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Maybe this will separate Feinberg from his lofty attitudes:
A legal expert says BP made "inaccurate and misleading" statements about its oil spill compensation fund, the Gulf Coast Claims Facility. Public statements about the fund portray it as neutral though it is operated through BP; "portray GCCF procedure as more just and fair than" the law demands; and claimants are told they will have to pay substantial attorneys' fees if they do not accept offers from the GCCF rather than sue BP, according to Geoffrey Hazard Jr., a professor at the University of California's Hastings College of Law who was hired by plaintiff counsel to determine whether Kenneth Feinberg's BP oil spill claims facility is releasing inaccurate information.It's worth citing the specifics of Hazard's brief here, especially for those readers who may themselves be involved in the claims process.
Hazard makes the claims in a 10-page statement, with 47 pages of appendices, submitted to U.S. District Judge Carl Barbier, who is hearing the massive oil-spill cases.
(NB: The pdf won't let me cut and paste, though it says it will. Any typos in the original I found and corrected are indicated in [brackets], as are any clarifications. I take full responsibility for any other typos.) (Also, sorry for the funky indenting: can't seem to correct it.)
Hazard's brief (pdf):
IN RE: OIL SPILL by the OIL RIG "DEEPWATER HORIZON" IN THE GULF OF MEXICO, on APRIL 20, 2010
THIS DOCUMENT RELATES TO:
4. The grievance concerning which Plaintiffs have sought the assistance of the Court is essentially that public statements by Mr. Feinberg, being received and possibly heeded by persons having potential Oil Spill claims, are inaccurate and misleading.
5. An opinion of an expert cannot itself determine issues of law, which are for the Court to decide, such as that concerning the roles and relationships of the Feinberg firm, GCCF and BP in this matter. However that issue is resolved, expert opinion can be proper as to the accuracy of the statements complained about, whether in application of the Rules of Professional Conduct or of the Court's authority under Rule 23.
6. A recognized standard of accuracy is whether the statements are materially misleading considered as a whole, which is the modern definition of fraud. Another standard is that of the Federal Judicial Center's Plain Language Guide for Notice in federal class actions. This guide advises that communications to class members should give "sufficient information for a class member to make an informed decision," and avoid omitting "information that the lawyers may wish to obscure." The statements at issue are being disseminated in public media for the purpose of encouraging Oil Spill claimants (who are also putative class members in the MDL [multidistrict litigation]) to enter contract relationships through GCCF, on an informed basis.
7. In my opinion the statements are inaccurate and misleading in the following respects:
a. The statements contrast the GCCF procedure with "the tort system." This is misleading because the Oil Pollution Act ("OPA") imposes duties on BP that are more exacting and beneficial to claimants than in the ordinary tort system.
b. The statements portray GCCF procedure as more just and fair than that in the ordinary tort system. The accurate contrast is with the OPA. The OPA requires a responsible party, such as BP, directly to receive claims, to make interim payments, and to fully compensate a claimant for loss caused.
c. The statements portray GCFF as an independent mediator. GCCF is not entirely independent because its operating expenses, which are substantial, come from BP. The GCCF is not a mediator, according to ordinary understanding of that term, because it was established unilaterally by BP and not with agreement of opposing claimants.
d. The statements say or suggest that claimants who proceed outside the GCCF will have to pay a large percentage of their recovery to legal counsel (40% being specifically mentioned). This is misleading because the claims prosecuted outside GCCF will or can be within the present class proceedings, in which the Court has the authority to limit the fees accruing to claimants' counsel.
e. The GCCF procedure requires claimants, in order to receive final payment, to release BP from the types of damages (such a[s] punitive damages and claims preparation expenses) that are not being considered by the GCCF. The release also covers other possibly liable parties. If the release covered only BP, claimants could assert claims against these other parties, to recover amounts not obtain from BP.
f. As I understand, attorneys being hired by the GCCF to assist claimants are not working pro bono but are being paid by BP. If that is so, those attorneys have a professional duty to inform any claimant they may assist of that compensation arrangement.
