BP announced its 2013 first-quarter profits this morning, reporting earnings of $4.2 billion — down 10 percent from this time last year but higher than analysts’ forecasts.

Here are some key facts about BP’s profits:

• The company is sitting on nearly $28 billion in cash reserves.
• In the first three months of 2013, BP spent $834 million buying back its own stock.
• Meanwhile, worldwide oil production decreased to 2.3 million barrels per day, 5 percent lower than the first quarter of 2012.
• BP’s CEO Bob Dudley raked in $2.7 million in 2012.
• In 2012, BP gave over $400,000 in federal campaign contributions, with 59 percent going to Republicans. They also spent nearly $9 million on lobbying.
• The company received an estimated $300 million annual tax break for 2011.

April 20th marked the third anniversary of BP’s Deepwater Horizon explosion that killed 11 workers and spewed 210 million barrels of crude oil into the Gulf of Mexico over the course of 87 days.

In November 2012, BP agreed to pay a $4.5 billion settlement in criminal charges related to the spill: the largest criminal penalty in history. But a separate, and much larger civil trial, is still underway for Clean Water Act violations and is expected to continue well into this year. Record-setting fines for this trial could reach up to $17 billion if BP is found guilty of gross negligence. On top of that, Alabama, Florida, Louisiana, and Mississippi are seeking an additional $34 billion for economic and property damage under the Oil Pollution Act.

The Daily Beast recently detailed the extreme health effects related to pouring 1.8 million gallons of toxic chemicals into the ocean in the wake of the spill. Corexit, a “dispersant,” was used to keep oil from reaching the Gulf Coast shorelines. In the process, it caused lasting neurological impairments, pulmonary problems, and many other serious ailments for hundreds of cleanup workers and coastal residents. The author, Mark Hertsgaard, explained that BP officials were told exactly how hazardous the chemical was, and lied about it. He told MSNBC in a recent interview that it will be an uphill battle for many people who have incurred huge hospital bills and are still suffering. “BP set aside roughly $8 billion for medical claims,” he said, “but most of the illnesses that these people are suffering from are not covered under that settlement.”

The BP disaster had a deep and lasting health and economic impacts throughout the Gulf Coast region. However, a recent column in the Wall Street Journal editorialized that drilling activity there hasn’t changed much since 2010. The Obama administration’s “toughened” drilling regulations “have amounted to little more than a speed bump for the energy industry,” which is “booming in the Gulf of Mexico.”

The next, and last, of the Big Five companies to announce its first quarter profit will be Royal Dutch Shell on Thursday May 2nd.

By Shiva Polefka

Today, Saturday, April 20th, marks the third anniversary of the explosion aboard BP’s Deepwater Horizon oil rig that killed 11 workers and set off the largest accidental spill in the oil industry’s history. The ruptured Macondo well spewed nearly 5 million barrels of crude oil over the course of the summer, ultimately fouling more than 1,000 miles of Gulf of Mexico coastline and bringing the vast fishing and tourism industries of the region to a standstill, before the Macondo well was finally sealed and “killed” on September 19, 2010.

Following the Deepwater Horizon blowout, President Obama appointed a panel of experts that convened as the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling. Its final report, issued in January 2011, revealed the irresponsible practices of BP and its contractors, uncovered a lack of federal oversight, and provided a comprehensive set of policy reforms that would make the offshore energy industry safer.

Earlier this week, members of the Commission, now acting independently as a group called Oil Spill Commission Action (OSCA), released their second “Report Card” on the progress major actors were making to implement their recommendations.

So, three years after the catastrophe, what has changed? Have we acted on the painful lessons taught by Deepwater Horizon? Are government and industry leaders taking steps to reduce the risk of another destructive spill or blowout? The answers are decidedly mixed.

Department of the Interior and Industry

OSCA awarded the Obama administration a B, in recognition that the Department of the Interior has enacted some of the safety reforms recommended within the official report, and brought about a 15 percent increase in offshore rig inspections occurring in the Gulf.

OSCA gave the oil industry a B-, noting that it has voluntarily contributed in meaningful ways to the reduction of risk future oil spills in response to Deepwater Horizon, by implementing new safety standards and readying four oil well capping systems for the Gulf of Mexico like the one ultimately used to stanch the Macondo well’s blowout. Before Deepwater Horizon, no such systems existed.

