Five years have passed since the Deepwater Horizon oil disaster. Oil company BP fears it will be financially ruined if ordered to pay civil damages, having already paid USD 4 billion to settle criminal charges related to the spill. Gulf residents and businesses aren’t impressed: environmental reports show that the spill is still wreaking havoc on the Gulf’s ecosystems. John Dyer reports from Boston.
Today is the disaster’s five year anniversary: on 20 April 2010, BP’s Deepwater Horizon oil rig exploded, killing 11 people and spilling almost 3.2 million barrels of oil into the Gulf of Mexico. As controversies about the ecological toll of the disaster rage to this day, the company is battling United States prosecutors over penalties connected to the crisis that gripped the world for around three months as waves of black oil washed onto the beautiful shores of five states in the region.
Judge to rule on civil penalties
BP claims to have set aside USD 42 billion for cleanup, court penalties, victims’ compensation and other costs stemming from the disaster, according to its financial returns. Almost 30 per cent of that sum has been paid out to around 300,000 Gulf residents and businesses that suffered during the spill, according to U.S. officials. About another 66,000 people are still waiting for their payments.
Thousands of other residents and businesses have or could file private and class-action lawsuits against the company, too. But those litigants are waiting to see how Judge Carl Barbier in the U.S. District Court for Eastern Louisiana will rule in a case that will decide how much BP should pay in civil penalties for every barrel it spilled into the Gulf. BP has already paid USD 4 billion to settle criminal charges related to the spill.
BP warns of financial ruin
In September, Barbier ruled that BP was “grossly negligent” in the spill. In February, he swept aside BP’s plea to keep the penalties in the disaster limited to USD 9.57 billion. Instead, Barbier said the maximum amount could be USD 13.7 billion for violating the Clean Water Act, or USD 4,300 for every barrel dumped into the Gulf.
BP now claims that amount would ruin its drilling unit, BP Exploration & Production, or BPEX, because its British owner isn’t liable for the disaster and therefore wouldn’t give its subsidiary the funding to pay the fines. “The United States incorrectly suggests that BPXP’s past borrowing from affiliates allows one to assume future funding to pay the fines,” BP said in court papers last month.
The oil giant’s critics view that argument as laughable. “The value of production in the Gulf of Mexico is too important to BP’s overall interests to allow the subsidiary to be financially vulnerable,” said Loyola University Law Professor Blaine LeCesne in New Orleans. “It stretches credulity to believe that a USD 13 billion fine could bring a company the size of BP down, especially if it is absorbed over time. It would hardly be a speed bump in its operations.”
Switzerland-based Transocean, which technically owned the oil rig, and Texas’s Halliburton, which performed work in the drilling, were included in the ruling but weren’t found as culpable as BP. Transocean settled its penalties, paying USD 1.4 billion in 2013 and Halliburton settled its last year for USD 1.1 billion.
Environmentalists don’t trust BP
BP and environmentalists are also at odds. Last month, the company released a report that its scientists found few long-term impacts on crab, shrimp, pelicans and other iconic animals in the Gulf. But Kyle Graham, the deputy director of the Louisiana’s Coastal Protection and Restoration Authority and the state’s representative on federal and regional efforts to assess spill damage, said his researchers have found high levels of fish and bird bills that suggest the spill is still wreaking havoc on the Gulf’s ecosystems.
“They would like us to believe that it is purely coincidence that these mortality events have a higher occurrence in the areas that experience the highest level of oiling,” he said. “Independent scientists have taken a look at this and do believe the two are linked. BP’s paid scientists and consultants and press office have come out and said they’re not.”
Shrimper Randy Borne, a Cajun, doesn’t care much about the scientific reports. Before the spill, Borne said pulled 70 traps of blue crabs everyday from the bayou. Now, it’s around 12 traps. “Every year is worse and worse. I’m hardly catching nothing,” said Borne. “I think the crabs got affected the most.”