cover up its leaking oil. Nevertheless, BP proceeded. Furthermore, BP appears to have withheld these safety warnings, as well as protective measures, both from the thousands of workers hired for the cleanup and from the millions of Gulf Coast residents who stood to be affected.
The financial implications are enormous. The trial now under way in New Orleans is wrestling with whether BP was guilty of “negligence” or “gross negligence” for the Deepwater Horizon disaster. If found guilty of “negligence,” BP would be fined, under the Clean Water Act, $1,100 for each barrel of oil that leaked. But if found guilty of “gross negligence”—which a cover-up would seem to imply—BP would be fined $4,300 per barrel, almost four times as much, for a total of $17.5 billion. That large a fine, combined with an additional $34 billion that the states of Louisiana, Alabama, Mississippi, and Florida are seeking, could have a powerful effect on BP’s economic health.
Yet the most astonishing thing about BP’s cover-up? It was carried out in plain sight, right in front of the world’s uncomprehending news media (including, I regret to say, this reporter).
The chief instrument of BP’s cover-up was the same substance that apparently sickened Jamie Griffin and countless other cleanup workers and local residents. Its brand name is Corexit, but most news reports at the time referred to it simply as a “dispersant.” Its function was to attach itself to leaked oil, break it into droplets, and disperse them into the vast reaches of the gulf, thereby keeping the oil from reaching Gulf Coast shorelines. And the Corexit did largely achieve this goal.
But the 1.84 million gallons of Corexit that BP applied during the cleanup also served a public-relations purpose: they made the oil spill all but disappear, at least from TV screens. By late July 2010, the Associated Press and The New York Times were questioning whether the spill had been such a big deal after all. Time went so far as to assert that right-wing talk-radio host Rush Limbaugh “has a point” when he accused journalists and environmentalists of exaggerating the crisis.
But BP had a problem: it had lied about how safe Corexit is, and proof of its dishonesty would eventually fall into the hands of the Government Accountability Project, the premiere whistleblower-protection group in the U.S. The proof? A technical manual BP had received from NALCO, the firm that supplied the Corexit that BP used in the gulf.
An electronic copy of that manual is included in a new report GAP has issued, “Deadly Dispersants in the Gulf.” On the basis of interviews with dozens of cleanup workers, scientists, and Gulf Coast residents, GAP concludes that the health impacts endured by Griffin were visited upon many other locals as well. What’s more, the combination of Corexit and crude oil also caused terrible damage to gulf wildlife and ecosystems, including an unprecedented number of seafood mutations; declines of up to 80 percent in seafood catch; and massive die-offs of the microscopic life-forms at the base of the marine food chain. GAP warns that BP and the U.S. government nevertheless appear poised to repeat the exercise after the next major oil spill: “As a result of Corexit’s perceived success, Corexit … has become the dispersant of choice in the U.S. to ‘clean up’ oil spills.”
BP’s cover-up was not planned in advance but devised in the heat of the moment as the oil giant scrambled to limit the PR and other damages of the disaster. Indeed, one of the chief scandals of the disaster is just how unprepared both BP and federal and state authorities were for an oil leak of this magnitude. U.S. law required that a response plan be in place before drilling began, but the plan was embarrassingly flawed.
“We weren’t managing for actual risk; we were checking a box,” says Mark Davis, director of the Institute on Water Resources Law and Policy at Tulane University. “That’s how we ended up with a response plan that included provisions for dealing with the impacts to walruses: because [BP] copied word for word the response plans that had been developed after the Exxon-Valdez oil spill [in Alaska, in 1989] instead of a plan tailored to the conditions in the gulf.”
As days turned into weeks and it became obvious that no one knew how to plug the gushing well, BP began insisting that Corexit be used to disperse the leaking oil. This triggered alarms from scientists and from a leading environmental NGO in Louisiana, the Louisiana Environmental Action Network (LEAN).
The group’s scientific adviser, Wilma Subra, a chemist whose work on environmental pollution had won her a “genius grant” from the MacArthur Foundation, told state and federal authorities that she was especially concerned about how dangerous the mixture of crude and Corexit was: “The short-term health symptoms include acute respiratory problems, skin rashes, cardiovascular impacts, gastrointestinal impacts, and short-term loss of memory,” she told GAP investigators. “Long-term impacts include cancer, decreased lung function, liver damage, and kidney damage.”
(Nineteen months after the Deepwater Horizon explosion, a scientific study published in the peer-reviewed journal Environmental Pollution found that crude oil becomes 52 times more toxic when combined with Corexit.)
BP even rebuffed a direct request from the administrator of the Environmental Protection Agency, Lisa Jackson, who wrote BP a letter on May 19, asking the company to deploy a less toxic dispersant in the cleanup. Jackson could only ask BP to do this; she could not legally require it. Why? Because use of Corexit had been authorized years before under the federal Oil Pollution Act.
In a recent interview, Jackson explains that she and other officials “had to determine, with less-than-perfect scientific testing and data, whether use of dispersants would, despite potential side effects, improve the overall situation in the gulf and coastal ecosystems. The tradeoff, as I have said many times, was potential damage in the deep water versus the potential for larger amounts of undispersed oil in the ecologically rich coastal shallows and estuaries.” She adds that the presidential commission that later studied the BP oil disaster did not fault the decision to use dispersants.
Knowing that EPA lacked the authority to stop it, BP wrote back to Jackson on May 20, declaring that Corexit was safe. What’s more, BP wrote, there was a ready supply of Corexit, which was not the case with alternative dispersants. (A NALCO plant was located just 30 miles west of New Orleans.)
But Corexit was decidedly not safe without taking proper precautions, as the manual BP got from NALCO spelled out in black and white. The “Vessel Captains Hazard Communication” resource manual, which GAP shared with me, looks innocuous enough. A three-ring binder with a black plastic cover, the manual contained 61 sheets, each wrapped in plastic, that detailed the scientific properties of the two types of Corexit that BP was buying, as well as their health hazards and recommended measures against those hazards.
