A court order, handed down by a judge in New Orleans, means BP will no longer be liable for a maximum of $21bn in fines at next week’s civil trial – after a judge ruled the oil company would not have to pay for 810,000 barrels of oil collected at the source of the broken well.
The oil company had been facing up to $21bn in fines in the civil case, based on the amount of oil that gushed into the Gulf following the fatal blowout of its well.
The federal government estimates that about 4.9m barrels of oils were released before BP engineers sealed off the well three months later.
The case was set to be the costliest to date for BP, which has already spent billions on cleanup costs, and settling thousands of claims arising from the 2010 disaster.
But the oil company got a break when the Justice Department agreed not to hold BP accountable for 800,000 barrels of oil which were captured at the site of the broken well.
District judge Carl Barbier, who is hearing the case in New Orleans, accepted the agreement on Tuesday night. “The ‘collected oil’ … never came into contact with any ambient sea water, and was not released to the environment in any way,” he said in the ruling.
The deal reduces BP’s potential exposure to the civil trial from $21bn to $17.6bn.
The federal government has said it will establish gross negligence on the part of BP in the 2010 blowout, which killed 11 men and fouled the Gulf of Mexico. That could treble BP’s fines under the Clean Water Act.
The oil company, in combative statements this week, accused the federal government of making excessive demands.
The company’s lawyers have told journalists they believe damages should be capped at a few billion dollars, and they are ready to take the risk of taking the federal government to court. BP is also disputing the federal government’s oil spill estimate, saying the figure is 20% too high.
With Tuesday’s court order, however, BP appears to have taken a first step towards reducing its potential liability in the case.
- Judge cuts potential fine against BP by $3.4B (bizjournals.com)
- U.S. judge accepts BP collected 810,000 barrels in spill (news.yahoo.com)
- Feds, BP agree oil captured not part of penalties (news.yahoo.com)
The consultation exercise about the proposed North Uist exploratory well attracted no responses from the public, and angered environmental groups who said they did not know of its existence.
Leaders of Greenpeace, the RSPB, WWF and Friends of the Earth wrote to Mr Huhne, the Energy and Environment Secretary, complaining they had not been made aware of it, and raising concerns about the difficulty of coping with a deepwater oil leak in the hostile conditions of the Atlantic.
Now Mr Huhne, who will decide whether the well should go ahead, has told the green groups that his officials will consider any further representations about North Uist until the end of this month.
The Independent disclosed two weeks ago that BP’s own worst-case scenario for a spill from the well, to be drilled at 1,290 metres (4,230ft) below the surface, would involve oil leaking at 75,000 barrels a day for 140 days. That would constitute the worst oil spill in history and one more than twice the size of the Deepwater Horizon catastrophe in the Gulf of Mexico last year which brought the oil giant to the brink of collapse.
The well, in a seabed block named after the Hebridean island of North Uist but located 80 miles north-west of Shetland, is part of BP’s continuing attempt to open up the West of Shetland sea area, sometimes referred to as the “Atlantic Frontier”.
The concern of environmentalists is that a spill from a deepwater well in the extreme sea conditions in the area might be very difficult if not impossible to contain. In particular, they are worried about the Shetland islands, which BP says “may be affected” in the event of a spill – and where a million seabirds breed every summer.
BP says that a new well-capping device, developed under the auspices of the Oil Spill Response and Advisory Group is available, and can be used at depths of up to 10,000ft.
In his letter to the green groups, Mr Huhne says that the cap “would not be deployable in weather conditions where the sea state or swell exceeded five metres.”
However, he says: “It is unlikely that drilling would be conducted in such conditions.”
- BP Earnings Slip 3.7% on Lower Production (nytimes.com)
- Oil Update : BP to risk worst ever spill in Shetlands drilling, The Independent finds (environmentaleducationuk.wordpress.com)
- BP reveals oil disaster strategy (mirror.co.uk)
- BP reveals emergency spill plan (bbc.co.uk)
- Leading article: An alarming environmental risk (independent.co.uk)
- BP gets go-ahead to expand North Sea drilling (guardian.co.uk)
- Exclusive: BP to risk worst ever oil spill in Shetlands drilling (independent.co.uk)
- Chris Huhne attacks ‘curmudgeons and faultfinders’ who don’t like wind farms (telegraph.co.uk)
- Chris Huhne attacks renewable energy critics (guardian.co.uk)
The Big Fix raises concerns over Obama administration’s use of toxic chemical Corexit and BP’s leverage in the crisis. The Guardian reports
But then, the events of last year’s BP oil disaster have so far been largely revisited in books, not documentaries. Until now, when a newdocumentary about the Gulf of Mexico oil spill has its premiere at the New Orleans film festival.
