By Kathryn Maureen Ryan
Impunity Watch Managing Editor

WASHINGTON DC, United Sates of America – On Thursday a judge ruled that oil giant BP PLC (formerly British petroleum) was grossly negligent in its conduct which lead to the blowout that caused an explosion that killed 11 workers on the Deepwater Horizon oil rig and caused the largest oil spill in United States history. Carl Barbier, Judge of the United States District Court for the Eastern District of Louisiana, finding of gross negligence, or more reckless and extreme behavior, means that BP faces up to $18 Billion in penalties under the Clean Water Act. BP faces as much as 18 billion in pollutions fines, mostly in penalties under the Clean Water Act, far more than the $3.5 billion the company had put aside to pay for civil penalties it expected under the Clean Water Act. If the judge’s ruling is upheld the payout the company will be forced to pay under the Clean Air Act would be higher than any penalty paid in the history of the legislation. BP shares fell $2.72, or 5.7 percent, to $44.99 per share midday on Thursday, dropping the company’s market value by $7 billion. The price per share was near $60 just before the April 2010 spill.

As a result of the ruling BP now faces a fine under the Clean Water Act of $4,300 per barrel of oil spilled during the 2010 spill. While the total number of barrels spilled is being debated it is likely to fall between 2.4 million and 4.1 million, which would make for a fine of between $10.3 billion and $17.6 billion. BP has said that it will appeal the ruling which will put on hold the final decision on the total fine to be paid by BP and will likely delay pending court cases concerning the 2010 spill.

During the six months after the Deepwater Horizon oil rig exploded more than 8,000 birds, sea turtles and marine mammals were found injured or dead in the Gulf region. Scientists are still assessing the long-term effect that the estimated 170 million gallons of crude oil that spewed into the Gulf of Mexico during the BP oil spill will have on the Gulf and its critical ecosystems. Although oil is no longer readily visible on the surface of the water in the Gulf, it isn’t gone. Scientists have found significant quantities of oil on the seafloor, and the oil that has already washed into wetlands and beaches will likely persist for several years or even decades. Microscopic particulate oil is also hazardous for marine life, effecting life at all levels of the food chain and ultimately impacting the fishing economy in the gulf region.

Scientists will continue to watch for fluctuations in wildlife in the gulf region. Four years after the 1989 Exxon Valdez oil disaster, the largest oil spill in United States history until the 2010 BP oil spill, the herring population collapsed demonstrating that the effects of oil on ecosystem’s may take years to be seen. Nearly 20 years after the Exxon Valdez spill the Herrin population has not yet recovered.

For more information please see:

Al Jazeera – Court Orders BP to Pay Up To $18 Billion in Damages for Gulf Oil Spill – 4 September 2014

Bloomberg – ‘Worst Case’ BP Ruling On Gulf Spill Means Billions More in Penalties – 4 September 2014

The Wall Street Journal – BP is Found Grossly Negligent in Deepwater Horizon Disaster – 4 September 2014

The National Wildlife Federation – How Does the BP Oil Spill Impact Wildlife and Habitat? – 2014

By Kathryn Maureen Ryan
Impunity Watch Managing Editor

Washington D.C., United States of America – Halliburton, North America’s largest oilfield services provider has reportedly reached a $1.1 billion settlement for the majority of claims related to its role in contributing to the BP (formally British Petroleum) Deepwater Horizon Oil Spill in the Gulf of Mexico in 2010. The settlement, which includes legal fees, was announced on Tuesday and would be paid in three instalments into a trust until appeals are resolved over the next two years. The settlement is subject to approval by the U.S. District Court for the Eastern District of Louisiana, Halliburton said. The company announced the settlement on their website in broad terms without providing any statements form company executives.

The settlement would protect Halliburton from certain punitive damages if the court were to rule later that the company had been negligent or ‘grossly negligent’ for its role in contributing to the blowout, the company’s Chief Financial Officer Mark McCollum said. Following the announcement Halliburton’s shares were down 0.18 percent at $67.49 in afternoon trading on the New York Stock Exchange. “We think this is a smart move by Halliburton,” said Stewart Glickman, an equity analyst at S&P Capital IQ. “While state claims by Louisiana and Alabama remain, we think this trims legal overhang.” Rig contractor Transocean, which employed nine of the 11 workers killed on the rig, agreed to pay $1.4 billion in settlement last year, while BP has paid about $28 billion so far.

The deal comes as Halliburton, BP and Transocean await a ruling form United States District Judge Carl Barbier in New Orleans on the degree to which each actor was negligent in the explosion and resulting oil spill. By settling, Halliburton would avoid the risk of higher damages if it is found to be grossly negligent. “This lifted the uncertainty and eliminated the impact of a potential negative ruling from Judge Barbier,” said Tom Claps, a litigation analyst at Susquehanna Financial Group.

Halliburton was BP’s cement contractor on the Deepwater Horizon drilling rig that exploded on Earth Day 2010. The explosion killed 11 workers and triggered the largest oil spill in United States history, spilling 4.9 million barrels of oil into the Gulf of Mexico over 87 days. The company was responsible for the placement of centralizers that are intended to help stabilize the well bore during the cementing process. Halliburton had earlier blamed BP’s decision to use only six centralizers – to save “time and money” – for the blowout that caused the explosion and massive spill.

David Uhlmann, a law professor at the University of Michigan and a former chief of the Justice Department’s environmental crimes section, said that Halliburton does not admit any liability in the settlement. However, he argues that the company never have agreed to pay more than a billion dollars unless there was substantial evidence that it was negligent.” The oil spill cost billions of dollars in economic damages for Gulf residents and the regional economy and threatened critical ecosystems in the region. The long-term economic and environmental impacts of the spill remain unclear.

For more information please see:

Al Jazeera – Halliburton to Pay $1.1bn for US Gulf Spill – 2 September 2014

Reuters – Halliburton to Settle U.S. Gulf Spill Claims For $1.1 Billion – 2 September 2014

The New York Times – Halliburton to Pay $1.1 Billion to Settle Damages – 2 September 2014

The Wall Street Journal – Halliburton to Settle Deepwater Horizon Claims For $1.1 Billion – 2 September 2014