Tag Archives: british petroleum

British Petroleum fined a record $20.8 billion for oil spill

In a monumental decision, British Petroleum (BP) was fined $20.8 billion for the 2010 oil spill in the Gulf of Mexico; this upgrades the initial deal from the $18.7 that were previously discussed and represents the largest corporate settlement in US history. This money is additional to the reported $28 billion spent on cleanup and compensation.

The oil spill, as seen by NASA's satellites.

The oil spill, as seen by NASA’s satellites. Image via Wikipedia

“The historic civil penalty also sends a clear message of accountability for those who pollute the U.S. environment,” said Adm. Paul Zukunft, the U.S. Coast Guard commandant.

Out of that sum:

  • $8.1 billion for natural resources damage claims, under the Oil Pollution Act. This includes additional money spent on cleaning and monitoring the area
  • $4.9 billion will go to the five Gulf states to compensate for economic damage
  • $1 billion will go to local governments to compensate for economic damage
  • $1.1 B will be managed by the U.S. Coast Guard for response and emergency response efforts
  • $4.4 B will go to the Gulf Coast Restoration Trust Fund in the U.S. Treasury Department

The Justice Department settlement includes $700 million saved for natural problems that might appear in the future – it was recently reported that a tar mat appeared in March in the area, and the oil was matched to the one from BP.

Paying a fine this big, you’d expect a company to be ruined (not to mention the image prejudice BP suffers), but it looks like the London giant will just shake it off. Their revenue was US$ 358.7 billion, while their reported profit is $4 billion. Furthermore, this money won’t all be given up front at once, but will be spread out over multiple years, so they have a pretty good chance of just shrugging it off year after year. But let’s not trivialize this – this is a monumental decision, and we should take our victories where we can get them. Will it hurt BP? Yes, obviously. Is the fine high enough? That’s debatable; does it cover the damage it did? Again, debatable, but probably not. But this decision sets a precedent – one that should have been made years before.

A pelican affected by the oil spill. Image via Wikipedia.

The Deepwater Horizon disaster is widely considered to be the worst oil spill in US history; it killed 11 workers, set the entire rig on fire and started a massive spill which took 87 days to stop. The US Government estimated the total discharge at 4.9 million barrels (210 million US gal; 780,000 cubic meters). The spill area hosts 8,332 species and numerous studies have tried to quantify the environmental damage, which was gargantuan.

25,000 Mexican Fisherman Sue BP Over Environmental Disaster

Five years after the British Petroleum catastrophe in the Gulf of Mexico, Mexican fishermen have still not received any compensation, so they’ve decided to sue the oil giant.

Image via BNet.

The Deepwater Horizon oil spill began on 20 April 2010 in the Gulf of Mexico. Eleven people were never found, and this is at the moment considered the largest accidental marine oil spill in the history of the petroleum industry, with an estimated 4.9 million oil barrels spilled in the ocean.

The company has initially been given a $17.6 billion fine, but that doesn’t include the compensation they have to pay. In particular, thousands of Mexican fishermen found themselves without a job overnight, and they still haven’t received a penny from BP, which is why they’re suing the company. Ironically, US fishermen have received compensation, but not to the Mexicans – which speaks a lot about how the company is dealing with the situation.

To make things even fishier, despite the fact that the US government has sued BP for compensation for the states of Washington, Alabama, Florida, Louisiana, Mississippi and Texas, conservative Mexican President Felipe Calderon refused to file a lawsuit against BP. Two years later, the Mexican national oil company Pemex signed an agreement to collaborate with the British company, something which sparked outrage across much of the Mexican population.

It’s the first time that BP has been sued by someone outside the US. The disaster caused by the company will haunt us for many years, but the very least they can do is ensure compensation for those who were affected. For a company that makes profits around $2 million an hour, that should be easily feasible.

Here’s a video that takes a look at the damage caused by the disaster:

BP’s fine for the Deepwater Horizon oil spill will be lower than expected

A federal judge decided this week that British Petroleum will pay a maximum of $13.7 billion for its 2010 Gulf of Mexico oil spill, saying that the oil spill was not as extensive as United States officials claimed. The sum is several billions lower than all parties involved were expecting – except for BP, of course.

