BP’s Strategy to Limit Liability in Regard to Its Gulf Oil Gusher

Posted on July 12, 2010. Filed under: BP, Clean Water Act, Deepwater Horizon, Dispersants, Federalize, liability, Oil Pollution Act, Oil Spill, Responsible Party, USCG |

BP’s Strategy to Limit Liability in Regard to Its Gulf Oil Gusher

By Brian J. Donovan

July 11, 2010

 

INTRODUCTION

As of July 11, 2010, regardless of whether you prefer to say “spill” or “gusher,” underwater “plume” or underwater “cloud,” these are the numbers to consider:

Total Amount of Oil Released to Date: 4,455,000 barrels
Amount of Oil Recovered by BP to Date (via Containment Cap): 771,100 barrels
Oily Water Recovered: 694,286 barrels of oily water = 69,429 barrels of oil
Oil Consumed by Controlled Burns: 237,857 barrels
Total Amount of Unrecovered Oil in Gulf of Mexico to Date: 3,376,614 barrels

Currently, the official release rate of oil from the Deepwater Horizon blowout is estimated to be 35,000 to 60,000 barrels per day. Unofficial credible estimates indicate that 80,000 to 100,000 barrels of oil may be spewing from the damaged well each day. Two vessels, the Q4000 and the Discoverer Enterprise, are collecting approximately 25,000 barrels of oil per day. The U.S. Coast Guard (USCG) expects BP’s third containment vessel, the Helix Producer, to increase total collection capacity to approximately 53,000 barrels of oil per day.

Under the Clean Water Act (CWA), BP faces fines of up to $4,300 for each barrel spilled. Furthermore, pursuant to Section 2702 of the Oil Pollution Act of 1990 (OPA 90), BP may be required to pay royalties (18.75%) owed to the federal government for the oil gushing from the well.

BP owns 65 percent of the Deepwater Horizon well, Anadarko owns 25 percent, and Mitsui owns 10 percent. Under OPA 90, responsible parties and guarantors are jointly and severally liable for the costs incurred. In this incident, BP has been named the responsible party. Pursuant to OPA 90, a “responsible party” means, in the case of an offshore facility, the lessee or permittee of the area in which the facility is located. Under the definition of responsible party in OPA 90, the fact that Anadarko and Mitsui are also “lessees,” may relate to the potential liability of Anadarko and Mitsui. However, the role of Anadarko and Mitsui as solely financial partners rather than operators of the well is a key issue. Passive investors like Anadarko and Mitsui would normally be required to pay their pro rata share of liability unless it is possible to prove gross negligence on the part of BP.

Gross negligence is defined as “the intentional failure to perform a manifest duty in reckless disregard of the consequences as affecting the life or property of another.”

The question is, given BP’s documented violation of federal safety regulations aboard the Deepwater Horizon, e.g., using an improper cementing technique to seal the well, failing to adequately test and maintain blowout prevention equipment and drilling deeper than BP’s federal permit allowed, did BP know or should BP have known about a condition that could lead to the disaster of April 20, 2010? If the answer is yes, it may be possible to prove gross negligence on the part of BP. If gross negligence can be proven on the part of BP, Anadarko and Mitsui could be fully indemnified.

This article briefly discusses BP’s strategy to limit its liability in regard to the Deepwater Horizon blowout. This strategy includes, but is not limited to, intentionally underestimating the rate of flow of oil that’s being released into the Gulf of Mexico, prohibiting independent measurement of the BP oil gusher by unbiased third party scientists and engineers, the excessive and unprecedented use of dispersants (both on the surface and underwater), systematically and intentionally collecting as small an amount of oil as possible from the waters of the Gulf of Mexico, and controlling and restricting media access to the areas affected by the Deepwater Horizon oil gusher.

 

INTENTIONALLY UNDERESTIMATING THE RATE OF FLOW OF OIL
THAT’S BEING RELEASED INTO THE GULF OF MEXICO

The BP Numbers Game
On April 24, BP reported that approximately 1,000 barrels per day (bbl/day) of oil were being released into the Gulf. On April 28, it was estimated that approximately 5,000 bbl/day were being released into the Gulf of Mexico. On May 27, USGS Director Dr. Marcia McNutt, Chair of the National Incident Command’s Flow Rate Technical Group (FRTG), announced that the amount of oil flowing from BP’s leaking oil well was estimated to be 12,000 to 19,000 bbl/day. On June 10, is was guesstimated that the well was gushing 20,000 to 40,000 bbl/day.

On June 15, 2010, Secretary of Energy Steven Chu, Secretary of the Interior Ken Salazar, and Dr. Marcia McNutt announced that the most likely flow rate of oil is between 35,000 and 60,000 bbl/day. Unofficial credible estimates indicate that 80,000 to 100,000 bbl/day of oil may be spewing from the BP well.

Since April 22, 2010, BP has knowingly and intentionally underestimated the flow rate of oil from the Deepwater Horizon well. For example, from April 22 to June 3, the official estimated rate of release of oil was between 20,000 and 40,000 bbl/day, the upper and lower estimates announced by the FRTG on June 10, 2010. Prior to May 27, BP had made no attempt to update its estimate of 5,000 bbl/day since releasing it on April 28th. Moreover, NOAA supported BP’s strategy to underestimate the amount of oil being released from the well. “I think the estimate at the time was, and remains, a reasonable estimate,” said Dr. Lubchenco, the NOAA administrator. “Having greater precision about the flow rate would not really help in any way. We would be doing the same things.”