BP applied two types of Corexit in the gulf. The first, Corexit 9527, was considerably more toxic. According to the NALCO manual, Corexit 9527 is an “eye and skin irritant. Repeated or excessive exposure … may cause injury to red blood cells (hemolysis), kidney or the liver.” The manual adds: “Excessive exposure may cause central nervous system effects, nausea, vomiting, anesthetic or narcotic effects.” It advises, “Do not get in eyes, on skin, on clothing,” and “Wear suitable protective clothing.”
When available supplies of Corexit 9527 were exhausted early in the cleanup, BP switched to the second type of dispersant, Corexit 9500. In its recommendations for dealing with Corexit 9500, the NALCO manual advised, “Do not get in eyes, on skin, on clothing,” “Avoid breathing vapor,” and “Wear suitable protective clothing.”
It’s standard procedure—and required by U.S. law—for companies to distribute this kind of information to any work site where hazardous materials are present so workers can know about the dangers they face and how to protect themselves. But interviews with numerous cleanup workers suggest that this legally required precaution was rarely if ever followed during the BP cleanup. Instead, it appears that BP told NALCO to stop including the manuals with the Corexit that NALCO was delivering to cleanup work sites.
“It’s my understanding that some manuals were sent out with the shipments of Corexit in the beginning [of the cleanup],” the anonymous source tells me. “Then, BP told NALCO to stop sending them. So NALCO was left with a roomful of unused binders.”
Roman Blahoski, NALCO’s director of global communications, says: “NALCO responded to requests for its pre-approved dispersants from those charged with protecting the gulf and mitigating the environmental, health, and economic impact of this event. NALCO was never involved in decisions relating to the use, volume, and application of its dispersant.”
Misrepresenting the safety of Corexit went hand in hand with BP’s previously noted lie about how much oil was leaking from the Macondo well. As reported by John Rudolf in The Huffington Post, internal BP emails show that BP privately estimated that “the runaway well could be leaking from 62,000 barrels a day to 146,000 barrels a day.” Meanwhile, BP officials were telling the government and the media that only 5,000 barrels a day were leaking.
In short, applying Corexit enabled BP to mask the fact that a much larger amount of oil was actually leaking into the gulf. “Like any good magician, the oil industry has learned that if you can’t see something that was there, it must have ‘disappeared,’” Scott Porter, a scientist and deep-sea diver who consults for oil companies and oystermen, says in the GAP report. “Oil companies have also learned that, in the public mind, ‘out of sight equals out of mind.’ Therefore, they have chosen crude oil dispersants as the primary tool for handling large marine oil spills.”
BP also had a more direct financial interest in using Corexit, argues Clint Guidry, president of the Louisiana Shrimp Association, whose members include not only shrimpers but fishermen of all sorts. As it happens, local fishermen constituted a significant portion of BP’s cleanup force (which numbered as many as 47,000 workers at the height of the cleanup). Because the spill caused the closure of their fishing grounds, BP and state and federal authorities established the Vessels of Opportunity (VoO) program, in which BP paid fishermen to take their boats out and skim, burn, and otherwise get rid of leaked oil. Applying dispersants, Guidry points out, reduced the total volume of oil that could be traced back to BP.
“The next phase of this trial [against BP] is going to turn on how much oil was leaked,” Guidry tells me. [If found guilty, BP will be fined a certain amount for each barrel of oil judged to have leaked.] “So hiding the oil with Corexit worked not only to hide the size of the spill but also to lower the amount of oil that BP may get charged for releasing.”
Not only did BP fail to inform workers of the potential hazards of Corexit and to provide them with safety training and protective gear, according to interviews with dozens of cleanup workers, the company also allegedly threatened to fire workers who complained about the lack of respirators and protective clothing.
“I worked with probably a couple hundred different fishermen on the [cleanup],” Acy Cooper, Guidry’s second in command, tells me in Venice, the coastal town from which many VoO vessels departed. “Not one of them got any safety information or training concerning the toxic materials they encountered.” Cooper says that BP did provide workers with body suits and gloves designed for handling hazardous materials. “But when I’d talk with [the BP representative] about getting my guys respirators and air monitors, I’d never get any response.”
Roughly 58 percent of the 1.84 million gallons of Corexit used in the cleanup was sprayed onto the gulf from C-130 airplanes. The spray sometimes ended up hitting cleanup workers in the face.
“Our boat was sprayed four times,” says Jorey Danos, a 32-year-old father of three who suffered racking coughing fits, severe fatigue, and memory loss after working on the BP cleanup. “I could see the stuff coming out of the plane—like a shower of mist, a smoky color. I could see [it] coming at me, but there was nothing I could do.”
“The next day,” Danos continues, “when the BP rep came around on his speed boat, I asked, ‘Hey, what’s the deal with that stuff that was coming out of those planes yesterday?’ He told me, ‘Don’t worry about it.’ I said, ‘Man, that s–t was burning my face—it ain’t right.’ He said, ‘Don’t worry about it.’ I said, ‘Well, could we get some respirators or something, because that s–t is bad.’ He said, ‘No, that wouldn’t look good to the media. You got two choices: you can either be relieved of your duties or you can deal with it.’”
Perhaps the single most hazardous chemical compound found in Corexit 9527 is 2-Butoxyethanol, a substance that had been linked to cancers and other health impacts among cleanup workers on the 1989 Exxon-Valdez oil spill in Alaska. According to BP’s own data, 20 percent of offshore workers in the gulf had levels of 2-Butoxyethanol two times higher than the level certified as safe by the Occupational Safety and Health Administration.
Cleanup workers were not the only victims; coastal residents also suffered. “My 2-year-old grandson and I would play out in the yard,” says Shirley Tillman of the Mississippi coastal town Pass Christian. “You could smell oil and stuff in the air, but on the news they were saying it’s fine, don’t worry. Well, by October, he was one sick little fellow. All of a sudden, this very active little 2-year-old was constantly sick. He was having headaches, upper respiratory infections, earaches. The night of his birthday party, his parents had to rush him to the emergency room. He went to nine different doctors, but they treated just the symptoms; they’re not toxicologists.”