The Bix Fix, by Josh and Rebecca Tickell, re-opens some of the most persistent questions about last year’s oil spill. How BP was able to exert so much control over the crisis as it unfolded? What were the long-term health consequences of using a toxic chemical, Corexit, to break up the oil and drive it underwater?
Rebecca Tickell herself had a serious reaction to the chemical after being out on the open water – and as it turned out so did the doctor she consulted in an Alabama beach town. She still has health problems.
“The most shocking thing to me was the disregard with which the people of the Gulf region were dealt,” Tickell said.
“Specifically I think that there was sort of a turn-a-blind-eye attitude towards the spraying of dispersants to clean up the spill. I don’t think anyone wanted to look too deeply at the consequences.”
- Rachel Weisz’s ordinary cop goes to extraordinary lengths (sfgate.com)
- BP, Anadarko settle Gulf disaster claims (sfgate.com)
- BP bounces 5% after $4bn settlement relating to Gulf of Mexico spilll (guardian.co.uk)
- BP agrees $4bn settlement with Anadarko over Gulf of Mexico spill (telegraph.co.uk)
- BP Recovers $4 Billion From Anadarko for Gulf Spill (nytimes.com)
- BP in $4bn Gulf spill settlement (bbc.co.uk)
- BP, Anadarko settle Gulf disaster claims (seattletimes.nwsource.com)
- Louisiana: Worst Shrimp Season in “Over 50 years” (friendseat.com)
- BP shares up amid £2.5bn oil spill deal (independent.co.uk)
From The Independent
Internal company documents seen by The Independent show that the worst-case scenario for a spill from its North Uist exploratory well, to be sunk next year, would involve a leak of 75,000 barrels a day for 140 days – a total of 10.5 million barrels of oil, comfortably the world’s biggest pollution disaster.
This would be more than double the amount of oil spilled from its Deepwater Horizon well in the Gulf of Mexico last year, which had a maximum leak rate of 62,000 barrels a day in an incident lasting 88 days – and triggered a social, economic and environmental catastrophe in the US which brought the giant multinational to the brink of collapse.
The North Uist well, in a seabed block named after the Hebridean island but located 80 miles north-west of Shetland, is part of BP’s ongoing attempts to open up the West of Shetland sea area, sometimes referred to as the “Atlantic Frontier”, as a rich new oil province to replace the dwindling productivity of the North Sea.
The project appeared to have been shelved by the former BP chief executive Tony Hayward last year in the aftermath of Deepwater Horizon and the barrage of criticism directed at the company for its safety record. But it is now going ahead, and the well will be drilled by a drilling ship, the Stena Caron, some time from January onwards, as long as it is given a licence by the Energy Secretary, Chris Huhne.
The company already has three West of Shetland wells producing oil, at depths from 140 to 500 metres (460 to 1,640ft). But North Uist, described by BP as “stepping out, in terms of depth”, will be nearly three times as deep, at 1,290m below the surface, in immensely testing conditions similar to those of its ill-fated Gulf well, which was located 1,500 metres down, and began its unprecedented “gusher” leak in April last year.
The difficulty of capping a gushing well at such depths, vividly illustrated by the three months it took for Deepwater Horizon to be staunched, is greatly concerning British environmentalists who point out that the waters which might be affected by a North Uist spill are among the most wildlife-rich in all the UK.
Seabirds including many rare species are found in enormous concentrations on Shetland, the nearest landmass to any spill, and in the surrounding waters, which also contain large numbers of whales, dolphins and seals, as well as substantial fish stocks.
A major destination for wildlife tourism, Shetland has already been badly affected by a previous oil spill, that of the tanker MV Braer, which ran aground on Shetland in January 1993. BP documents referring to the North Uist project themselves list more than 20 vulnerable Shetland nature sites, including eight Special Protection Areas, two Special Conservation Areas and 12 Sites of Special Scientific Interest, which involve the breeding grounds of otters and rare birds such as the great skua, the red-throated diver and Leach’s petrel.
“This project is so risky that even BP is quietly planning for the possibility of the world’s worst ever oil spill happening off Scotland’s precious coastline,” said John Sauven, executive director of Greenpeace UK.
“It would be utterly reckless for Chris Huhne to approve this plan as if the Deepwater Horizon disaster never happened.
“Instead of chasing the last drops of oil from one of our country’s most sensitive and important natural environments, ministers should be developing a comprehensive plan to get us off the oil hook.”
