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Lessons from the Gulf
Wednesday, 12 May 2010
BP is a serial scofflaw, earning billions while assessed pocket change in fines and penalties. It is allowed to conduct business as usual because effective crackdowns aren't imposed in deference to all predatory giants in all sectors, preying on the public and environment for profit with complicit government help.
On April 22, AP reported the news - an initial April 20 explosion, then a larger one igniting Deepwater Horizon's oil drilling platform that burned for more than a day before sinking and releasing thousands of barrels of oil daily into surrounding waters, enough potentially to cause the greatest ever environmental disaster if not sealed in time to prevent.
Transocean Ltd. owned and operated the Deepwater Horizon platform under contract to BP Exploration and Production Inc., a division of BP - 4th on Fortune Global 500 with $239 billion in 2009 operating revenue and $14 billion in profits. It ranked fourth behind Royal Dutch Shell, Exxon Mobil and Wal-Mart. Of the world's 10 largest companies, six are oil giants. Transocean, an offshore drilling contractor, owns operates about 140 drilling rigs. More on its culpability below.
On April 29, the Institute for Southern Studies published "Facts and Figures" about the Gulf explosion and emerging disaster saying:
Obama Administration Complicity
On May 11, 2009, Interior Secretary, Ken Salazar (rancher, former Colorado senator, and notorious pro-business flack with a dismal environmental record), filed a legal brief in the US Court of Appeals for the District of Columbia to overturn or amend an earlier ruling blocking new drilling in the Gulf's outer continental shelf, including the Deepwater Horizon site. In July, it was partly approved provided an environmental impact study assessed the risks and found them acceptable. It's not been completed and perhaps never seriously undertaken.
Like its predecessors since at least the 1980s, the Obama administration has close industry ties across the board, including Big Oil. It thus bears equal responsibility for the consequences as a willing co-conspirator. In fact, it actively intervened to exempt BP from preparing an environment assessment on the Deepwater Horizon site, and after the incident continues to grant "categorical exemptions" for deep water drilling - 27 in all, according to the Center for Biological Diversity.
In March, Obama exceeded the oil-run Bush administration in proposing offshore exploration from Delaware to Florida as well as the latter state's Gulf coast. Those plans are on hold but remain in place unless state officials can stop them. Avoidable accidents happen because of decades of regulatory laxity and oversight, at least since the Carter administration, in deference to powerful industry interests, including Big Oil.
BP's History of Violations
On May 5, Public Citizen's Tyson Slocum reported that BP has "the worst safety and environmental record of any oil company operating in America." In recent years alone, it pled guilty to two crimes (among many), paying over $730 million in fines and settlements to the federal and state governments and civil lawsuits for "environmental crimes, willful neglect of worker safety rules, and penalties for manipulating energy markets."
It paid the largest fine in OSHA history ($87 million) for willful negligence, causing the deaths of 15 workers and 170 injured from its March 2005 Texas City Refinery explosion. In September 2005, OSHA cited BP for 296 "Egregious Willful Violations" and others related to the explosion, fining the company another $21 million.
In August 2006, spills caused by pipeline corrosion shut its Prudhoe Bay, Alaska operation. In March 2006, National Geographic News reported the spillage of 267,000 gallons (about one million liters) in the North Slope's tundra, "raising a new round of questions from environmental groups about proposed plans to open more land" to drilling.
In September 2001, OSHA fined BP $141,000 after an explosion killed three workers at its Clanton Road facility. OSHA levied additional fines in September 2005 for 301 violations, and in April 2006 for two "willful violations" over its shutdown procedures.
In 2009, OSHA found BP in non-compliance of 270 "notifications of failure to abate" and 439 new "willful violations," resulting in the $87 million fine.
In 2007, a US Chemical Safety & Hazard Investigation Board concluded that: "The Texas City disaster was caused by organizational and safety deficiencies at all levels of the BP Corporation." Warning signs were there, but company management ignored them. In 2004, OSHA fined BP $63,000 for violations at the same facility. In December 2009, a Texas jury awarded workers $100 million for their injuries at Texas City.