“It’s not the crime, it’s the cover-up.” Ever since the Watergate scandal of the 1970s, that’s been the mantra. Cover-ups don’t work, goes the argument. They only dig a deeper hole, because the truth eventually comes out.
But does it?
GAP investigators were hopeful that obtaining the NALCO manual might persuade BP to meet with them, and it did. On July 10, 2012, BP hosted a private meeting at its Houston offices. Presiding over the meeting, which is described here publicly for the first time, was BP’s public ombudsman, Stanley Sporkin, joining by telephone from Washington. Ironically, Sporkin had made his professional reputation during the Watergate scandal. As a lawyer with the Securities and Exchange Commission, Sporkin investigated illegal corporate payments to the slush fund that President Nixon used to buy the silence of the Watergate burglars.
Also attending the meeting were two senior BP attorneys; BP Vice President Luke Keller; other BP officials; Thomas Devine, GAP’s senior attorney on the BP case; Shanna Devine, GAP’s investigator on the case; Dr. Michael Robichaux; Dr. Wilma Subra; and Marylee Orr, the executive director of LEAN. The following account is based on my interviews with Thomas Devine, Robichaux, Subra, and Orr. BP declined to comment.
BP officials had previously confirmed the authenticity of the NALCO manual, says Thomas Devine, but now they refused to discuss it, even though this had been one of the stated purposes for the meeting. Nor would BP address the allegation, made by the whistleblower who had given the manual to GAP, that BP had ordered the manual withheld from cleanup work sites, perhaps to maintain the fiction that Corexit was safe.
“They opened the meeting with this upbeat presentation about how seriously they took their responsibilities for the spill and all the wonderful things they were doing to make things right,” says Devine. “When it was my turn to speak, I said that the manual our whistleblower had provided contradicted what they just said. I asked whether they had ordered the manual withdrawn from work sites. Their attorneys said that was a matter they would not discuss because of the pending litigation on the spill.” [Disclosure: Thomas Devine is a friend of this reporter.]
The visitors’ top priority was to get BP to agree not to use Corexit in the future. Keller said that Corexit was still authorized for use by the U.S. government and BP would indeed feel free to use it against any future oil spills.
A second priority was to get BP to provide medical treatment for Jamie Griffin and the many other apparent victims of Corexit-and-crude poisoning. This request too was refused by BP.
Robichaux doubts his patients will receive proper compensation from the $7.8 billion settlement BP reached in 2012 with the Plaintiffs’ Steering Committee, 19 court-appointed attorneys who represent the hundreds of individuals and entities that have sued BP for damages related to the gulf disaster. “Nine of the most common symptoms of my patients do not appear on the list of illnesses that settlement says can be compensated, including memory loss, fatigue, and joint and muscular pain,” says Robichaux. “So how are the attorneys going to file suits on behalf of those victims?”
At one level, BP’s cover-up of the gulf oil disaster speaks to the enormous power that giant corporations exercise in modern society, and how unable, or unwilling, governments are to limit that power. To be sure, BP has not entirely escaped censure for its actions; depending on the outcome of the trial now under way in New Orleans, the company could end up paying tens of billions of dollars in fines and damages over and above the $4.5 billion imposed by the Justice Department in the settlement last year. But BP’s reputation appears to have survived: its market value as this article went to press was a tidy $132 billion, and few, if any, BP officials appear likely to face any legal repercussions. “If I would have killed 11 people, I’d be hanging from a noose,” says Jorey Danos. “Not BP. It’s the golden rule: the man with the gold makes the rules.”
As unchastened as anyone at BP is Bob Dudley, the American who was catapulted into the CEO job a few weeks into the gulf disaster to replace Tony Hayward, whose propensity for imprudent comments—“I want my life back,” the multimillionaire had pouted while thousands of gulf workers and residents were suffering—had made him a globally derided figure. Dudley told the annual BP shareholders meeting in London last week that Corexit “is effectively … dishwashing soap,” no more toxic than that, as all scientific studies supposedly showed. What’s more, Dudley added, he himself had grown up in Mississippi and knows that the Gulf of Mexico is “an ecosystem that is used to oil.”
Nor has the BP oil disaster triggered the kind of changes in law and public priorities one might have expected. “Not much has actually changed,” says Mark Davis of Tulane. “It reflects just how wedded our country is to keeping the Gulf of Mexico producing oil and bringing it to our shores as cheaply as possible. Going forward, no one should assume that just because something really bad happened we’re going to manage oil and gas production with greater sensitivity and wisdom. That will only happen if people get involved and compel both the industry and the government to be more diligent.”
And so the worst environmental disaster in U.S. history has been whitewashed—its true dimensions obscured, its victims forgotten, its lessons ignored. Who says cover-ups never work?
Mark Hertsgaard is a fellow at the New American Foundation and the author, most recently, of HOT: Living Through the Next Fifty Years on Earth. This article was reported in partnership with the Investigative Fund at the Nation Institute.
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The 13 largest oil spills in history
Here’s a look at the largest spills in world history and how the Gulf oil spill and the Exxon Valdez disaster compare.
OILY LEGACY: Twenty-one years later, oil from the Exxon Valdez spill remains a few inches below the surface on many of Alaska’s beaches.
When the Deepwater Horizon oil rig sank in the Gulf of Mexico on April 22, no one was prepared for the massive environmental disaster that followed. Now that BP has successfully capped the gushing oil well — a temporary fix until relief wells are completed — we can see how the Gulf oil spill, the worst environmental disaster in U.S. history, stacks up against the world’s worst oil spills.
13. The Torrey Canyon Oil Spill
When: March 18, 1967
Where: Scilly Isles, UK
Amount spilled: 25-36 million gallons
The Torrey Canyon was one of the first big supertankers, and it was also the source of one of the first major oil spills. Although the ship was originally built to carry 60,000 tons, it was enlarged to a 120,000-ton capacity, and that’s the amount the ship was carrying when it hit a reef off the coast of Cornwall.
