Tag Archives: Oil Pollution Act

What Transocean Pays for the Oil Spill in the Gulf

transocean headquarters Huston.  Image from wikipedia

Transocean Ltd. appeared in federal court in New Orleans after reaching a $1.4 billion settlement with the U.S. over the 2010 Gulf of Mexico oil spill….The company agreed last week to plead guilty to a misdemeanor count of violating the Clean Water Act and to pay $400 million in criminal fines and $1 billion plus interest in civil penalties. Under the agreement, Transocean will undergo five years’ probation and establish a technology innovation group to focus on drilling safety, devoting a minimum of $10 million to this effort…..

The agreement doesn’t cover costs to Transocean for natural-resources damage under the Oil Pollution Act of 1990, the company said. That law requires responsible parties to reimburse governments for restoring natural resources to pre- incident conditions.  Transocean said last week that the company’s liability for these damages was limited by a 2012 court ruling that it wouldn’t be liable under the Oil Pollution Act for subsurface discharge from the well.

The blowout and explosion aboard Transocean’s drilling rig sent millions of barrels of crude leaking into the gulf. The accident prompted hundreds of lawsuits against Transocean, London-based BP, the well’s owner, and Houston-based Halliburton Co. (HAL), which provided cementing services. BP previously agreed to pay $4 billion to the Justice Department to resolve charges connected to the spill and $525 million to settle the U.S. Securities and Exchange Commission’s claim that the company misled investors about the rate of oil flowing into the gulf.  BP announced Nov. 15 that it reached a deal with the Justice Department to plead guilty to 14 counts, including 11 for felony seaman’s manslaughter. U.S. District Judge Sarah S. Vance said last month that she would determine at a Jan. 29 hearing whether to accept BP’s plea.

The criminal case is U.S. v. Transocean Deepwater Inc., 13- cr-001, U.S. District Court, Eastern District of Louisiana (New Orleans). (pdf)

Margaret Cronin Fisk & Allen Johnson Jr, Transocean Appears in Court After $1.4 Billion Spill Pact, Bloomberg, Jan. 9, 2013

See also How much oil spills cost

 

 

Polluting Low-Income, Minority Neighborhoods: Union Pacific Railroad, United States

Union Pacific Railroad Co. will pay $1.5 million to settle alleged violations of the US Clean Water Act and US Oil Pollution Act.  The settlement with the Environmental Protection Agency resolves a Clean Water Act enforcement action against Union Pacific that involves operations at 20 rail yards and spills of oil and coal in 2003 and 2004 along railroad lines in Colorado, Wyoming and Utah. Most of the rail yards are in low-income areas with minority populations, according to the EPA.

About $1.4 million of the settlement will be deposited into a fund used by federal agencies to respond to oil spills. The remaining $100,000 will be deposited in U.S. Treasurys for coal spills and storm-water violations.   The settlement requires the company to develop a management and reporting system to ensure compliance with various regulations.  Union Pacific also must perform installations to safely store oil and prevent spills from leaving its properties. The company must designate an environmental vice president tasked with following oil spill prevention and storm water control requirements at the 20 rail yards.  The complaint stemmed from six oil spills in Colorado, Utah, and Wyoming and three coal spills in Colorado.

Union Pacific to pay $1.5M settlement in oil spills, Northern Colorado Business Report, February 10, 2012

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/