A spokesman for BP said that the company was legally obliged to model the worst-case scenario, “but the reality is, the chances of a spill are very unlikely”. Since Deepwater Horizon, he added, BP had invested “a huge amount of time and resources strengthening procedures, investing in additional safety equipment and further improving our oil spill response capability”.
In particular, a major new well-capping device, designed for use at depths of up to 10,000ft, has been constructed, tested and made available, and could quickly be deployed, and any leak from North Uist is likely to be at a much lower pressure than that in the Gulf.
“We are confident that the improvements that have been made provide the level of assurance necessary against the risks,” the BP spokesman said.
North Uist: The story so far
In the storm of criticism of its safety record that followed the Deepwater Horizon blow-out, BP blew hot and cold about drilling the North Uist well. After confirming that it would go ahead, in August 2010, the company faced more criticism that such a similar deep well was inappropriate in the aftermath of the disaster in the Gulf of Mexico. Tony Hayward, BP’s chiefexecutive at the time, hinted to the House of Commons Energy Select Committee in September 2010 that BP would hold its plans for deep water drilling off the Shetlands. He left the company shortly afterwards, and a final decision was taken to go ahead with North Uist, although more than a year later than originally intended.
BP has held a public consultation about the project, which ended last week. However, it was not widely advertised, had virtually no publicity, and a BP spokesman said there had been “no responses” from the public.
- The Gulf Oil Spill Help Center Urges Louisiana Fishing Camp Owners with Property Devalued by the BP Deepwater Horizon Oil Spill to Get Identified Now (prweb.com)
- BP reveals emergency spill plan (bbc.co.uk)
- Leading article: An alarming environmental risk (independent.co.uk)
- Wednesday Newspaper round-up. (brokermandaniel.com)
- USCG: Deepwater Horizon Is NOT Source Of Gulf Oil Sheen (gcaptain.com)
- Gulf Oil Spill Help Center Says It’s Vital Louisiana Fishing Camp Owners with Property Devalued by the BP Deepwater Horizon Oil Spill Get Identified Now (prweb.com)
- BP reveals oil disaster strategy (mirror.co.uk)
- Benbecula and then home (christinelaennec.co.uk)
- Study reveals how gas, temperature controlled bacterial response to Deepwater Horizon spill (physorg.com)
- Pollution Update : disaster fears as rescue tugs are ditched (environmentaleducationuk.wordpress.com)
- 10 largest oil spills in history (telegraph.co.uk)
- The News Matrix: Wednesday 12 October 2011 (independent.co.uk)
- Oil spill update : Exploration under Arctic ice could cause ‘uncontrollable’ natural disaster (environmentaleducationuk.wordpress.com)
- Oilspill Update : Company sets up 2nd spill fund (environmentaleducationuk.wordpress.com)
A calamity is waiting to happen….. Michael McCarthy reports
Any serious oil spill in the ice of the Arctic, the “new frontier” for oil exploration, is likely to be an uncontrollable environmental disaster despoiling vast areas of the world’s most untouched ecosystem, one of the world’s leading polar scientists has told The Independent.
Oil from an undersea leak will not only be very hard to deal with in Arctic conditions, it will interact with the surface sea ice and become absorbed in it, and will be transported by it for as much as 1,000 miles across the ocean, according to Peter Wadhams, Professor of ocean physics at the University of Cambridge.
The interaction, discovered in large-scale experiments 30 years ago, means that the Arctic oil rush, which was given a huge boost last week with a $3.2 billion (£1.9bn) investment from Exxon Mobil, is likely to be the riskiest form of oil exploration ever undertaken, said Professor Wadhams, who is a former director of Cambridge’s Scott Polar Research Institute.
“If there is serious oil spill under ice in the Arctic it will be very hard, if not impossible to stop it becoming an environmental catastrophe,” he said. “It will be very much harder to deal with than a major spill in open water.”
The world’s oil companies are now turning to the Far North as supplies elsewhere across the globe start to run out or become harder to extract, and both the potential profits from Arctic oil, and the fears about the damage that extracting it may do, are enormous.
The area north of the Arctic Circle is thought to contain as much as 160 billion barrels of oil, more than a quarter of the world’s undiscovered reserves. Some of it is under land, as in Alaska’s North Slope field, but large amounts of it are known to lie under the seabeds of the Arctic Ocean and Baffin Bay off Greenland, which are ice-covered for all or part of the year, depending on the region.
It is this offshore oil which is now the focus of a new exploration rush, with Royal Dutch Shell and Exxon among the strongest contenders, focusing on the Arctic Ocean itself, while the first wells in the sea off Greenland are already being drilled by Edinburgh-based Cairn Energy.