The spill created an oil slick measuring 270 square miles, contaminating 180 miles of coastland. More than 15,000 sea birds and enormous numbers of aquatic animals were killed before the spill was finally contained.
Toxic solvent-based cleaning agents were used by Royal Navy vessels to try to disperse the oil, but that didn’t work very well and instead caused a great deal of environmental damage. It was then decided to set fire to the ocean and burn away the oil by dropping bombs.
12. The Sea Star Oil Spill
When: Dec. 19, 1972
Where: Gulf of Oman
Amount spilled: 35.3 million gallons
The South Korean supertanker, Sea Star, collided with a Brazilian tanker, the Horta Barbosa, off the coast of Oman on the morning of Dec. 19, 1972. The vessels caught fire after the collision and the crew abandoned ship. Although the Horta Barbosa was extinguished in a day, the Sea Star sank into the Gulf on Dec. 24 following several explosions.
11. Odyssey Oil Spill
When: Nov. 10, 1988
Where: Off the coast of Nova Scotia, Canada
Amount spilled: 40.7 million gallons
This large oil spill occurred about 700 nautical miles off the coast of Newfoundland and spilled more than 40 million gallons of oil into the ocean.
10. M/T Haven Tanker Oil Spill
When: April 11, 1991
Where: Genoa, Italy
Amount spilled: 45 million gallons
This oil tanker exploded and sank off the coast of Italy, killing six people and leaking its remaining oil into the Mediterranean for 12 years. The source of the explosion was thought to be the ship’s poor state of repair — supposedly the Haven was scrapped after being hit by a missile during the Iran-Iraq War, but was put back into operation.
9. ABT Summer Oil Spill
When: May 28, 1991
Where: About 700 nautical miles off the coast of Angola
Amount spilled: 51-81 million gallons
This ship exploded off the coast of Angola, discharging massive amounts of oil into the ocean. Five of the 32 crew members on board died as a result of the incident. A large slick covering an area of 80 square miles spread around the tanker and burned for three days before the ship sank on June 1, 1991. Subsequent efforts to locate the wreckage were unsuccessful.
When: March 16, 1978
Where: Portsall, France
Amount spilled: 69 million gallons
The massive Amoco Cadiz was caught in a winter storm that damaged the ship’s rudder. The ship put out a distress call, but while several ships responded, none were able to prevent the ship from running aground. On March 17, the gigantic supertanker broke in half, sending its 69 million gallons of oil into the English Channel. The French later sunk the ship.
7. Castillo de Bellver Oil Spill
When: Aug. 6, 1983
Where: Saldanha Bay, South Africa
Amount spilled: 79 million gallons
The Castillo de Bellver caught fire about 70 miles north west of Cape Town, and drifted in the open sea until it broke in two 25 miles off the coast. The ship’s stern sank along with the 31 million gallons of oil it was carrying. The bow section was towed and deliberately sunk later.
6. Nowruz Oil Field Spill
When: Feb. 10, 1983
Where: Persian Gulf, Iran
Amount spilled: 80 million gallons
The oil spill was the result of a tanker collision with an oil platform. The weakened platform was closed, and it collapsed upon impact, spewing oil into the Persian Gulf. The ongoing war between Iran and Iraq prevented the leak from being capped quickly.
5. Kolva River Oil Spill
When: Aug. 6, 1983
Where: Kolva River, Russia
Amount spilled: 84 million gallons
A poorly maintained pipeline caused this massive oil spill. The pipeline had been leaking for eight months, but a dike contained the oil until sudden cold weather caused the dike to collapse. Millions of gallons of accumulated oil were released that spread across 170 acres of streams, fragile bogs and marshland.
4. Atlantic Empress Oil Spill
When: July 19, 1979
Where: Off the coast of Trinidad and Tobago
Amount spilled: 90 million gallons
This Greek oil tanker was caught in a tropical storm off the coast of Trinidad and Tobago when it collided with the Aegean Captain. The damaged ship started losing oil and continued to leak it into the ocean while it was towed. The oil tank finally sunk into deep water on Aug. 3, 1979, where the remaining cargo solidified.
3. Ixtoc 1 Oil Spill
When: June 3, 1979
Where: Bay of Campeche off Ciudad del Carmen, Mexico
Amount spilled: 140 million gallons
Like the Gulf oil spill, this spill didn’t involve a tanker, but rather an offshore oil well. Pemex, a state-owned Mexican petroleum company was drilling an oil well when a blowout occurred, the oil ignited and the drilling rig to collapse. Oil began gushing out of the well into the Gulf of Mexico at a rate of 10,000 to 30,000 barrels a day for almost an entire year before workers were finally able to cap the well.
2. Gulf oil spill
When: April 22, 2010
Where: Gulf of Mexico
Amount spilled: An estimated 206 million gallons
The Gulf oil spill is officially the largest accidental spill in world history. It began when an oil well a mile below the surface of the Gulf blew out, causing an explosion on BP’s Deepwater Horizon rig that killed 11 people. BP made several unsuccessful attempts to plug the well, but oil flowed — possibly at a rate as high as 2.5 million gallons a day — until the well was capped on July 15, 2010. Oil gushed from the broken well for more than 85 days, oiled 572 miles of Gulf shoreline, and killed hundreds of birds and marine life. The long-term effects of the oil and the 1.82 million gallons of dispersant used on this fragile ecosystem remain unknown, but experts say they could devastate the Gulf coast for years to come.
1. Arabian Gulf/Kuwait
When: Jan. 19, 1991
Where: Persian Gulf, Kuwait
Amount spilled: 380-520 million gallons
The worst oil spill in history wasn’t an accident — it was deliberate. During the Gulf War, Iraqi forces attempted to prevent American soldiers from landing by opening valves at an offshore oil terminal and dumping oil from tankers. The oil resulted in a 4-inch thick oil slick that spread across 4,000 square miles in the Persian Gulf.
How does the Exxon Valdez oil spill compare?