8. If the foregoing statements are attributable to BP, on the basis that GCCF is its agent, they should properly be evaluated by the Court through its inherent authority and under Rule 23.
a. The Manual for Complex Litigation[...] provides: "Rule 23(d) authorizes the court to regulate communications with potential class members, even before certification." That section also states: "if class members have received inaccurate precertification communications, the judge can take action to cure the miscommunication and to prevent similar problems in the future." This is long-established law. [...] "Misleading communications to class members concerning the litigation pose a serious threat to the fairness of the litigation process, the adequacy of representation and the administration of justice generally."
b. These authorities are consistent with the First Amendment[...], as are many other controls on statements about litigation.
c. There are qualifications where the party opposing the class has a continuing relationship with the potential class members, such as that of employer-employee, or "in the ordinary course of business." Here there are no such relationships as to most [i]f not all of the potential class members.
9. If the statements are attributed to Mr. Feinberg as a lawyer representing a different entity (the GCCF itself), they may also properly be evaluated under the Louisiana Rules of Professional Conduct and the counterpart professional rules of other jurisdictions. The relevant rules of all jurisdictions in substance are the same.
10. Consideration of the grievances about the public statements has been short-circuited by questions concerning the role of the Feinberg law firm and GCCF and the relationship to BP. On one hand it is argued that the law firm and GCCF are independent. On the other hand it is implicitly affirmed that GCCF is an agent for BP, because otherwise there is no one fulfilling BP's responsibilities under OPA. It cannot be both ways.
a. It seems to be accepted that, if Mr. Feinberg and his firm are identified as "lawyer for BP," the Rules of Professional Conduct of Louisiana would apply. The statement complained of would be assessed in terms of Rules [etc...] If they were so assessed, some of them could be regarded as professionally improper. If Mr. Feinberg and GCCF were to be regarded as third-party neutrals, Rule 2.4(b) would apply.
12. The Feinberg firm and GCCF can properly be considered agents for BP, even though they seek to be "fair and independent."
a. Whether they are "fair" is the issue presented by Plaintiff's grievances. If the statements complained of are inaccurate, to that extent BP through its agents is not being fair.
b. It is a reasonable interpretation of OPA that a responsible party, such as BP, is required to be fair and to act in good faith in fulfilling its responsibilities, directly or through an agent, much as an insurer is required to do with respect to its insureds.
Pensicola lawyer and BP claims expert Jeff DeWeese is urging clients not to file final claims with the Gulf Coast Claims Facility.
Doing his best Feinberg impression, DeWeese [gives] an example of how a meeting with the claims czar would go. “I am Ken Feinberg, everything I have done, we have done wrong. We are unresponsive, we don’t answer your calls, we need more people on the telephones and you don’t know how we have come to the number we have... what else can I help you with?” he said with a chuckle.And right on cue:
“It’s going to go exactly like that,” he added.
DeWeese said the claims process is an inexact science. One example he gave was a client who has eight restaurants along the coast. Out of the eight, six of them received 100 percent of what they requested. Out of the two others, one got 50 percent of what they asked for and the other got denied completely.
“The one that got denied is the closest one to the Gulf,” he said. “We have seen hotels in Lakeland, Fla., get paid for 100 percent of their claims. Restaurants in Melbourne, on the Atlantic, are getting paid for 100 percent of their claims, while restaurants here are getting denied.”
[...T]he best advice he could offer to his clients and those who are in the same situation is to keep filing interim claims. He said Feinberg and the GCCF would do their best to get people to take a final claim, which would prevent them from suing BP or any other related party down the road.
He also recommended for businesses to keep as many detailed records as possible and to prepare a 2011 budget in regard to what you think a “normal” year would look like. DeWeese said as the year progresses, if you find that you are under budget, than that is just more evidence to support your claim.
“If you don’t know what your future is going to look like, why would you want to file a final claim?”
The Gulf oil spill didn't reach South Florida beaches or shoreline, but Palm Beach County is still hoping BP will cover its costs of preparing for an oil spill.*
Palm Beach county officials used in-house employees to come up with its emergency response plan.
Dade County and Broward County was reimbursed and raised an excellent point that it cost the county because staff had to work on this as opposed to working on other issues," said Palm Beach County Assistant County Administrator Vince Bonvento.
Bonvento said the county also spent about $6,500 to hire a company to do water testing. Officials are now in the process of documenting staff time and cost associated with developing their contingency plan and they and hope to present it to BP next week.
There's a lot of fallout this week in the wake of the National Oil Spill Commission's release of their final report.
