Why BP’s $20 Billion Settlement is Business as Usual in the Gulf of Mexico
Antonia Juhasz analyses the lasting devastation from the spill in the Gulf and the renewed commitments to offshore drilling
SHARMINI PERIES, EXECUTIVE PRODUCER, TRNN: Welcome to the Real News Network. I’m Sharmini Peries coming to you from Baltimore.
April 20 is the sixth anniversary of the disastrous BP oil spill in the Gulf of Mexico, the biggest marine oil disaster in history. While communities in the gulf are still suffering the consequences of that spill and have been protesting, calling to halt drilling in the gulf, the Obama administration recently released a five-year plan offering oil companies new drilling leases in the Arctic and the gulf.
On to talk about the continued battle against offshore oil drilling is Antonia Juhasz. She’s joining us from Texas today. Antonia is oil and energy analyst and journalist. She is the author of three books on the oil industry, among them “The Tyranny of Oil” and, most recently, “Black Tide: The Devastating Impact of The Gulf Oil Spill.” Antonia, good to have you with us today.
ANTONIA JUHASZ: Thanks for having me on again. Nice to be with you.
PERIES: So, Antonia, let’s talk about the sixth year anniversary and the consequences of this disaster on the people and marine life in the region.
JUHASZ: Absolutely. You know, it’s been six years since the April 20 blowout of the Deepwater Horizon, the death of 11 men on the rig and the beginning of a three-month-long, continuous, massive oil spill in the Gulf of Mexico. I was in a submarine, I believe we’ve spoken about this, about a year and a half ago in the Gulf of Mexico at the site of the BP oil spill, about a mile below the surface of the ocean, and can personally attest to the fact that the ongoing impacts of this spill continue, from the depths of the bottom of the ocean, throughout the aquatic system, onto land and air and from people to wildlife to sea life and to all sorts of vegetation.
The impacts are still being felt economically and also in terms of health, and just a devastating series of findings continue to come out, showing us how long the impacts on people and wildlife and vegetation will continue to unfold. The most recent finding that just came out this month is a result of what we’re likely to see, which is a continuation of many new scientific studies being made available, because in February the federal government’s Natural Resource Damage Assessment, which was its whole calculation of all of the environmental impacts of this spill, was completed, and then the scientific studies that went into that calculation are now being made public, and one of those–Yeah?
PERIES: I understand that one of them is about the number of dolphins that are dying of the effects on its, effects in wildlife in general and then it’s offspring as well. Tell us more about that.
JUHASZ: So, this was a paper that found that dolphins are dying, both in utero and in stillbirth, at unprecedented amounts as a direct result of the oil spill, and it also found that the impacts on dolphin species across the gulf are likely to continue to be felt for as much as 50 years into the future because reproduction has been so hard hit.
And this had to do with the functioning of the females’ lungs and their capacity to carry births to term, and we’re seeing, therefore, not only die-offs of adult dolphins at record rates, which had been witnessed across the golf, but now also clearly describing the lack of the reproductive capacity of dolphins to carry on, you know, their species for the long term at this point. As I said, 50 years, in one of the studies, for impacts.
PERIES: So, that’s a brief picture of the impact on wildlife, and, of course, the people that are protesting against all this, but what is actually happening in terms of the cases underway against BP and damages that they have had to pay, and of course I understand that they recently had an annual general meeting, so what has happened to BP?
JUHASZ: BP has definitely been affected by this disaster and there have been a long series of legal cases against BP. The legal cases essentially came to conclusion this month, after six years’ worth of legal wrangling, and in the end these are really going to end up being the best that BP could have hoped for, unfortunately, and so what the most recent conclusion was, Judge Barbier in Louisiana, who has been covering this case for six years now, accepted a settlement agreement between BP, the federal government, five states and hundreds of local communities, and this total judgment was for 20 billion dollars for BP.