When the Exxon Valdez supertanker hit a reef off the Alaskan coast, 11 of its cargo tanks ruptured, dumping 11 million gallons of crude into Prince William Sound. But the spill could have been much worse — the Valdez was carrying 53 million gallons.
In terms of sheer volume, the Exxon Valdez spill ranks as the 36th worst oil spill in history; however, the spill was far from small. Despite attempts to use dispersing agents and oil skimming ships, oil washed onto 1,300 miles of Alaskan coastline. Today, oil remains a few inches below the surface on many of Alaska’s beaches.
Responders found carcasses of more than 35,000 birds and 1,000 sea otters, which was considered to be a fraction of the animal death toll because carcasses typically sink to the seabed. It’s estimated 250,000 seabirds, 2,800 sea otters, 300 harbor seals, 250 bald eagles, up to 22 killer whales died along with billions of salmon and herring eggs.
The repaired Exxon Valdez was renamed the SeaRiver Mediterranean, and, although it is banned from Alaskan waters, the tanker still carries oil around the world.
(MNN editor Caitlin Leary contributed to this story.)
via The 13 largest oil spills in history | MNN – Mother Nature Network.
via The 13 largest oil spills in history | MNN – Mother Nature Network.
Bradley Manning & The Deepwater Horizon
Bradley Manning & The Deepwater Horizon
Three years ago this month, on the 20th of April, 2010, the BP Deepwater Horizon drilling rig blew itself to kingdom come.
Soon thereafter, a message came in to our office’s chief of investigations, Ms Badpenny, from a person I dare not name, who was floating somewhere in the Caspian Sea along the coast of Baku, Central Asia.
The source was in mortal fear he’d be identified – and with good reason. Once we agreed on a safe method of communication, he revealed this: 17 months before BP’s Deepwater Horizon blew out and exploded in the Gulf of Mexico, another BP rig suffered an identical blow-out in the Caspian Sea.
Crucially, both the Gulf and Caspian Sea blow-outs had the same identical cause: the failure of the cement “plug”.
To prevent blow-outs, drilled wells must be capped with cement. BP insisted on lacing its cement with nitrogen gas – the same stuff used in laughing gas – because it speeds up drying.
Time is money, and mixing some nitrogen gas into the cement saves a lot of money.
However, because BP’s penny-pinching method is so damn dangerous, they are nearly alone in using it in deep, high-pressure offshore wells.
The reason: nitrogen gas can create gaps in the cement, allow methane gas to go up the borehole, fill the drilling platform with explosive gas – and boom, you’re dead.
So, when its Caspian Sea rig blew out in 2008, rather than change its ways, BP simply covered it up.
Our investigators discovered that the company hid the information from its own shareholders, from British regulators and from the US Securities Exchange Commission. The Vice-President of BP USA, David Rainey, withheld the information from the US Senate in a testimony he gave six months before the Gulf deaths. (Rainey was later charged with obstruction of justice on a spill-related matter.)
Britain’s Channel 4 agreed to send me to the benighted nation of Azerbaijan, whose waters the earlier BP blow-out occurred in, to locate witnesses who would be willing to talk to me without getting “disappeared”. (They didn’t talk, but they still disappeared.)
And I was arrested. Some rat had tipped off the Security Ministry (the official name of the Department of Torture here in this Islamic Republic of BP). I knew I’d get out quick, because throwing a reporter of Her Majesty’s Empire into a dungeon would embarrass both BP and the Azeri oil-o-crats.
The gendarmes demanded our film, but I wasn’t overly concerned: Before I left London, Badpenny handed me one of those Austin Powers camera-in-pens, on which I’d loaded all I needed. But I did fear for my witnesses left behind in Azerbaijan – and for my source in a tiger cage in the USA: Pvt Bradley Manning.
Manning could have saved their lives
Only after I dove into deep water in Baku did I discover, trolling through the so-called “WikiLeaks” documents, secret State Department cables released by Manning. The information was stunning: the US State Department knew about the BP blow-out in the Caspian and joined in the cover-up.
Apparently BP refused to tell its own partners, Chevron and Exxon, why the lucrative Caspian oil flow had stopped. Chevron bitched to the office of the US Secretary of State, Condoleezza Rice. (George Bush’s cabinet member should not be confused with the 129,000-tonne oil tanker “Condoleezza Rice”, which Chevron named after their former board member.)
The US Ambassador in Baku got Chevron the answer: a blow-out of the nitrogen-laced cement cap on a giant Caspian Sea platform. The information was marked “SECRET”. Apparently loose lips about sinking ships would help neither Chevron nor the Azeri President Ilham Aliyev, the beneficiary of millions of dollars in payments of oil company baksheesh.
So what about Bradley Manning?
Manning has been charged with “aiding the enemy” – a crime punishable by death.
But Manning’s sole and only purpose was to get out the truth. It wasn’t Manning who wrote the cover-up memos, he merely wanted to get them to the victims: us.
And since when did the public become “the enemy”?
Had Manning’s memos come out just a few months earlier, the truth about BP’s deadly drilling methods would have been revealed, and there’s little doubt BP would have had to change its ways. Those eleven men could well have been alive today.
Did Manning know about this particular hush-hush cable about BP’s blow-out when he decided he had to become Paul Revere and warn the planet?
That’s unlikely, in the thousands of cables he had. But he’d seen enough evidence of murder and mendacity in other cables, so, as Manning, under oath, told a court, he tried to give it all to the New York Times to have knowledgeable reporters review the cables confidentially for life-saving information.
The New York Times immediately seized on this extraordinary opportunity… to ignore Manning. The Times only ran it when the Guardian was going to scoop – and embarrass – the New York hacks.
Though there are limits. While reporter David Leigh put the story of BP’s prior blow-out on page one of the Guardian, neither the New York Times or any other major US news outlet ran the story of the blow-out and oil industry cover-up. No surprise there, though – the most “prestigious” US news programme, PBS Newshour, was sponsored by… Chevron Corporation.