An oiled Brown Pelican near Grande Isle, Louisiana. Image via Wiki Commons.

In September 2014, a federal judge has called major oil company BP (British Petroleum) “reckless”, and Transocean and Halliburton “negligent” following the major oil spill of 2010. The US District Judge Carl Barbier has ruled that BP’s “gross negligence” was responsible for the 11 lives which were lost and the 4.9 million barrels (210 million US gal; 780,000 cubic meters). The spill area hosts 8,332 species, and several peer reviewed studies and governmental reports have shown that the environmental damage (both in short and the long run) is inestimable.

Oil from the Deepwater Horizon oil spill approaches the coast of Mobile, Ala., May 6, 2010. Image via Wiki Commons.

The legal terms here revolve around negligence: under a “gross negligence” ruling Barbier issued in September, BP could be fined a statutory limit of up to $4,300 for each barrel spilled. However, a simple “negligence” ruling, which BP sought, caps the maximum fine at $1,100 per barrel – about 4 times lower.

Striped dolphins (Stenella coeruleoalba) observed in emulsified oil on April 29, 2010. Image via Wiki Commons.

The fine might seem huge – and it is, in a way. The maximum sum is $13.7 billion… which goes without saying, is a lot of money. But when you put it into perspective, things change significantly. BP’s annual profit was almost $24 billion in 2013, and shows no reason of dropping from the $20 billion ballpark in the future. So for the 4.9 million barrels of oil which killed countless animals and caused an unprecedented environmental disaster, the company will have to pay about half of its annual profits. Doesn’t seem so much now, does it ?

Even after the Clean Water Act fines are set, BP may face other bills from a lengthy Natural Resources Damage Assessment — which could require BP to carry out or fund environmental restoration work in the Gulf — as well as other claims.

Oil skimming vessels (distance) in the Gulf of Mexico. Image via Wiki Commons.

So far, 810,000 barrels were collected during the clean-up, and even the imperfect cleaning efforts have cost BP more than the fine. As a matter of fact, without the fines, the Deepwater Horizon oil spill has cost BP some $42 billion already – not counting the negative publicity.

 

 

Oil Company will build the longest vessel ever

Well despite what you may think, the oil industry is doing better than ever. With a length of 468 meters, this giant will be exploiting the Prelude gas field, about 500 km away from Australia, relying on a Floating Liquefied Natural Gas (FLNG) plant. However, the vessel will be too far away from land to be connected to a pipeline, so Shell wants to use a liquid natural gas plant right on the ship.

“In simple terms, the facility can be compared to an island with a liquid natural gas plant on it,” says Shell’s Neil Gilmour.

Still, the second largest ship is only 10 meters shorter, but it will weigh so much more, and displace 600,000 tonnes of water. Mark Lambert of the Royal Institution of Naval Architects in London says the job will be quite a challenge, but he has faith in the project.

“It’s feasible,” he says, “but they will have to be very careful about how it flexes along its length if fatigue cracking is to be avoided.”

Picture from NewScientist

British Petroleum Abandons Green Plans, Goes Back to Carbon

british petroleumI had every bit of admiration for BP when they announced they were going towards some greener alternative, although this meant cutting back on some profits. Under the leadership of former CEO Lord Browne, British Petroleum had made steps to move its business model beyond only petroleum and into newer and greener energy sources.

But the oil price is at it’s highest and it probably won’t go down, so the new CEO Tony Hayward has decided to go back to their corporate money making non-green roots. The thing is that this is just a small move in a masterplan created by Hayward, which includes 14,500 jobs cut and nearly $1 billion trimmed from overhead costs. He decided that high prices are here to stay, and the company had to make money from this.

His plans have angered both environmental groups and former CEO Lord Browne, who calls these actions a “climate crime”. But the current CEO has made it crystal clear that unprofitable energy sources, no matter how green or popular, will not find their way to BP. But this could be a long term disaster for them, because the company could find itself totally unadapted to the needs the world will have years from now. Some BP staff are even thought to disagree with Hayward’s decisions, because they claim there is going to be a great price paid for all the emissions.

One can only wonder where is Steven Seagal, or some other guy who bullies corporations by himself… meanwhile, we can just watch how these companies laugh at the environment, and pretty much at us too. I feel sorry I felt admiration for them.