Published on Saturday, December 17, 2011 by CommonDreams.org

Agencies are reporting that the Senate has passed legislation to extend the payroll tax cut and jobless benefits for two months. The legislation also included a provision requiring the White House to make a decision on the Keystone XL project in 60 days.

“If President Obama allows a deal cut in oily, money-filled congressional back rooms to lead to a pipeline that harms the public — and if he does without a credible, science-based environmental review — he will have failed one of the biggest tests of his presidency,” said Friends of the Earth President Erich Pica. The measure was overwhelmingly approved with a 89-10 vote during a Saturday session.

Republican Sens. Bob Corker (Tenn.), Jim DeMint (S.C.), Ron Johnson (Wis.), Mark Kirk (Ill.), Jerry Moran (Kan.), Jeff Sessions (Ala.), Richard Shelby (Ala.) and Democratic Sens. Patrick Leahy (Vt.) and Joe Manchin (W.Va.), as well as Independent Bernie Sanders (Vt.) voted against the package.

GOP and Democratic sources told POLITICO “that the White House swallowed the House Republican-written pipeline rider in order to get a deal to extend the tax holiday, jobless benefits and the Medicare reimbursement rate into February.”

On Friday, Noah Greenwald, endangered species director at the Center for Biological Diversity, stated: “The State Department’s own environmental review states that pumping dirty tar sands oil from Alberta, Canada to refineries on the Gulf of Mexico through Keystone XL will pollute our water. It will also commit us to an unsustainable future based on dirty fossil fuels at the precise moment when the national interest demands that we rapidly transition to clean energy to avoid climate catastrophe. There is simply no way that President Obama can honor his commitments to the American people if he caves to Big Oil on Keystone XL at this late hour.”

From AP:

In a statement, White House communications director Dan Pfeiffer indicated Obama would sign the two-month extension measure, saying it had met his test of “preventing a tax increase on 160 million hardworking Americans” and avoiding damage to the economy recovery.

The statement made no mention of the pipeline.

CNN reports:

A senior administration official noted that though the president has said he would reject any attempt to “mandate” construction of the pipeline before it receives further review, the Keystone provision Senate leaders have agreed to speeds up the approval process — giving the administration 60 days to make a decision — but does not mandate construction.

The two-month deadline on the pipeline decision comes as a defeat to the Obama administration, which had sought to postpone the decision until 2013, well after elections.

Sen. Bernie Sanders (I-Vt.) voted against the measure. “I strongly oppose the provision to fast-track approval of the Keystone XL pipeline. Producing tar sands oil creates 82 percent more carbon pollution than conventional oil, according to the Environmental Protection Agency. NASA scientist James Hansen says exploiting the tar sands would be ‘game over’ for our efforts to reverse global warming. I urge President Obama to call the Republicans’ bluff and reject the dangerous Keystone XL project,” Sanders said.

According to Politico, “A senior Obama official noted Friday after the Senate deal was announced that the Keystone pipeline permit likely won’t be approved because it forces the State Department to conduct its review at a faster pace than is possible. The official added the Senate deal does not mandate construction of the pipeline.”

Reacting to the Saturday vote, environmentalist and anti-tar sands activist Bill McKibben tweeted:

big oil is backing the pres. up against a wall on keystone; small hopeful signs emerging he may do the brave thing?

Susan Casey-Lefkowitz, director of the international program at the Natural Resources Defense Council, was optimistic the two-month deadline would kill the project. “The Republican stampede to build the Keystone XL tar sands pipeline is going to backfire. In forcing President Obama to reach a hasty decision — which he has said he would not do — the president will have no choice but to reject the pipeline as not in the national interest.”

Friends of the Earth President Erich Pica had the following response:

“The deal passed by the Senate rushes the pipeline review process, making a credible, science-based review impossible. Because of this, and the great harm we already know the pipeline would cause, President Obama has no choice but to reject the pipeline.

“The Keystone XL pipeline is a carbon bomb that would devastate our climate by resulting in the use of vast quantities of tar sands oil that is much dirtier than conventional crude.

“The pipeline would threaten communities through America’s heartland with costly and toxic spills — a spill from a similar pipeline last year shut the Kalamazoo River in Michigan and the ongoing cleanup has already cost more than half a billion dollars.

“The pipeline would also harm people at both ends, poisoning drinking water near tar sands extraction sites in Canada and increasing air pollution that causes lung disease near refineries in Texas.

“If President Obama allows a deal cut in oily, money-filled congressional back rooms to lead to a pipeline that harms the public — and if he does without a credible, science-based environmental review — he will have failed one of the biggest tests of his presidency.