 

PROHIBITING INDEPENDENT MEASUREMENT OF THE BP OIL GUSHER
BY UNBIASED THIRD PARTY SCIENTISTS AND ENGINEERS

Rate of the Flow of Oil from the BP Well
Scientists have come down hard on BP for refusing to take advantage of methods available to measure the oil. On May 13, The New York Times reported that BP was planning to fly scientists from the Woods Hole Oceanographic Institute to Louisiana to conduct volume measurements. The oceanographers were poised to use underwater ultrasound equipment to measure the flow of oil and gas from the ocean floor when BP canceled the trip.

On June 8, in responding to a question regarding the rate of the flow of oil from the BP well, Admiral Thad Allen told ABC News, “Everything we know and everything we see is through either the remote sensors or remote-operated vehicles that are like looking through a particular keyhole at a particular time.” Unfortunately, access to that keyhole is still completely controlled by BP.

An accurate measurement of the flow of oil could change the way people remember this gusher and their opinion of BP.  Once the leak is plugged and the oil is dispersed throughout the oceans of the world, who’s to say for certain whether BP’s oil well blowout gushed an average of 1,000 or 100,000 bbl/day of oil? By allowing BP to obscure the gusher’s true magnitude, the federal government appears to support BP’s strategy.

Deep Spill 2
Frustrated with limited data on the BP oil gusher, a group of independent scientists, led by Ira Leifer, a researcher at the Marine Science Institute of the University of California at Santa Barbara, has proposed a large experiment that would give a clearer understanding of where the oil and gas are going and where they’ll do the most damage. The research project, titled “Deep Spill 2,” calls for about two weeks of experiments with two research vessels and robotic vehicles at a cost of $8.4 million. The scientists would use monitoring equipment and sampling to conduct experiments at various levels in the water column. The scientists say their mission must be undertaken immediately, before BP kills the runaway well. They propose using what’s probably the world’s worst oil accident to learn how crude oil and natural gas move through water when they’re released at high volumes from the deep sea. Leifer’s team also wants to see how the oil breaks down into toxic and safer components in different ocean conditions, information that would help predict which ocean species are most at risk.

Mr. Leifer’s proposed experiment could help improve the estimate, but because the flow amount can change over time, it would still be impossible to come up with an accurate amount. “We’re trying to figure out not just how much is coming out, but where it’s going,” Leifer said. “The question is where is it going, why is it going there and what is it killing?”

On July 2, 2010, McClatchy Newspapers reported that many experts say the overall scientific evaluation of the spill is surprisingly uncoordinated, as federal officials and BP have failed to mount a speedy, focused inquiry to understand its impact. “BP has not been an agent for insuring that learning occurs in the past,” Leifer noted drily.

 

EXCESSIVE AND UNPRECEDENTED USE OF DISPERSANTS
(BOTH ON THE SURFACE AND UNDERWATER) 

To date, 1,762,000 gallons of oil dispersant (1,070,000 gallons of surface dispersant; 692,000 gallons of subsea dispersant) have been applied by BP since the April 22 sinking of the Deepwater Horizon rig, an unprecedented application and for a duration and at depths also without precedent.

A Toxic Strategy
BP is using the dispersant “Corexit 9500.” While Corexit 9500 is on the EPA’s approved list, BP is using this dispersant in unprecedented volumes and has been using it underwater at the source of the leak, a procedure that has never been tried before. The EPA has acknowledged that “much is unknown about the underwater use of dispersants.” Moreover, of all the chemicals approved by the EPA for use on oil spills, Corexit 9500 is among the most toxic to certain organisms. It also is among the least effective in breaking up the kind of oil that is prevalent in the area around the spill site, EPA tests concluded. Corexit might also be contributing to the formation of large undersea “oil plumes” thousands of feet below the surface.

On April 29, 2010, BP began using the chemical dispersant Corexit to dissolve the crude oil, both on the surface and underwater. Dispersing the oil is considered one of the best ways to protect birds and keep the slick from making landfall. But the dispersants contain harmful toxins of their own and can concentrate leftover oil toxins in the water, where they can kill fish and migrate great distances.

“There is a chemical toxicity to the dispersant compound that in many ways is worse than oil,” said Richard Charter, a foremost expert on marine biology and oil spills who is a senior policy advisor for Marine Programs for Defenders of Wildlife and is chairman of the Gulf of the Farallones National Marine Sanctuary Advisory Council. “It’s a trade off – you’re damned if you do damned if you don’t — of trying to minimize the damage coming to shore, but in so doing you may be more seriously damaging the ecosystem offshore.”

Dispersants are mixtures of solvents, surfactants and other additives that break up the surface tension of an oil slick and make oil more soluble in water, according to a paper published by the National Academy of Sciences. They are spread over or in the water in very low concentration –  a single gallon may cover several acres.

Once they are dispersed, the tiny droplets of oil are more likely to sink or remain suspended in deep water rather than floating to the surface and collecting in a continuous slick. Dispersed oil can spread quickly in three directions instead of two and is more easily dissipated by waves and turbulence. But the dispersed oil can also collect on the seabed, where it becomes toxic food for microscopic organisms at the bottom of the food chain and eventually winds up in shellfish and other organisms. Moreover, experiments by John Nyman of Louisiana State University indicate that the combination of Louisiana crude and the dispersant used on the current gusher is more toxic to marsh-dwelling invertebrates than oil alone would be.

