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Posted: Friday, 18 April 2014 3:13PM
April 20 marks the fourth anniversary of an explosion on the BP-operated drilling rig Deepwater Horizon, which killed 11 workers about 50 miles off the Louisiana coast in the Gulf of Mexico and set off the nation’s worst offshore oil disaster.
The Deepwater Horizon well was drilling the night of April 20 when it was rocked by an explosion and began burning. The rig sank less than two days later and crude oil gushed into the Gulf from the blown-out Macondo well. The well’s location about a mile below the Gulf surface and the pressure of oil and natural gas erupting from it severely hampered efforts to cap the well. In July 2010, a cap was successfully placed over the well after an estimated 200 million gallons of oil escaped, though that amount is one of many points that remain in dispute. The collapsed rig remains on the Gulf bottom. The spill led to a moratorium for a time on deep-water drilling in the Gulf and assurances from federal officials that offshore oil drilling regulation and monitoring would be tightened in an effort to prevent future disasters like the BP spill. Drilling has since resumed.
CLAIMS, SETTLEMENTS, DISPUTES
Two phases of a trial in U.S. District Court have been held in New Orleans and a third is schooled to begin in January, dealing with matters of fault, questions of negligence, how much oil ultimately was spewed into the Gulf – all of which will determine how much the oil giant will have to pay in penalties under the federal Clean Water Act.
Meanwhile, BP estimates that, since May 2010, it has paid out roughly $11 billion so far in claims to individuals and businesses over economic losses and damages, plus nearly $1.5 billion to government. In 2012, the company and a committee representing numerous plaintiffs agreed to a settlement resolving most economic and property damage claims. However, a court-appointed administrator’s interpretation of that settlement remains in dispute. The company initially estimated the settlement would result in it paying $7.8 billion in claims. Later, as it started to challenge the business payouts, the company said it no longer could give a reliable estimate for how much the deal will cost.
In 2012, BP agreed to pay $4.5 billion in a settlement with the U.S. government and to plead guilty to felony counts related to the deaths of the 11 workers and lying to Congress. The figure includes nearly $1.3 billion in criminal fines – the largest such penalty ever – along with payments to several government entities. Two BP well site leaders are charged with manslaughter, and a former executive is charged with lying to authorities.
In 2013, the Justice Department reached a $1.4 billion settlement with rig owner Transocean Ltd., requiring the Switzerland-based company to pay $1 billion in civil penalties and $400 million in criminal penalties and plead guilty to a misdemeanor charge of violating the Clean Water Act.
Also in December 2013, former BP engineer Kurt Mix was convicted in federal court of obstruction of justice after prosecutors said he deleted text messages to and from a supervisor and a BP contractor to stymie a grand jury’s investigation of the spill. He has motions pending before the trial judge to have the jury’s verdict thrown out.
BP and plaintiffs agreed in 2012 to a settlement providing oil spill cleanup workers and residents in specified areas close to the coast with payments for medical claims related to the spill. BP does not have an estimate of how much it will likely pay out. Lawyers have estimated as many as 200,000 people may benefit.
Oil from the busted well spread north after the blowout, eventually soiling marshes, beaches and barrier islands from Louisiana to Florida and forcing rich seafood grounds to be closed. Rescue and cleaning centers were set up for animals affected by the spill. Researchers continue to monitor marshlands, marine life and oyster beds lingering effects from the oil.
(image from Louisiana GOHSEP)
Special thanks to Richard Charter