“Hundreds of thousands of Americans standing up for their land, water and future have said ‘no’ to this dirty and dangerous pipeline. It is time for the president to unambiguously join them. We will campaign aggressively to encourage him to do so.”

While the GOP has pushed the claim that the tar sands pipeline would bring much needed jobs to the U.S., Grist notes that “the only independent analysis conducted of the American job-creation potential of the Keystone XL pipeline finds that between 500 and 1,400 temporary construction jobs [PDF] will be created, with a negative long-term economic impact as gas prices rise in the Midwest and environmental costs are borne.” The report further states “the new permanent U.S. pipeline jobs in the U.S. number as few as 50.”

Special thanks to CommonDreams.org

http://www.bloomberg.com/news/2011-12-14/bp-oil-spill-shows-blowout-preventers-need-redesign-panel-says.html

BP Oil Spill Shows Blowout Preventers
Need Redesign, Panel Says
By Jim Polson – Dec 14, 2011 7:00 AM PT

Blowout preventers, which are supposed to seal off an oil well in an emergency, must be redesigned to prevent failures like the one last year at BP Plc’s Macondo well in the Gulf of Mexico, according to the final report of a technical panel.

The U.S. government and the energy industry had “misplaced trust” in the ability of blowout preventers to act as fail-safe mechanisms, a committee of the National Academy of Engineering and National Research Council said in a report today. The 57 foot (17 meter) valve systems, which stand atop deep-water wells, weren’t designed or tested for the conditions that existed when the Macondo well exploded, the report found.

A blowout at the Macondo well in April 2010 killed 11 workers aboard Transocean Ltd. (RIG)’s Deepwater Horizon drilling rig off the coast of Louisiana, causing it to sink and resulting in the biggest offshore U.S. oil spill in history. An estimated 4.9 million barrels of crude went into the Gulf while operators fought for 87 days to seal the well.
If the blowout preventer had cut off the flow of oil and gas from the well, the rig might not have sunk and the spill probably would’ve been smaller, the report found.

“It failed to stop the blowout because of its design and operational shortcomings,” the committee reported. “There is an urgent need for those shortcomings to be corrected.”
The 400-ton system built by Cameron International Corp. (CAM) was four years overdue for maintenance and hadn’t been disassembled and refurbished since the Deepwater Horizon was commissioned in 2001, Jason Mathews, a member of a joint U.S. Coast Guard- Interior Department investigative panel, said during an April 6 hearing in Metairie, Louisiana.

‘Limited’ Evolution

Cameron invented blowout preventers in 1922 and “the evolution of this expensive and long-lived piece of equipment appears to have been limited,” according to today’s report. It “was neither designed nor tested for the dynamic conditions that most likely existed at the time that attempts were made to recapture well control” at Macondo.

The report, requested by Interior Secretary Ken Salazar, is the latest in a series of three government probes of the disaster. President Barack Obama appointed a commission to investigate the spill and the Coast Guard and Interior Department held their own joint inquiry.

A November 2010 interim report by the same committee issuing today’s findings said key staff overlooked signs of a failed cement plug that led to the blowout. It accused BP, its contractors and federal regulators of weak oversight. Today’s report proposes new procedures and regulation of well design and offshore rigs.

‘Robust and Reliable’

It also calls for redesign of blowout preventers to allow for “robust and reliable cutting, sealing and separation,” as well as new testing and maintenance procedures.

The government in September 2010 required drillers to have third-party verification that blowout preventers are capable of cutting off pipes, as well as having the ability to remotely close off the valves.

The report “has helped to affirm the tremendous efforts we have made in the last 18 months to raise the bar for safety and oversight of offshore oil and gas operations,” Salazar said in a statement. “The work we have done to implement rigorous new offshore drilling and safety rules and reform offshore regulation and oversight is in line with the recommendations of the committee.”
BP, based in London, won permission on Oct. 21 to resume oil exploration in the Gulf’s deep waters. The company said on July 15 it will use blowout preventers with added equipment to cut off the flow in the event of an emergency in the Gulf.

Salazar is scheduled to be in New Orleans today to announce the first Gulf of Mexico oil and natural-gas leases to be awarded since the Deepwater Horizon explosion.

To contact the reporter on this story: Jim Polson in New York at jpolson@bloomberg.net
To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net

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http://www.google.com/hostednews/ap/article/ALeqM5giLPFasRXVOgfuii2XUQmvKvz98Q?docId=9d55b04065ea434f877388c7fb61d89d

Engineering experts hit safety culture in BP spill
By SETH BORENSTEIN, AP Science Writer – 20 minutes ago

WASHINGTON (AP) – BP and the oil industry drilling in the Gulf of Mexico lacked the proper safety attitude to handle the large risks of deep-water drilling, leading to the many bad decisions behind the nation’s worst offshore spill, a panel of expert engineers said Wednesday.

