BP Oil Spill

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BP Oil Spill 

In the News

“BP, whose $5.6 billion net profit in the fourth quarter was larger than expected and boosted by higher oil prices, raised to $40.9 billion its estimate for the cost of the Gulf oil spill. The charge covers the cost of the explosion aboard the Deepwater Horizon rig, which killed 11 workers in April, as well as plugging the well and cleaning up the southern U.S. coast.”
BP resumes dividends despite full-year loss
Associated Press, 2/4/11

 “While only 34 of the 125 rigs in the Gulf are actually working -- half the total that were active before the Macondo well blowout -- the vast majority of the idle rigs, particularly those slated for big-ticket jobs in deepwater, will remain under contract for the rest of 2011.”
More oil drilling rigs are in Gulf of Mexico than before BP oil spill
The Times-Picayune, 2/3/11

“When the National Oceanic and Atmospheric Administration issued a report on the size of the BP oil spill last year, one congressman had some questions about it. And six months later, he still does.”
BP Oil Spill Report Spurs Congressional Inquiry -- and Claim of Stonewalling
Politics Daily, 1/26/11

On April 20, 2010, a BP exploration rig 50 miles off the Louisiana coast blew out and set fire to Transocean’s Deepwater Horizon offshore oil rig, killing 11 people and resulting in the largest oil spill and environmental disaster in U.S. history.

President Obama called on BP to create a $20 billion fund as one avenue for Gulf Coast residents and businesses to be compensated for their losses due to the spill. The Gulf Coast Claims Facility, operated by prominent Washington, D.C. lawyer Kenneth Feinberg, has been active since Aug. 23, 2010.

This voluntary claims process may quickly and fairly compensate some for their losses, but ultimately, the BP fund will work alongside the civil justice system to ensure Gulf Coast residents are made whole and to hold accountable the negligent corporations responsible for the explosion and spill.

Watch AAJ President Gibson Vance explain the BP oil spill including legislation currently in Congress and how those on the Gulf Coast will seek recourse for the damage. 

   

There are several maritime laws that will govern resolution of this disaster in the courts. Discussion has focused primarily on the need to raise the $75 million cap under the Oil Pollution Act (OPA), which limits the company’s liability for economic damages inflicted on area residents and businesses.

But the problems with maritime law are much bigger than OPA’s severely inadequate liability cap. Changes also must be made to two other maritime laws that govern liability of the disaster – the Limitation of Liability Act (LOLA) and the Death on the High Seas Act (DOHSA). 

The Death on the High Seas Act (DOHSA):

Gordon Jones, 28, was working as a mud engineer aboard the Deepwater Horizon when the rig exploded, leaving his widow Michelle to care for their two young sons, one born just weeks after his father's death. Watch his father and brother, Keith and Chris Jones, discuss why Congress must fix the Death on the High Seas Act.

DOHSA is the law under which the 11 families of the workers who died in the Deepwater Horizon oil rig explosion can bring wrongful death suits against BP. Passed in 1920, this law limits BP’s liability to economic damages only, which in most cases means burial costs and the loss of support that family member would have provided.

Under DOHSA, BP is immune from entirely compensating families for the horrible way in which their loved ones died and the relationship they have now lost. DOHSA does not just significantly discount the worth of a lost loved one’s life – it is also inconsistent. The law was amended in 2000 in response to the TWA Flight 800 crash so the families of commercial aviation victims that die on the “high seas” can recover full damages, but the same protections were not extended to those killed on vessels like the Transocean rig. DOHSA now needs to be amended to provide equal remedies to victims of oil spills and other maritime disasters on the high seas, starting with the 11 brave men who died on the Deepwater Horizon.

The Limitation of Liability Act (LOLA):
The Limitation of Liability Act (LOLA) is the outdated law under which Transocean is seeking to limit its liability to the post-accident value of the Deepwater Horizon: just under $27 million, which is their estimated value of the rig as it sits on the bottom of the ocean. This relic of was passed in 1851 to protect owners who did not have control over their vessels – like, for instance, if pirates overtook and set fire to a ship, the ship’s owner would only be on the hook for an amount equal to the worth of the ruined ship.

The act was intended to protect the value of a ship’s cargo, not human life. With modern insurance and communications technologies now standard, this 160-year-old law is totally antiquated, and is just another procedural obstacle that Transocean is using to deflect accountability for this disaster. Further, the Deepwater Horizon was a foreign flagged rig, which allowed Transocean to conveniently skirt U.S. taxes and regulations. Allowing Transocean to also abuse U.S. liability protections just goes too far.

Jones Act:
The Jones Act allows injured “seamen,” and families of seamen that file wrongful death claims, to obtain damages from their employers for the negligence of the shipowner, the captain, or fellow members of the crew.  A “seamen” under the Jones Act is an individual who has a substantial employment connection to a vessel. Passed in 1920, this act limits Transocean’s liability for wrongful death claims to economic damages and pre-death pain and suffering only. Legislation has been introduced that would amend the Jones Act to provide the noneconomic damages of recovery for loss of care, comfort and companionship to surviving family members from the seamen’s employer.

The Oil Pollution Act:
The Oil Pollution Act (OPA) caps BP’s liability at $75 million for economic damages inflicted on area residents and businesses. The law was passed in 1990 in response to the infamous 1989 Exxon Valdez oil spill in Alaska’s Prince William Sound. In addition to the liability cap, it also created a new tax on oil producers and a national Oil Spill Liability Trust Fund with a $1 billion cap per incident.

Congress is considering raising this $75 million cap, which is severely inadequate. It would barely scratch the surface of the catastrophic damage the spill has caused or even begin to hold BP accountable, which made almost that much per day – $62 million – in the first quarter of 2010. This cap is an example on a grand scale of why arbitrary liability caps are just not reasonable: you cannot decide the expense of a disaster before it happens. Liability caps allow companies like BP to avoid bearing the responsibility for the full cost of the damage they inflict.

 

 

 

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