According to a 2005 National Academy of Sciences report, the dispersants and the oil they leave behind can kill fish eggs. A study of oil dispersal in Coos Bay, Ore. found that Polycyclic Aromatic Hydrocarbons (PAHs) accumulated in mussels, the Academy’s paper noted. Another study examining fish health after the Exxon Valdez spill in Alaska in 1989 found that PAHs affected the developing hearts of Pacific herring and pink salmon embryos. The research suggests the dispersal of the oil that’s leaking in the Gulf could affect the seafood industry there.

“One of the most difficult decisions that oil spill responders and natural resource managers face during a spill is evaluating the trade-offs associated with dispersant use,” said the Academy report, titled Oil Spill Dispersants, Efficacy and Effects. “There is insufficient understanding of the fate of dispersed oil in aquatic ecosystems.”
 
Sylvia Earle, the National Geographic’s explorer-in-residence and former chief scientist at NOAA, stated that “the instructions for humans using Corexit warn that it is an eye and skin irritant, is harmful by inhalation, in contact with skin and if swallowed, and may cause injury to red blood cells, kidney or the liver.” “People are warned not to take Corexit internally,” she said, “but the fish, turtles, copepods and jellies have no choice. They are awash in a lethal brew of oil and butoxyethanol.”

Earle further states, “Not only is the flow of millions of gallons of oil an issue in the Gulf, but also the thousands of gallons of toxic dispersants that make the ocean look a little better on the surface – where most people are – but make circumstances a lot worse under the surface, where most of the life in the ocean actually is. We don’t know what the effect of dispersants applied a mile underwater is; there’s been no laboratory testing of that at all, or the effect of what it does when it combines with oil a mile underwater.” One problem with breaking down the oil is that it makes it easier for the many tiny underwater organisms to ingest this toxic soup.

Earle called for a halt on the subsurface use of dispersants, while limiting surface use to strategic sites where other methods cannot safeguard critically important coastal habitats.

The National Oil and Hazardous Substances Pollution Contingency Plan
The National Oil and Hazardous Substances Pollution Contingency Plan, more commonly called NCP, is the federal government’s blueprint for responding to both oil spills and hazardous substance releases. Pursuant to NCP Section 300.310, “As appropriate, actions shall be taken to recover the oil or mitigate its effects. Of the numerous chemical or physical methods that may be used, the chosen methods shall be the most consistent with protecting public health and welfare and the environment. Sinking agents shall not be used.” Sinking agents means those additives applied to oil discharges to sink floating pollutants below the water surface. The question is whether BP’s dispersants are “sinking agents” when they are applied a mile underwater at the source of the well leak.

Undersea Oil Plumes
On May 15, 2010, The New York Times reported that scientists are finding enormous oil  plumes in the deep waters of the Gulf of Mexico, including one as large as 10 miles long, 3 miles wide and 300 feet thick in spots. Researchers from the University of Georgia, University of Southern Mississippi, University of South Florida and Louisiana State University have added to this preliminary body of evidence suggesting that some of the oil – no one knows what proportion – is dissolving into the water and forming huge plumes of dispersed oil droplets beneath the surface. This is worrisome because it raises the possibility that sea life, including commercially important species of fish, could be exposed to a greater load of toxins than conventional models of oil spills would suggest. The undersea plumes may go a long way toward explaining the discrepancy between the flow estimates, suggesting that much of the oil emerging from the well could be lingering far below the sea surface.

On May 28, 2010, Reuters reported that the toxic dispersants applied underwater by BP may work their way up the food chain.

David Hollander, a University of South Florida oceanographer, headed a research team that discovered a six-mile (10-km) wide “oil cloud” while on a government-funded expedition aboard the Weatherbird II, a vessel operated by the university’s College of Marine Science. “We were collecting samples down to two miles (3 km) below the surface,” Hollander told Reuters in an interview on Friday. Hollander said the contaminants – which could eventually be pushed onto the continental shelf before shifting slowly down towards the Florida Keys and possibly out to the open Atlantic Ocean – raised troubling questions about whether they would “cascade up the food web.” “The threat is that they will poison plankton and fish larvae before making their way into animals higher up the food chain,” Hollander said.

The underwater contaminants are particularly “insidious” because they are invisible, Hollander said, adding that they were suspended in what looked like normal seawater. “It may be due to the application of the dispersants that a portion of the petroleum has extracted itself away from the crude and is now incorporated into the waters with solvents and detergents,” he added. He said dispersants, a cocktail of organic solvents and detergents, had never been used at the depth of BP’s well before, and no one really knows how they interact physically and chemically under pressure with oil, water and gases.

“Out-of-Sight, Out-of-Mind”
Carl Safina, president and co-founder of Blue Ocean Institute, a New York-based conservation organization, believes BP’s dispersant strategy has more to do with PR than good science. “It takes something that we can see that we could at least partly deal with and dissolves it so we can’t see it and can’t deal with it,” he said. It’s not at all clear to me why we are dispersing the oil at all,” Safina said. “It’s an out-of-sight, out-of-mind strategy. It’s just to get it away from the cameras on the shoreline.

 

SYSTEMATICALLY AND INTENTIONALLY COLLECTING AS SMALL AN AMOUNT OF OIL AS POSSIBLE
FROM THE WATERS OF THE GULF OF MEXICO

Let’s conservatively assume that, since April 22, 2010, the average rate of flow of oil gushing from the BP well is 55,000 bbl/day.