Hanging their source while taking his applause
As a working journalist, and one whose head is likely to be in the foggy gun-sights of some jet jockey or a dictator’s goon squad, I have more than a little distaste for toffs like New York Times’ former executive editor, columnist Bill Keller, who used Manning documents to cash in on a book deal and land star turns on television while simultaneously smearing his source Manning as, “troubled”, “emotionally fractured”, “vague”, “inchoate” and – cover the children’s ears – “gay”.
Furthermore, while preening about their revelations from the Manning documents, the Times had no problem with imprisoning their source. I do acknowledge that the Times and Keller did editorialise that a sentence of life imprisonment without parole would be “overkill”. How white of them.
When it was mentioned that Manning is no different from Daniel Ellsberg, the CIA operative who released the Pentagon Papers, Keller reassured that the Times also told Ellsberg he was “on his own” and did not object to their source being charged as a spy.
And the Times’ much-lauded exposure of the My Lai massacre? My late good friend, the great investigative reporter Ron Ridenhour, who gave the story to Seymour Hersh, told me that he and Hersh had to effectively blackmail the Times into printing it.
Manning: aid to the enemy?
Times man Keller writes that Manning, by going to “anti-American” WikiLeaks, threatened the release of, “information that might get troops in the field or innocent informants killed”.
Really?
This is the same Bill Keller who admits that he knew his paper’s reports in 2003 that Saddam Hussein had weapons of mass destruction were completely false, but that he – as editor – covered up his paper’s knowledge their WDM stories were simply bogus. Those stories validated the Bush propaganda and helped tip the political balance to invade Iraq. Four-thousand US soldiers died. I guess the idea is that releasing information that kills troops is criminal, but that dis-information that kills troops is quite acceptable.
Maybe I’m just cranky because I wouldn’t have seen my own sources vanish and my film grabbed if the Times had only run the Manning facts about BP and Caspian when they had the chance.
Look, I’m only picking on the New York Times and PBS Newshour because they are the best in America, God help us.
What other lives could have been saved by the Manning revelations? Lots. Watch this space: I promise more aid to the enemies of the state – which is YOU.
Greg Palast investigated the BP Deepwater Horizon deaths for Channel 4 Television UK. Those dispatches are contained in his highly acclaimed book Vultures’ Picnic, named Book of the Year 2012 on BBC Newsnight Review.
On April 5, there will be a gathering in New York with Daniel Ellsberg and defenders of Bradley Manning. Go to Greg Palast’s facebook page for more info.
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‘Dirty blizzard’ in Gulf may account for missing Deepwater Horizon oil
Oil from the 2010 Deepwater Horizon spill acted as a catalyst for plankton and other surface materials to clump together and fall to the sea floor in a massive sedimentation event that researchers are calling a “dirty blizzard.”
Jeff Chanton, the John Widmer Winchester Professor of Oceanography in the Department of Earth, Ocean and Atmospheric Science at Florida State University, is one of the members of the Deep-C Consortium who presented the dirty blizzard hypothesis at a recent conference in New Orleans that focused on the effects of the oil spill on the Gulf of Mexico ecosystem.
The consortium, which includes researchers from FSU, Eckerd College, the University of South Florida and Georgia Institute of Technology, confirmed the never before observed dirty blizzard hypothesis by using thorium, lead and radiocarbon isotopes in addition to DNA analyses of sediments.
The dirty blizzard phenomenon may explain what happened to some portion of the more than 200 million gallons of spilled oil. Microbes likely processed most of the oil within months of the spill, but government assessments have not accounted for all of the spilled oil.
“Some of the missing oil may have mixed with deep ocean sediments, creating a dirty bathtub effect,” Chanton said. “The sediments then fell to the ocean floor at a rate 10 times the normal deposition rates. It was, in essence, an underwater blizzard.”
The oily sediments deposited on the sea floor could cause significant damage to ecosystems and may affect commercial fisheries in the future, he said.
The dirty blizzard hypothesis explains why layers of water that would normally be cloudy with suspended plankton instead appeared transparent during the spill, except for strings of particles falling to the bottom.
“The oil just sucked everything out of the surface,” Chanton said.
Chanton and his Deep-C colleagues are continuing their research to determine exactly how much of the oil ended up on the sea floor.
The Deep-C (Deep Sea to Coast Connectivity in the Eastern Gulf of Mexico) Consortium is composed of 10 major institutions involved in a long-term, interdisciplinary study of deep sea to coast connectivity in the northeastern Gulf of Mexico. The study is investigating the environmental consequences of the 2010 oil spill on living marine resources and ecosystem health.
The research was made possible in part by the Gulf of Mexico Research Initiative (GoMRI), a 10-year independent research program investigating the effects of the Deepwater Horizon incident. The mission of the GoMRI is to improve society’s ability to understand and mitigate the impacts of hydrocarbon pollution and stressors on the marine environment and public health. The program was established through a $500 million financial commitment from BP. For more information, visit http://gulfresearchinitiative.org/.
BP created a ‘well from hell’ in Gulf of Mexico
US government prosecutors spent the first day of a long-delayed trial into the 2010 Deepwater Horizon disaster arguing that corporate greed was the cause of the explosion that killed 11 people and created America’s worst offshore oil spill.
“BP put profits before people; profits before safety; profits before the environment,” claimed Mike Underhill, a lawyer for the Department of Justice.
A tense day in a federal court in New Orleans saw all four companies involved in the disaster accused of systematically disregarding safety as they sought to extract oil from ever greater depths in the Gulf of Mexico. The Macondo well was called “the well from hell” by a worker, the court heard.
The US government is seeking fines of almost $18bn (£11.8bn) from BP. Its lawyers claimed the bulk of the blame for the disaster lay with the UK company. Most legal experts thought BP would settle with the government over the weekend, but the company has vigorously denied it was grossly negligent in the spill.
The first part of the trial will apportion blame for the disaster between BP; Transocean, the owner of the Deepwater Horizon rig; Halliburton, which cemented the well; and Cameron, the manufacturer of a piece of safety equipment designed to prevent a well from blowing up.