Despite better safety practices, the experts worried that the improvements could fade without new steps. They pointed to NASA and how lessons the agency learned after the 1986 Challenger disaster eventually dimmed, leading to the 2003 Columbia disaster.
The National Academy of Engineering, which advises the federal government, cited errors that combined to make the well platform explode and oil spill, but noted a problem with the safety culture underlying last year’s 172 million gallon spill at BP’s Macondo well in the Gulf of Mexico.

“The industrial management involved with drilling the Macondo well had not adequately understood and coped with the system safety challenges presented by offshore drilling operations,” the 136-page report said. “This raises questions about the industry’s overall safety preparedness, the ability to handle the complexities of the deep-water operations, and industry oversight to approve and monitor well plans and operational practices and personnel competency and training.”

That’s a problem because the report called drilling in the Gulf’s deep waters “some of the most complex and most risky ventures conducted by commercial enterprises.”

Experts said a deficient safety culture led BP to rely on blowout preventers – a 57-foot-tall, 400-ton system of well control devices – as equipment that just couldn’t fail.

The trouble is that even before the April 2010 well blowout, “there were numerous warnings to both industry and regulators about potential failures of existing” blowout preventers, the report said. The report pointed to studies in 2001, 2002, 2004, and a 1999 well blowout and fire off the Louisiana coast.

“One needs to understand that they do not work all the time,” said panel chairman Donald Winter, a former Navy secretary and engineering professor at the University of Michigan. BP and all the industry had “a misplaced confidence that the blowout preventer could provide a guarantee if you will, an insurance policy, against a blowout.”

Panel member Roger McCarthy, a private engineering consultant who has investigated past oil spills, said blowout preventers are treated like drilling’s circuit-breakers, but there’s no safety group certifying them in the same that Underwriters Laboratories approves key electrical safety devices in homes.

Winter said the safety culture issue was apparent in the industry’s attitude toward risks involved in drilling: Instead of acknowledging that there are risks and that industry officials need to make intelligent decisions comparing risk and business decisions, they had an unrealistic attitude that their actions never added risks.

Like other studies of the BP spill, the report highlighted several technical failures behind the disaster, with no lone cause. But Winter said the bad decision that was uppermost to him was the decision to abandon the well temporarily, which is normal, even though the cement poured in the well failed important pressure tests.

“Once they made the decision to basically disregard the tests,” it set the chain-of-events for all that followed, Winter said.

In a statement, BP said it “has acknowledged its role in the accident and has taken concrete steps to further enhance safety and risk management throughout its global operations.”

The experts do say drilling safety has improved in the Gulf of Mexico.

“We think it is indeed in fact a reasonable process to continue drilling at this point in time,” Winter said at news conference. “But further improvements in safety can in fact be made and should be made.”

The independence of the National Academy of Engineering means the report is likely to carry more weight in Congress than some of other investigations. Republican lawmakers have criticized prior reports by a presidential commission saying that the panel was biased.

A joint federal investigation also has inherent conflicts of interest because the committee was comprised of those who regulate the offshore drilling industry.

Since the disaster, the Obama administration has reorganized the offshore drilling agency and boosted safety regulations. But Congress has yet to pass a single piece of legislation to address safety gaps highlighted by the disaster. House Republicans, meanwhile, have passed bills to jump start offshore drilling.

Associated Press writer Dina Cappiello contributed to this report.
On the Net:
* The National Academy of Engineering report: http://bit.ly/vQK3ai

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http://www.businessweek.com/news/2011-12-13/cameron-asks-court-to-derail-february-bp-gulf-spill-trial.html

Business Week

Bloomberg
Cameron Asks Court to Derail February BP Gulf Spill Trial
December 13, 2011, 9:51 PM EST

By Margaret Cronin Fisk and Laurel Brubaker Calkins
(Updates with law professor’s comment in 11th paragraph.)

Dec. 13 (Bloomberg) — Cameron International Corp. asked a federal appeals court to derail a trial set for February to determine which companies should be blamed for the 2010 BP Plc oil spill in the Gulf of Mexico.

