The Cost of Oil: BP Reaches $20 Billion Settlement with the Federal Government

In the largest single entity settlement in the Department of Justice's history, BP will have to pay $20.8 for its role in the infamous Gulf of Mexico oil spill in April, 2010. Since the disastrous explosion of the Deepwater Horizon drilling platform BP has been engaged in protracted negotiations with the federal government. Now the Department of Justice have finalized the settlement with BP. The settlement comes after years of legal wrangling. In July, the Supreme Court denied the company’s appeal to block benefits for those not directly affected by the spill.

As reported by The Hill, the fine breaks down as follows

• $5.5 billion to settle civil claims under the Clean Water Act
• $7.1 billion for environmental restoration work
• $700 million to compensate for still-unknown damages to natural resources in the region
• $4.9 million to Gulf Coast states affected by the spill
• $1 billion to local communities. Florida, Alabama, Mississippi, Louisiana and Texas will split that portion of the settlement.
• BP has also already spent more than $1 billion on environmental restoration work in the area

Almost $9 billion of the settlement money will be used by for a Gulf restoration fund. This money will be invested in coastal and habitat repair, water quality improvement in wetlands and recreational projects in the region.

Biologists have observed that the 3.19 million gallons of oil that pored into the Gulf is having long term effects that continue to this day.

"This is still the largest environmental penalty under the Clean Water Act and Oil Pollution Act, ever," Attorney General Loretta Lynch said. "BP is receiving the punishment it deserves while also providing critical compensation to the damage to the Gulf region."

The punishment will serve as a deterrent that will hopefully prevent similar disasters in the future.

"The steep penalty should inspire BP and its peers to take every measure necessary to ensure that nothing like this can ever happen again," Lynch said.

The $20.8 billion fine is separate from the class-action settlement with businesses and individuals affected by the spill.

Environmental Protection Agency Administrator Gina McCarthy noted that the settlement includes $700 million to address any potential environmental damages that officials have yet to discover.

"Justice is not about dumping a pile of money and walking away," McCarthy said. "It is about investing in sustainable ways that empower and strengthen the Gulf communities over the long term."

The settlement still needs to be approved by a federal court.

Related
BP's Legal Wrangling Five Years After the Gulf Oil Spill
The Toll on Wildlife from the Gulf of Mexico BP Oil Spill
BP's Gulf Oil Spill: Summary of Research Evidence Five Years Later
The BP Oil Spill in the Gulf Five Years Later
Supreme Court Gives BP a Lump of Coal for Christmas
Transocean to Pay $1.4 billion for its Role in the Gulf Oil Spill
The Costs of Oil: BP Liable for up to 90 Billion
Judge Declares BP is Grossly Negligent but are Fines Enough?
Infographic - BP Oil Spill 4 Years Later
Video - The Ongoing Impacts of the BP Oil Spill in the Gulf of Mexico
The Cost of Oil: BP Barred from Doing Business with the US
The Costs of Oil: BP Liable for Tens of Billions
BP's Corporate Irresponsibility
Responsibility for the Costs of the Gulf Oil Spill
The Costs of Offshore Drilling
Managing the Massive Gulf Oil Spill
Offshore Oil is an Avoidable Tragedy
Two More Reasons to Move Beyond Fossil Fuels

Read More»

BP's Legal Wrangling Five Years After the Gulf Oil Spill

BP has a lengthy criminal rap sheet that culminated in the Deepwater Horizon explosion in the Gulf of Mexico. Despite BP's long criminal history they are anything but repentant. Rather than accept the penalties levied against them for the 2010 spill they are doing everything in their power to minimize their legal and financial responsibilities.

US District Court judge Carl Barbier found that BP was guilty of "gross negligence" and "willful misconduct." Although the trial concluded earlier this year, the final settlement has yet to be announced.

All throughout the legal proceedings BP has waged a massive and misleading advertising campaign which gives the impression that all is well in the Gulf. However this contention is squarely refuted by the science.

The statutory penalty in the Clean Water Act for BP's actions its actions is $4,300 per gallon, or over $18 billion. Thus far BP has agreed to pay $4.5 billion in related criminal and civil penalties and faces additional fines, as well as to thousands of claims by individuals and companies. It’s also agreed to resolve most private-party lawsuits as part of an uncapped settlement BP values at about $9.2 billion

Whatever the fines, they will be a fraction of the actual costs to the economy, wildlife and the Gulf ecosystem.

After months of negotiations the EPA gave BP the right to bid for US contracts and oil leases on March 2014. However, BPs misinformation and refusal to take full responsibility for the Gulf oil spill casts aspersions on the EPA decision.

