March 18, 2012
Published: 11:27 AM 03/18/2012
By Gregg Re
George Buck, president of Chevron’s subsidiary in Brazil, speaks to media in Rio de Janeiro, Brazil, Monday Nov. 21, 2011. Rio de Janeiro state’s environment secretary, Carlos Minc, says Brazil is expected to fine Chevron nearly $28 million for the oil spill in an offshore field operated by Chevron at the Bacia de Campos, in Rio de Janeiro state and will also ask Chevron to pay for damages caused by the Atlantic spill. Minc said Monday he considers the fine way too lenient, but it’s the maximum allowed under current Brazilian law. (AP Photo/Victor R. Caivano)
Seventeen top oil executives from Chevron are currently trapped in Brazil after a federal court there barred them from leaving the country pending criminal charges, CNN reports. Police said the executives must turn over their passports within 24 hours. Chevron said in an email to CNN that it had not been formally alerted to the charges.
The court order stems from a 2,400-barrel oil spill that occurred about 240 miles off the coast of Rio de Janeiro in November 2011. Chevron and oil rig operator Transocean already face up to $11 billion in civil liability from the incident, which spilled approximately 110,000 gallons (about 416,000 liters) of oil. At the time, Chevron stated that the leak occurred because it underestimated the pressure in an underwater reservoir. “Chevron and Transocean were not able to control the damages caused by the spilling of almost 3,000 barrels of oil, which shows a lack of environmental planning and management by the companies,” Brazilian prosecutors said in a statement.
The chief operating officer for Chevron’s Brazilian division is among those facing charges for environmental crimes, prosecutors said.
President Barack Obama visited Brazil last year to offer to help Brazil expand its offshore drilling operations, even as the United States oil industry struggled to return to normal after the disastrous 2010 BP oil spill. “When you’re ready to start selling, we want to be one of your best customers,” Obama said, adding that he “could not be happier with the potential for a new, stable source of energy.”
The president’s affinity for Brazil’s valuable oil supply drew ire from some Republicans, who feel that the administration should be doing more to uphold its commitment to domestic energy production. Brazil hopes to output 7 million barrels per day by the end of the decade, which would displace the U.S. as the world’s third-largest oil producing country.
“We have abundant energy resources off Louisiana’s coast, but this administration is using Americans’ tax dollars to support drilling off the coast of Brazil,” Republican Sen. David Vitter said in a statement. “It’s ridiculous to ignore our own resources and continue going hat-in-hand to countries like Saudi Arabia and Brazil to beg them to produce more oil.” Oil executives, including Gulf Oil CEO Joe Petrowski, went further, called Obama’s support of Brazilian oil “puzzling” and “humorous.” “It seems a double standard and it seems somewhat hypocritical to a country that desperately needs jobs that we’re encouraging other countries to create the jobs that we need,” he told Fox News.
The president’s most high-profile attempt to create domestic energy jobs didn’t end particularly well: Solyndra – the solar panel manufacturer that received $585 million from the federal government -declared bankruptcy last year. All 1,000 jobs that the administration promised would result from the investment in Solyndra were lost.
On March 15, Chevron halted production operations in Brazil after yet another small leak was discovered, the BBC reported. Company executives denied that the latest leak was caused by drilling, but the company will reportedly face more fines regardless.
Special thanks to Richard Charter