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Energy Judge hears claims BP lied to feds about oil spill

Judge hears claims BP lied to feds about oil spill

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Robert Francis
Robert is a Fort Worth native and longtime editor of the Fort Worth Business Press. He is a former president of the local Society of Professional Journalists and was a freelancer for a variety of newspapers, weeklies and magazines, including American Way, BrandWeek and InformatonWeek. A graduate of TCU, Robert has held a variety of writing and editing positions at publications such as the Grand Prairie Daily News and InfoWorld. He is also a musician and playwright.

MICHAEL KUNZELMAN, Associated Press

NEW ORLEANS (AP) — The focus of a trial over BP’s massive 2010 oil spill has shifted from the causes of the deadly disaster to the company’s struggle to plug its blown-out well while millions of gallons of crude gushed into the Gulf of Mexico for nearly three months.

The trial’s second phase opened Monday with claims that BP could have capped the well much sooner if it hadn’t ignored decades of warnings about the risks of a deep-water blowout or withheld crucial information about the size of the spill from federal officials.

BP attorney Mike Brock denied those allegations and said the company’s efforts to stop the flow of oil were guided by an overriding principle: “Don’t make it worse.”

“It was what the government instructed us to do,” Brock told U.S. District Judge Carl Barbier.

The April 20, 2010, blowout triggered an explosion that killed 11 workers on the Deepwater Horizon drilling rig and spawned the nation’s worst offshore oil spill. BP used a capping stack to seal the well July 15 after other methods failed.

Brian Barr, an attorney for residents and businesses who claim they were hurt by the spill, said BP treated the Gulf like its own “private laboratory” as its engineers tried in vain to stop the flow of oil. BP had a 600-page oil spill response plan that only included one page on “source control,” but it simply called for assembling a team of experts to devise a way to stop a blowout, Barr said.

“BP’s plan was nothing more than a plan to plan,” he said.

The trial’s first phase, which lasted eight weeks before ending in April, included testimony from high-ranking company officials and rig workers who survived the explosion. It focused on the complex chain of mistakes and failures that caused the blowout.

The second phase is divided into two segments: The first, scheduled to last four days, centers on BP’s efforts to cap the well. The second, expected to last three weeks, is designed to help Barbier determine how much oil spilled into the Gulf.

The government’s estimate is some 70 million gallons more than what BP says spilled. Establishing how much oil leaked into the Gulf will help figure out the penalties the oil company must pay. Billions of dollars are at stake.

In May 2010, BP tried in vain to use the “top kill” method to stop the flow of oil by pumping mud and other material into the blowout preventer. Plaintiffs’ lawyers claim BP knew the strategy was doomed to fail based on higher flow rate estimates that the company didn’t share with federal officials at the time.

“Nevertheless, BP pressed ahead and falsely claimed that it was a slam dunk,” said Brad Brian, an attorney for rig owner Transocean.

A week after the spill started, high-ranking BP official Doug Suttles told Coast Guard Rear Adm. Mary Landry that the company estimated oil was flowing at a rate of 1,000 to 5,000 barrels per day. But the company’s adversaries at the trial say BP’s own internal documents and emails show an effort to conceal much higher estimates.

“BP’s policy of not releasing the flow rate information was enforced at the highest levels of the company,” Brian said, pointing to an email that a BP employee sent to BP Exploration and Production CEO Andy Inglis and his assistant on May 15.

The employee, Mike Mason, warned them that they should be “very cautious” standing behind the lower estimate because his team’s models showed estimates that were up to 20 times higher.

Mason said he was called in for a meeting the following day with Inglis’ assistant, who suggested he should not have put his warning in writing. When Mason asked what the problem was, the assistant replied, “It’s the big number,” Mason recalled in videotaped testimony that was shown in court Monday.

The top kill was among several methods that didn’t work. Other attempts, such as the Cofferdam and the “top hat,” also failed. The terms were obscure industry jargon before the spill but became buzzwords as the company scrambled to find a way to plug the well.

Under the Clean Water Act, a polluter can be forced to pay a maximum of either $1,100 or $4,300 per barrel of spilled oil. The higher maximum applies if the company is found grossly negligent, as the government argues BP should be. But the penalties can be assessed at amounts lower than those caps. Congress passed a law dictating that 80 percent of the Clean Water Act penalties paid by BP must be divided among the Gulf states.

The Justice Department’s experts estimate 4.2 million barrels, or 176 million gallons, spilled into the Gulf. BP has urged Judge Barbier to use an estimate of 2.45 million barrels, or nearly 103 million gallons, in calculating any Clean Water Act fines. Both sides agree that 810,000 barrels, or 34 million gallons, was captured before it could pollute the Gulf.

Using the government’s figures, a maximum penalty if the company is found negligent could total $18 billion. Using the company’s figures, that maximum penalty would be around $10.5 billion.

In late July, BP reported a second quarter net profit of $2 billion as lower oil prices, higher taxes and a drop in income from its operations in Russia took their toll on the company. The company has already set aside more than $42 billion for the oil spill, including damage claims from residents and businesses.

 

 


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