Cameron, which made the blow-out prevention equipment used for the Macondo well, asked the U.S. Court of Appeals in New Orleans to throw out the existing trial plan and rule that claims against the company should be tried before a jury. U.S. District Court Judge Carl Barbier, who is overseeing much of the spill litigation, has scheduled a nonjury trial for Feb. 27 in New Orleans to determine liability and apportion fault.

Barbier plans two subsequent nonjury phases on the size of the spill and efforts to contain it. Test jury trials on damages to victims would follow, the judge has said. Cameron said that trial plan violates its constitutional rights.

“The proceeding envisioned by the district court’s plan is not a ‘trial’ as it is known in Anglo-American law,” Cameron, a defendant in hundreds of lawsuits over the explosion and subsequent oil spill, said in a court filing. “Its three phases are reminiscent of the procedures followed by European courts in which the judges are active prosecutors in search of justice while the litigants are virtually bystanders.”

The appeals court last week set oral arguments on Cameron’s challenge for Dec. 22 in Dallas.

Blowout and Explosion

The April 2010 Macondo well blowout and the explosion that followed killed 11 workers and set off the worst offshore oil spill in U.S. history. The accident and spill led to hundreds of lawsuits against BP and its partners and contractors, including Cameron, Transocean Ltd., the Switzerland-based owner and operator of the Deepwater Horizon drilling rig that exploded and Halliburton Co., which provided cementing services.

The lawsuits for injuries, economic and environmental loss are combined before Barbier in federal court in New Orleans.

Cameron, based in Houston, argues that the trial plan should include specific claims by injured parties in the multidistrict litigation, or MDL.

“The trial plan does not formally include the claim of any individual MDL plaintiff or limitation claimant, yet it seeks a global fault allocation for all of them,” the company said in court papers.

‘Free-for-All’

The trial plan “invites” the plaintiffs’ lawyers “to participate in a potentially riotous free-for-all over fault on behalf of an undifferentiated mass of unidentified plaintiffs,” wrote David Beck, Cameron’s lawyer.

“The appeals court may be reluctant to intervene,” said Carl Tobias, a law professor at the University of Richmond in Virginia. “MDLs are special and appeals courts are pretty deferential to MDL judges.”

The appellate court may decide that it needs more time to decide and delay the Feb. 27 trial, Tobias said. “If Cameron is right, and the trial goes forward, they would have to redo it all,” he said.

Cameron also contends that Barbier chose the wrong laws to govern the spill litigation and that claims against the company fall under the federal Outer Continental Shelf Lands Act, which allows for a jury trial.

‘Impermissibly’ Infringed

Maritime law disputes are typically tried by a judge alone. By choosing maritime law, Barbier “impermissibly” infringed on Cameron’s constitutional right to a jury trial, the company’s lawyer said.

BP, which owns the blown-out well, filed papers disagreeing with Cameron and urging the appellate court to allow Barbier the discretion to conduct the massive spill litigation in whatever manner he deems most efficient.

“BP does not agree with all of the rulings” Barbier has made in “perhaps the most complex admiralty proceeding in history,” the London-based oil company said last month. “But BP does believe that Judge Barbier is doing an admirable job of managing the enormous proceedings.”

Lawyers for spill victims also opposed Cameron’s appeal. Cameron “fundamentally misunderstands” the structure of Barbier’s trial plan, which doesn’t require the participation of individual injured parties, lawyers for the committee representing thousands of spill victims said in an appellate filing.

Facts and Conclusions

Barbier is entitled to utilize the structure to determine facts and conclusions he’ll need to apply in further phases of the spill litigation, Stephen Herman and James Roy, liaison counsel said in the filing.

Halliburton Co., which provided the cementing services to the well, said it supported the challenge to the trial plan.

“The current trial plan purports to address liability issues in isolation from actual claims and causation issues,” Donald Goodwin, Halliburton’s lawyer, said in a Nov. 7 filing at the appeals court.

Any attempt to use the judge’s liability findings in individual claims “violates the district court’s limited pre- trial jurisdiction over MDL cases,” Goodwin said. Houston-based Halliburton supports the use of maritime law to govern the lawsuits, he said.

Barbier said in September that the February trial would “address all allocation of fault issues that may properly be tried to the bench without a jury.” This includes “the negligence, gross negligence, or other bases of liability of, and the proportion of liability allocable to the various defendants, third parties, and non-parties,” he said.

Fault Denied

Cameron has denied any fault for the incident, contending its blowout preventer functioned as designed.

“The BOP was not activated in time to seal the well and prevent a blowout,” Cameron lawyer David Beck said in an Oct. 18 filing in the appeals court.

Transocean set the trial in motion last year by filing what’s known as a limitation action, seeking to restrict the company’s exposure to damage claims under a 160-year-old law that shields ship owners from unlimited injury claims.