As reported by Bloomberg, the EPA imposed the contract suspension in 2012 after determining that BP hadn’t fully corrected deficiencies that led to the Gulf oil spill. BP sued the EPA in federal court in Houston seeking to lift the suspension and then dropped the lawsuit after a deal was reached.

As explained by Tyson Slocum, director of the Public Citizen’s Energy Program in Washington, the EPA decision was premature. This "lets a corporate felon and repeat offender off the hook for its crimes against people and the environment," Slocum said in a statement. BP "was on criminal probation at the time of the 2010 Deepwater Horizon disaster, and it has failed to prove that it is a responsible contractor."

The government suspended BP’s rights to seek federal contracts after the company pleaded guilty to 11 counts of felony seaman’s manslaughter, two pollution violations and one count of lying to Congress in connection with the spill.

In addition to the spill, the EPA cited the 2005 explosion at a BP-owned Texas City, Texas, refinery and two oil spills in Prudhoe Bay, Alaska, as grounds for the 2012 debarment. At the time of the April 2010 spill, BP was on probation after pleading guilty in 2007 to a felony air-pollution charge and paying a $50 million fine for the explosion in Texas City that killed 15 workers.

Related
The Toll on Wildlife from the Gulf of Mexico BP Oil Spill
Research Summary of BP's Gulf Oil Spill
Supreme Court Gives BP a Lump of Coal for Christmas
Transocean to Pay $1.4 billion for its Role in the Gulf Oil Spill
The Costs of Oil: BP Liable for up to 90 Billion
Judge Declares BP is Grossly Negligent but are Fines Enough?

Read More»

The Toll on Wildlife from the Gulf of Mexico BP Oil Spill

A number of wildlife species have been devastated by the 2010 BP oil spill in the Gulf of Mexico. This includes seabirds, turtles, fish, and vegetation.

Between 800,000 and one million sea birds have died from oil exposure in the Gulf of Mexico since 2010. Entire seabird populations have suffered from major die-offs. Oil related deaths include 12 percent of brown pelicans (over 200,000 have been exposed to oil),  almost one third (32 percent) of northern gulf laughing birds and 13 percent of royal turns. A total of 20,000 Kemp's turtles and 60,000 Ridley turtles died in 2010.

Five times the normal rate of lung disease have been observed in bottlenose dolphins and a total of 1000 dolphins have been found stranded between 2010 and 2015.

Under the water a number of species were impacted including oysters and sea grass which provide food and habitat for a wide range of aquatic life. There has been an 85 percent reduction in the diversity of northern gulf seaweed habitats. Species that depend on this seaweed include shrimps, lobsters and crabs.

In the two years following the disaster there was a 50 percent drop in oysters and 10 square miles of sea grass were adversely impacted.

The importance of the gulf oil spill on fish species is important because two thirds of fish species that live in the area of the spill are found only in the gulf. As few as 50 Brydes whales are thought to be left in the gulf and the calves of this species are particularly vulnerable to the dispersant used to break-up the spill. Dispersants are also thought to have adverse health impacts on Sperm Whales and other species

To this day fish species continue to suffer from disruptions to their growth, development and reproduction. Some fish species were found to be covered in lesions due to the spill.

Heart defects and other morphological abnormalities have been found Atlantic bluefin, yellowfin tunas and an amberjack species. Swordfish, marlin, mackerel and other Gulf species may also suffer from similar impacts.

It will take years if not decades to understand the full scope on the impacts.

Related
BP's Legal Wrangling Five Years After the Gulf Oil Spill
Research Summary of BP's Gulf Oil Spill
Supreme Court Gives BP a Lump of Coal for Christmas
Transocean to Pay $1.4 billion for its Role in the Gulf Oil Spill
The Costs of Oil: BP Liable for up to 90 Billion
Judge Declares BP is Grossly Negligent but are Fines Enough?

Read More»

Research Summary of BP's Gulf Oil Spill

A number of studies indicate that the environmental impacts of the BP's 2010 oil spill in the gulf is anything but over. Huge amounts of oil are still on the ocean floor and this is finding its way into the food chain. Other studies show fish that spawn in these oil contaminated waters in the Gulf are suffering from a wide range of lethal deformities.

A study published earlier this year suggested that the oil that lingers in the Gulf of Mexico continues to pose a threat to local ecosystems. The study by Florida researchers indicates that About 3,243 sq miles (8,400 square km) of the sea floor is still covered with oil from the disaster.

"This is going to affect the Gulf for years to come," Jeff Chanton, the study's lead researcher and a professor of chemical oceanography at Florida State University, said in a statement.