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by Kiley Kroh

Yesterday, the Justice Department announced BP agreed to plead guilty to 14 criminal charges stemming from the 2010 Deepwater Horizon oil spill and agreed to pay $4.5 billion in fines and penalties – the largest single criminal fine and largest total criminal resolution in US history. Attorney General Eric Holder emphasized several times that the announcement is only one piece of the government’s ongoing efforts to hold BP fully accountable for the deaths of 11 men and one of the worst environmental disasters in US history.

Here’s a rundown of what the settlement entailed and what lies ahead.

What were the charges?

• BP plead guilty to 14 counts: 11 felony counts of misconduct for the 11 workers killed at the rig, one misdemeanor count under the Clean Water Act, one misdemeanor count under the Migratory Bird Treaty Act, and one felony count of obstruction of Congress.
• Three BP employees were also charged, two of them with manslaughter.

Where will the money go?

In addition to the size of today’s resolution, the settlement is also historic in its dedication of the majority of funds to the affected Gulf Coast states for environmental restoration.

• $2.4 billion will go to the National Fish and Wildlife Foundation, – an independent, non-profit conservation group chartered by Congress in 1984. The funds will be paid out over a period of five years and be earmarked for environmental restoration and preservation in Gulf states.
• $350 million will go to the National Academy of Sciences for oil spill prevention, education, research, and training – also to be paid out over five years.
• More than $1 billion will go to the Coast Guard’s Oil Spill Liability Trust Fund, overseen by the U.S. Coast Guard to be available to pay for future oil spill cleanup.
• The oil giant will also pay $525 million to resolve claims with the Securities and Exchange Commission for misleading its investors regarding the size of the Deepwater Horizon spill.

What additional aspects of BP’s liability have not been resolved?

Yesterday’s settlement was just one step toward determining full liability for the catastrophe, with the largest potential penalties still remaining.

• Civil penalties under the Clean Water Act are the largest potential fine, as the company will be charged up to $4,300 per barrel of oil spilled.  Holder indicated that the government will pursue the maximum penalty, which could result in a fine as large as $21 billion.
• Federal and state Natural Resource Damages claims also remain outstanding. Historically, these have taken the longest to resolve. In the case of the Exxon Valdez spill, they took more than a decade to settle.
• State economic loss or private civil claims that aren’t covered by the $7.8 billion settlement announced in March.

The people and ecosystem of the Gulf Coast continue to struggle with the devastating impacts of the Deepwater Horizon spill – and will likely do so for many years to come.  Therefore, it is encouraging that the government has structured the settlement to ensure the majority of penalties paid by BP are returned to the impacted states to begin the painstaking process of environmental and economic restoration.  The bipartisan RESTORE Act, which passed Congress in June, is a critical piece of legislation also aimed at achieving that end.  The bill requires 80 percent of civil fines paid by the responsible parties under the Clean Water Act to be diverted  to the five Gulf states impacted by the spill, rather than to the general treasury.

Today’s action marks an enormous step forward in the enduring effort to make the Gulf Coast whole again.  In order to truly hold the responsible parties accountable for the Deepwater Horizon tragedy and ensure long-term recovery of the hard-hit region, the Administration should continue to pursue the maximum penalty in remaining civil fines and damages.

Kiley Kroh is the Associate Director of Ocean Communications at the Center for American Progress.

by Katie Valentine

Federal regulators have issued the most permits for deepwater drilling in the Gulf of Mexico this year since 2007.

That’s according to data from the Bureau of Safety and Environmental Enforcement, as reported by the New Orleans Times-Picayune.

So far this year, the government has issued 90 new drilling permits for wells deeper than 500 feet — more than the last two years combined and more than each of the two years before the Deepwater Horizon oil spill in 2010.

The news comes on the heels of President Obama and Governor Romney’s heated exchange about energy development during the second presidential debate last week. It further refutes Romney’s claims that new licenses and permits for drilling are down under the Obama administration, and backs up a report from Representative Edward Markey, which finds oil and gas companies have 3,684 idle leases in the Gulf of Mexico.

Oil production from existing federal leases in the Gulf of Mexico is also increasing, according the Times-Picayune:

Nearly 1.3 million gallons of oil were produced per day in July, up from 1.2 million gallons the year before, according to the U.S. Energy Information Administration. That’s still down from 1.7 million gallons in 2009, the year before the spill.

