Interview: The Way Forward after Deepwater Horizon Spill
- Business & Finance
January 20th marked the beginning of the third phase of the multiyear trial before the New Orleans District Court to determine how much BP and other responsible parties should pay for their role in the BP Deepwater Horizon oil disaster in the Gulf of Mexico.
As the end of legal saga on one of the worst environmental disasters closes in numerous questions remain especially with respect to the future Gulf restoration activities and repairing of the inflicted damage to both the coastal communities and the environment.
Ocean Conservancy’ Gulf Restoration Program is working with Gulf leaders, scientists, conservationists, natural resource managers and local residents to achieve comprehensive coastal and marine restoration for the Gulf of Mexico and the communities that depend on it.
WMN: When can we expect the final decision by New Orleans District Court to be made?
Lankford: “The trial is scheduled to end Feb 5, and then the parties will file briefs with the court until late April. There is no established timeline for when the judge will issue a ruling, and there is always the possibility that the parties could agree on a settlement.”
WMN: What are your projections on the final amount of the penalty to BP and what would be the proper amount?
Lankford: “Judge Barbier ruled this month that 3.19 million barrels of oil were released into the Gulf in 2010 Deepwater Horizon oil spill (he essentially split the difference between the governments’ estimate and BP’s estimate).
This means that the maximum fine BP will face is USD 13.7 billion. This final phase of the trial will focus on eight factors, as required by the Clean Water Act, including BP’s history of prior violations and the seriousness of this violation. These penalty factors will be hotly debated during the trial, and arguments will help determine whether the judge leans toward the high end of USD 13.7 billion or the low end of USD 5 or 6 billion.”
The eight factors are:
- the seriousness of the violations,
- the economic benefit to the violator, if any, resulting from the violation,
- the degree of culpability involved,
- any other penalty for the same incident,
- any history of prior violations,
- the nature, extent, and degree of success of any efforts of the violator to minimize or mitigate the effects of the discharge,
- the economic impact of the penalty on the violator, and
- any other matters as justice may require
WMN: What will be the key deciding factors based on which the court will determine the amount of the penalty?
Lankford: “A key factor to keep in mind will be BP’s efforts to minimize the harm. In other words, did BP do enough good in responding to the disaster that their fine should be lowered to give them credit for those response activities?
Yes, BP took efforts to stop the flow from the well and the spread of oil, but BP also lied about the rate at which oil was spewing from the well.
Factor #7, the economic impact of the penalty on BP, will be interesting to watch as well. The court will need to determine whether this inquiry focuses on BP (the parent company) as a whole or only on its subsidiary, BP Exploration & Production, known as BPXP. Also, BP is expected to argue that the recent dip in oil prices should be factored into this inquiry.
Factor #3 plays to the issue of simple vs. gross negligence. That question was answered back in September when the court ruled that the oil disaster was the result of BP’s “gross negligence” and “willful misconduct,” terms used in the Clean Water Act.
Though it sounds like legalese, this ruling is extremely important; it means more funding will be available for restoring the Gulf. Funding for restoration projects via the RESTORE Act comes from Clean Water Act fines. And the finding of “gross negligence,” rather than ordinary negligence, means that fines can be as high as USD 4,300 per barrel of oil spilled, instead of USD 1,100.”
WMN: Can we expect more compensation claims?
Lankford: “The next big claim to watch for is the natural resource damages assessment (NRDA) under the Oil Pollution Act. BP has a legal obligation to fund the complete restoration of natural resources injured by the oil disaster. NRDA claims are usually resolved via a settlement. A trial is unlikely, but not out of the question. The federal and state NRDA Trustees are conducting studies to identify the extent of injuries to natural resources, the best methods for restoring those resources, and the type and amount of restoration required. The Trustees will present a claim to BP once the assessment is complete, though it is unknown when that will be.”
WMN: How will the fine be distributed, who will be the greatest beneficiaries?
Lankford: “The greatest beneficiaries will be the people of the Gulf and the Gulf ecosystems they depend on. Twenty percent of the fines will go to the Oil Spill Liability Trust Fund per the Clean Water Act.
Normally, all the fines would be deposited into the Trust Fund. However, in 2012, Congress passed the RESTORE Act which created the Gulf Coast Restoration Trust Fund. This fund will receive 80 percent of the penalties paid by BP and other companies responsible for the BP oil disaster. This Trust Fund will support ecological and economic restoration activities throughout the Gulf region.”