This study corroborates an October study which found that as much as 30 percent of the spilled oil remains on the ocean floor.

"Fish will likely ingest contaminants because worms ingest the sediment, and fish eat the worms. It's a conduit for contamination into the food web."

CBS news quoted the study’s lead researcher, Jeff Chanton, as saying: ‘This is going to affect the Gulf for years to come.

‘Fish will likely ingest contaminants because worms ingest the sediment, and fish eat the worms. It's a conduit for contamination into the food web.’

Dolphins and turtles in the Gulf are dying in record numbers. Bottlenose dolphins have been dying at more than twice the normal rate over the past five years and the nesting habits of the endangered Kemp's Ridley sea turtle changed dramatically around the time of the spill. Commercial fisheries have also seen a reduced yield.

The BP oil spill was an unprecedented disaster and after five years 2 percent of samples of water and seafloor sediment continue to exceed federal toxicity levels. According to research from the Associated Press the overall health of the Gulf of Mexico has declined 11 percent since April 2010.

The research suggests that lingering impacts of the BP oil spill in the Gulf are being felt by tuna and other species that spawned in oiled offshore habitats in the northern Gulf of Mexico. A Stanford NOAA study revealed that the spill is causing severe defects in the developing hearts of Atlantic bluefin, yellowfin tunas and an amberjack species. The study shows that crude oil exposures is slowing the heartbeat or causing an uncoordinated rhythm in these fish, which can ultimately lead to heart failure.

"We know from the 1989 Exxon Valdez spill in Prince William Sound that recently spawned fish are especially vulnerable to crude oil toxicity," said Nat Scholz, Ph.D., leader of the ecotoxicology program at NOAA’s Northwest Fisheries Science Center in Seattle. “"That spill taught us to pay close attention to the formation and function of the heart."

"This fits the pattern," said Dr. John Incardona, NOAA research toxicologist and the study’s lead author. "The tunas and the amberjack exposed to Deepwater Horizon crude oil were impacted in much the same way that herring were deformed by the Alaska North Slope crude oil spilled in Prince William Sound during the Exxon Valdez accident."

"The timing and location of the spill raised immediate concerns for bluefin tuna," said Barbara Block, Ph.D., a study coauthor and professor of biology at Stanford University. "This spill occurred in prime bluefin spawning habitats, and the new evidence indicates a compromising effect of oil on the physiology and morphology of bluefin embryos and larvae."

The culprit in the heart defect appears to be oil-derived polycyclic aromatic hydrocarbons (PAHs). PAHs can persist for many years in marine habitats and cause a variety of adverse environmental effects. Other observed morphological abnormalities on oil-exposed larva were also revealed in the study. This includes poor growth of fins and eyes.

"We now have a better understanding why crude oil is toxic, and it doesn’t bode well for bluefin or yellowfin embryos floating in oiled habitats.” said Block. “At the level of a single heart muscle cell, we’ve found that petroleum acts like a pharmacological drug by blocking key processes that are critical for cardiac cell excitability."

The authors further suggest that other species like cardiac-related impacts on swordfish, marlin, mackerel and other Gulf species may also be impacted cardiac abnormalities if they spawned in proximity to oil.

Experts say it could take "decades" for the ecosystem to recover.

Related
BP's Legal Wrangling Five Years After the Gulf Oil Spill
The Toll on Wildlife from the Gulf of Mexico BP Oil Spill
Supreme Court Gives BP a Lump of Coal for Christmas
Transocean to Pay $1.4 billion for its Role in the Gulf Oil Spill
The Costs of Oil: BP Liable for up to 90 Billion
Judge Declares BP is Grossly Negligent but are Fines Enough?

Read More»

The BP Oil Spill in the Gulf Five Years Later

Exactly five years ago (April 20, 2010), BP's Deepwater Horizon oil well exploded in the Gulf of Mexico killing 11 people and injuring 17 more. The explosion unleashed one of the worst environmental disasters in human history. For 87 days (April 20 and July 15, 2010) the oil spewed from the well and by the time it was finally contained at least 3.2 million barrels (134 million gallons) of crude oil had contaminated the Gulf of Mexico and 1,100 miles of coastline.

The worst marine disaster ever damaged bird sanctuaries, marine and wildlife habitats. It also soiled beaches, killed wildlife and devastated local economies. The ecologically vital marsh lands of the gulf coast have not recovered and wildlife is still suffering.

The Gulf may look clean but it is not. Even after a five year $28 billion clean-up operation the repercussions from the spill continue to this day. While much of the oil has evaporated or dissolved, up to 10 million gallons of oil remain on the sea floor. About 3,243 sq miles of the sea floor is still covered with oil from the disaster. Oil can also be found in marshes along the coast and deposits still wash up on shore.