That number is projected to grow to 1.4 million gallons per day by the end of 2013, according to federal estimates.

Andy Radford, a senior policy analyst with the American Petroleum Institute, expects deepwater drilling will continue to pick up, as additional rigs become available and operators become accustomed to the regulations and resumed pace of permitting.

Many operators are now trying to build up a cache of permits so that when drilling rigs become available, they can make a move, Radford said, which shows that operators are bullish on the outlook of drilling in the Gulf.

In fact, U.S. oil production is at its highest level since 1997, according to government figures. Though Republicans often tout domestic production as the key to lower gas prices, current and historical experiences shows that isn’t the case: fuel prices are still high today, in spite of record production levels, because the price of oil is determined by the global market.

An Associated Press analysis of 36 years of data on oil production and gasoline prices found “no statistical correlation between how much oil comes out of U.S. wells and the price at the pump.”

The surge in new drilling permits has to do with better communication of new rules and regulations between oil companies and government officials, industry analysts say. The Obama administration suspended deepwater drilling in the Gulf of Mexico for six months following the Deepwater Horizon spill, a decision that was criticized by the oil industry and Gulf coast officials, who said it was excessive and would hurt the industry and the Gulf economy.

After lifting the moratorium early in October 2010, administration officials said the time period had been necessary put into place new rules and requirements that would reduce the risks of drilling enough to prevent another disaster.

More than two years later, the consequences of the Deepwater Horizon spill are still playing out.  Oil has been leaking from a 100-ton containment device on the seafloor near the site of the Macondo well blowout since at least September 16 of this year, when a sheen was discovered at the site. The leak is occurring at a rate at a rate of 100 barrels per day, and tests have confirmed the oil matches that which flowed from the Macondo well in 2010.

August’s Hurricane Issac  brought about 565,000 pounds of oiled material to the surface, more than had been collected in eight months before the storm. It’s estimated that up to 1 million barrels of oil from the spill remain beneath the ocean’s surface – oil that is affecting marine life in ways scientists still don’t know for sure.

In addition, scientists have discovered shrimp with no eyes or eye sockets and fish with deep lesions in the region.

Katie Valentine graduated from the University of Georgia with a degree in Journalism. She is currently an intern on the international climate policy team at the Center for American Progress.

by Joe Smyth, via The Witness blog

Oil is washing up along the Gulf Coast in the wake of Hurricane Isaac, confirming concerns that the storm could churn up oil in the Gulf of Mexico. A Greenpeace research team took samples from beaches along the Alabama coast on September 2, including from an area with hundreds of tar balls in the Bon Secour National Wildlife Refuge.

Hundreds of tar balls on the beach at Bon Secour National Wildlife Refuge, Alabama on September 2, 2012

According to the US Coast Guard, oiled pelicans and other wildlife have been found in Louisiana marshes as well. As people struggle with flooding, wind damage, and power outages in the wake of the hurricane, officials have expressed concerns that on top of that disaster, Hurricane Isaac may stir up oil from the BP spill:

“This is another disaster on top of the hurricane that we’re going to have to deal with,” Garret Graves, chairman of Louisiana’s Coastal Protection and Restoration Authority, told The Huffington Post. “The threat is not insignificant.”

Up to 1 million barrels of oil are estimated to remain in the Gulf of Mexico. That oil remains, Graves said, because BP has failed to clean it all up in the more than two years since the tragedy. “That’s four to five times the oil that was spilled with the Exxon Valdez,” he added.

One of the tar balls on the beach at Bon Secour National Wildlife Refuge

Meanwhile, officials in Washington DC are calling on federal agencies to provide an update on their oil spill cleanup efforts in the wake of Hurricane Isaac:

Rep. Edward Markey (D-Mass.) wants two federal agencies to explain how they will address lingering oil contamination from the 2010 explosion of the BP Deepwater Horizon drilling rig.

Markey told the heads of the Environmental Protection Agency (EPA) and the National Oceanic and Atmospheric Administration (NOAA) in letters sent Friday that Hurricane Isaac makes the Gulf of Mexico cleanup effort imperative.

– Joe Smyth is a media officer with Greenpeace USA. This piece was originally published at Greenpeace’s The Witness blog and was reprinted with permission.