Now, that sounds like a lot of money because it is a lot of money. Unfortunately, this was also the largest offshore oil drilling spill in world history and it caused irrevocable damage throughout the gulf, and a straight application of our laws should really have put this cost closer to 150, 190 billion. Instead, the total cost for BP is going to end up being somewhere around 50 billion, which fits just right in with what their expectations were, that their total costs would be probably as much as 60 billion. So they’ve put out statements that say, basically, we’re fine. We can handle this settlement, which is why we accepted he settlement, and really, you know, they can.
And it’s unfortunate that it’s not an amount of money that is equivalent to not only our laws but what the economic losses are. So, under the US oil pollution act, BP is required to put everything back the way it was before the spill. In addition, we have the clean water act, which states that we have a per barrel of oil fine that’s applied to oil companies when they spill oil. Now, the appropriate fine under the Clean Water Act alone should have been 18 billion dollars, and the total fine for BP has ended up being about 20 billion dollars. That’s not even counting, you know, if you count 18 billion that should have been applied for the clean water act alone, that means that’s not taking into account all the natural resource damages, all the environmental damages, et cetera.
So BP really got off for what it should have paid. The National Wildlife Federation, for example, estimated that the natural resource damage cost should have been closer to 32 billion dollars just for the ecological impacts, and so, you know, while this is a large settlement, a historic settlement, it’s not nearly enough to account for the damage that BP did or the legal requirements for what BP should have been held account to.
What that means is that, you know, in essence it’s business as usual in the Gulf of Mexico, and has you had alluded to in that intro, you know, I was most recently in the Gulf of Mexico covering a protest that took place, and I’ve never seen any protests like this in the six years that I’ve been covering the Gulf of Mexico. You know, at first when this happened we’re talking about an economy that’s deeply intertwined with offshore drilling, and people were very reticent to turn against drilling. Well, that’s really changed as the impacts of the oil spill have unfolded and continue to expand, and as I think people in the gulf have not seen the appropriate response on behalf of companies or the government to address what caused the disaster in the first place and ongoing problems in the Gulf of Mexico.
So there was this mass protest of hundreds of people taking over a federal lease sale that the Obama administration had tried to hold within the iconic Superdome in New Orleans, the, you know, climate disaster location of last resort during Hurricane Katrina, and within the Superdome the Interior Department tried to hold a new lease sale for many more leases for offshore drilling in the Gulf of Mexico, and people from across the Gulf of Mexico came together there to demand that no new leases be sold. And that position has really turned around in these six years, where the demand is now, you know, we don’t want to see more drilling in the Gulf of Mexico or any of our offshore waters, which is quite different from where it was, you know, when this disaster occurred.
PERIES: And, are they successful? Are they being heard, their cry for stopping drilling in the gulf?
JUHASZ: Well, unfortunately, the lease sale went ahead over the chants and protests of the crowds that were there. It was a historically low lease sale, which is good, but offshore drilling, unfortunately, is expanding, so the Obama administration is in the process of proposing a new five-year lease plan, and the latest proposal in the development of that plan includes even more drilling in the Gulf of Mexico, expanded offshore drilling at even far greater depths than those at which BP was drilling, much greater, about twice as far [as] when the Deepwater Horizon exploded. It also involves new lease sales, proposed lease sales in the Arctic, which many people had thought would be taken off the table.
It leaves the existing drilling in the Pacific where we, I’m from California, do a lot of offshore oil drilling. That stays in place, and the one thing that it did do was, in response to over a million public comments in opposition to drilling in the Atlantic, took drilling in the Atlantic off the table for the next five years.
PERIES: And I understand that in the recent annual general meeting that BP, well, first of all, I guess I should ask you this question first. Hold on. Antonia, is BP part of the bidding process for these leases?
JUHASZ: Oh, yes. BP was one of the major bidders. BP has remained consistently active in the Gulf of Mexico, was one of the largest bidders in this most recently sale as well.