The unprecedented spill took place 5000 feet below the surface of the ocean, 40 miles off the Louisiana coast. It had immediate economic impacts on the fishing industry and tourism. It also took a devastating toll on wildlife. Untold thousands of birds, turtles fish and shrimp were killed in the aftermath and a range of species are being impacted to this day. Dolphins and turtles are dying in record numbers and fisheries are still being affected.

The head of the NOAA during the spill Jane Lubchenco aptly summarized events when she said, "The spill was — and continues to be — a disaster. The bottom line is that oil is nasty stuff. Yes, the Gulf is resilient, but it was hit pretty darn hard."

Related
BP's Legal Wrangling Five Years After the Gulf Oil Spill
The Toll on Wildlife from the Gulf of Mexico BP Oil Spill
BP's Gulf Oil Spill: Summary of Research Evidence Five Years Later
Supreme Court Gives BP a Lump of Coal for Christmas
Transocean to Pay $1.4 billion for its Role in the Gulf Oil Spill
The Costs of Oil: BP Liable for up to 90 Billion
Judge Declares BP is Grossly Negligent but are Fines Enough?

Read More»

Beijing's Coal Plant Closures are Cause for Australia to Think Twice about Investing in Dirty Energy Projects

Concerns about air pollution and poor viability have pushed Beijing to announce the closure of all of its coal plants. As a major coal supplier to China Australia is watching with interest and more than a little bit of concern. The move to shut Beijing's remaining coal plants comes in response increasingly vocal protests that are making government officials nervous. Pollution is one of the major sources of friction between the government and citizens. There are also a very real productivity issue at stake. The move to close the plants is intended to reduce the incidence of death and disease associated with the chronic air pollution.

Beijing's last coal fired electricity plants will be switched off in 2016. Beijing has air pollution rates that are almost twice the national standard. However, Beijing is not the most polluted city in China. Nine out of ten Chinese cities exceed the government's own minimum air quality standards.

The closures will reduce China's consumption of coal by 9.2 million metric tons annually and prevent 30 million tons of climate change causing carbon from being released into the atmosphere each year. The Beijing coal plant closures are in addition to the closure of more than 2,000 smaller plants which are slated to occur by the end of this year. 

At present almost two thirds of China's energy is derived from coal. However, people in China are concerned about air pollution and these concerns are a contributing factor pushing the central government's world leading climate mitigation efforts. China's energy equation is rapidly changing due to massive investments in cleaner energy including hydroelectric, solar, wind and nuclear.

As the world's largest emitter of carbon, China is under pressure from within and without to reduce its emissions. China has already signed a major emissions reduction deal with the US and further cuts can be expected at the COP 21 climate talks later this year in Paris.

All of this calls into question Australian Prime Minister Tony Abbott's efforts to supply more coal to China. He is working to significantly expand the nation's coal extraction and he is investing billions of dollars to expand Australia's coal export infrastructure.

These Australian coal projects, not only imperil the Great Barrier Reef, they may end up being worthless if the Chinese coal market dries up. At the very least the reduction in Chinese coal consumption will drive down the already low price of coal. To make matters worse last fall China announced that it will reintroduce import tariffs of 6 percent a tonne on thermal coal used to generate electricity.

Like Canada's tar sands, coal is a dirty source of energy and a major contributor to climate change. At a time when the data clearly shows that the world is moving away from coal, Abbott's massive coal investments make little sense. There is already a glut of coal as markets are rapidly declining.

Indian mining giant Adani is developing the Carmichael coal mine in central Queensland and Australia's largest coal terminal at Abbot Point. In January, the Mackay Conservation Group launched a legal challenge to the project. They allege that the Abbott government's environmental assessment was flawed because it did not take into account projected greenhouse gas emissions from the project. The same criticisms have been leveled at the Keystone XL pipeline which would ferry 800,000 barrels of tar sands crude each day from Alberta to the the Gulf of Mexico.

The indigenous people of Australia are challenging the coal project. In a similar fashion Canada's indigenous people have challenged the tar sands.

Abbott and Canadian Prime Minister Stephen Harper have a lot in common when it comes to fossil fuels. The Canadian situation may serve as a cautionary tale for Australia. Just as Canadians are reaping the economic repercussions of Harper's misguided energy efforts, Australians will end up footing the bill for Abbott's energy miscalculations.

Abbott and Harper are united in the love for fossil fuels and they also share a belligerent disregard for climate science. Their common obsession with fossil fuels wastes tax payer's money on doomed energy investments and it would appear they are both destined to preside over vast quantities of stranded assets.