As of July 9, 2010
Total Amount of Oil Released to Date: 4,455,000 barrels
Amount of Oil Recovered by BP to date (via Containment Cap): 771,100 barrels
Oily water recovered: 694,286 barrels of oily water = 69,429 barrels of oil
Oil Consumed by Controlled Burns: 237,857 barrels
Total Amount of Unrecovered Oil in Gulf of Mexico to Date: 3,376,614 barrels

In a March 24, 2010 response plan filed with the Minerals Management Service (MMS), BP claimed it had the capacity to skim and remove 491,721 barrels of oil each day in the event of a major spill.

As of July 9, 2010, the skimming operations that BP stated to MMS were key to preventing an environmental disaster have averaged 857 barrels a day. That’s less than .2% of BP’s claimed capacity. Mathematically, it’s the equivalent of BP claiming the distance between New York City and San Francisco is 6 miles.

Skimming has captured only 69,429 barrels, and BP has relied on burning to remove 237,857 barrels. Most of the oil recovered, approximately 771,100 barrels, has been captured directly at the site of the leaking well.

The disparity between what BP promised in its March 24 filing with federal regulators and the amount of oil recovered since April 22, 2010 underscores what some officials and environmental groups call a misleading numbers game that has led to widespread confusion about the extent of the spill and the progress of the recovery. “It’s clear they overreached,” said John F. Young Jr., council chairman in Louisiana’s Jefferson Parish. “I think the federal government should have at the very least picked up a phone and started asking some questions and challenged them about the accuracy of that number and tested the veracity of that claim.”

On April 22, 2010, although its projections reported to the federal government were only weeks old, BP cited a greatly reduced number in a news release filed with the federal Securities and Exchange Commission. BP projected that it had “skimming capacity of more than 171,000 barrels per day, with more available if needed.”

These intentionally misleading figures clearly have confused journalists, with many media outlets reporting the figures as solid oil recovery numbers.

“This has been a cat-and-mouse game since March when they put out these estimates,” said Earthjustice attorney Colin H. Adams. “We want real figures instead of inflated estimates on what they are cleaning up and deflated estimates on how much is gushing out.”

BP’s Flotilla of Futility
As of July 9, 2010, BP reports that there are more than 6,840 response vessels actively involved in the collection of the oil that has been released into the waters of the Gulf of Mexico from the BP well.

Unfortunately, collection of the BP oil spill has never been a “skimming” operation. This “spill” is a gusher of oil being released from the seafloor, approximately one-mile below the sea surface. BP, with support and authorization from USCG, is using conventional skimmers, boom and dispersants normally deployed for inland waterway surface oil spills. This ineptitude would be humorous if the situation were not so serious. BP and USCG will eventually use tankers to collect the oil that has been released into the Gulf of Mexico as a result of the Deepwater Horizon blowout of April 20, 2010. Unfortunately, this decision will be made after the devastation of many coastal communities.

Boom
As of July 9, 2010, BP reports that more than 3,060,000 feet of boom are deployed.

The use of the boom strategy in open water is nothing more than public relations. Deploying boom may be an effective containment strategy in the calm waters of rivers, lakes, or municipal swimming pools but, as has been demonstrated since April 22nd, in the open waters of the Gulf of Mexico the boom will be breached.

Personnel
As of July 9, 2010, BP reports that approximately 47,800 people are involved in this response.

BP fails to note that the vast majority of response personnel are: untrained individuals walking on beaches attempting to collect tar balls with shovels and plastic bags, out-of-work commercial fisherman and charter boat operators assisting with positioning ineffective boom, and employees of subcontractors involved in the very inefficient skimming operation. 

Window Dressing
The number of response vessels, the amount of deployed boom, and the number of response personnel in BP’s alleged response “effort” is extraordinary. However, given that only 69,429 barrels of oil have been skimmed and 237,857 barrels of oil have been consumed by controlled burns since April 22nd, it is merely window dressing.     

The blowout of April 20, 2010 aboard the Deepwater Horizon was clearly preventable. The fact that oil from the BP oil gusher has been allowed to reach coastal areas is inexcusable.

 

CONTROLLING AND RESTRICTING MEDIA ACCESS TO THE AREAS
AFFECTED BY THE DEEPWATER HORIZON OIL GUSHER

BP continues to employ its “out-of-sight, out-of-mind” strategy by controlling and restricting media access to the areas affected by the Deepwater Horizon oil gusher.

Lack of Transparency
As BP makes its latest attempt to plug its gushing oil well, news photographers are complaining that their efforts to document the slow-motion disaster in the Gulf of Mexico are being thwarted by local and federal officials – working with BP – who are blocking access to the sites where the effects of the gusher are most visible. More than a month into the disaster, a host of anecdotal evidence is emerging from reporters, photographers, and TV crews in which BP and Coast Guard officials explicitly target members of the media, restricting and denying them access to oil-covered beaches, staging areas for clean-up efforts, and even flyovers.

