by Kiley Kroh and Rebecca Leber
Two years after the Deepwater Horizon disaster, BP is reporting profits of $5.9 billion for the first quarter of 2012.
That’s an 18.5 percent dip compared to the first quarter of last year; however, it’s a major reversal from 2010. After claiming a loss that year, BP quickly rebounded in 2011, recording a profit of $25.7 billion.
Even as the company sells off assets to pay billions in damages for the 2010 disaster, it is already pursuing drilling plans again in the Gulf of Mexico:
The company is continuing to sell assets to reach its goal of raising $38 billion by the end of next year. It is also seeking to gain access to new deepwater exploration acreage. BP said it was selling some assets in the Gulf of Mexico, including the Marlin, Horn Mountain and Holstein fields, which do not have any strategic importance for the company. BP said it was on track with its plan to start six exploration projects in 2012, including in Angola and in the Gulf of Mexico in the second quarter.
BP has also returned to pre-disaster levels for campaign contributions. It has nearly surpassed 2010 spending with $122,410 in political contributions so far this cycle, 65 percent of which has gone to Republicans. Its lobbying is much more expansive, with $8.1 million in 2011, and nearly $2.2 million so far this year.
Meanwhile, CEO Bob Dudley received a raise of $6.8 million in compensation, while BP paid out $1.1 million in shares to former CEO Tony Hayward, who resigned in the wake of the Gulf disaster.
With new exploratory wells in the Gulf, BP is on track to increase offshore production. The company is sitting on cash reserves of over $14 billion as of January 2012, even while litigation over the spill continues with billions of dollars for damages unpaid.
We take a closer look at the ongoing damage from the disaster:
- Criminal charges were recently filed against former BP engineer Kurt Mix for allegedly intentionally destroying evidence and potentially misleading the public and the U.S. government about the amount of oil spewing into the Gulf of Mexico. While the oil giant has agreed to pay an estimated $7.8 billion in plaintiffs’ claims, environmental damages from the spill remain unresolved. Because fines are assessed on a per barrel basis, a cover-up could have major implications for assessing the company’s ultimate liability.
- Following the unprecedented disaster, BP took losses related to the clean-up for tax purposes, reducing its tax bill by $13 billion. As a result, the company paid no federal income taxes in 2010. Gulf Coast residents who suffered major losses as a result of the spill, on the other hand, found out their compensatory payments from BP would be taxed.
- Even though BP’s slick new ads show sparkling beaches and flourishing marshes, the perception that everything is fine in the Gulf is far from the truth. Last week Garret Graves, top coastal adviser to Louisiana Gov. Bobby Jindal, said the state “still has 200 miles of oiled coast,” including “very clear, retrievable oil in coastal areas,” and called the current conditions “unacceptable.”
- An in-depth Al Jazeera investigation found ominous signs of the impact the spill may be having on the region and a frightening snapshot of what may lie ahead for Gulf fisheries: eyeless shrimp, crabs without claws, and fish with open lesions. Keath Ladner, a third-generation seafood processor in Hancock County, Mississippi, observed, “We’ve fished here all our lives and have never seen anything like this.”
- While long-term damage estimates vary, a new study published in the Canadian Journal of Fisheries and Aquatic Sciences determined that over seven years, the oil spill could have an $8.7 billion impact on the economy of the Gulf of Mexico, including losses in revenue, profit, wages, and close to 22,000 jobs.
- The only oil removed for certain was the amount directly recovered from the wellhead— about 17 percent of the total oil spilled. According to Markus Huettel, a benthic ecologist at Florida State University, “a staggering amount – he suggests 60 percent is a conservative estimate – remains unaccounted for.”
- The “State of the Beach” report, released last week by the Surfrider Foundation, found that the mixture of toxic dispersants and crude oil has now weathered into tar product. The “unholy mix” is allowing potentially carcinogenic concentrations of organic pollutants to remain in the environment, and is absorbed by wet skin twice as fast as by dry skin.
- Another alarming and under-reported fallout from the spill is the human health crisis currently being experienced throughout the Gulf Coast. As reported in The Nation, cleanup workers and their families are experiencing a wide range of symptoms from respiratory infections to rashes, seizures, vomiting, and bleeding. The Government Accountability Project, which will release the results of its 11-month investigation of the public health threats associated with the cleanup this summer, found cleanup workers reported being threatened with termination when they asked for respirators because it would “look bad in media coverage.” BP’s proposed $7.8 billion settlement will cover some health problems but excludes other conditions such as cancer, mental health disorders, or birth defects.