District Judge Carl Barbier said he expects the first part of the trial to last three months. Government lawyers insisted before the trial that evidence would prove their accusation that BP was grossly negligent, a finding that would see the oil giant fined the maximum amount under the US Clean Water Act.
In his opening statement, Mr Underhill cited an email sent from John Guide, who was BP’s manager of the Macondo well, to his manager, David Sims, four days before the explosion on April 2010.
In it, Mr Guide says that his team are “flying by the seat of our pants” and that pressure from above is creating “paranoia” as they pushed to complete a well that the US government claims was $50m over budget by the time it exploded.
In an email response read in court, Mr Sims replied that he was off to “dance practice”, where he would be dancing to the Village People.
BP, which is one of the largest deepwater drillers in the Gulf of Mexico, has always denied that it cut corners to speed up the lucrative flow of oil from the region.
However, Jim Roy, a lawyer representing local businesses damaged by the spill, said BP’s senior management had applied heavy pressure in early 2010 on its Gulf of Mexico operations to speed up production, because it needed to find another $7bn to help pay for a dividend to shareholders.
BP shares closed up 1.6pc at 451½p in London on Monday, but investors who wanted the oil giant to settle before the matter reached court may be bracing for a lengthy trial. BP has set aside $42.2bn to cover the cost of the spill. The trial continues.
via BP created a ‘well from hell’ in Gulf of Mexico – Telegraph.
via BP created a ‘well from hell’ in Gulf of Mexico – Telegraph.
No Fracking in Ireland -Greg Palast | Investigative Reporter
by Greg Palast for No Fracking Ireland
On the 20th of April 2010, the Deepwater Horizon oil rig blew out in the Gulf of Mexico, killing eleven men instantly, then destroying 600 miles of coastline. On 9 September 2010, a natural gas pipeline exploded in San Bruno, California, burning eight to death, one of several recent pipeline explosions in the USA. In 1992, in Chicago, a gas pipe leaked and 18 houses exploded, incinerating three people.
What do these deaths have to do with plans for “fracking” for natural gas in Ireland?
Everything. It was my job to investigate these three explosions, the Deepwater Horizon and California explosions as a reporter for the UK Channel 4’s Dispatches, the earliest as a US government investigator. In all three cases, the deaths were preceded by the same reassurances about the safety of drilling and piping that I read now in the debate about fracking in Ireland.
First, the Deepwater Horizon. Eleven men died when the ‘mud’ – drilling cement meant to cap the wellhead – failed and methane gas blew out the top of the pipes and exploded. The Shannon Basin is not the Gulf of Mexico, but your safety will be just as dependent on Halliburton’s mud.
Can we trust Halliburton’s reassurances? The owners of the Deepwater Horizon have told a US court that they’ve discovered that Halliburton hid critical information that the well cement could fail. Halliburton denies the cover-up. But cover-up or not, the cement failed as it has several times recently in the US in wells drilled for fracking. In all cases, including the contamination of water supplies in Pennsylvania (where some residents could set their tap water alight with a match), drilling was preceded by mollifying studies indicating that all was safe. But they failed to see all the looming dangers.
In Ireland, you haven’t even done the studies. The University of Aberdeen study for the Irish Environmental Protection Agency has been played as some kind of endorsement for charging ahead with fracking in Ireland – but this is not the case if you actually read the study. The University study is, in fact, a long series of warnings that proposed drilling methods, the local geology and the potential impacts on water quality all require studies not even begun. It also points to the necessity of creating a regulatory system not now in place which can cope with watching thousands of explosive, toxic well-sites.
The Shannon river basin is a truly eyebrow-raising place to blindly drill thousands of wells. It’s located in proximity to one of Irelands few major aquifers (your drinking water supply) and the drilling will be relatively shallow. Where I live in the State of New York, the government, though a major booster of fracking, has banned the fracking of shallow shale deposits and banned the process from all locations near our aquifers. The US experience is not comforting.
Horizontal fracking (as proposed for Irish deposits) requires explosive charges to be fired along miles of pipe underground (and under houses and water supplies) followed by the pumping of fluids at high pressure through these pipes. The result has been man-made earthquakes. Buildings don’t fall down, but cracks bring hydrocarbon poisons into the aquifers. In the vast uninhabited wastes of the American Dakotas, we simply abandon water systems. Where in Ireland can you do that?
And then there are the pipelines. The fracked gas doesn’t get to market by carrier pigeon. Ireland has had virtually no discussion of the difficulties, danger and cost of running hundreds, and ultimately, thousands of miles of gathering pipes. I’ve been investigating the horror of pipeline explosions for three decades now and the problem is exponentially worsened by the new web of lines created by fracking. Highly explosive transport systems require an elaborate system of on-site government regulation which Ireland does not have and cannot now afford. And it’s simply too easy for the PIGs to cheat.
A PIG is a Pipeline Inspection Gauge, a robot that looks like a mechanical porker with wire whiskers that crawls through pipes hunting for corrosion, cracks, leaks and trouble. When the PIG ’squeals’, the pipes must be dug up and replaced. And that’s frightfully expensive.
It especially frightens the executives who have to pay for pipe replacement. So, what I’ve found and reported is that the providers of software and its users are aware that the PIGs’ diagnostic computer code, which converts the squeals of the PIG into warnings, has flaws which understate dangers. And the results have been horribly predictable: Despite the reassuring noises from the PIGs, pipes have leaked, polluted, exploded and killed.
Is there a safe way to frack? Probably: but not profitably; and certainly not within the geology of a little emerald isle. I am weary of appearing at scenes of death and destruction when cement fails, pipes crack and tremors spew poisons only to hear a gas or oil company executive’s PR flack issue an apology. I doubt those apologies will sound better in Gaelic.
——–
Re-prints permitted with credit to the author.
Greg Palast is the author of Vultures’ Picnic (Penguin 2011), which centers on his investigation of BP, bribery and corruption in the oil industry. Palast, whose reports are seen on BBC-TV and Britain’s Channel 4.