Barbier allowed thousands of spill victims who suffered only economic losses to file claims in Transocean’s limitation action, rather than requiring them to file individual suits under the Oil Pollution Act, which compensates economic losses.

‘Limitation Action’

“Cameron was dragged into the limitation action and forced to confront the prospect of liability to a vast number of claimants in that proceeding, as well as potentially catastrophic liability to BP on its cross claims,” Beck told the appeals court.

The limitation action has high-jacked what should be a trial over liability and damages conducted under Oil Pollution Act rules, Cameron contends. Under OPA, injured parties must present damage claims to designated responsible parties first. Only after this stage can legitimate damage claims be filed in court or lodged against third parties, such as Cameron, which aren’t designated as responsible parties under OPA, the company said.

“The district court has inverted the congressional order by confusing Transocean’s limitation action with the OPA claims that this case is mainly about,” Beck said in the Oct. 18 filing. “This has become a case of the caboose driving the train, and it needs to be put back on the tracks.”

Even if subsequent juries determine the company isn’t liable for specific injuries, Barbier may have already unfairly assigned a percentage of fault to Cameron through the proceeding that’s to begin in February, Beck argued. “A futile trial would be very prejudicial, and the prejudice suffered cannot be put back in the bottle,” he said.

The appeals case is In re: Cameron International, U.S. Court of Appeals for the Fifth Circuit. The lawsuits are combined in In re Oil Spill by the Oil Rig Deepwater Horizon in the Gulf of Mexico on April 20, 2010, MDL-2179, U.S. District Court, Eastern District of Louisiana (New Orleans).

–Editors: Fred Strasser, Michael Hytha
To contact the reporters on this story: Margaret Cronin Fisk in Southfield, Michigan, at mcfisk@bloomberg.net; Laurel Brubaker Calkins in Houston at laurel@calkins.us.com
To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

Special thanks to Richard Charter

http://online.wsj.com/article/SB10001424052970203893404577098780998054576.html?mod=googlenews_wsj

DECEMBER 14, 2011, 8:22 P.M. ET

By MATTHEW COWLEY And JOHN LYONS

SAO PAULO-A Brazilian federal prosecutor on Wednesday asked a judge to shut down all Chevron Corp. and Transocean Ltd. operations in Brazil in a lawsuit that seeks some 20 billion Brazilian reais ($11 billion) in damages from the companies, the latest legal broadside to the firms since oil leaked from a well they operate in early November.

In a statement announcing the lawsuit, the prosecutor’s office in Campos, a city in Rio de Janeiro state, said Chevron and Transocean “showed a lack of planning and environmental management,” by allowing the leak, which authorities say allowed at least 2,400 barrels to flow into the ocean.

In a statement, Chevron said it hasn’t received any formal notice of the lawsuit. It said it responded “responsibly” to the spill, and that the flow of oil was stopped within four days. Chevron said there’s now less than a single barrel of oil on ocean surface, and that there hasn’t been any coastal or wildlife impact.

Experts on Brazil’s oil industry say the companies are unlikely to be shut down or pay the enormous damages sought in the lawsuit. Brazilian prosecutors have seldom succeeded when seeking to shut down companies in past environmental lawsuits. All the same, the lawsuit adds a new level of complications for Chevron, and underscores the highly charged political environment gathering around the Brazilian deep-water oil.

“Unhappily, oil has become political; every prosecutor wants to get on television, and so we get absurd lawsuits like this,” said Adriano Pires, director the Brazilian Infrastructure Center, a Rio de Janeiro firm that consults on oil and other energy projects. “Nothing is going to happen to Chevron. But what will happen is that it will scare investors; Brazil loses credibility, and the cost of investment goes up.”

The Nov. 7 drilling accident caused an oil spill at an appraisal well at the Frade oil field, located in deep Atlantic waters off the coast of Rio de Janeiro state. Brazilian authorities levied fines and ordered the firm to stop all drilling-but have allowed Chevron to continue pumping some 79,000 barrels per day from its other existing wells.

In a Dec. 1 interview with The Wall Street Journal, Ali Moshiri, who runs Chevron’s Latin American and African operations, said the “overreaction is puzzling us.”

The leak came at a crucial moment for Brazil’s oil industry, which is preparing to start developing huge oil fields discovered deep below the Atlantic seabed. They contain some of the largest reservoirs of oil and gas discovered anywhere in the world in the last two decades.

Brazil represents about 3% of Chevron’s world-wide assets, compared to 17% for Australia and 21% for the U.S. Gulf of Mexico, according to a Deutsche Bank research note.