Photo: Tabitha Hawk, via Flickr

by Christina DiPasquale and Michael Conathan

As soon as today, Congress and the White House could issue decisions with massive and opposing ramifications for oceans in distant corners of our country.

The House and Senate are expected to pass a sweeping Transportation bill including a provision to send badly needed dollars to the Gulf Coast that will help communities and ecosystems recover from BP’s Deepwater Horizon spill. The money would comprise 80 percent of the civil fines BP and other responsible parties will have to pay as a result of the 2010 catastrophe, a measure recommended in the CAP-Oxfam report “Beyond Recovery.”

Meanwhile, the Department of Interior is on the cusp of issuing permits for Shell for drilling new oil wells in the Arctic Ocean’s Beaufort and Chukchi Seas off the north slope of Alaska. The administration’s justification? As Secretary Salazar stated earlier this week, “I believe there will not be an oil spill.”

The irony of these two actions occurring almost simultaneously proves we are still more inclined to mitigate future disasters than set up the rigorous safeguards that can help prevent them.

Giving Shell the permits needed to commence drilling in the Arctic—an area shown to have extremely limited infrastructure to respond to a potential spill, as detailed in the CAP report “Putting a Freeze on Arctic Ocean Drilling” — is a recipe for yet another disaster for local economies and the environment. The lack of response capabilities in the region becomes clearer when compared to the resources needed in the response to the Deepwater Horizon spill (view CAP’s map here).

So while we’re doling out billions to the Gulf to help mop up, we’re simultaneously setting ourselves up for the possibility of another failure in a region where we have virtually no resources for cleaning up a spill. Admiral Robert Papp, the commandant of the U.S. Coast Guard, explained the situation in a June 2011 Senate hearing:

“Our current Arctic capabilities are very limited…. Imagine if we had to mount a major pollution response—we would have to create our own infrastructure… Although private industry may assert they are adequately prepared for a response to a spill, we must determine what response capability our Coast Guard and Nation needs to have so we can mount an adequate response as exploration advances towards production.”

In addition to Admiral Papp’s warning, businesses have indicated their skittishness about investing in or insuring oil exploration in the region. German bank WestLB announced they would not provide financing to any offshore oil or gas drilling ventures in the area, declaring the “risks and costs are simply too high.” A week earlier, the insurance giant Lloyd’s of London concluded that offshore drilling in the Arctic would “constitute a unique and hard-to-manage risk” and advised companies to “think carefully about the consequences of action.”

With the nearest permanent Coast Guard facility over 1,000 miles away, no major roads, railroads, or ports along the North Slope, and extreme and unpredictable weather patterns, any coordinated response effort would be daunting.

Communities across Alabama, Florida, Louisiana, Mississippi and Texas — all too familiar with the economic and environmental price of insufficient response plans — are close to receiving badly needed funding to rebuild their economy and environment from fines paid by BP and other companies. The money, which could be as much as $16 billion, will then be invested in projects and activities that restore the long-term health of the Gulf Coast ecosystems and coastal economies.

Unfortunately, the transportation bill fails to address the strain put on government funds once the liability limit (or polluter’s ability to pay) has been reached. Though BP will not invoke the set $75 million liability cap for the Gulf disaster, Congress leaves the door open for other polluters to do so in the future, ignoring the Government Accountability Office’s 2007 and 2010 reports which both found “the liability limits for certain vessel types may be disproportionately low compared with their historic spill cost.”

At least now we know that there’s a precedent. If a spill wrecks the pristine Arctic and endangers the environment, culture, and very existence of the North Slope’s Alaska native communities, they may be first in line for a big payout to help clean up. Assuming we can ever figure out exactly how to do it.

Christina DiPasquale is an Associate Director for Press Relations at the Center for American Progress; Michael Conathan is Director of Ocean Policy at the Center for American Progress.

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:

Deepwater Horizon disaster ruined Florida's shores.

On the heels of the second anniversary of the Deepwater Horizon disaster, federal prosecutors have issued the first arrest related to the worst oil disaster in U.S. history. The Justice Department has charged former BP engineer Kurt Mix with destroying evidence on BP’s internal response to the disaster.

Mix, who worked on estimating the amount of oil spilling into the Gulf, allegedly deleted hundreds of text messages with a BP supervisor. This includes one that read “Too much flowrate —- over 15,000,” barrels of oil per day, which was three-times higher than BP’s public estimate of barrels of oil per day at the time.

