BP tries to wriggle off the hook

While collecting windfall profits, oil giant backs away from its commitments to restore the Gulf Coast

Michael Conathan, CAP’s Director of Ocean Policy, in a cross-post.

Nine months ago, in the aftermath of the explosion and collapse of the Deepwater Horizon offshore oil rig, the 24-hour news networks doubled as 24-hour oil spill cams, with a picture-in-picture window of the out-of-control undersea gusher serving as a constant reminder of the ongoing environmental calamity. At the time, promises to clean up the polluted waters and coastlines gushed with equivalent expedience from the mouths of BP executives testifying on Capitol Hill.

Yet today, as the world’s attention is focused on political upheaval in the Gulf of Sidra and the Gulf of Aden rather than environmental upheaval in the Gulf of Mexico, BP is quietly retreating from its responsibility to restore the environmental and economic health of the Gulf coast.

Unrest throughout the Arab world sent the price of a barrel of oil back to the neighborhood of $100 last week. CAP’s Dan Weiss and Valeri Vasquez pointed out how BP and the rest of the world’s major oil producers are poised to reap windfall profits that go along with the rising cost of oil. Coming on top of BP’s reported earnings of $5.6 billion in the fourth quarter of 2010. In the coastal communities of Louisiana, Mississippi, and Alabama, still reeling from last summer’s catastrophe, few folks believe the oil giant’s financial success will trickle down to them.

Adding insult to injury, earlier this week, the newly minted Bureau of Ocean Energy Management, Regulation, and Enforcement, or BOEMRE, awarded the first deep water offshore drilling permit since suspension of permitting in the spill’s aftermath. The largest shareholder in the well that received the permit? BP.

This latest bungle must serve as a wake-up call. Instead of following through on commitments to clean up the permitting process and take responsibility for past mistakes, BP is doing everything in its power to drop the curtain on last spring’s fiasco as quickly as possible, allowing a return to the kind of business as usual that led to the disaster in the first place. Simultaneously, the oil giant is failing to follow through on its promises.

Last Friday, Sen. David Vitter (R-LA) sent a letter to Ken Feinberg, the oil spill “claims czar,” tasked with overseeing the $20 billion escrow fund established by BP at the behest of President Obama to make payments to Gulf residents affected by the spill. In the letter, Vitter questioned Feinberg’s independence given that his contract for remuneration from BP is structured to be renegotiated with the oil giant every three months. This arrangement flies in the face of BP’s then-CEO Tony Hayward who pledged to the House Energy Committee in June of last year that the claims mediator would be “fully independent of BP.”

Vitter lucidly points out the unacceptability of this conflict:

It would be like a judge not only being paid by one of the parties to a lawsuit before that judge, but having the judge’s salary subject to a negotiation between the judge and that party every three months at exactly the same time as that judge hears and decides the case.

Would you want to be that other party to the case?

On February 2, 2011, a federal judge issued an order banning Feinberg from claiming independence and requiring him to clarify that he is “acting for and on behalf of BP in fulfilling its legal obligations.”

These situations only add fuel to the perception that BP is scrambling to put this calamity prematurely in its rear-view mirror. Meanwhile reports like the following continue to emerge:

Most recently, Dr. Sandra Joye presented research at the annual meeting of the American Association for the Advancement of Science, or AAAS, showing that life on the seabed near the site of the blowout remains “devastated.”

Even in the face of mounting evidence of the scope of its malfeasance, reports are rolling in that BP is shirking its commitments to help restore the Gulf. Last week, the New Orleans Times-Picayune reported that BP has “reneged on promises” to send timely payments to the state for reconstruction of oyster beds and damaged wetlands. And National Public Radio reported that after an initial down payment of $50 million in independent research funding, BP has failed to allocate any more of the $500 million it pledged to universities and research groups in the Gulf.

Dr. Ira Leifer, a chemical engineering researcher at the Marine Science Institute of the University of California, Santa Barbara claims in this troubling video that in the early days of the spill””at the same time it was bending over backwards on Capitol Hill””BP was taking pains to make it more difficult for researchers to properly determine the flow rate of the gushing oil. Leifer claims BP only showed scientists a blurry feed from a video camera pointed at a low-resolution computer monitor showing the actual footage from the seabed. Subsequently, in December, the oil giant began a legal challenge to the federal government’s flow rate estimate, which, if successful, could save the company upwards of $10 billion in EPA fines.

These are not the deeds of a company seeking to “take full responsibility” to “make this right” as BP was so quick to claim in the television ads that peppered the airwaves last June.

“Our actions will mean more than words,” said Hayward in his testimony on Capitol Hill last June, “and we know that, in the end, we will be judged by the quality of our response.” Following the 1989 Exxon Valdez spill, it took nearly two decades for Exxon to finally settle its debt to those affected by the disaster. Thousands of victims died waiting for their compensation. And by the way, the state of Alaska and the U.S. Department of Justice have a pending court claim suggesting Exxon still owes them $92 million. This time around, the American people and the federal government must ensure history does not repeat itself.

As our former president infamously malapropped, “fool me once, shame on me. Fool me twice”¦” It appears we are all, in fact, on the cusp of being fooled again.

Michael Conathan is the Director of Ocean Policy at American Progress.

14 Responses to BP tries to wriggle off the hook

  1. jcwinnie says:

    Wait, you were expecting otherwise?

  2. Mike Roddy says:

    What’s new? These are, after all, gangsters. Tony Hayward was a good front man, since he looks like a clerk in a London bank, but the owners and stockholders are much darker characters, more like Dick Cheney or Joey Gallo.