But the South American country’s offshore riches make Chevron’s Brazilian assets a strategically important toehold, and the firm has previously challenged the Brazilian response to the spill.

Write to Matthew Cowley at matthew.cowley@dowjones.com and John Lyons at john.lyons@wsj.com

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http://wnyt.com/article/stories/S2413685.shtml?cat=300

Associated Press
Posted at: 12/14/2011 8:08 PM
By BRADLEY BROOKS

Prosecutors seeking $10B from Chevron for leak
(AP) SAO PAULO – Brazilian federal prosecutors said Wednesday they are seeking $10.6 billion in damages from U.S.-based Chevron Corp. because of environmental harm caused by an offshore oil leak.

The prosecutors are also asking a judge to order Chevron and Transocean Ltd., the drilling contractor for the well where the leak occurred in November, to halt all activities in Brazilian territory for an indefinite period.

“During an investigation, the attorney general’s office found that Chevron and Transocean were not capable of controlling the damage caused by the spill of nearly 3,000 barrels of oil, proof of a lack of environmental planning and management by the companies,” the statement read.

Chevron, in an emailed statement, said that it had received no notice of the action by the federal prosecutors and that Brazilian oil regulators had not contacted it about the issue.

“From the outset, Chevron responded responsibly to the incident at its Frade Field and has dealt transparently with all Brazilian authorities,” the company said.

Most of Brazil’s oil drilling is conducted offshore, and that is where Chevron’s work is concentrated. The company does own lubricants manufacturing plants in Rio de Janeiro and Sao Paulo. It wasn’t clear if these operations would be affected by any decision a judge might make on the federal prosecutor’s requests.

Transocean said in a statement that it also had not received any official notice of the prosecutors’ action. “At present, our rigs are operating in Brazilian waters and we continue to cooperate with the authorities,” it added.

In late November, Brazil’s National Petroleum Agency banned Chevron from any drilling activities in Brazil until an investigation into the leak was finished.

Brazil’s Environment Ministry fined Chevron about $28 million, but has said the company could face further penalties. Chevron has not indicated if it will contest the fine in court, which it can do under Brazilian law.

The company was strongly criticized by officials at the ministry and also the petroleum regulatory agency for not fully sharing information about the spill in its early days and for not having the proper emergency equipment on hand to deal with the spill.

Oil started leaking at the site of a Chevron appraisal well Nov. 7, about 230 miles (370 kilometers) off the northeastern coast of Rio de Janeiro state.

George Buck, chief operating officer for Chevron’s Brazilian division, has said the spill occurred because Chevron underestimated the pressure in an underwater reservoir.

He said in late November that this caused crude oil to rush up a bore hole and eventually escape into the surrounding seabed. The oil leaked out through at least seven narrow fissures on the ocean floor, all within 160 feet (50 meters) of the wellhead.

Both Chevron and Brazilian officials said in late November that the leak was under control, although some residual oil continues to seep from the site of the leak.

The work at the Frade field where the leak occurred is one of Chevron’s biggest capital investments, according to the company’s website, though details are not provided.

Special thanks to Richard Charter

http://www.miamiherald.com/2011/12/16/2548990/bp-settles-with-maker-of-failed.html

Miami Herald

Posted on Friday, 12.16.11

BP settles with maker of failed blowout preventer

ASSOCIATED PRESS
NEW ORLEANS — Cameron International, the maker of the Deepwater Horizon blowout preventer that failed to stop last year’s massive oil spill in the Gulf of Mexico, has agreed to pay $250 million to BP under a legal settlement, BP said Friday.

BP said it was “in their mutual best interests, and the agreement is not an admission of liability by either party.” The companies are dropping all claims against one another, they said.

The settlement comes in advance of a federal trial over the catastrophic Gulf oil spill. The non-jury trial is slated to begin in February and determine fault in the April 20, 2010, explosion and subsequent oil spill off the Louisiana coast of more than 200 million gallons of oil.

The settlement with Cameron does not end the legal fighting over the blowout of the Macondo well, which was owned by London-based BP and two partners, MOEX and Anadarko. BP has already settled claims with those two companies and a third company, Weatherford, the maker of a part used in the well.

“Today’s settlement allows BP and Cameron to put our legal issues behind us and move forward to improve safety in the drilling industry,” said Bob Dudley, BP group chief executive.

“Unfortunately, other companies persist in refusing to accept responsibility for their roles in the accident and for contributing to restoration efforts,” Dudley said in a swipe at Halliburton Corp. and Transocean Ltd. Halliburton supplied critical cement to seal the well and Transocean was the company drilling the well.

