Oil Companies Should Not be Allowed to Lobby or Litigate Their Way out of Responsibility for Oil Spills
Oil companies have amassed massive profits over the past decade. BP is the largest oil and gas producer in the United States with over 22,000 oil and gas wells many on federal land) across the United States. It has enjoyed considerable profits along with the other major oil companies over the past five years. BP profits for the first quarter of 2010 alone were $5.59 billion dollars. Since 2005 profits have totaled approximately $105 Billion according to their own annual reports.
| Year | 2005 | 2006 | 2007 | 2008 | 2009 |
| Profits | $22.6 Billion | $22.2 Billion | $18.3 Billion | $22.2 Billion | $13.9 Billion |
In the past three years BP has managed to receive 97% percent of all flagrant violations issued by the Occupational Safety and Health Administration (OSHA). BP accumulated 862 citations (760 classified as egregiously willful) for violations at two of its five U.S. refineries. It is also still under scrutiny by the federal worker – safety monitor for the 2005 explosion at the Texas City refinery that killed 15 workers after failing to correct problems that were pointed out by OSHA inspections. Last year BP was fined $87 million for violations at the same Texas City refinery and another $3 million for violations at the Toledo Ohio refinery. BP is in the process of contesting the penalties.
It appears clear that BP has displayed a blatant disregard for regulations involving safety, maintenance, and operational procedures and this disregard extended to the rig Deepwater Horizon. Senior managers from BP were overheard “taking shortcuts” that involved substituting salt water for heavy drilling fluid in the well that blew out and resulted in the oil spill currently ravaging the Gulf of Mexico and 11 deaths. BP’s attitude of non-compliance towards regulation seems motivated by profit maximization and the company has not appeared overly concerned with consequences.
This may be due to the “cozy relationship” BP has with the Mineral Management Service who is responsible for safety and environmental regulation. The Obama administration has vowed that this relationship will cease. Another possible reason for non-compliance could be the tens of millions of dollars on lobbying ($16 million spent last year alone) over the past 5 years, much of which was concentrated against regulation. It also donated more than $500,000 in campaign contributions for federal elections. Another factor could be a result of oil industry lobbying influence from the past which resulted in a government reserve fund called the Oil Spill Liability Trust Fund. There is approximately $2 billion in this fund to cover a disaster like the one occurring in the Gulf. The reserve fund also ensures that operators of offshore rigs will be held liable for only $75 million in damages claimed by individuals, companies, States, or the federal government. They can still be held liable for clean up costs.
Regardless of the reasons for non-regulatory compliance, it appears BP will once again rely on lobbying to influence key legislators to reduce long term penalties and to fight violations and lawsuits in court much like Exxon did with the Exxon Valdez spill. They are confident this practice will result in the greatest cost savings and retention of future profits. Once again the U.S. taxpayer will be left picking up the tab, this time for unspecified clean up costs, loss of States revenue from tourism, and the economic damage done to numerous industries that rely on the Gulf. Not to mention the potentially irreversible environmental damage done to coastlines that may even include Atlantic seaboard states. This cannot be allowed to happen!
BP has demonstrated a willingness to take the measures necessary to cap the flow and take the lead in the clean up. Twenty-two thousand people and a small armada of ships are currently working on the spill. But in reality, they have not brought near enough resources to bear quickly enough to stem the flow or to clean up the oil. A small fleet of supertankers used successfully in the Persian Gulf spill, each capable of sucking up to one million gallons of oil / water a day has not been implemented to date. Additional fast moving Coast guard, military, and civilian vessels could have been utilized to skim and remove surface oil. Assistance from Exxon, Shell, Chevron, ConocoPhillips and other industry experts were not sought out quickly enough nor were suggestions acted upon. Many including the U.S. government incorrectly assumed that BP was the expert in such matters and had the best chance of correcting the damaged well.
BP is still cutting corners even in the face of this disaster choosing to use almost 800,000 gallons of the cheaper less effective and much toxic chemical dispersant Corexit to break the oil up even after the EPA asked it to cease. Corexit is produced by Nalco and BP enjoys a tight relationship with Nalco sharing board of director members .The Obama administration has also been accused of being at fault and not pressuring BP enough to ensure appropriate action was implemented rapidly enough.
Hopefully the Top Kill or Junk shot procedures will be effective in the next few days and a relief well will be drilled into the original borehole and drilling mud pumped in to permanently stop the oil flow. But even if these measures are implemented quickly there is no guarantee of complete success. Note – Top Kill was not successful. All these practice were used on the Ixtox 1 back in 1979 in water 160 ft deep (Deepwater Horizon is at 5000 ft), they were all unsuccessfull. That well was not sealed for 9 months until the releif wells were completed.
BP needs to be incentivized to ensure that it will take all actions necessary to ensure that not only the well is sealed, but that clean up is rapid and thorough, the coastlines have been restored to the fullest extent possible, and that the livelihoods of those affected by the Gulf spill are re-established or they are compensated accordingly. BP must not be allowed to lobby and litigate there way out of accountability.
The Obama administration should demand that BP have the well fully sealed by relief wells within 90 days, the bulk of surface oil be removed from the Gulf within 180 days and if necessary from Florida and the East Coast, and that the oil be cleaned from the affected coast lines and marshlands within 180 days. Note – these timelines are arbitrary and should be determined by the EPA, independent environmental, and industry experts. Failure to meet these conditions will result in:
- Suspension of all U.S. contracts and barring of future contracts – this will cease BP’s access drilling operation on all federal lands both onshore and offshore.
- Seizure of BP’s holdings on U.S. federal lands. Negotiate settlement requiring all profits derived from oil and gas obtained on U.S. federal lands be allocated clean up measures and restitution to affected parties. If BP attempts to use litigation to delay negotiations, turn over operations to U.S. base competitors and split the profits with federal/state governments until adequate cleanup measures and restitutions are made.
- Federal government will spearhead lawsuits and provide litigation support for individuals and companies affected by the Gulf disaster . Litigation will be directed at BP both domestically and abroad where applicable.
- Put a moratorium on BP’s lobby access and campaign contributions that would result in favorable legislation regarding the Gulf oil spill. This will include barring BP from hiring any third party (ie. the Chamber of Commerce) to lobby for them for the next five years or until the matter is rfully esolved in the U.S.
An investigation needs to be conducted to determine if BP was criminally liable, and to what extent TransUnion or Halliburton were at fault. If this appears harsh, it is meant to be. The long term effects of this disaster are immeasurable. It will affect people’s lives for years and the U.S. taxpayer should not be left paying the long term expenses.
My intention is not to put BP out of business, simply to stimulate the company to respond to its full potential, and not allow it to remain focused on maximizing its profits. It has lost that option concerning this situation. BPs profits over the past year should be more than suitable to cover all the expenses associated with this disaster. This will also send a strong message to the other oil and gas companies that strict adherence to the safety and maintenance protocols is serious, mandatory and can prove extremely costly.
This incident is just another in a long string of reasons as to why it is time to shift the focus away from fossil fuels and towards renewable energy sources such as cellulosic ethanol, biodiesel derived from jatropha, halophytes, and bioalgae, wind energy, solar thermal and geothermal.
http://www.bp.com/extendedsectiongenericarticle.do?categoryId=9021605&contentId=7040949
http://www.osha.gov/dep/bp/bp.html
http://www.grist.org/article/2010-05-17-bp-has-numerous-safety-violations-at-refineries-study-finds/
http://www.opensecrets.org/lobby/clientsum.php?year=2009&lname=BP&id=
http://www.propublica.org/feature/epa-officials-weighing-sanctions-against-bps-us-operations