Feb 20, 2019 | Updated: 10:02 AM EST

BP Starts To Settle After Nasty Oil-Spill Related Deaths

May 21, 2015 02:23 PM EDT


BP has begun to settle claims related to the 2010 Deepwater Horizon oil spill with Halliburton and Transocean. This means that as to Halliburton and Transocean only (the litigation is ongoing) the battle is over. The long-term in court battle has centered upon the human costs of the offshore well disaster, which included the deaths of 11 workers. The overall impact of the disaster has been sobering for the scientific community as well; the Deepwater disaster has thus far been the largest offshore oil spill in US history.

The Settlement

At the time of the explosion and spill, barrels of crude oil began spilling into the Gulf of Mexico. BP's ultimate financial responsibility for the environmental damage has yet to be determined by US federal courts. BP owned the Macondo well and the company's employees directed the well drilling operation. Halliburton performed critical services such as cementing the well. Transocean owned and operated the Deepwater Horizon drilling rig.

Transocean, a Swiss company, must pay $212 million to claimants who include local governments and businesses, plus attorney's fees-all subject to approval from the U.S. District Court. In response Transocean sought reimbursement from BP.

The settlement decrees that BP will pay any damages for harm done to natural resources imposed on Transocean. Past court rulings have hinted that the terms of the contract for the rig make BP responsible for these costs. BP has now also agreed to pay Transocean $125 million for legal fees. Under the settlement Transocean is responsible all awards for personal injury claims from its employees, and to pay for any pollutants that may have leaked from the Deepwater Horizon rig itself-such as the diesel fuel which has contaminated certain areas.

"These settlements provide substantial closure to five years of litigation and we are confident that this agreement can be a significant step forward in our efforts to renew our partnership with BP," says Jeremy Thigpen, Transocean's President and Chief Executive Officer.

Halliburton reached an agreement with BP separately, which will settle all remaining litigation on this issue between the companies. According to the Financial Times, Halliburton says that its agreement with BP touches upon "indemnities between the parties and dismissal of all claims against each other."

Halliburton chief executive Dave Lesar told FT that the agreement "allows Halliburton to strengthen its relationship with BP by negotiating a global master services agreement between the companies."

BP has settled with its contractors, but settling with local business and governments is yet to come. The company also faces a substantial pollution fine based on the federal Clean Water Act and possible imposition of damages for restoration of natural resources like wildlife and plants.

The federal court which presides over the case has stated that BP failed to perform essential safety tests and acted recklessly to cut costs. Had they performed these critical tests workers may well have been able to avert the disaster, as they would have discovered that BP could easily lose control of the Macondo well, which wasn't properly sealed. BP has also been found liable for 3.19 million of the crude oil barrels that leaked into the Gulf. What that will mean in dollars is yet undetermined.

Anatomy of a Disaster

Five years ago in April 2010, 200 miles southwest of the beaches of the Florida panhandle, the Deepwater Horizon rig exploded, killing 11 people. More than 200 million gallons of crude oil began to gush into the Gulf of Mexico from the well beneath the wreckage. Nobody knew how far the oil would spread or when the well would finally be capped. It took 87 days of oil flowing into the ocean before that happened.

Within the next two months coastal areas in Louisiana were being blackened by the oil. Many experts feared this trend would spread all the way to the Florida Keys. Federal and state wildlife officials along with rescue groups, scientists, and volunteers were working overtime to stem the environmental damage, but the costs were high.

Teams dug up normally protected loggerhead sea turtle nests in the white sandy beaches of the Florida panhandle. Scientists knew that if the oil reached them the sea turtle hatchlings would suffocate or simply be coated in oil, doomed to a slower death. Experts feared the disaster would wipe out an entire generation of green, leatherback, and loggerhead sea turtles along the Gulf Coast, so sea turtle nests in the Florida panhandle were unearthed and relocated to storage facilities.

Ultimately Pensacola beaches and nearby areas did experience oil, although much of the panhandle escaped the worst of the disaster. The Louisiana coast was far less fortunate. In total more than one thousand miles of American coast were coated with a muddy, oily sheen.