Probes of the Deepwater Horizon explosion by the federal government and independent scientists and engineers have found all three companies were at fault for a series of decisions and actions that led to the Macondo well blowout, the nation’s largest offshore oil spill.

BP is engaged in an intense legal fight with Halliburton Corp. and Transocean. Earlier this month, BP went so far as to accuse Halliburton employees of covering up damaging evidence about a cement mixture Halliburton used in drilling the well.

BP said it would use the $250 million from Cameron to pay for the cost of cleaning up from the spill and paying individual damages claims by people, businesses and government entities hurt by the spill. BP said it has spent about $7.5 billion so far of those claims. But the British company faces billions of dollars in additional damages and fines.

Under the agreement, BP said Houston-based Cameron is no longer responsible for any additional cleanup costs related to the spill. But BP said the agreement does not cover civil, criminal and administrative fines and other penalties that might arise out of the court proceedings.

Jack Moore, the chairman and CEO Cameron, said the agreement with BP “removes uncertainty facing Cameron” as litigation intensifies over the Deepwater Horizon explosion.

“This eliminates all significant exposure to historical and future claims related to this incident,” Moore said.

Moore said Cameron does not expect to have to pay much for possible court fines and penalties. “We do not consider these items to represent a significant risk to Cameron,” he said.

Cameron said its insurers were expected to fund at least $170 million of the $250 million payment the company agreed to make to BP.

BP and Cameron also pledged to “improve safety in the drilling industry” and do more to improve blowout preventers.

Read more: http://www.miamiherald.com/2011/12/16/2548990/bp-settles-with-maker-of-failed.html#ixzz1gjNzh3E3

FILE – In a Sept. 13, 2010 file photo, the bottom of the blowout preventer stack, from the Deepwater Horizon explosion and oil spill, which is being examined as evidence for federal investigations, is seen at the NASA Michaud Assembly facility in New Orleans. BP PLC said Friday, Dec. 16, 2011, it will be paid $250 million by the maker of the blowout preventer that failed to halt oil spewing from BP’s busted well in the Gulf of Mexico.
Gerald Herbert, File / AP Photo
BY CAIN BURDEAU

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http://www.bloomberg.com/news/2011-12-16/transocean-asks-judge-to-force-bp-to-indemnify-gulf-oil-spill-damages.html

Bloomberg

Transocean Asks Judge to Force BP to Indemnify Gulf Oil-Spill Damages

By Margaret Cronin Fisk and Allen Johnson Jr. – Dec 16, 2011 9:33 AM PT

Transocean Ltd. (RIG)’s drilling contract with BP Plc (BP/) promised indemnification for damages from oil spilled below the surface of the Gulf of Mexico and should be enforced for claims over the Deepwater Horizon accident, the rig owner told a judge.

Claiming the drilling contractor shares blame for the disaster, London-based BP sued Transocean in April to recover part of more than $40 billion in damages and costs from the 2010 spill. Transocean accused BP of breaching their contract by failing to defend the rig owner and hold it harmless against claims.

“What Transocean seeks is to hold BP to its promise,” John M. Elsley, a lawyer for Transocean, told U.S. District Judge Carl Barbier at a hearing in New Orleans federal court today. “BP does not want that to happen.”

BP has argued that Transocean’s conduct voided the agreement. Transocean, based in Vernier, Switzerland, denies willful misconduct and claims the indemnity provision requires BP to pay virtually all damages and cleanup costs because it was a subsurface spill.

The April 2010 Macondo well blowout and the explosion that followed killed 11 workers and set off the worst offshore oil spill in U.S. history. The sinking of Transocean’s Deepwater Horizon drilling rig and spill led to hundreds of lawsuits against BP and its partners and contractors.

The case is In Re Oil Spill by the Oil Rig Deepwater Horizon in the Gulf of Mexico on April 20, 2010, MDL-2179, U.S. District Court, Eastern District of Louisiana (New Orleans).

To contact the reporters on this story: Margaret Cronin Fisk in Detroit at mcfisk@bloomberg.net; Allen Johnson Jr. in New Orleans at allenmct@gmail.com
To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

Special thanks to Richard Charter

CONTACT: Stacy Kika
Kika.stacy@epa.gov 202-564-0906 202-564-4355

FOR IMMEDIATE RELEASE
December 16, 2011

Sentence is the largest ever criminal fine in Louisiana for air pollution

WASHINGTON – Pelican Refining Company LLC, was sentenced to pay $12 million for felony violations of the Clean Air Act and to obstruction of justice charges in federal court in Lafayette, La. announced Cynthia Giles, assistant administrator for the U.S. Environmental Protection Agency’s Office of Enforcement and Compliance Assurance, and Ignacia S. Moreno, assistant attorney general of the Environment and Natural Resources Division of the Department of Justice.