In addition to epic energy mismanagement, the defining legacy of these two men will likely be their wanton disregard for future generations.

Related
Australia Can Dump Coal and Adopt Renewables
Australia's Dirty Coal Development Projects to Move Forward
Beijing Passes New Air Pollution Law
China is Using Drones to Combat Air Pollution
China's New Year: Pollution and Drought Underscore the Contradiction of Pollution and Mitigation 
Chinese Smog Crisis is Driving the Transition to a Greener Economy
The Beginning of the End for Coal
World Bank to Stop Funding Coal
Study Shows Coal is a Bad Investment
Sustainable Growth Excludes Coal

Read More»

BP Issues Climate Warning and Calls for Carbon Pricing

One of the world's largest oil companies has stated that we have to price carbon to curtail carbon emissions.

The science is clear and there have been a vast number of warnings coming from a wide variety of sources including, AGU, IEA, IPCC, PwC, World Bank, and the World Meteorological Organization stating that our current trajectory is catastrophic. Now even those responsible for the problem are coming forward with warnings of their own.

In a February 2015 report titled, "Energy Outlook 2035," BP says that to keep carbon dioxide emissions within upper threshold limits the world must take coordinated action. 

BP's warning foreshadows demands that will be made for global emissions reductions at the forthcoming COP 21 climate talks at the end of the year in Paris. The UN and many other scientific bodies have repeatedly said that we must keep global temperatures from rising more than 2 degrees Celsius above preindustrial times to avert the worst impacts of climate change.

Many people think that the only way we can curtail climate change is through some forms of carbon pricing scheme and it would appear that BP agrees. BP has warned that atmospheric levels of CO2 from burning fossil fuels are unsustainable in the absence of global pollution regulations. The BP report predicts that CO2 emissions will increase by 1pc per year, or 25pc in total, through to 2035.

"The most likely path for carbon emissions, despite current government policies and intentions, does not appear sustainable. The projections highlight the scale of the challenge facing policy makers at this year’s UN-led discussions in Paris. No single change or policy is likely to be sufficient on its own," said BP chief executive, Bob Dudley. "This underpins the importance of policy-makers taking steps that lead to a global price for carbon, which provides the right incentives for everyone to play their part."

The author of the report, BP’s new chief economist Spencer Dale also acknowledged the volatile nature of oil prices from here on in.

"After three years of high and deceptively steady oil prices, the fall of recent months is a stark reminder that the norm in energy markets is one of continuous change," said Mr Dale.

Related
BP's Legal Wrangling Five Years After the Gulf Oil Spill
The Toll on Wildlife from the Gulf of Mexico BP Oil Spill
BP's Gulf Oil Spill: Summary of Research Evidence Five Years Later
The BP Oil Spill in the Gulf Five Years Later
Supreme Court Gives BP a Lump of Coal for Christmas
Transocean to Pay $1.4 billion for its Role in the Gulf Oil Spill
The Costs of Oil: BP Liable for up to 90 Billion
Judge Declares BP is Grossly Negligent but are Fines Enough?

Read More»

After a Failed Cover-up Shell Sub-Contractor Pleads Guilty

On December 11, Noble Drilling, Shell’s sub-contractor pleaded guilty to eight felony charges relating to environmental and safety violations on board the vessels Noble Discoverer and Kulluk in the Alaskan Arctic in 2012.

In addition to the offenses which include unsafe operating procedures Noble Inc. also tried to cover-up their illegal actions. According to the court ruling, Noble, “actively took steps to conceal its use of illegal [systems]”, and “knowingly made false entries” concealing problems from the authorities. Noble also admitted to illegally discharging bilge water from the Discoverer.

Noble will pay a $12.2m fine and the company has been placed on probation for four years and must upgrade all of its plans to meet safety and environmental protection requirements.

This news comes as Shell prepares to drill in the Arctic's Chukchi Sea next summer.

Shell has scrapped the Kulluk but the replacement called the Polar Pioneer may be worse as it is owned by Transocean, the same company that was behind the 2010 Deepwater Horizon oil spill in the Gulf of Mexico. The US Supreme Court recently denied BP's request to reduce its liability for the disaster.

Related
Shell Pauses its Arctic Drilling for 2013
Shell's Game with the Arctic
Shell Oil Rig Runs Aground in Alaska Raising More Safety Concerns
Video - An Oil Rig Belonging to Shell is Grounded in Alaska 
Shell's Game with the Future of the Arctic
Another Offshore Oil Leak this Time from Shell
Lawsuit Protecting the Arctic from Arctic Drilling

Read More»