On June 30, 2010, the Captains of the Port for Morgan City, La., New Orleans, La., and Mobile, Ala. , under the authority of the Ports and Waterways Safety Act, established a 20-meter safety zone surrounding all Deepwater Horizon booming operations and oil response efforts taking place in Southeast Louisiana. Vessels must not come within 20 meters of booming operations, boom, or oil spill response operations under penalty of law. The safety zone allegedly has been put in place to protect members of the response effort, the installation and maintenance of oil containment boom, the operation of response equipment and protection of the environment by limiting access to and through deployed protective boom. In areas where vessels operators cannot avoid the 20-meter rule, they are required to be cautious of boom and boom operations by transiting at a safe speed and distance. Violation of a safety zone can result in up to a $40,000 civil penalty. Willful violations may result in a class D felony. Permission to enter any safety zone must be granted by the Coast Guard Captain of the Port of New Orleans

Initially, the establishment of a “safety zone” seems reasonable and prudent. However, these are not hypersensitive journalists and environmentalists complaining about limited access. This is not merely one photojournalist complaining because he or she finds it more difficult to get that award-winning picture of an oil-covered pelican, breached boom, response personnel wearing hazmat uniforms, etc. This “safety zone” regulation is a way for BP and USCG to hide the failures of their oil gusher response. CNN’s Anderson Cooper describes the new rule as making it “very easy to hide incompetence or failure.” Since “oil spill response operations” covers much of the clean-up effort on the beaches, Cooper describes the rule as banning reporters from “anywhere we need to be.”

“With this, the Gulf Coast cleanup operation has now entered a weird Orwellian reality where the news is shaped, censored and controlled by the government in order to prevent the public from learning the truth about what’s really happening,” writes Mike Adams at NaturalNews. “We might expect something like this from Chavez, or Castro or even the communist leaders of China, but here in the United States, we’ve all been promised we lived in ‘the land of the free,'” Adams continues.

The U.S. government uses this same tactic during every war. The first casualty of war, as they say, is the truth. There are lots of war images the government doesn’t want you to see and there are other images they do want you to see. War reporting is carefully monopolized by the government to deliver precisely the images they want you to see while censoring everything else. However, the feeble response to the BP oil gusher is definitely not a war. The federal government has not declared war on BP. In reality the federal government and BP are allies.

Lack of Trust
Trust between the media and the BP/federal government team leading the oil spill response is non-existent. It was forfeited long ago, when BP misrepresented the true extent of the gusher and were slow to even release underwater video of the leak; when the federal government questioned the credibility of independent researchers who had found evidence of underwater oil plumes, evidence that turned out to be correct; when BP and its contractors, with the apparent support of local police in the region, kept media away from oiled beaches and wildlife and created an atmosphere where cleanup workers felt they’d lose their jobs if they talked; when the gross discrepancy between what BP claimed to be able to do in the case of an oil spill and what it can actually do became obvious; when BP employed a group of in-house “reporters” to bring back absurdly optimistic stories of the gusher. It’s impossible now for the media or the public to take at face value anything concerning the oil gusher that comes from official sources – the trust is gone, and no amount of official press conferences will change that.

As McClatchy has reported, it’s been obvious from the start that BP has looked at the oil spill through the lens of legal risk, not reputational risk – BP moved quickly to hire all the best oil spill experts, to make sure they couldn’t testify against the company in coming litigation. They’re not really concerned about the truth; they’re more concerned about ensuring the complete destruction of the proof!

A Few Specific Examples of Controlling and Restricting Media Access
(a) BP has bought entire police departments which now do its bidding:  “One parish has 57 extra shifts per week that they are devoting entirely to, basically, BP security detail, and BP is paying the sheriff’s office.”

(b) Southern Seaplane Inc., based in Belle Chasse, Louisiana, which was scheduled to take a New Orleans Times-Picayune photographer for a flyover, and says it was denied permission once BP officials learned that a member of the press would be on board. “We are not at liberty to fly media, journalists, photographers, or scientists,” the owner of Southern Seaplane said in a letter it sent to Sen. David Vitter (R-La.). “We strongly feel that the reason for this massive (temporary flight restriction) is that BP wants to control their exposure to the press.”

(c) Photographers who have traveled to the Gulf commonly say they believe that BP has exerted more control over coverage of the spill with the cooperation of the federal government and local law enforcement. “It’s a running joke among the journalists covering the story that the words ‘Coast Guard’ affixed to any vehicle, vessel, or plane should be prefixed with ‘BP,’ ” says Charlie Varley, a Louisiana-based photographer.

(d) BP determines what reporters see and when they see it. AP photographer Gerald Herbert has been covering the disaster since the Deepwater Horizon rig exploded on April 20. He says that access has been hit or miss, and that there have been instances when it’s obvious members of the press are being targeted. “There are times when the Coast Guard has been great, and others where it seems like they’re interfering with our ability to have access,” says Herbert. One of those instances occurred early last week, when Herbert accompanied local officials from Plaquemines Parish in a police boat on a trip to Breton Island, a national wildlife refuge off the barrier islands of Louisiana. With them was Jean-Michel Cousteau, son of Jacques, who wanted to study the impact of the oil below the surface of the water. Upon approaching the island, a Coast Guard boat stopped them. “The first question was, ‘Is there any press with you?’ ” says Herbert. They answered yes, and the Coast Guard said they couldn’t be there. “I had to bite my tongue. That should have no bearing.”

(e) Local fishermen and charter boat captains are also being pressured by BP not to work with the press. Left without a source of income, most have decided to work with BP to help spread booms and ferry officials around. Their passengers used to include members of the press, but not anymore. “You could tell BP was starting to close their grip, telling the fishermen not to talk to us,” says Jared Moossy, a Dallas-based photographer who was covering the spill along the Gulf Coast earlier this month. “They would say that BP had told them not to talk to us or cooperate with us or that they’d get fired.”