Attorney General Eric Holder issued the statement [emphasis added]:

“The department has filed initial charges in its investigation into the Deepwater Horizon disaster against an individual for allegedly deleting records relating to the amount of oil flowing from the Macondo well after the explosion that led to the devastating tragedy in the Gulf of Mexico,” said Attorney General Holder. “The Deepwater Horizon Task Force is continuing its investigation into the explosion and will hold accountable those who violated the law in connection with the largest environmental disaster in U.S. history.”

As the criminal investigations continue, Congress has still not yet passed legislation responding to a disaster that continues to have devastating effects on fish, beaches, and wetlands.

The Lasting Impact Of Deepwater Horizon

by Kiley Kroh and Michael Conathan

Two years ago an explosion aboard the Deepwater Horizon rig in the Gulf of Mexico took the lives of 11 men and spewed nearly 5 million barrels of oil into the Gulf. It took 9,700 vessels, 127 aircraft, 47,829 people, nearly 2 million gallons of toxic dispersants, and 89 days to stop the gush of oil. But the work to restore the ecosystem and Gulf economy has only just begun.

The regional oil and gas industry hasn’t skipped a beat despite claims from Big Oil and drilling advocates in Congress that the moratorium on deepwater drilling imposed in the wake of the spill devastated the Gulf economy. The New Orleans Times-Picayune found that oil-fueled economies in the Houma area are humming along just fine. And according to a recent Reuters analysis, Gulf drillers will be busier this year than at any point since the spill, adding eight new deepwater rigs and bringing the total count to 29, just shy of pre-spill levels.

But 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 advisor 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.”

While the Obama administration took steps to strengthen offshore drilling safety and oversight, much remains to be done. Tourism in the region has rebounded this year but the Gulf Coast is still struggling with the lingering effects of the spill and will likely continue to do so for decades to come. Here are five reasons the Gulf deserves renewed attention:

Read more

The Deepwater Horizon oil rig exploded nearly two years ago to the day, beginning an oil spill that lasted three months and released some two hundred million gallons of oil into the Gulf of Mexico. BP may have declared their mission accomplished, but the results of the spill are still trickling out.

The latest? Shrimp with no eyes, fish with lesions, and clawless crabs.

Scientists believe that shrimp, fish, and crabs in the gulf have been deformed by the chemical released to disperse oil during the spill. Fishers in the area say that they’ve been noticing deformities on their catches since. Al Jazeera reports:

“At the height of the last white shrimp season, in September, one of our friends caught 400 pounds of these,” [Louisiana commercial fisher Tracy] Kuhns told Al Jazeera while showing a sample of the eyeless shrimp.

According to Kuhns, at least 50 per cent of the shrimp caught in that period in Barataria Bay, a popular shrimping area that was heavily impacted by BP’s oil and dispersants, were eyeless. Kuhns added: “Disturbingly, not only do the shrimp lack eyes, they even lack eye sockets.”

“Some shrimpers are catching these out in the open Gulf [of Mexico],” she added, “They are also catching them in Alabama and Mississippi. We are also finding eyeless crabs, crabs with their shells soft instead of hard, full grown crabs that are one-fifth their normal size, clawless crabs, and crabs with shells that don’t have their usual spikes … they look like they’ve been burned off by chemicals.” [...]

The dispersants are known to be mutagenic, a disturbing fact that could be evidenced in the seafood deformities. Shrimp, for example, have a life-cycle short enough that two to three generations have existed since BP’s disaster began, giving the chemicals time to enter the genome.

BP claims to be investigating any toxicity and testing fish in the gulf, but they also claimed these marshes were clean. The company is clearly trying to distance itself from the spill, which was a public relations disaster. Indeed, just today, BP came to a settlement agreement with plaintiffs suing over health and economic issues related to the spill.

Tumors on a shrimp found in the gulf

At the same time, deep water drilling has started again. And though details are still only emerging on the full impact of the spill, some want the U.S. to move back into offshore drilling as aggressively as possible. Today, Sen. David Vitter (R-LA) went on the Senate floor to advocate for more drilling permits in the Gulf, arguing that “mother nature has proved amazingly resilient” in the wake of the spill.

Tell that to the fish without livers and the shrimp without eyes.