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2014-09-05

Profit over Safety: BP Faces Billions in Fines for "Grossly Negligent" Role in 2010 Gulf Oil Spill

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A federal judge has ruled that BP was "grossly negligent" and "reckless" in the lead-up to the 2010 Deepwater Horizon explosion that killed 11 workers and caused more than 200 million gallons of oil to flood into the Gulf of Mexico. BP could face up to $18 billion in extra fines following the ruling. The ruling also found BP subcontractors Transocean and Halliburton "negligent" in the accident. BP says it will immediately appeal. In a statement on its website, BP wrote: "BP strongly disagrees with the decision? … The law is clear that proving gross negligence is a very high bar that was not met in this case. BP believes that an impartial view of the record does not support the erroneous conclusion reached by the District Court." We discuss the court ruling with Antonia Juhasz, an oil and energy analyst who has reported on the Gulf oil spill from its outset. She is the author of "Black Tide: The Devastating Impact of the Gulf Oil Spill."

Transcript

This is a rush transcript. Copy may not be in its final form.

JUAN GONZÁLEZ: A federal judge ruled Thursday that BP was, quote, "grossly negligent" and "reckless" in the lead-up to the 2010 Deepwater Horizon explosion that killed 11 workers and caused more than 200 million gallons of oil to flood into the Gulf of Mexico. BP could face up to $18 billion in extra fines following the ruling. The company has already paid out $28 billion in claims for oil spill costs. Attorney General Eric Holder applauded the ruling.

ATTORNEY GENERAL ERIC HOLDER: We are pleased that the district court in New Orleans has found that the largest oil spill in United States history was caused by BP’s gross negligence and willful misconduct. The court’s findings will ensure that the company is held fully accountable for its recklessness. This case, which was vigorously pursued by the United States’s, I think, stellar legal team, marks another significant step forward in the Justice Department’s continuing efforts to seek justice on behalf of the American people for this disaster. And we are confident that this decision will serve as a strong deterrent to anyone who is tempted to sacrifice safety and the environment in the pursuit of profit.

JUAN GONZÁLEZ: New Orleans U.S. District Judge Carl Barbier also found BP subcontractors Transocean and Halliburton "negligent" in the accident. Earlier this week, the contracting giant Halliburton reached a $1.1 billion settlement with the plaintiffs, resolving almost all of the company’s financial exposure.

AMY GOODMAN: BP declined our request for an interview. In a statement on its website, it wrote, quote, "BP strongly disagrees with the decision ... The law is clear that proving gross negligence is a very high bar that was not met in this case. BP believes that an impartial view of the record does not support the erroneous conclusion reached by the District Court."

Well, we’re joined now by Antonia Juhasz, author of Black Tide: The Devastating Impact of the Gulf Oil Spill.

Antonia, welcome back to Democracy Now! Talk about the significance of this ruling.

ANTONIA JUHASZ: Thanks so much for having me. Good morning. It’s an incredibly important ruling. As you said in the introduction, I think the most important piece is that Judge Barbier found BP, Transocean and Halliburton guilty and negligent for the events that led to the largest offshore oil spill in world history. These are the largest offshore operators in the world, certainly in the United States. The fact that they behaved negligently is very worrisome for offshore oil development, in general. But then we square in on BP, because BP, as the leaseholder and the operator, is ultimately responsible for these series of events that led to the disaster. And in the case of BP, Judge Barbier said over and over again that BP essentially chose profit over safety, chose profit over securing its responsibility to the environment, to the 11 men who died on the rig, and that that profit-driven motive led it to behave with gross negligence and willful misconduct. And this is something that anyone who’s been following this case, as I have for four years, knew was the truth, that BP acted with gross negligence. And what that means is that in the final stage of the trial that’s coming up, when the judge determines how much money BP owes for this disaster, BP now faces the highest possible fines under the Clean Water Act. So for the five million barrels of oil that were released as a result of this disaster, it faces a potential of $4,300 per barrel of oil spilled, instead of the lesser $1,100 per barrel spilled if it had simply been found negligent.

JUAN GONZÁLEZ: Well, Antonia Juhasz, the judge’s decision was quite extensive, and it also cited, as I understand, a phone conversation that happened between some of the managers of the rig and BP executives in Houston 40 minutes before the actual explosion. Could you talk about that?

ANTONIA JUHASZ: Yeah. You know, basically, one of the things that has been very clear is that there was a series of decisions, really in the year leading up to this disaster, but all the way down to the final minutes, where BP was over and over again given warnings, as was Transocean, as was Halliburton, that things were going wrong. And as in interviews that I’ve done with oil workers who work in the Gulf across many companies, they said BP continually made the decision, and each of the companies, to just press ahead and get to that oil. And in that 40-minute conversation, what we heard was executives on the shore in Houston and the lead BP workers on the rig essentially deciding down to the wire, there are decisions that we could be making that could slow things down, that could stop the process that’s unfolding, and instead they decided to press forward. And those similar choices were made over and over and over again over the history of the development of this well.

AMY GOODMAN: Antonia, the profit-driven decisions that were made leading up to this?

