BP SETTLES OUT OF COURT

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BP pleads guilty to 14 felony charges and agrees to pay a record amount 4.5 million in penalty charges. The rig explosion and ensuing oil spill took 11 lives of the coast. In addition 17 others were injured in the explosion. The Deep-water horizon platform which is located 50 miles off the coast of Louisiana sank after an explosion on April 20, 2010. The mile-deep Macondo oil well spewed 4.9 million barrels of oil into the Gulf of Mexico which then floated to the coast line from Florida to Texas. After investigation the investigation team concluded the explosion was due to me-saving, cost-cutting decisions by BP and its drilling partners in cementing the well shaft. It was estimated 172 million gallons of crude oil was spilled onto the seafloor. The spill then was washed into the marshes and wetlands which killed wildlife and shut off vast areas to commercial fishing. The spill exposed government flaws with regulation of offshore drilling. Because of the spill it led to a temporary ban on deep-water drilling while officials and the oil industry studied the risks. The government then worked to make it safer and developed better disaster plans.

After the spill BP’s environmentally friendly image was tarnished, and CEO Tony Hayward stepped down. The Exxon Mobile spill in 1989 was far surpassed by the BP oil spill. Exxon in the end settled with the U.S. government for $1 billion, which would be about $1.8 billion today. Others were sued also by the government and plaintiffs like Trans-ocean Ltd., the rig's owner, and cement contractor Halliburton. After a sequence of pretrial rulings by a federal judge weakened BP's legal strategy and put the blame on BP which BP did not want to happen. Of the 14 criminal charges, only 1 of them is directly related to the accident that happened because of faulty equipment that should have been replaced but was not monitored. New Orleans District Carl Barbier will have the final say over the settlement. He will also judge whether to give final approval to the $7.8 billion deal commercial fishermen, shrimper men, charter captains, property owners, environmental groups, restaurants, hotels and others who claimed they suffered financial losses. BP also has to face countless civil claims, penalties for destroying natural resources along the coast line. Relatives of workers on the Deep-water Horizon rig are also suing BP. BP has also admitted now to misleading statistics to congress of rates at which toxins were spewed into the waters off the coast of Louisiana, Florida, Alabama, and Mississippi. One misdemeanor count BP is facing is violating the Clean Water Act. BP could pay anywhere from $1,100 to $4,300 for each barrel of oil drained between Apr. 20 and Jul. under the Clean Water Act.

30,000 people responded to the spill in the Gulf working on various jobs of cleanup such as collect oil, clean up beaches, taking care of animals and performing various other duties. Over 1,000 animals have been estimated dead because of the oil spill including several that are on the endangered species list. Of the animals affected by the oil 6% have been cleaned and by scientists judgment most of them will still die from the oil.

In my opinion, BP should have taken more precautions in safety, maintaining equipment, and I think they should pay more than 4.5 billion because of the considerable damage that was done.

On April 20, 2010, one of BP’s oil rigs off the coast of Louisiana, Deepwater Horizon, exploded. The explosion resulted in the death of 11 crew men. The oil flow was not stopped until July 15, 2010, 85 days later, by that time 206 million gallons of crude oil was released into the Gulf of Mexico. The spill also killed countless wildlife, covered beaches and tidal estuaries with oil, and harmed the commercial fishing industry as well as the tourism industry in the Gulf. A mere two and a half years later, the full effects of the oil spills’ devastation on the environment and the wildlife living there is still uncertain.

BP is being charged with 14 different charges in all, 11 of which are accounts of manslaughter, another is a criminal violation of The Clean Water Act. BP is being charged with the largest criminal penalty in the United States’ history; they have agreed to pay $4.5 billion in government penalties. They are required to pay 2.5 times more than Exxon was required to pay back in 1989 when they suffered an oil spill as well. Overall, since April of 2010, BP has spent over $42 billion for all spill-related expenses. These expenses include: government fees, the cost of repairing and stopping the free flow of oil into the Gulf, compensation to owners of businesses along the coast that suffered because of the spill, and compensation to the families of those 11 men that died due to the explosion on the rig. They may be fined with an additional $20 billion, or so, for violations of The Clean Water Act. The money that needs to be paid will be directly proportional to the amount of oil spilt; which according to the government, was 50,000 barrels of oil per day, however, according to BP, they should only be held accountable for 35,000 barrels of crude oil per day.

The rig’s owner, Transocean, and the cement contractor, Halliburton, were also under scrutiny for the oil spill, but in the end, the courts ruled that BP was the company that should be held most accountable. According to a report filed by federal regulators and a team of Coast Guard officials, BP violated federal regulations, made bad decisions, and ignored critical warnings during the cementing of the well. According to inside sources, the explosion of the rig was caused by multiple bad decisions that were meant to save time and/or money. The Justice Department argued, in a pretrial court filing, that BP’s decisions and actions before the spill amounted to ‘gross negligence.’ A Justice Department attorney stated, “We do not use words like ‘gross negligence’ and ‘willful misconduct’ lightly; but the fact remains that people died, many suffered injuries to their livelihood, and the Gulf’s complex ecosystem was harmed as a result of BP and Transocean’s bad acts or omissions.”

By: Jim West/Courtney Forsythe