The BP disaster thrust itself on the nation’s collective conscience once more last week with the report of the commission appointed by a president who had previously pledged that “the days of science taking a back seat to ideology are over.” It certainly didn’t look that way last June when President Barack Obama filled out a panel that was long on politicians and activist environmentalists and very short on experts on drilling for oil.
To be sure, any such group needed to include academics, environmentalists and, yes, party loyalists. But certainly one or two technical experts would not have been unreasonable. The industry had every reason to expect the worst, particularly after the secretary of the interior vowed “to keep a boot on the neck” of the world’s third-largest oil company.
The commission errs egregiously[...] in insisting that the deficiencies that led to the Macondo blowout were “systemic,” which suggests that several hundred exploration and production firms and related service companies share guilt for this disaster. BP was probably about 90% of the Macondo problem. It is well-known that, starting with Lord Browne, BP repeatedly took shortcuts other companies eschewed, shortcuts that led to refinery failures and pipeline failures and finally to the great drilling disaster that put the whole industry’s future in the U.S. at risk.
Moreover, anyone who has ever worked on an offshore drilling program knows that the operator, in this case BP, sets the tone, and that all of the contractors working on the project are there at the sufferance of the operator. The organizational model has more to do with a military chain of command than it does with any New England town hall meeting.
Although the recent report of the National Commission on the catastrophe purports to provide "thorough analysis and impartial judgment" on the "causes" of the explosion and "the lessons learned," one can read the 306 page report and the supporting staff papers and find barely a word — much less an assessment — about the board and senior management's role in the multiple failures of prevention, response and recovery.
Although the National Commission report emphasizes the importance of corporate safety culture and safety management "from the highest levels on down" as a necessary complement to regulatory reform, it never looks at the overall global organization of BP and never evaluates what board and business leaders did and did not do in furtherance of those goals.
We need a much broader and deeper understanding of the role of board and senior management in a large, complex corporation. BP and other companies in the oil and gas industry (as well as any corporation with potentially catastrophic operations) need to understand these larger governance and risk management lessons in meaningful detail in order to address complicated risk across far-flung global firms more effectively.
With the Commission's emphasis on understanding "root causes" in order to prescribe both public and private remedies for the future, it is thus striking that it failed so completely to look at broader BP leadership and organizational failures. Such an assessment would have provided a concrete stimulus across the industry to ensure clear board and senior management accountability and responsibility for high priority substantive issues (like deepwater drilling), for essential safety management processes and, ultimately, for creating a safety culture. Such a culture, which a board can measure, truly puts avoidance of accidents first and prevents imprudent cutting of corners due to cost, time, or other pressures. Such an assessment would have exposed in detail the failure of leadership to take ultimate responsibility for oversight and management of subcontractors across the company, not just on the Deepwater Horizon. It would have highlighted how governance failures, not just on the rig but at the highest levels, can lead to catastrophe.
Derivative suits have been brought against BP directors and officers alleging violation of fiduciary duties, in among other things, failing to correct prior safety problems identified in other accidents, and in failing to carry out a settlement mandating governance changes in a prior derivative suit relating to a BP spill in Alaska. If those suits survive procedural hurdles, they may well be settled before extensive discovery and publicity about the workings of the BP board of directors and senior business leaders.
Thus, the National Commission has let the best opportunity to understand the broader governance and risk management issues behind the Gulf explosion slip away. Despite the pendancy of the derivative suits, the Commission could have asked hard questions because many of its other lines of inquiry and factual findings implicate BP liability in other suits or regulatory proceedings (such as whether it was grossly negligent, thus multiplying potential fines).
Given the Commission's recognition of how important was the role of the board and senior management in the systemic failures of prevention, response, and recovery, its silence on that issue is baffling and leaves a major hole in the report on the core question of how boards and business leaders should manage catastrophic risk in complex global corporations.
[W]ith the release of the panel's final report, the show is over. In 60 days, the commission officially goes out of business. Its records will be trucked off to the National Archives in College Park, Md., where they will join the records of hundreds of other presidential commissions.Freek Vermeulen has perhaps the most cutting and insightful take on the report.
"These people file their reports and truthfully, the reports gather dust," Stephen Hess, an expert on the presidency at the Brookings Institution in Washington, D.C., told AOL News. "That doesn't mean they are useless. They create a discussion. And sometimes the discussion goes on at universities and in other venues. But the idea that they are going to solve any particular problem is rare."