(f) “I think they’ve been trying to limit access,” said Representative Edward J. Markey, a Democrat from Massachusetts who fought BP to release more video from the underwater ROVs that have been filming the oil-spewing pipe. “It is a company that was not used to transparency. It was not used to having public scrutiny of what it did.”

(g) Senator Bill Nelson, Democrat of Florida, tried to bring a small group of journalists with him on a trip he was taking through the gulf on a USCG vessel. Mr. Nelson’s office said USCG agreed to accommodate the reporters and camera operators. But at about 10 p.m. on the evening before the trip, someone from the Department of Homeland Security’s legislative affairs office called the senator’s office to tell them that no journalists would be allowed.

(h) A reporter and photographer from The Daily News of New York were told by a BP contractor they could not access a public beach on Grand Isle, La., one of the areas most heavily affected by the oil spill. The contractor summoned a local sheriff, who then told the reporter, Matthew Lysiak, that news media had to fill out paperwork and then be escorted by a BP official to get access to the beach. “For the police to tell me I needed to sign paperwork with BP to go to a public beach?” Mr. Lysiak said. “It’s just irrational.”

(i) CBS News reported that one of its news crews was threatened with arrest for trying to film a public beach where oil had washed ashore. USCG said later that it was disappointed to learn of the incident.

(j) Michael Oreskes, senior managing editor at the Associated Press, likened the situation to reporters being embedded with the military in Afghanistan. “There is a continued effort to keep control over the access,” Mr. Oreskes said. “And even in places where the government is cooperating with us to provide access, it’s still a problem because it’s still access obtained through the government.”

We’ve frequently heard excuses that the federal government has little power to do anything to BP because “under OPA 90, BP, the responsible party, has the primary responsibility to clean up its oil spill.” However, the federal government certainly seems to have ample power to do a great deal for BP. 

Obviously, the federal government and BP share the same interest – preventing the public from seeing the magnitude of the gusher and the incompetency of the clean-up efforts – but police state tactics are unacceptable in the U.S.

 

THE FEDERAL GOVERNMENT’S RESPONSE TO BP’S STRATEGY

Question: What is the name of the bayou that is most representative of the federal government’s response to the victims of the BP oil gusher?
Answer: “Bayou Self”

The federal government fully supports BP’s strategy. The Obama administration has shown no indication that it intends to hold BP accountable. MMS (now the Bureau of Ocean Energy Management, Regulation and Enforcement), NOAA, and USCG have abdicated their respective responsibilities.

“Under OPA 90, BP, the responsible party, has the primary responsibility to clean up its oil spill” has been repeated, in one form or another, so many times by President Obama that it has become the truth. The truth is that President Obama, under OPA 90, has the primary responsibility to “ensure effective and immediate removal of a discharge, and mitigation or prevention of a substantial threat of a discharge, of oil.”

Pursuant to OPA Section 4201, and given that the BP oil spill is a “discharge posing substantial threat to public health or welfare,” President Obama should have federalized the collection of the oil that is in the sea and the restoration of the coastal areas impacted by the oil. Both of these activities could be done without having to federalize the operational priority of stopping the flow of oil from the well.

BP, with the full support of the federal government, is knowingly and systematically underestimating the size of the gusher to limit the financial impact on the company. Under the CWA, BP faces fines of up to $4,300 for each barrel spilled. Furthermore, pursuant to Section 2702 of OPA 90, BP should be required to pay royalties (18.75%) owed to the federal government for the oil gushing from the well.

 

CONCLUSION

BP’s strategy to limit liability in regard to its Gulf oil gusher will succeed for the following reasons: (a) BP’s excessive and unprecedented use of toxic dispersants both on the surface and a mile underwater ensures that the oil either sinks or remains suspended in deep water rather than floating to the surface and collecting in a continuous slick; (b) BP’s misleading numbers game ensures the continued widespread confusion about the extent of the spill and the progress of the recovery: (c) BP’s systematic and intentional collection of as little of the oil as possible from the waters of the Gulf of Mexico; (d)  the practice by BP and its contractors, with the apparent support of local police in the region, to kept media away from photographing and reporting on oiled beaches and wildlife; and (e) the fact that the federal government fully supports BP’s strategy.

The Obama administration has shown no indication that it intends to hold BP accountable under either OPA 90 or CWA: (1) pursuant to OPA Section 4201, and given that the BP oil spill is a “discharge posing substantial threat to public health or welfare,” President Obama should have federalized the collection of the oil that is in the sea and the restoration of the coastal areas impacted by the oil. Both of these activities could be done without having to federalize the operational priority of stopping the flow of oil from the well; (2) under the CWA, BP faces fines of up to $4,300 for each barrel spilled; and (3) pursuant to Section 2702 of OPA 90, BP should be required to pay royalties (18.75%) owed to the federal government for the oil gushing from the well.

BP is not concerned about the truth; the oil company is concerned about ensuring the complete destruction of the proof. Once the leak is plugged and the oil is dispersed throughout the oceans of the world, who’s to say for certain whether BP’s oil well blowout gushed an average of 1,000 or 100,000 bbl/day of oil?

 

APPENDICES

References
Adams, Mike, “First Amendment suspended in the Gulf of Mexico as spill cover-up goes Orwellian,” NaturalNews (July 3, 2010), available at: http://www.naturalnews.com/029130_Gulf_of_Mexico_censorship.html

Bhattacharyya, S., P.L. Klerks, and J.A. Nyman. 2003. Toxicity to freshwater organisms from oils and oil spill chemical treatments in laboratory microcosms. Environmental Pollution 122:205-215.

