While collecting windfall profits, oil giant backs away from its commitments to restore the Gulf Coast
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:
- Figures compiled by Louisiana Seafood News show that landings of oysters, shrimp, and crabs from January through October of 2010 were all down more than 50 percent.
- Scores of dead dolphins , many of them newborns or partial term fetuses, have begun washing up on Gulf shores, though the cause of these unusual strandings remains under investigation.
- High levels of toxic chemicals have surfaced in some Gulf residents’ blood.
- The spill caused significant psychological stress and hardship even to communities not directly touched by oil.
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.