PERIES: And also tell us a little bit about what’s happening in the corporation itself. I understand the CEO of BP during the disaster has now moved on and they have a new CEO, and what’s his plan for drilling in the gulf?
JUHASZ: Yeah, well, Tony Hayward, who was the CEO during all of these crisis, a name that’s very well known to people in the Gulf of Mexico for sure, he’s now the head of a new oil company which is making huge amounts of money with operations in Iraq and in Iraqi-held Kurdistan, but also with oil trading. They’re making huge amounts of money trading on the volatility of the price of oil. So he’s doing quite well.
The new CEO, Bob Dudley, on the other hand, well, he’s doing well, but he just faced a huge backlash. BP just held their annual general meeting in London this week, and even though BP’s profits fell in the fourth quarter by 90 percent from the year before, and even though they have laid off thousands and thousands of workers around the world, they gave Bob Dudley a 20 percent pay increase this year, putting his pay up to almost 20 million dollars, and there was a huge shareholder revolt against that pay increase. 60 percent voted against it. Unfortunately, that vote was really just symbolic, and the pay increase is still going to go forward.
So BP [inaud.] the whole oil industry is suffering dramatically as a result of the dramatic decline in the price of oil, which was really their doing. They’re reaping what they had sown. They sought to produce oil everywhere, on every corner of the Earth, at the deepest depths of the ocean, you know, from tar sands, from fracking, fighting wars for oil in Iraq, and lots of oil got put on the market as a result of that, which caused the price to fall, and that’s really hit these companies, and it’s hit BP quite dramatically as well. They, however, remain committed to oil production and oil production everywhere all the time, and believe that their, you know, fates will turn again for the better in the short term.
PERIES: Antonia, tell us also about the other CEOs that were involved in this spill and disaster and the legal cases that have been brought up against them and where the cases are at at this time.
JUHASZ: Really, we’ve gotten to this point with the six-year anniversary that most of the legal cases against BP have now been resolved, and the biggest ones were resolved in this last month. And unfortunately, even though the federal government sought prosecution against four executives from BP, from BP and Transocean, and those cases had originally included charges of manslaughter for responsibility for the 11 men who were killed on the rig, all four of those cases are now concluded. The final one concluded this month, and the cases were all either acquitted or the worse charges brought were minor, misdemeanor charges under the Clean Water Act and probation for those involved.
So that included a BP executive who lied to Congress and lied to the federal government about the size of the spill, which was, you know, a huge problem throughout the course of those three months. This included key decision making from those who were the head, in leadership positions on the rig at the time of the disaster that led to the blowout, you know, getting either acquitted or just misdemeanor charges. you know, so this is a real travesty in terms of, no one’s going to jail, and no one got even a serious charge, from executives of either BP or Transocean or Haliburton, for that matter, for causing this disaster.
In addition to fact, however, that those four men who were charged, I have to say, I don’t think are the people who should have borne ultimate responsibility. The chief executives of BP, not the guys on the rig but the guys on the shore who are making knowing decisions, year after year after year, that, and then in the years leading up to and the months and days leading up to this disaster knew that they didn’t know how to deal with a blowout at Deepwater, knew that they were making risky decisions, knew that they had let the blowout preventer, for example, which is supposed to prevent blowouts, run out of batteries, knew that they didn’t have the equipment that they needed.
They made those decisions and that led to what really was an expected outcome, which was a mass blowout in Deepwater for which they had no preparation and no planning, and I think those executives should have been, you know, should have gone to jail, should have been held to account, and they were never even charged. So on that side, I think, again, we have a pretty large legal failure in making sure that those who committed these crimes be held to account, and most importantly that there is, you know, a serious enough outcome to making those decisions so that other people, including at BP, will make those decisions in the future.
PERIES: Antonia, I thank you so much for joining us today.
JUHASZ: Thank you. Thanks for having me.
PERIES: And thank you for joining us at the Real News Network.
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