BP is Not the Only Responsible Party, available at: http://renergie.wordpress.com/2010/05/25/bp-is-not-the-only-responsible-party/

Chokkavelu, Anand, “The BP Stat That Will Shock You,” Motley Fool (July 9, 2010), available at: http://www.msnbc.msn.com/id/38165954/ns/business-motley_fool/

Clean Water Act

EPA: http://www.epa.gov/oem/content/lawsregs/opaover.htm

Greenwald, Glenn, “The BP/Government police state,” Salon (July 5, 2010), available at:
http://www.salon.com/news/opinion/glenn_greenwald/2010/07/05/bp/index.html

Kindy, Kimberly, “Recovery effort falls vastly short of BP’s promises,” Washington Post
(July 6, 2010), available at:
http://www.washingtonpost.com/wp-dyn/content/article/2010/07/05/AR2010070502937.html

Lustgarten, Abrahm, “Chemicals Meant To Break Up BP Oil Spill Present New Environmental Concerns,” ProPublica (April 30, 2010), available at: http://www.propublica.org/article/bp-gulf-oil-spill-dispersants-0430

MMS: http://www.mms.gov/

National Contingency Plan

NOAA: http://www.noaa.gov/

Oil Pollution Act of 1990

Peters, Jeremy W., “Efforts to Limit the Flow of Spill News,” The New York Times (June 9, 2010)

Philips, Matthew, “BP’s Photo Blockade of the Gulf Oil Spill,” Newsweek (May 26, 2010), available at: http://www.newsweek.com/2010/05/26/the-missing-oil-spill-photos.html

Schoof, Renee and Bolstad, Erika, “BP well may be spewing 100,000 barrels a day, scientist says,” McClatchy Newspapers (June 7, 2010), available at: http://www.mcclatchydc.com/2010/06/07/95467/bp-well-may-be-spewing.html

Schoof, Renee, “Scientists propose big experiment to study Gulf oil spill,” McClatchy Newspapers (July 11, 20100, available at:
http://www.miamiherald.com/2010/07/11/1725271/scientists-propose-big-experiment.html

USA Today: http://content.usatoday.com/communities/greenhouse/post/2010/05/how-responsible-is-us-government-for-gulf-oil-spill/

USCG: http://www.uscg.mil/

Walsh, Bryan, “The Oil Spill and the Perils of Losing Trust,” Time (July 7, 2010), available at:
http://ecocentric.blogs.time.com/2010/07/07/the-oil-spill-and-the-perils-of-losing-trust/

 

 

About the Author
Brian J. Donovan is an attorney and marine engineer with thirty-five years of international business experience.

Mr. Donovan, a member of The Florida Bar, The U.S. District Court, Middle District of Florida and The United States Court of Appeals for the Eleventh Circuit, holds a J.D. from Syracuse University College of Law (where he was recipient of the “Global Law & Practice Award” as the outstanding graduate in the areas of International Law and International Business Law) and a B.S., with honors, in Marine/Mechanical and Nuclear Engineering from the United States Merchant Marine Academy.

Mr. Donovan, with deep family roots in southern Louisiana, has first-hand knowledge of the catastrophic devastation of the Louisiana Gulf Coast caused by hurricanes Katrina and Rita. He fully appreciates that the damage caused by Katrina and Rita may pale in comparison to the massive and potentially unprecedented environmental and economic impact of the BP oil gusher of April, 2010.

 

UPDATE No. 1

Scientists say Gulf spill altering food web
By MATTHEW BROWN and RAMIT PLUSHNICK-MASTI (AP)
July 14, 2010

NEW ORLEANS — Scientists are reporting early signs that the Gulf of Mexico oil spill is altering the marine food web by killing or tainting some creatures and spurring the growth of others more suited to a fouled environment.

Near the spill site, researchers have documented a massive die-off of pyrosomes — cucumber-shaped, gelatinous organisms fed on by endangered sea turtles.

Along the coast, droplets of oil are being found inside the shells of young crabs that are a mainstay in the diet of fish, turtles and shorebirds.

And at the base of the food web, tiny organisms that consume oil and gas are proliferating.

If such impacts continue, the scientists warn of a grim reshuffling of sealife that could over time cascade through the ecosystem and imperil the region’s multibillion-dollar fishing industry.

Read the entire article at:
http://www.google.com/hostednews/ap/article/ALeqM5iJwXzrq3lD7vHJJH4DU8uNjjihPwD9GUPEC00

 

UPDATE No. 2

BP buys up Gulf scientists for legal defense, roiling academic community
By Ben Raines
Press-Register
July 16, 2010

For the last few weeks, BP has been offering signing bonuses and lucrative pay to prominent scientists from public universities around the Gulf Coast to aid its defense against spill litigation.

Robert Wiygul, an Ocean Springs lawyer who specializes in environmental law, said that he sees ethical questions regarding the use of publicly owned laboratories and research vessels to conduct confidential work on behalf of a private company.

With its payments, BP buys more than the scientists’ services, according to Wiygul. It also buys silence, he said, thanks to confidentiality clauses in the contracts.