At the time, Bloomberg.com reported that victims accused BP of having "a long 'rap sheet' and a disturbing pattern of violations and unfulfilled promises to correct them," saying that "Meaningful change will occur only if forced by strict oversight through the court system." Unfortunately, the courts, especially federal ones, are stacked with pro-business justices so getting their help rarely happens and almost never enough to matter.
In April 2010, OSHA fined BP $3 million for "willful safety violations" at one of its Ohio refineries. In April 2006, it paid a $2.4 million fine for similar safety and health violations at the same facility.
In 1999, the EPA cited BP Exploration & Oil for chemical violations at 24 of its Ohio facilities, assessing over $295,000 in fines. It also issued a 926 count administrative complaint against the company.
In March 2003, California sued BP for $319 million over thousands of clean air violations at its Carson refinery. The south Coast Air Quality Management District accused the company of repeatedly breaking rules on its storage tanks over an eight year period.
In 2004, Alaska state regulators accused BP of safety violations, proposing to fine the company for the second time. The other was for earlier August 2002 violations causing a well explosion that seriously injured a worker.
Minerals Management Service (MMS) fined BP numerous times:
BP's Deepwater Horizon site didn't have a remote-control shut-off switch, an acoustic device some other oil producing countries require (including Brazil and Norway) to protect against underwater spills. When they occur, they work automatically to prevent small problems from becoming greater.
BP has also been charged with numerous environmental violations, felonies and at least one criminal misdemeanor, paying out about $153 million in fines, penalties and settlements. It was fined another $363 million for "price-gouging consumers and taxpayers." Nonetheless, it legally avoided paying $172.5 million in taxpayer royalties on its Gulf operated leases.
BP is a serial scofflaw, earning billions while assessed pocket change in fines, penalties and settlements for a company its size. Despite its history of repeated violations, it's allowed to conduct business as usual because effective crackdowns aren't imposed in an environment of regulatory laxity. And, of course, it's as true across the board in deference to all predatory giants in all sectors, preying on the public and environment for profit with complicit government help.
BP Whistleblower Warns of More to Come
In his April 30 Truthout article, Jason Leopold cited a whistleblower (unnamed for his protection), saying to expect more Gulf catastrophes based on BP's history of breaking federal laws and its own internal procedures.
He "was hired to oversee the company's databases," containing Atlantis project documents. On the job, he learned "that the drilling platform had been operating without a majority of the engineer-approved documents it needed to run safely, leaving the platform vulnerable to a catastrophic disaster," as bad or potentially worse than the current spill.
BP knew of the problem, yet did nothing to address it, showing its reckless disregard for public and environmental safety and its own employees. Once a violator, always one, short of regulatory crackdowns and criminal prosecutions, telling all violators what to expect. Not in America, a scofflaw's paradise.
Transocean's Troubled History
On May 10, Wall Street Journal writer Ben Casselman headlined, "Rig Owner Had Rising Tally of Accidents," saying:
Its oil company clients also saw a drop in its safety performance. From 2005 - 2007, "a Transocean rig was involved in 13 of the 39 deep-water drilling incidents investigated by MMS...." After merging with rival GlobalSantaFe, MMS found that it "accounted for 24 of the 33 incidents."
It raises troubling questions of company negligence related to the current spill. So far, no cause has been determined, but at least two areas will be investigated - a cement seal in place to keep oil and gas from escaping, and the blowout preventer, ocean floor valves meant to close off the well in an emergency. MMS records show Transocean's troubled history with both, including in 2006 when regulators found a blowout preventer failed, partly from poor maintenance. In 2005, a failed cement seal caused drilling fluid to leak.
Until now, company violations have been minor, but small problems warn of potentially greater ones, the current incident a prime example.
Transocean "specializes in a new frontier, drilling from huge floating rigs that are either anchored to the sea floor or kept in place with satellite-controlled thrusters." BP is its biggest Gulf client. Although its overall safety record, measured by injuries per hour worked, surpasses the industry average, it's especially worse than competitors on deep water projects.
In recent years, this type drilling has increased rapidly, forcing operators to compete for a limited number of skilled workers. As a result, less experienced ones are used, suggesting a greater potential for accidents, including serious ones like on April 20.
