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.

Oily snakes — or snake oil?

Sure, you thought nothing good could come from ExxonMobil’s pipeline spill of some 200,000 gallons into the residential streets of Mayflower, Arkansas. After all, it was “low-quality Wabasca Heavy crude oil from Alberta.” And a technicality has spared Exxon from having to pay any money into the fund that will be covering most of the clean up costs — a 1980 law ensures that diluted bitumen is not classified as oil.

But ExxonMobil reports from the Mayflower Incident Unified Command Joint Information Center that even this cloud of oil has a silver lining:

The majority of the impacted wildlife has been reptiles, primarily venomous snakes.

Strangely, HuffPost reports, “According to its Facebook page, the Helping Arkansas Wild Kritters (HAWK) Center, which has worked to help scores of animals hurt by the March 29 spill, has not rescued any venomous snakes, but has cared for many birds.”

A technicality has spared Exxon from having to pay any money into the fund that will be covering most of the clean up costs of its Arkansas pipeline spill.

The cleanup efforts themselves took a sobering turn as crews found injured and dead ducks covered in oil.

The environmental impacts of an oil spill in central Arkansas began to come into focus Monday as officials said a couple of dead ducks and 10 live oily birds were found after an ExxonMobil Corp. pipeline ruptured last week.

“I’m an animal lover, a wildlife lover, as probably most of the people here are,” Faulkner County Judge Allen Dodson told reporters. ”We don’t like to see that. No one does.”

Exxon has confirmed that the pipeline was carrying “low-quality Wabasca Heavy crude oil from Alberta.” This oil comes from the region of Alberta where the controversial tar sands are located. Heavy crude is strip mined or boiled loose from dense underground formations that often contain a large amount of bitumen. This oil is very thick and needs to be diluted with lighter fluids in order to flow through pipelines. Reports have stated that at least 12,000 barrels of oil and water spilled into the town.

A 1980 law ensures that diluted bitumen is not classified as oil, and companies transporting it in pipelines do not have to pay into the federal Oil Spill Liability Trust Fund. Other conventional crude producers pay 8 cents a barrel to ensure the fund has resources to help clean up some of the 54,000 barrels of pipeline oil that spilled 364 times last year.
Read more

The planet we live on is valuable only as a repository for natural resources, according to Rep. Steve Stockman (R-TX). Stockman, a lawmaker best known for bringing Ted Nugent to the State of the Union and opposing the Violence Against Women Act because it protected “change-gender” individuals, went on an extended Twitter rant Thursday afternoon accusing environmentalists of hating science.

His commentary included several dubious assertions about the planet:

 

The best thing about the Earth is if you poke holes in it oil and gas come out.

— Rep. Steve Stockman (@SteveStockmanTX) March 21, 2013

There is reportedly $1 trillion in oil off the coast of California. But liberal hatred of science and human progress keeps them bankrupt

— Rep. Steve Stockman (@SteveStockmanTX) March 21, 2013

 

The offshore drilling moratorium Stockman refers to largely does not cover the majority of federal land. The moratorium was originally imposed after a massive oil spill off of the coast of Santa Barbara caused three million gallons of oil to leak into the ocean.

Most people probably believe the best thing about the Earth is that it has a stable biosphere and climate that sustains life — unique among all the planets we have observed. And while Stockman asserts that liberals hate science, he refers to the scientific reality of anthropogenic climate change — something that could kill millions of people in the next two decades alone and ultimately destroy our livable climate — as “the new fad thing.”

Stockman’s number one source of corporate campaign donations in the 2012 election was the oil and gas industry.

By Shiva Polefka, Michael Conathan, and Kiley Kroh

In November 2012, BP settled the Justice Department’s criminal case against it in the wake of the 2010 Deepwater Horizon oil disaster, agreeing to pay $4.5 billion in fines and admit it was guilty of 11 counts of manslaughter. But that 10-figure deal was just the tip of the iceberg.

Yesterday, the civil trial to assess BP’s violations of the U.S. Clean Water Act began in New Orleans, a process that will end with additional fines that could exceed four times that amount.

The civil trial will determine responsibility for an unprecedented environmental disaster, in which BP’s high-pressure Macondo well ruptured and discharged nearly 5 billion gallons of crude oil in to the Gulf of Mexico — as well as the amount of fines the company must pay to the U.S. Federal government, Gulf Coast states, and municipalities for violations of federal environmental law.