BP suspended from US federal contracts over ‘lack of business integrity’
BP has been blocked from seeking new contracts with the US government because of the oil company’s “lack of business integrity” during the Gulf of Mexico oil disaster, the Environmental Protection Agency said Wednesday.
The temporary order bans BP from competing for new oil leases in the Gulf of Mexico – such as the auction of 20m acres taking place on Wednesday – or from bidding on new contracts to supply the Pentagon or other government agencies with fuel.
While the ban does not affect existing business, it raises wider questions about the company’s future in a crucial market.
The type of suspension imposed by the EPA typically does not last more than 18 months. But an official said that in this case the ban could be extended because of the ongoing legal proceedings. That could mean BP, the largest oil producer in the Gulf of Mexico, would remain under an extended moratorium until all criminal charges and law suits are resolved.
BP was clearly taken by surprise and struggled to explain the impact on its business. Its shares fell nearly 2% in London as investors reacted with dismay to the news which puts a major dent in the company’s already battered reputation.
The finance director of the London-based oil group warned investors at a recent presentation that any outright ban could “affect BP’s investment thesis in the US“.
The order was handed down just two weeks after BP agreed to plead guilty to manslaughter and other charges arising from the April 2010 explosion of the Deepwater Horizon oil rig, as well as pay a record $4.5bn in fines.
The oil company, in announcing its plea deal with the Justice Department earlier this month, had specifically said it did not expect to be barred from future business dealings. “Under US law, companies convicted of certain criminal acts can be debarred from contracting with the federal government,” the company said in its statement at the time. “BP has not been advised of the intention of any federal agency to suspend or debar the company in connection with this plea agreement.”
The EPA said the suspension was based on BP’s conduct at the time of the blow-out as well as the 87 days it took to contain the well. Some 4.9m barrels of crude gushed into the Gulf of Mexico before it was finally capped.
“EPA is taking this action due to BP’s lack of business integrity as demonstrated by the company’s conduct with regard to the Deepwater Horizon blowout, explosion, oil spill, and response, as reflected by the filing of a criminal information,” the announcement said.
The announcement went on to describe the oil spill as the “largest environmental disaster in US history”.
It said BP would remain under suspension, and barred from new federal government contracts and transactions, until the company can demonstrate that it meets federal business standards.
“Federal executive branch agencies take these actions to ensure the integrity of federal programmes by conducting business only with responsible individuals or companies. Suspensions are a standard practice when a responsibility question is raised by action in a criminal case,” the EPA announcement said.
The agency gave no further details about the duration of the suspension, and the potential costs to BP were not immediately clear.
In its response, BP said the ban would not affect existing business. “The temporary suspension does not affect any existing contracts the company has with the US government, including those related to current and ongoing drilling and production operations in the Gulf of Mexico,” BP said.
The company said it was working with EPA and the US Justice Department to lift the suspension. “The EPA has informed BP that it is preparing a proposed administrative agreement that, if agreed upon, would effectively resolve and lift this temporary suspension. The EPA notified BP that such a draft agreement would be available soon,” the statement said.
The press release also noted that BP had been granted more than 50 new leases in the Gulf of Mexico since the oil disaster.
Peter Hutton, an analyst with RBC Capital Markets, said the EPA action had “real significance”, especially as it came days after Lamar McKay, the head of BP in America, was promoted to head of global exploration and production.
“The critical question is whether this is a shot across BP’s bows to get a settlement, or a more sustained stance, in which case the importance of the context is underlined by comments from BP’s chief financial officer, Brian Gilvary, in a recent conference call that such actions could ‘affect BP’s investment thesis in US’.”
But Joe Lampel, professor of strategy at the Cass Business School in London, said while the ban was a blow to BP the damage should be relatively limited.
“This suspension should be seen as an additional penalty rather than a pressure tactic that the US government often uses when it wants to force firms to concede liability. We do not know how long the ban will last, but I suspect that it will be lifted after a sufficient grace period has passed.”
In its attempt to consign Deepwater to the past, BP has agreed to pay $7.8bn to settle private claims stemming from the spill, and with the plea deal reached earlier this month, had hoped to limit its criminal liability. It is still on the hook for up to $21bn for environmental damage to the Gulf. Wednesday’s move by the EPA presents an additional complication.
Meanwhile, two BP rig supervisors appeared in a New Orleans court on Wednesday to be formally charged with manslaughter in the deaths of 11 workers aboard the rig. The supervisors, Donald Vidrine and Robert Kaluza, are accused of ignoring abnormal pressure readings seen as a red flag of a well blow-out.
Kaluza told reporters just before his hearing that he was innocent of the charges. “I think about the tragedy of the Deepwater Horizon every day. But I did not cause the tragedy,” he told reporters at the court. “I am innocent and I put my trust, reputation and future in the hands of the judge and jury.”
A former BP executive David Rainey was charged separately for allegedly lying to Congress about the amount of oil that was gushing from the well. All three men were expected to plead not guilty.
The EPA action was positively received by a number of key players, including former senator Bob Graham, who had chaired the White House oil spill commission. “I can’t put a dollar figure on what that would mean but I would assume that access to one of the larger reserves of petroleum in the world – which the Gulf of Mexico is – would have some economic consequences. And the longer the prohibition, the greater the consequences,” Graham told the Guardian.
He went on to praise the Obama administration for holding the oil company to account.
“I think sending a very strong signal that the federal government is going to be a much better steward of public property and that those who are permitted to explore and then potentially exploit those public properties are going to have to conduct themselves by world-class standards,” Graham said.
Campaign groups also applauded the move by the EPA. But the Oceana conservation group said the tough line from the Obama administration was undercut by its decision to go ahead with new lease sales in the Gulf of Mexico on Wednesday.
“We are pleased that BP is being penalised for the irresponsible actions,” said Matt Dundas, the campaign director. But he went on: “Overall, President Obama is missing the lesson of the Deepwater Horizon disaster which is that offshore drilling is inherently dirty and dangerous and needs to be phased out.”
