Tag Archives: environmental liability

The Oil Spill at a Home Near You: ExxonMobil

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The Arkansas [United States] attorney general said Tuesday that he will investigate the cause and impact of an oil spill after an ExxonMobil pipeline ruptured  State Attorney General Dustin McDaniel also is asking ExxonMobil to preserve all documents and information related to Friday’s oil spill and ongoing cleanup efforts in Mayflower, a small city about 20 miles northwest of Little Rock.

Crews have recovered about 12,000 barrels of oil and water since the Pegasus pipeline started leaking. Investigators are still working to determine what caused the spill, which led authorities to evacuate nearly two dozen homes.”It’s obvious that the rupture was not the fault of the state and the state has been damaged in addition to the private property owners,” McDaniel told reporters Tuesday.

In a letter to ExxonMobil officials dated Tuesday {April 2, 2013], McDaniel said he believes the company may have liability for the consequences of the spill under the Arkansas Water and Air Pollution Act and other applicable laws.”There are many questions and concerns remaining as to the long-term impacts, environmental or otherwise, from this spill,” McDaniel wrote.

Some of the environmental effects began to come into focus Monday [April 1, 2013] as officials said a couple of dead ducks and 10 live oily birds had been found since the oil spill.  McDaniel said he has communicated with attorneys general in other states that have seen larger spills, including Louisiana and Mississippi.   “We don’t want to overreact, but obviously a prudent response would require investigating the cause and determining what remedies are available and appropriate for the state,” McDaniel told reporters.ExxonMobil spokeswoman Kim Jordan said the company will cooperate with McDaniel’s office.

The pipeline that ruptured dates back to the 1940s, according to ExxonMobil, and is part of the Pegasus pipeline that carries crude oil from the Midwest to refineries in the Gulf of Mexico.

Arkansas will investigate ExxonMobil oil spill, Associated Press, April 2, 2013

Chevron and Amazon: the $18 billion Ecuador Liability

The D.C. Circuit Court of Appeals  on June 12, 2012  (pdf) dealt another setback to Chevron over its $18 billion Ecuador liability, reversing a lower court decision that allowed the oil giant access to documents from a prominent consulting group for the Amazon rainforest communities that sued the company.-

Oil Drilling in the Arctic and Pollution Impact

The Lloyd’s of London, one of the biggest insurers in the world,-

How Much Oil Spills Cost? BP and Deepwater Horizon

BP and Anadarko Petroleum Company have reached an agreement to settle all claims between them related to the Deepwater Horizon accident…. The agreement is not an admission of liability by any party regarding the accident.  Under the settlement agreement, Anadarko will pay BP $4 billion in a single cash payment. BP will apply the payment to the $20 billion trust it established that is available to meet individual, business and government claims, as well as the cost of the natural resource damages. Anadarko will also transfer all of its 25 per cent interest in the MC252 lease to BP.  In addition, Anadarko will no longer pursue its allegations of gross negligence with respect to BP. Anadarko and BP have agreed to work cooperatively with respect to indemnified claims, and Anadarko has the opportunity for a 12.5 per cent participation in future recoveries from third parties or insurance proceeds cumulatively exceeding $1.5 billion, up to a total cap of $1 billion.  Finally, the parties have also agreed to mutual releases of claims against each other. BP has agreed to indemnify Anadarko for certain claims arising from the accident. However, BP’s indemnity excludes civil, criminal or administrative fines and penalties, claims for punitive damages, and certain other claims.

“This settlement represents a positive resolution of a significant uncertainty and it resolves the issues among all the leaseholders of the Macondo well,” said Bob Dudley, BP group chief executive. “There is clear progress with parties stepping forward to meet their obligations and help fund the economic and environmental restoration of the Gulf. It’s time for the contractors, including Transocean and Halliburton, to do the same.”  BP previously announced settlements with MOEX, which had a 10 per cent interest in the Macondo well, and Weatherford, which provided drilling equipment.

According to its public filings, BP has recorded a charge in excess of $40 billion for total estimated costs associated with the event. To date, BP has invoiced Anadarko an aggregate of $6.1 billion for what BP considers to be Anadarko’s 25-percent proportionate share of BP’s actual and near-term costs….Anadarko will record a $4.0 billion liability associated with this settlement in its third-quarter 2011 financials……

“Consistent with official investigations that found the accident was the result of multiple causes, involving multiple parties, BP is working to ensure that other parties, including Halliburton and Transocean, contribute appropriately,” says a BP press release. “Multiple official investigations, including those conducted by the Presidential Commission and the Marine Board of Investigation, found that conduct by those parties contributed to the accident. The issuance of regulatory violations last week to BP, Transocean and Halliburton by the U.S. Department of Interior demonstrates that the contractors responsible for well control and cementing, not just the operator, should be held accountable for their conduct.  From the outset, says BP, it has committed to paying all legitimate claims and fulfilling its obligations to the Gulf Coast communities under the Oil Pollution Act. BP has to date paid out more than $7 billion.

BP chief says agreement with Andarko resolves “a significant uncertainty”, http://www.marinelog.com, Oct. 21, 2011

See also http://www.restorethegulf.gov/