Read the entire article at:
http://blog.al.com/live/2010/07/bp_buys_up_gulf_scientists_for.html

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10 Responses to “BP’s Strategy to Limit Liability in Regard to Its Gulf Oil Gusher”

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Brian,

A well written piece. A couple additional observations:
1. assuming the clean up costs for the Valdez spill from Exxon are correct at $3 billion, then that implies a clean up cost of $3 billion / 250000 barrels of oil = $12,000 per barrel of oil to be cleaned-up regardless of the fine.
2. note that at a flow rate of 70,000 barrels of oil/ day * $4300 / barrel spilled implies that the federal government receives .3 billion dollars a day in fines for doing nothing therefore it has no incentive to stop the leak and has every incentive to limit access to the site in order to limit public anger.

Brian,

A well written piece. A couple additional observations:

1. assuming the clean up costs for the Valdez spill from Exxon are correct at $3 billion, then that implies a clean up cost of $3 billion / 250000 barrels of oil = $12,000 per barrel of oil to be cleaned-up regardless of the fine.

2. note that at a flow rate of 70,000 barrels of oil/ day * $4300 / barrel spilled implies that the federal government receives .3 billion dollars a day in fines for doing nothing therefore it has no incentive to stop the leak and has every incentive to limit access to the site in order to limit public anger.
____________________

Nick,

These are valid observations.

1. A direct correlation between the clean-up and restoration costs for the Valdez spill and the BP gusher on a $/bbl basis would be difficult to substantiate – the BP well is gushing oil and gas, the shorelines are very different, etc.

2. “…the federal government receives .3 billion dollars a day in fines for doing nothing therefore it has no incentive to stop the leak and has every incentive to limit access to the site in order to limit public anger.”

(a) “for doing nothing” – This is very true, however, the federal government must appear to be doing something. Therefore significant federal resources (personnel and equipment) have been deployed to the Gulf of Mexico.

(b) “…the federal government receives .3 billion dollars a day in fines ……… therefore it has no incentive to stop the leak” – The federal government has no intention of holding BP accountable under either OPA 90 or CWA. You are correct that under the CWA, BP faces fines of up to $4,300 for each barrel spilled. Furthermore, pursuant to Section 2702 of OPA 90, BP may be required to pay royalties (18.75%) owed to the federal government for the oil gushing from the well. If the federal government intended to collect $4,300 and a royalty of 18.75% for each barrel spilled, it would:
(1) try to have at least a very rough estimate of the number of barrels gushing from the BP well. This estimate does not exist. From April 28th to May 27th, the official estimated flow rate was 5,000 bbl/day. This intentionally underestimated amount of oil being released was from NOAA, not BP. NOAA supported BP’s strategy to underestimate the amount of oil being released from the well. “I think the estimate at the time was, and remains, a reasonable estimate,” said Dr. Lubchenco, the NOAA administrator. “Having greater precision about the flow rate would not really help in any way. We would be doing the same things.”
(2) collect every barrel of oil that is released into the Gulf of Mexico before it reaches the marshes of Louisiana and the beaches of Alabama, Mississippi and Florida. This requires stopping the use of dispersants to allow the oil to reach the surface and using tankers to collect the oil.

I agree with you on one point: money is the reason that the federal government is doing nothing.

(c) “..the federal government has every incentive to limit access to the site in order to limit public anger.” In the U.S., limiting access to the site will generate, not limit, public anger.

For a clearer understanding of the issues involved, visit:

http://renergie.wordpress.com/2010/05/25/bp-is-not-the-only-responsible-party/

and

http://donovanlawgroup.wordpress.com/2010/06/05/the-oil-pollution-act-provides-for-the-federalization-of-the-bp-oil-spill/

and

http://donovanlawgroup.wordpress.com/2010/06/14/why-bp-does-not-want-an-accurate-measurement-of-the-gulf-oil-spill/

Mr. Donovan,
Please do not got work FOR these corporate fascist, feudalistic pricks.

My god U.S. citizens need talented, analytic, people like yourself!

http://www.huffingtonpost.com/2010/07/16/oil-spill-lawsuits-bp-spe_n_649335.html

[…] Under the CWA alone, gross negligence penalties based upon 3,768,934 barrels of oil spilled would equal $16,206,416,200. Unfortunately, the federal government has no intention of holding BP accountable under either OPA 90 or CWA. Pursuant to OPA Section 4201, and given that the BP oil spill is a “discharge posing substantial threat to public health or welfare,” President Obama should have federalized the collection of the oil that is in the sea and the restoration of the coastal areas impacted by the oil. Both of these activities could be done without having to federalize the operational priority of stopping the flow of oil from the well. To date, the federal government has allowed BP to use more than 1,840,000 gallons of oil dispersant. Once the well is capped and the oil is dispersed throughout the oceans of the world, who’s to say for certain whether BP’s oil well blowout gushed an average of 1,000 or 100,000 bbl… […]

[…] BP’s Strategy to Limit Liability in Regard to Its Gulf Oil Gusher […]

[…] BP’s Strategy to Limit Liability in Regard to Its Gulf Oil Gusher […]

[…] use an excessive and unprecedented amount of dispersant both on the surface and underwater. This toxic “out-of-sight, out-of-mind” strategy resulted in tiny dispersed droplets of oil sinking or remaining suspended in deep water rather than […]


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    Renergie created “field-to-pump," a unique strategy to locally produce and market advanced biofuel (“non-corn fuel ethanol”) via a network of small advanced biofuel manufacturing facilities. The purpose of “field-to-pump” is to maximize rural development and job creation while minimizing feedstock supply risk and the burden on local water supplies.

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