Responsibility for the Spill

The genie is out of the bottle.  The oil has started to come ashore.  The damage will be horrific, and the cost, staggering.  While this may seem like I’m pointing fingers and placing blame, that doesn’t matter.  I don’t give a damn whose fault it is.  What is important is assigning responsibility for the costs involves, because unless we do, and demand that the responsible parties pal all costs, direct and indirect, we taxpayers will be saddled with them.

For this first article, I’d like to thank my Facebook friend Diane, who emailed it to me.

BP, the global oil giant responsible for the fast-spreading spill in the Gulf of Mexico that will soon make landfall, is no stranger to major accidents.

In fact, the company has found itself at the center of several of the nation’s worst oil and gas–related disasters in the last five years.

In March 2005, a massive explosion ripped through a tower at BP’s refinery in Texas City, Texas, killing 15 workers and injuring 170 others. Investigators later determined that the company had ignored its own protocols on operating the tower, which was filled with gasoline, and that a warning system had been disabled.

Are you a Gulf Coast resident? Do you have direct experience as a laborer, consultant, or contractor on offshore oil rigs? Or insight into how safety and emergency response decisions are made and implemented? Write reporter Abrahm Lustgarten (if needed, you can speak anonymously).

The company pleaded guilty to federal felony charges and was fined more than $50 million by the U.S. Environmental Protection Agency.

Almost a year after the refinery explosion, technicians discovered that some 4,800 barrels of oil had spread into the Alaskan snow through a tiny hole in the company’s pipeline in Prudhoe Bay. BP had been warned [1] to check the pipeline in 2002, but hadn’t, according to a report in Fortune. When it did inspect it, four years later, it found that a six-mile length of pipeline was corroded. The company temporarily shut down its operations in Prudhoe Bay, causing one of the largest disruptions in U.S. oil supply in recent history.

BP faced $12 million in fines for a misdemeanor violation of the federal Water Pollution Control Act. A congressional committee determined that BP had ignored opportunities to prevent the spill and that "draconian" cost-saving measures had led to shortcuts in its operation.

Other problems followed. There were more spills in Alaska. And BP was charged with manipulating the market price of propane. In that case, it settled with the U.S. Department of Justice and agreed to pay more than $300 million in fines.

At each step along the way, the company’s executives were contrite.

"This was a preventable incident. … It should be seen as a process failure, a cultural failure and a management failure," John Mogford, then BP’s senior group vice president for safety and operations, said in an April 2006 speech about the lessons learned in Texas City. "It’s not an easy story to tell. BP doesn’t come out of it well."

In a 2006 interview with this reporter after the Prudhoe Bay spill, published in Fortune [2], BP’s chief executive of American operations, Robert Malone, said, "There is no doubt in my mind, what happened may not have broken the law, but it broke our values."

Malone insisted at the time that there was no pattern of mismanagement that increased environmental risk.

"I cannot draw a systemic problem in BP America," he said. "What I’ve seen is refineries and facilities and plants that are operating to the highest level of safety and integrity standards."

Nonetheless, Malone, who spent three decades at BP and was promoted to the CEO of BP America shortly after the Texas refinery blast, promised to increase scrutiny over BP’s operations and invest in environmental and safety measures.

He told Congress that it was imperative BP management learn from its mistakes.

"The public’s faith has been tested recently," he said. "We have fallen short of the high standards we hold for ourselves and the expectations that others have for us."

Time will tell whether the accident that killed 11 workers and sent the Transocean Deepwater Horizon drilling rig — a $500 million platform as wide as a football field — floating to the bottom of the Gulf of Mexico was simply an accident or something else.

Malone, who retired last year, declined to comment for this article. A spokesman for BP was not available for comment.

Families of workers who died in the accident have already filed lawsuits accusing BP of negligence. Congress, as well as the Minerals and Management Service, the federal agency that regulates drilling in the Gulf, were already separately investigating allegations that BP has failed to keep proper documents about how to perform an emergency shutdown [3] of the Atlantis, another Gulf oil platform and one of the largest in the world.

There are also indications that BP and Transocean, the owner of the Deepwater Horizon rig that burned and sank, could have used backup safety gear [4] — a remote acoustic switch that would stanch the flow of oil from a leaking well 5,000 feet underwater — to prevent the massive spill now floating like a slow-motion train wreck toward the Mississippi and Louisiana coastline. The switch isn’t required under U.S. law, but is well-known in the industry and mandated in other parts of the world where BP operates…

Inserted from <Propublica.org>

It’s quite clear that BP has a long track record of maximizing profit while ignoring worker and environmental safety.  The remote acoustic switch that could have prevented this was not used because it costs $500,000, a paltry sum considering the billions they take in.

Another measure of corporate citizenship is it’s choice of subcontractors.  In choosing a subcontractor with a long history of fraud and substandard work would be damning indeed, but that is exactly what they did.

An inadequate underwater cement job during the deepwater drilling process is emerging as a potential cause for the devastating oil spill off the Louisiana coast in the Gulf of Mexico.

Officials haven’t said what they think caused the April 20 explosion that led to the sinking two days later of the Deepwater Horizon drilling rig, owned by Transocean Ltd. But industry speculation points to a process where cement is used to seal cracks in the ocean floor surrounding the tubing through which crude oil flows.

Transocean operated the drilling rig under contract for British oil giant BP Plc., the largest oil producer in the U.S. portion of the gulf and a company with a spotty safety history. Transocean has said the global construction titan Halliburton had just completed "cementing" the 18,000-foot-long well around the time of the explosion.

In a statement Friday, Halliburton confirmed that it was the "cementer" hired for the job and said it had completed its job about 20 hours prior to the explosion.

"The cement slurry design was consistent with that utilized in other similar applications," the company said. It said all procedures had been "in accordance with accepted industry practice approved by our customers."… [emphasis added]

Inserted from <McClatchy DC>

No wonder the Bush Regime gutted drilling regulation.  Cheney was raking it in.

Now, when I refer to BP, I am also including Transocean, Halliburton, and other relevant subcontractors.  They must pay for this, ALL of this.

Some of the costs are quite obvious, namely the costs of attempting to contain the spill and repairing environmental damage.  BP must pay for all.  It must include restoring all the damaged ecosystems to their original undamaged state, not just the cosmetics.

There are other costs that are not so obvious.  Businesses that make their living from tourism, fishing and other Gulf uses will lose their livelihood.  Their employees will have no work.  BP must pay their lost profits and lost wages.

Other businesses who supply directly affected businesses and their workers will suffer in the same way.  BP must pay their lost profits and wages as well., throughout the entire supply chain.

Local, State and Federal governments will lose taxes and fees.  BP must pay for that.

Property values of local residents will decrease.  BP must pay the lost value.

Goods such as shrimp will become more scarce, driving up the costs for consumers.  BP must pay the difference.

Whatever I have missed, BP must pay for that too.

The day slaps on the wrist for corporate criminals must end.  The only way to make corporations take the steps to do business in a responsible manner is to hold them responsible.  If taxpayers bear most of these costs, as we have in the past, there is no incentive for corporations to change their ways.  Only having to pay the full devastating price of the damage they have caused will do that.