“Facilities have a responsibility to protect their employees and local residents by following our nation’s environmental laws,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “Corporations that choose to cut corners and ignore these critical safeguards will face significant consequences.”

“This corporation operated without even the most basic requirements of an environmental compliance plan and endangered the public and its own employees by implementing unsafe practices in violation of its permit and reporting requirements,” said Ignacia S. Moreno, assistant attorney general for the Environment and Natural Resources Division of the Department of Justice. “Today’s plea demonstrates that the Justice Department will continue to vigorously prosecute those who violate environmental and workplace safety laws.”

Pelican was sentenced to pay a $12 million penalty, which includes a $10 million criminal fine and $2 million in community service payments that will go toward various environmental projects in Louisiana, including air pollution monitoring. The criminal fine is the largest ever in Louisiana for violations of the Clean Air Act. Pelican is also prohibited from future operations unless it implements an environmental compliance plan, which includes independent quarterly audits by an outside firm and oversight by a court-appointed monitor.

In a joint factual statement filed in court, Pelican, headquartered in Houston, Texas, admitted that the company had knowingly committed criminal violations of its operating permit at the refinery located in Lake Charles, La. The violations were discovered during a March 2006 inspection by the Louisiana Department of Environmental Quality (LDEQ) and the Environmental Protection Agency (EPA), which identified numerous unsafe operating conditions. Pelican also pleaded guilty to obstruction of justice for submitting materially false deviation reports to LDEQ, the agency that administers the federal Clean Air Act in Louisiana.

Pelican admitted to the following:

* Pelican had no company budget, no environmental department and no environmental manager;

* In order to comply with a permit issued under the Clean Air Act, the refinery was required to use certain key pollution prevention equipment, but that equipment was either not functioning, poorly maintained, improperly installed, improperly placed into service and/or improperly calibrated;

* It was a routine practice for over a year to use an emergency flare gun to re-light the flare tower at the refinery designed to burn off toxic gasses and provide for the safe combustion of potentially explosive chemicals; because the pilot light was not functioning properly, employees would take turns trying to shoot the flare gun to relight the explosive gasses;

* Sour crude oil was stored in a tank that was not properly placed into service and remained in the tank after the roof sank;

* A caustic scrubber designed to remove hydrogen sulfide from emissions was bypassed;

* A continuous emission monitoring system (CEMS) designed to measure the hydrogen sulfide levels in refinery emissions was not working properly, and

* Pelican provided false information to the State of Louisiana and the State of Texas concerning the laboratory testing of asphalt.

Byron Hamilton, the Pelican vice-president who oversaw operations at the Lake Charles refinery since 2005 from an office in Houston, Texas pleaded guilty on July 6, 2011, to negligently placing persons in imminent danger of death and serious bodily injury as a result of negligent releases at the refinery. Hamilton faces up to one year in prison and a $200,000 fine for each of the two Clean Air Act counts. On Oct. 31, 2011, Pelican’s former asphalt facilities manager, Mike LeBleu, also pleaded guilty to a negligent endangerment charge under the Clean Air Act.

The government’s investigation of the Pelican Refinery continues. Under the Crime Victims’ Rights Act, crime victims are afforded certain statutory rights, including the opportunity to attend all public hearings and provide input to the prosecution. Any person adversely impacted is encouraged to learn more about the case and the Crime Victims’ Rights Act or contact the Victim Witness Coordinator for the U.S. Attorney’s Office, Western District of Louisiana.

The criminal investigation is being conducted by the EPA Criminal Investigation Division in Baton Rouge and the Louisiana State Police, with assistance from the Louisiana Department of Environmental Quality. The case is being prosecuted by U.S. Attorney Stephanie Finley, Richard A. Udell, Senior Trial Attorney of the Environmental Crimes Section of the Environment and Natural Resources Division of the U.S. Department of Justice, Trial Attorney Christopher Hale with the Environmental Crimes Section.

More information on EPA’s criminal enforcement program:
http://www.epa.gov/compliance/criminal/index.html

Read the joint factual statement: http://www.epa.gov/compliance/criminal/investigations/pelican-jfs-10-21-11.pdf

Photos: http://www.epa.gov/compliance/criminal/investigations/pelican-exhibits.pdf

Special thanks to Richard Charter