If Federal District Judge Carl J. Barbier agrees with the Justice Department that BP was grossly negligent in its handling of the blowout and oil spill, the London-based oil giant could face more than $17 billion dollars in federal fines under the Clean Water Act. While this would be a record fine under the statute, it corresponds to the unprecedented scale of the environmental disaster the company caused, because responsible parties are charged per barrel of oil spilled. And it would still be significantly less than the $26 billion in profit BP amassed in 2011 alone.

In addition, Gulf Coast states are seeking more than $34 billion in damages under the U.S. Oil Pollution Act, which was passed in response to Exxon’s 1990 spill in Valdez, Alaska. The OPA explicitly authorizes U.S. states to impose their own fines and penalties on parties deemed responsible for oil spills that affect them.

Continuing its effort to shift blame for the accident, BP argues that it was not grossly negligent, and that its contractors Halliburton and TransOcean instead share significant responsibility for the spill. TransOcean, from whom BP leased the Deepwater Horizon oil rig, settled with the Justice Department in November of 2012, admitting criminal and civil violations and agreeing to pay $1.4 billion in fines.

BP’s latest trial follows its settlement last fall of the US government’s criminal case against the company. In that agreement, BP pled guilty to 14 criminal counts stemming from accident, including manslaughter in the deaths of 11 oil rig workers that were killed when safety equipment failed, and the oil rig exploded and sank. BP also admitted to obstruction of Congress, for purposefully providing lawmakers with estimates of oil-discharge rates 10-times lower than what they knew was occurring. As part of the criminal settlement, BP agreed to pay $4.5 billion over 6 years.

Thanks to the RESTORE Act, which Congress passed and President Obama signed into law as part of a larger transportation bill in 2012, 80 percent of the civil fines paid by BP and other responsible parties will go directly to the affected Gulf Coast states to fund economic and environmental recovery — rather than going to the U.S. Treasury — making the ultimate decision in the current case a critical one for ecosystem and economic restoration in the Gulf. Analysis by the Center for American Progress indicates that by allocating the penalties to ecosystem restoration in Louisiana, Alabama and Mississippi, the RESTORE Act will create thousands of jobs supporting and restoring industries that were devastated by the Deepwater Horizon disaster — such as tourism and fishing, which are cumulatively worth more than $25 billion per year to these states.

The first phase of the trial is expected to take three months, and will result in assignment of percentages of blame among the responsible parties. Reportedly, Judge Barbier has insisted he won’t let the trial drag on for years as occurred following 1989’s Valdez spill.

With funding to restore damaged ecosystems along the Gulf Coast hanging in the balance, Judge Barbier’s sense of urgency is welcome and warranted. Gulf Coast residents and the American public deserve a prompt, decisive and just resolution.

Shiva Polefka is the Ocean Program Research Associate, Michael Conathan is the Director of Ocean Policy, and Kiley Kroh is the Associate Director of Ocean Communications at the Center for American Progress.

After a year of warnings, mishaps, and legal violations, the press is paying closer attention to Shell’s efforts to drill offshore for oil in Arctic waters.

But few have depicted what it really means to drill in such a remote region with almost no infrastructure to deal with an oil spill.

Now that people are coming to grips with the kind of emergencies that could take place in the remote region, it’s helpful to revisit an important resource put together last year by my colleagues on the oceans team at the Center for American Progress. They documented roads, airports, disaster response staging areas, coast guard stations, and everything else needed to respond to an oil spill in the Arctic. They then compared that infrastructure to the Gulf Coast, where response crews dealt with a massive well blowout in 2010 that spewed 5 million barrels of oil into ocean — a crisis that lasted three months, even with an all-out emergency response.

So what would happen if there’s a major blowout in Arctic waters? Here’s a stunning visual representation of just how little is available for response. (Click to enlarge). An explanation follows below.

In 2011, the Admiral of the U.S. Coast Guard, Robert Papp, summed up the situation pictured above in testimony to Congress: “If this [an oil spill] were to happen off the North Slope of Alaska, we’d have nothing. We’re starting from ground zero today…We have zero to operate with at present.”

When we consider all of Shell’s mishaps this year, most of them occurred in very benign settings where help was close by. When Shell’s underwater oil spill containment unit failed during testing and “crushed like a beer can,” it was in the Puget Sound — a completely different setting from the harsh conditions of the Arctic.