ANTONIA JUHASZ: I mean, so there were so many cases that were cited within this ruling. And I think one of the most important things is that this decision by Judge Barbier was really focused in just on the decision making that led to the explosion and the disaster itself. So he cited very specific cases of decisions around the cement job that Halliburton conducted, decisions where BP could have run a series of tests by a company called Schlumberger that had been on the rig, that could have performed very critical tests, that BP decided, "Go ahead and send them home." BP used old products that were sitting on the rig instead of bringing in newer products. It used less security devices than it could have chosen. And all of these were decisions around time that it would have taken to perform the extra tests, to get the extra products, to use the better cement. And instead, it chose the quicker, cheaper method, over and over again.

AMY GOODMAN: The blowout preventer wasn’t checked in 10 years?

ANTONIA JUHASZ: Excuse me?

AMY GOODMAN: The blowout preventer wasn’t checked in 10 years?

ANTONIA JUHASZ: So, this is a problem that was both a problem of Transocean, the largest rig owner and operator in the Gulf of Mexico and one of the largest in the world, and BP. And the blowout preventer, essentially, the key device that sits at the base of the ocean floor that is supposed to lock in the well in the case of a blowout, it had run out of batteries. The batteries had been allowed to run down. Horrific and shocking. But yes, that was one of the causes of the disaster. They simply hadn’t brought it in to have it checked. And, in fact, fixing the battery is something that could have been done even if they hadn’t brought the blowout preventer in.

But beyond that, and again, what this decision was about was these very specific decisions that led BP and Transocean and Halliburton to cause this disaster. What Barbier really couldn’t rule on and has only alluded to in the decision is that these are also problems that go beyond this one disaster. So, one of the problems with the blowout preventer wasn’t just that it had been allowed to have its battery run out, which is a problem of both regulators, obviously, inappropriate oversight—Halliburton, BP—I’m sorry, Transocean and BP, in this case—but that the blowout presenter itself, even if it had been adequately charged, wasn’t probably capable of actually performing the function that it was supposed to do. It wasn’t designed properly. And the problems—the broader problem with the blowout preventer is something that has been cited by the U.S. Chemical Safety Board, numerous other oversight bodies, that have looked at this disaster to say this isn’t just a threat in this case, but rather another Deepwater Horizon-like disaster is not a question of if, but when, given much broader problems within the industry, including this very specific problem with the blowout preventer itself.

JUAN GONZÁLEZ: And in the judge’s ruling, Halliburton came off pretty lightly, actually, because the judge ruled that BP was 67 percent responsible for the catastrophe, that Transocean was 30 percent responsible for the catastrophe, and Halliburton only 3 percent. Your sense of the relative guilt of the parties involved here?

ANTONIA JUHASZ: Well, that’s really a determination about the fact that BP is ultimately the leaseholder and operator, and ultimately bears responsibility. But if you read through the decision, you know, Halliburton is found to have performed with—egregiously, to be negligent, to have made decisions that were illegal and were simply not appropriate for ensuring the safety of this well. And Halliburton is the largest—one of the largest energy services companies in the world, certainly one of the largest operators in offshore oil development. The fact that it’s making really fairly basic decisions egregiously and negligently when it comes to the risks involved with offshore drilling, which are, of course, enormous—again, the largest offshore oil drilling disaster in history, five million barrels of oil spilled into the Gulf of Mexico—that’s very worrisome. The attribution of responsibility really had more to do, at the end of the day, with the fact that BP is the leasee, it is the operator, it’s ultimately responsible. But each of these actors made very serious, bad decisions and misconduct, including Halliburton and Transocean.

AMY GOODMAN: Finally, this in context, Antonia, of President Obama expanding offshore drilling?

ANTONIA JUHASZ: Yeah, very worrisome. Again, you know, this decision was very specifically looking at this incident, but the many, many oversight boards over the past four years that have looked at this disaster have said over and over again that this disaster is representative of systemic problems within the industry. And I believe that those problems have to do with the fact that the industry is moving ahead based on technology and money. It has the technology to physically do the drilling. It doesn’t have the technology to protect in the case of a disaster. And it’s moving very rapidly ahead in terms of risk aversion. It doesn’t particularly care about the risks associated, because the oil’s out there, and that the likelihood of another disaster is very real.

And at the same moment that all of the bodies that are investigating this disaster have come to those same conclusions, the Obama administration is expanding offshore drilling, looking to move offshore drilling off the coast of the Atlantic, in new parts of Alaska in the Arctic, and to move even deeper into the Gulf of Mexico, significantly farther out and deeper than where the Deepwater Horizon disaster occurred. And I think all the findings tell us that this just isn’t safe. The industry doesn’t actually know how to do this in terms of averting risk, dealing with catastrophes when they happen, and preventing them from happening in the first place. Just because it has a profit motive and a lot of oil in its sights doesn’t mean it should be allowed to pursue that profit and that oil.

AMY GOODMAN: Antonia Juhasz, we want to thank you for being with us, author of Black Tide: The Devastating Impact of the Gulf Oil Spill.

This is Democracy Now! When we come back, we’ll talk about the fast-food protests yesterday, more than 400 people arrested across the United States. Stay with us.

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