Unprecedented environmental impacts came from both the spill and the dispersants that were used in the cleanup.

Fish died off at rates that had never before been documented. Thousands of oiled marine mammals, sea turtles, and birds were gathered in the rehabilitation efforts, although thousands didn't survive at all. Wetlands were permanently damaged as grasses and trees were killed by the oil-tens of thousands of acres were affected.

The Road Ahead

The environmental effects seen since the disaster have been almost as disturbing. In 2011, 163 dolphins stranded in Louisiana, and 111 stranded in Mississippi. This was a serious jump from the average of 20 strandings in each state from 2002 through 2009, according to the National Oceanic and Atmospheric Administration. Almost every commercially consumed crustacean and fish species has exhibited birth defects and deformities on a notable scale. And researchers have documented high levels of toxic substances including carcinogens in the eggs of coastal birds and the bodies of dozens of other marine species.

Even so, the true scope of the damage and its long-term effects are unknown. On April 29, scientists testified that existing research is insufficient to properly assess the full impact of the spill in a congressional hearing concerning the spill's effects. Christopher Reddy, a senior scientist at the Woods Hole Oceanographic Institution in Massachusetts said, "Today, I can't say how much oil is still on the Gulf of Mexico floor. I can't say how toxic it is. And I can't say whether or not it's negatively affecting the Gulf."

According to a National Geographic report on the testimony: "The scientists called for more baseline ecological studies of Gulf habitats to better understand the impacts of the spill, as well as more research into the environmental effects of the dispersants used in the cleanup. They noted that financial support to meet important research needs was critically lacking and that both government and the private sector should direct funds towards these efforts in order to help repair the ecology of the Gulf and to increase preparedness in the event of a future spill. They also pointed to a need for increased communication between scientists and incident responders in future spills."

Unfortunately, even the response to the overarching problem has been inadequate. In January 2013 the "capped" well was found to be leaking, and it is unknown whether that issue has been resolved for good. And of course federal regulators have recently granted Louisiana-based LLOG Exploration Offshore permission to drill a new well a few miles from the Deepwater explosion site.

Meanwhile, this week researchers from the NOAA and the National Marine Mammal Foundation released a report describing a link between the Deepwater disaster and a dramatic increase in dolphin deaths in the Gulf of Mexico. According to the NOAA's Office of Response and Restoration, one in three of recovered dolphins from the Alabama, Louisiana, and Mississippi coasts suffered from previously rarely-seen adrenal lesions. The lesions, which are consistent with exposure to petroleum, can be seen in half of the dolphins In Barataria Bay, Louisiana, one of the areas hurt most by the disaster. This approximately 33 percent is far higher than the 7 percent rate of similar adrenal gland damage found in stranded dolphins outside the spill zone.

This kind of adrenal gland damage is dangerous. The adrenal gland regulates and produces hormones which manage essential bodily functions like blood pressure and metabolism.

"Animals with adrenal insufficiency are less able to cope with additional stressors in their everyday lives," says Stephanie Venn-Watson, the study's lead author and a veterinary epidemiologist, "and when those stressors occur, they are more likely to die."

Researchers also found that 22 percent of these spill zone dolphins suffered from serious bacterial pneumonia. Among those 22 percent with pneumonia, 70 percent experienced severe lung disease which "either caused or contributed significantly to death." Similar lung disease occurs in only 2 percent of dolphins outside of the spill area.

"The evidence to date indicates that the Deepwater Horizon oil spill caused the adrenal and lung lesions that contributed to the deaths of this unusual mortality event" Venn-Watson says. "We reached that conclusion based on the accumulation of our studies including this paper."

In a classic obfuscation of the difference between legal liability and science, BP questions the link between the oil spill and the dolphin deaths.

"This new paper fails to show that the illnesses observed in some dolphins were caused by exposure to Macondo oil," BP's senior VP for US communications and external affairs, Geoff Morell says.

"According to NOAA, the Gulf 'unusual mortality event' (UME) began in February 2010, months before the spill. ... Even though the UME may have overlapped in some areas with the oil spill, correlation is not evidence of causation."

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