WMN: What will be the Ocean Conservancy’s first steps once the ruling is reached?
Lankford: “Ocean Conservancy will breathe a sigh of relief knowing that we are one critical step closer to a healthier future for the Gulf. Regardless of how this trial ends, a successful resolution must include funding to monitor the Gulf ecosystem over the course of 25 years or more, restoration that includes the offshore environment where the oil disaster began, and a transparent decision-making process that allows the public to participate in restoration in a meaningful way.”
WMN: What have been the findings of scientific studies done so far? What crucial studies are needed to move forward?
Lankford: “Ocean Conservancy has been tracking impacts from the BP oil disaster for almost 5 years now. Of course, we can only track the data that is publicly available and not related to the natural resource damage assessment (NRDA). NRDA data is tied up in the litigation process as it is evidence for the U.S. government against BP.
In the years since the disaster, scientists have continued to see impacts ranging from sick dolphins and dying corals to altered bluefin tuna spawning habitat and shifts in whale shark abundance and distribution.
There are several studies that point to the direct impact the BP Oil disaster has had on the Gulf and its wildlife:
- Scientists estimate that between 600,000 and 800,000 coastal seabirds died because of the BP Deepwater Horizon oil disaster, a number far greater than any previous estimate. Understanding the ripple effect of 800,000 coastal birds dying in the Gulf of Mexico is critical to the recovery of this special place. These findings come from a study released in Marine Ecology Progress Series (see impacts table for citation).
- A NOAA-commissioned study of 32 dolphins living in Barataria Bay, Louisiana – an area of the Gulf heavily oiled by the BP oil disaster – determined that dolphins had severely reduced health. The animals showed multiple signs of poor health, including tooth loss, lung disease, reduced hormone levels and low body weight. These symptoms were not seen in dolphins at an unoiled comparison site or in previous dolphin health assessments unrelated to this study.
WMN: What are the key challenges in restoring marine and coastal environments?
Lankford: “The biggest challenge we face in the restoration process is making the individual projects add up to more than just the sum of their parts. Taking an ecosystem-wide approach is key to successful restoration. Restoration must be comprehensive–from the rivers that feed the estuaries, to the deepest expanses of the seafloor where the BP oil disaster began, to the communities that call the Gulf Coast home. We must make smart and immediate investments that address pressing needs in the Gulf, as well as foundational projects that support ongoing and future restoration efforts.”
WMN: What have been the costs so far and how much more funding will it be necessary to finance the restoration?
Lankford: “The restoration process is in its infancy. Some monies are available in the Gulf Coast Restoration Trust Fund at this time. Transocean settled its civil liability in 2013 for $1 billion, and 80 percent of that ($800 million) was deposited into the Fund. However, the largest portion of restoration dollars will come from the BP trial which will determine the Clean Water Act fines BP must pay.”
“To answer your second question, it’s not possible to know how much money is needed for restoration until we know the full extent of the injury.”
WMN: How long will it take for the restoration program to be carried out?
Lankford: “This is a difficult question to answer since we don’t yet know the full extent of the injury. We can look to past oil spills such as Exxon Valdez and try to glean information. We know that 26 years after the Exxon Valdez spill, there are still species that have not yet recovered such as Pacific herring and orca whales.”
WMN: Would you say that four years after the spill Deepwater Horizon is old news?
Lankford: “The BP oil disaster may not be on the national radar as much as it was four (almost five) years ago; however, in the minds of Gulf residents it is never forgotten. We are reminded of this disaster when a storm washes tar balls on the beach, or when scientific studies are released that point to injury of the ecosystem, or when BP’s commercials roll across the TV screen telling us all is well. While the issue might not be a nightly headline around the nation, the injuries are still fresh and we still have a long way to go.”
WMN: What can be done to prevent similar spillages from happening again?
Lankford: “Deepwater drilling is risky and requires extensive safety precautions—precautions that were not taken seriously by BP. If BP had taken these risks seriously, they never would have done things like list the Arctic-dwelling walrus as a species of concern in their Gulf oil spill planning and response documents, or included the names of people long passed away as their response experts in the Gulf. Their arrogance and disregard for the people and natural resources of the Gulf led to this disaster. Experts have made numerous recommendations for improvements to planning and response systems. For example, a bipartisan presidential commission issued a report in 2011 recommending major improvements for planning, prevention and response. “
World Maritime News Staff; Image Credit: NOAA, B. Goliwas; Texas Marine Mammal Stranding Network