After its 2007 GlobalSantaFe merger, Transocean's rankings were close to the bottom in many categories of customer satisfaction. In 2008 and 2009, it ranked last among deep water drillers for "job quality" and second last in "overall satisfaction." Pre-merger, it was near top ranked on both measures - more evidence of the destructiveness of monopoly or oligopoly size and the best reason to break up giants in all sectors to prevent it.
The Halliburton Connection
Besides its war-profiteering history, Halliburton's notoriously shoddy on-the-job performance was suggested in Russell Gold and Ben Casselman's April 30 article titled, "Drilling Process Attracts Scrutiny in Rig Explosion," saying with regard to the Gulf incident:
Cementing is done to prevent oil and gas leakages by filling gaps between "the outside of the well pipe and the inside of the hole bored into the ocean floor." Cement is also used to plug wells once drilling is completed.
For Deepwater Horizon, cementing was finished and the required areas temporarily plugged, but it's not known if the entire process was done before the explosion. Regulators found cementing problems the cause of other well blowouts, "in which oil and natural gas surge out of a well with explosive force." When cementing is improperly done and cracks develop, it happens, and because gas is highly combustible, it's "prone to ignite."
Halliburton is the largest company in the global cementing business. It was contracted for the Deepwater Horizon rig. Transocean said the process was completed. According to Robert MacKenzie, FBR Capital Markets Managing Director of energy and natural resources:
Other drilling experts agree, saying a faulty bottom of well cement plug may be to blame. In 2007, a Minerals Management Service (MMS) study found that faulty cementing was a factor in 18 of 39 Gulf blowouts over a 14 year period. Halliburton was involved before - one instance being a major 2009 Timor Sea explosion, causing fire and tens of thousands of barrels leaked for over 10 weeks. MMS' recently retired regulatory affairs head, Elmer Danenberger, believes poor Halliburton cementing caused the Timor problem.
It's shoddy work may be a factor in the Gulf, but Transocean and BP share culpability, based on their disturbing histories, besides regulatory and oversight laxity allowing it.
A Much Greater Disaster than Reported
According to Ian MacDonald, Florida State University biological oceanographer, about one million gallons of oil are leaking daily, based on NASA data he studied. If so, the incident already exceeds the 1989 Exxon Valdez catastrophe (topping 11 million gallons) from which affected areas haven't recovered and won't for decades, perhaps longer, from any spill that large. Already, said MacDonald, as of May 7, around 6,200 square miles are affected, a figure growing daily as long as leakage continues.
Other scientists agree, suggesting an estimated 25,000 daily barrels spilled, or over one million gallons. The National Oceanic and Atmospheric Administration (NOAA) reports a worse potential if a so-called bent "riser pipe" deteriorates further. If so, daily leakage could more than double to over two million barrels.
Already, vast parts of the Gulf are at risk as well as marshes, other type wetlands, estuaries, beaches, fishing, wildlife, the mouth of the Mississippi River, East Coast, Florida Keys and Everglades, parts of the Atlantic up to the Grand Banks off Newfoundland and beyond if Gulf Stream currents are affected, as well as inland cities, towns, rivers, and lakes if Gulf hurricanes spread oil-contaminated rain - a vast ecosystem threatened by corporate criminal negligence and government complicity, the usual combination behind virtually all destructive acts.
Public health is also affected from contaminated fish, water, rain, and air from oil smoke and vapors - problems that won't abate for years because oil is a toxic brew and enough contaminating the environment causes an array of health problems, including potential chemical poisoning (hydrocarbon pneumonia).
According to Columbus, Ohio Nationwide Children's Hospital Pharmacology and Toxicology head, Dr. Marcel Casavant:
Why is because burning oil smoke contains carbon dioxide, carbon monoxide, sulfur dioxide, nitrogen oxides, volatile organics, and other toxins - all harmful to human health. Once ingested, serious problems can result affecting the heart, lungs, gastrointestinal tract, liver, pregnancy, other bodily functions, and the potential for cancer and other diseases. It'll be years before the full impact is known, but it's already clear what happens when government and business share the same bed. The public always suffers - this time, like others, disastrously.
Listen to Lendman's cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.
Mr. Lendman's stories are republished in the Baltimore Chronicle with permission of the author.
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