And when Shell’s Kulluk drilling rig ran aground near a remote Alaskan island during a nasty storm, the company was lucky enough to have a permanent Coast Guard station 50 miles away. As a result, the situation was under constant monitoring and the Coast Guard was able to respond quickly to the incident. By comparison, the closest permanent Coast Guard station to Shell’s proposed offshore drilling site is 1,000 miles away by plane, and more than 2,000 miles by sea.

Here are some more stark comparisons between the Gulf Coast and the Arctic in that recent CAP report, called “Putting a Freeze on Arctic Drilling“:

Read more

In November of last year, British oil giant BP agreed to a historic $4.5 billion criminal fine in the aftermath of the 2010 Deepwater Horizon disaster that killed 11 workers and blew 5 million barrels of oil into the Gulf of Mexico.

While BP owned the Macondo well and was in charge of onsite operations, it leased the Deepwater Horizon rig and its crew from Transocean Ltd., one of the world’s largest offshore drilling contractors. And yesterday, the Justice Department announced that Transocean agreed to pay $1.4 billion to settle the investigation of its involvement in the oil spill.

From the DOJ:

Transocean Deepwater Inc. has signed a cooperation and guilty plea agreement with the government, also filed today, admitting its criminal conduct.   As part of the plea agreement, Transocean Deepwater Inc. has agreed, subject to the court’s approval, to pay $400 million in criminal fines and penalties and to continue its on-going cooperation in the government’s criminal investigation.

In addition, pursuant to the terms of a proposed partial civil consent decree also lodged with the court today, Transocean Ocean Holdings LLC, Transocean Offshore Deepwater Drilling Inc., Transocean Deepwater Inc. and Triton Asset Leasing GMBH have agreed to pay an additional $1 billion to resolve federal Clean Water Act civil penalty claims for the massive, three-month-long oil spill at the Macondo Well and the Transocean drilling rig Deepwater Horizon. Under the civil settlement, the Transocean defendants also must implement court-enforceable measures to improve the operational safety and emergency response capabilities at all their drilling rigs working in waters of the United States.

“This agreement holds Transocean criminally accountable for its conduct and provides nearly a billion dollars in criminal and civil penalties for the benefit of the Gulf states.” said Attorney General Eric Holder.

The settlement concluded the Justice Department’s investigation into Transocean’s responsibility for the spill, a question that was often fraught with accusations and counter-accusations between the contractor and BP.

The hostilities  began on the rig itself, as investigations revealed deep disagreements over operations in the run-up to the blow out. “This wasn’t our accident,” BP’s chief executive declared at one point, laying blame on Transocean’s systems, equipment and people. Transocean later accused BP of hoarding results and information from its own investigation into the spill. The finger pointing inspired President Obama to criticize both companies, calling the public argument a “ridiculous spectacle.”

Transocean has not faced any felony charges at the personell or corporate level, but BP has pleaded guilty to 12 felony counts including “seaman’s manslaughter” and obstruction of Congress, as well as two misdemeanor counts under the Clean Water Act and the Migratory Bird Treaty Act. Two of its site leaders have pleaded not guilty to multiple felony counts of manslaughter, and one of its executives pleaded not guilty to misleading a congressional subcommittee. The company could also face up to $20 billion in civil fines under the Clean Water Act.

As for Transocean, its stock rose 7 percent following yesterday’s settlement announcement.

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.

BP has agreed to pay a historic $4.5 billion criminal fine over a six-year period, after pleading guilty to 11 felony counts and criminal charges for the 2010 Deepwater Horizon disaster that killed 11 workers. After two years, the litigation is not yet over since BP faces damages from Gulf states and additional civil charges from the Justice Department.

Much of the fine, $2.4 billion, will go to Gulf of Mexico restoration, where 5 million barrels of oil spilled over 87 days. Even now, an estimated 1 million barrels of oil remain in the waters, with excess oil washing up on Louisiana beaches as recently as September. Oil-soaked pelicans and other wildlife continue to wash up on shores. The disaster’s other legacies have produced eyeless shrimp and fish with lesions.

BP has earned tens of billions in profit since the 2010 disaster. In the last quarter alone, BP earned $5.4 billion net profit, bringing its total for the year to $9.7 billion. The company retains $15 billion in cash reserves, and has also spent $15 million lobbying Congress since 2011.

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.