However, many observers are seriously alarmed about the spill risks in the extreme conditions, especially in the wake of BP’s calamitous leak at the Deepwater Horizon platform in the Gulf of Mexico last year, which could not be controlled for three months, released as much as five million barrels of crude, and came close to wrecking the company.
“A spill in the Arctic would essentially make dealing with something like Deepwater Horizon look almost straightforward,” said Ben Ayliffe, polar campaigner for Greenpeace.
“There are problems with ice encroachment, the remoteness of the Arctic, darkness, extreme weather, deep water, high seas, freezing conditions and icebergs. Basically it would mean that responding to a Gulf of Mexico-style spill off somewhere like Greenland would be impossible.”
Yet Professor Wadhams, who was the first civilian scientist to travel under the Arctic ice in a submarine, in 1971, and who has made five more under-ice trips, is spotlighting an even greater level of concern with his knowledge of how oil and ice interact – with potentially calamitous consequences.
It stems from large-scale experiments he took part in off the coast of Canada in the 1970s, in which substantial quantities of oil were deliberately released into the frozen sea, to see how it behaved. “What we found, and one of the great difficulties, is that spilled oil becomes encapsulated in the ice and is then transported around the Arctic by it,” he said.
“The oil is caught underneath the ice, so you can’t get at immediately to clean it up or burn it off. You don’t know exactly where it is, and then it gets encapsulated in the new ice which grows underneath, so you then have a kind of oil sandwich inside the pack ice.
“And that’s being transported around the Arctic and isn’t released until spring, when it may be several hundred or even a thousand miles from the source of the spill, so you can have a huge area of the Arctic becoming polluted by oil without initially it being clear where that oil is.”
He added: “Once it is released in springtime, it’s very toxic, because the encapsulation in the ice preserves the oil from weathering, so that instead of the lighter fraction evaporating and the heavier fraction becoming just tar balls, you have fresh oil being released exactly where the ice is melting, usually round the edge of the pack ice where you’ve got a lot of migratory birds.
“Not great for the environment. In fact, I think the appropriate word would be ‘terrible’.”
Professor Wadhams is so concerned that he is helping to organise a high-level scientific workshop on the subject of oil spills in sea ice, in Italy later this month.
While companies such as Cairn Energy stress that they will be drilling exploratory wells only in the summer months, in areas of sea which are ice-free, it is likely that once oil production actually begins, it will be a year-round business and continue through the winter when production facilities are ice-bound. “We would need to produce all year round, in order to make the whole thing worthwhile,” a spokesman for Shell said at the weekend.
The oil companies insist that they are aware of the risks and have prepared detailed oil spill response plans, but Professor Wadhams, who has read several of them, said they did not amount to comprehensive plans for dealing with oil in ice.
* Professor Peter Wadhams, of Cambridge University, is an oceanographer and glaciologist and one of the world’s leading experts on polar ice. He is celebrated for submarine voyages beneath it.
His concern about how sea ice will interact with oil from a spill as the Arctic is opened up for drilling is so great that he has helped to convene an international high-level academic seminar to discuss Oil Spills in Sea Ice – and Future at Italy’s Polar Geographical Institute in Fermo, Italy, from 20-23 September.
- Unlocked by melting ice-caps, the great polar oil rush has begun (independent.co.uk)
- Arctic oil spill plan condemned (independent.co.uk)
- Arctic oil spill response plans are triumphs of hope over expectation | Damian Carrington (guardian.co.uk)
- Arctic Riches Lure Explorers – Exxon, Rosneft, Shell Set to Pour Billions Into Potentially Huge, Risky Prospects (gcaptain.com)
- Arctic Riches Lure Explorers – Exxon, Rosneft, Shell Set to Pour Billions Into Potentially Huge, Risky Prospects (uwtreasures.wordpress.com)
- Leading article: The case for a moratorium on oil drilling in the arctic is overwhelming (independent.co.uk)
- New Videos Prove That All Is Not Well At Fukushima … Or The BP Oil Spill Site (destructionist.wordpress.com)
- Oil update: Shell given go-ahead to drill off Alaska (environmentaleducationuk.wordpress.com)
- UK’s first Amundsen exhibition celebrates extraordinary explorer (uwtreasures.wordpress.com)
- Exxon Mobil Teams Up With Russian Oil Company, Gains Access To Arctic Drilling Rights (inquisitr.com)
- Exxon Mobil to Learn: In Soviet Russia, Oil Explores You! (blogs.wsj.com)
- Pipe dreams (bbc.co.uk)
- Rosneft and Exxon Mobil sign deal to explore Arctic for oil (telegraph.co.uk)