    After the Exxon Valdez spill, Exxon Mobil was expected to pay $15 billion in damages. After spending about $2 billion on immediate cleanup, Exxon attorneys eventually got the payout to fishermen and other victims down to about $500 million, and they didn’t even spring for medical care for cleanup workers. BP and others took note: feign concern early on, and figure that the press and public will forget about it after a while. As for political leadership, puhleez: who do you think is in charge here?

    Eventually we will have to nationalize oil, gas, and coal companies, and seize their bank accounts in order to pay for part of the damage they have done. The only question is whether this occurs before it’s too late.

  3. Bob Doublin says:

    They’re getting awfully blatant about it aren’t they? But then, what’s going to happen? Rioting in the streets? I’ll never forget the comment a Brazilian woman made to a post I did on a political yahoo group back in 2005: “In America, they steal two elections in a row (substitute:destroy the Gulf of Mexico) and you Americans do absolutely nothing. In Brazil, they raise the bus fare and people riot in the streets and burn the buses.” Gee, aren’t the semi-finals of American Idol coming up soon? And didn’t a new season of that Donald Trump program just start?

  4. David Stockbridge Smith says:

    This is a major failure of the American legal system. Justice is supposed to be blind. We are supposed to be eternally vigilant to maintain it’s blindness (a difficult task, but at the hands of large corporations it is a travesty. People died, people lost their livelihoods, There was massive environmental damage and no one is brought up on charges. No one goes to prison, No on in the corporations involved has lost anything. There are no consequences. Yet, Tim DeChristopher is tried in a week, had his legal arguments thrown out of court and stands convicted while the auction he obstructed was not even legal.

    How is an average person supposed to respect court decisions in a system that produces these results? This isn’t Libya or Saudi Arabia. This is supposed to be the land of the free and the home of the brave.

    Forget about science denial. We need a revolution in our legal system. Respect people, not corporations or money. It’s bad enough that corporations are beginning to decide the balance of power in our government. When corporations decide who goes to jail as well, it’s game over.

  5. Alex Mac says:

    The problem is that the whole system is built to have companies minimise costs by avoiding to pay for environmental and social damage they cause. The cost of petrol is low at the pump but we pay with cancer, pollution, climate change and by having to subsidy petrodicatorships in the Middle East. (Y)our children will pay much more.

    Unfortunately, currently society is addicted on cheap oil (mind you, this will change very soon) so any public outcry will ultimately fail to produce long lasting consequences because the whole system is rigged in favour of obtaining cheap hydrocarbons.

    We are still waiting for the politicians to provide a level field to let alternative energies gain pace but so far the failure is appalling. It is easier to stick a straw in the ground and suck oil – until it lasts. In the meanwhile, Western taxes go to line the petrodictators’ pockets and to pay for the oil wars in the Middle East.

    Then, when the party is over and we’ll have to pay the bill, we will all be in this together. This being shit. But no worries, history teaches that those who gain most by wrecking society will ultimately be able to buy one luxury. That of starving last.

  6. David Stockbridge Smith says:

    The legal argument that was thrown out in the DeChristopher trial was the one that a relatively small wrong was undertaken in order to stop a action that would have a huge negative impact. (There are better ways to say this). In the Gulf of Mexico BP dumped hundreds of thousands of gallons of extremely toxic dispersants (not to mention all the oil) into the ocean (Normally illegal, and always illegal if I did it) in order to prevent greater harm to eco-systems; same strategy, no repercussions.

  7. MarkF says:

    Its a perfect comparison, de christopher, who should be a hero, goes to jail

    BP and it’s cohorts, who carry out operations causing 14 deaths, and god knows what other damage, nothing. not one charge that i have heard of, against this company, or it’s executives.

    messaging problem I guess.

    this American system of government is now as corrupted as any system on the planet.

  8. Prokaryotes says:

    “BP tries to wriggle off the hook”

    Does this comes as a surprise from now a partly governmental russian company? From a government which is the 2nd largest dirty oil and gas producer in the world.

  9. Robert In New Orleans says:

    How does BP restore the coast, given the fact that the coast is sinking because of geological subsidence and the sea level is rising because of sea water thermal expansion and ice sheet melting?

  10. Roger says:

    $hh, don’t tell anybody, but corporation$ (via their wealthy owner$) are the rising, greatly prized citizen$ of this country, not we humans.

    Folk$ like the Koch$ are what many politician$ need the$e day$ in order to get relected. Humans work, $pend, and pay taxe$ in order to feed the $y$tem. A greedy few ri$e to own and run profit-thir$ty corporation$

    As Jim Hansen and others have indicated, our systems our failing. We are headed into a dangerous downward spiral. BOLD ACTION is needed.

    Check this potential when you’re ready to roll:

    Remember BP; then remember Tim Dechristopher. It’s SOS, then ACT.

  11. Anne van der Bom says:

    money = power

    ’nuff said

  12. Bill Thune says:

    [March 16-18] Tent City at Houma, Louisiana BP Headquarters. Free Lunch. Make Your Voices Heard! The media will be there. PROTEST. Make signs. Invite Friends!

  13. Dano says:

    If you can’t beat ’em join ’em….maybe we should all get jobs with the oil companies so when they profit we profit !! We could get the employee discount for gas and have a great paying job too !!

  14. What ever happened to stringing up these guys up or tar and feathering or riding them out of town on a rail?