What's to become of the Oil Spill Commission's work remains to be seen. The panel looked into a[...] watershed event in American life: the worst environmental disaster in the nation's history. But the commission's probe is just one of several, including the Justice Department investigation that will determine whether criminal charges are filed and fines are assessed against BP and its partners.
William Reilly, one of the panel's co-chairmen, [...] said he and his co-chairman, former Florida senator and governor Bob Graham, plan to testify to House and Senate committees Jan. 26.
Then there's always that bully pulpit. Said Reilly: "We're going to make a lot of noise."
The report is to be applauded for its clarity and thoroughness, and for recognising the complex and systemic nature of the cause. However, what it fails to recognise is that the structural failure of management is embedded in an even wider context, namely how in our society we run our economies and corporations. Given this wider economic context, it is inevitable that similar disasters – of similar apocalyptic proportions – will happen in the future.*
Many of the descriptions of how the oil rig disaster unfolded, as well as the reports’ conclusions, for example, could word for word have been taken from reports on the Union Carbide gas disaster in Bhopal in 1984. Swap some names and dates and a few technicalities and the various reports’ descriptions of a lack of a top-down safety culture, design errors, break-down of communication, and the influence of cost-cutting, and so on are near identical. And that tells us something; if alone that this is unlikely to be the last disaster of its kind that we are going to witness.
Professors Gabriel Szulanski from INSEAD and Sid Winter from the Wharton School, who examined corporate disasters, wrote about this “When people try to explain a disaster after the fact (an accident in a nuclear plant, for example), they are typically under pressure to name a relatively simple cause so that existing policies can be revised to prevent similar events in the future”. We are eager to find a culprit, and someone to blame, and the CEO of the offending company is the most logical and easiest target[...]
The anthropologists Anthony Oliver-Smith and Susanna Hoffman, who examined a variety of man-made disasters, concluded about this “a disaster becomes unavoidable in the context of a historically produced pattern of vulnerability”. And that is what we saw at BP; a pattern that produced a situation that at some point was going to go off the rails. Hence, the committee is certainly right that “the missteps were rooted in systemic failures by industry management (extending beyond BP)”.
Where the report falls short, however, probably also because it extends the scope and vision of the committee, is recognising that the way BP, Transocean and Halliburton are managed is the logical consequence of how the world of business operates and is organised in our society. The report for example concludes, with ample surprise and indignation, that safety was not the firm’s top priority. Well, of course it is not, I’d say, because in today’s society we tell our companies that their top priority is shareholder value.
[A]ll BP did and has been doing is to optimise that trade-off for its shareholders – precisely as we expect them to do.
Whenever I ask a group of executives to whom the ultimate responsibility of a company is they proclaim in chorus “shareholders” – some of them even get annoyed if not angry by questioning that very assumption. Because that is what they are supposed to do: maximise the value of the corporation for its owners. And, as said, that implies making risk-return trade-offs. The tricky thing is of course that such trade-offs inevitably at some point somewhere down the line lead to something going seriously off the rails.
In fact, the way we remunerate top managers – including Tony Hayward – is largely through stock options. The only reason to so abundantly use stock options (and not, for instance, stock) is that they stimulate top managers to take more risk. And the world of business and our stock markets in specific are organised in such a way that we believe that that is what we want: top managers who take risks. We applaud them when it goes well, but we vilify them when it goes badly wrong, although that’s simply the other, inevitable side of the same risky coin.
Research – by professors Gerry Sanders from Rice University and Don Hambrick from Penn State – confirmed that CEOs with more stock options take more risks, but they also experience bigger losses. Furthermore, research by professors Xiaomeng Zhang and colleagues from the American University of Washington showed that option-loaded CEOs are more likely to engage in earnings manipulations. Clearly these are not the risks we want CEOs to take, but they are the logical consequence of the way we remunerate them. We ask and reward them for taking risks, so they do.
If we design a system in which firms are expected to maximise shareholder value and CEOs are stimulated to take risks, some of the investments are going to go wrong. And both Union Carbide in Bhopal and BP in the Gulf of Mexico were clearly investments that went wrong.
So the White House committee was right; the Deep Water Horizon rig disaster was caused by a systemic failure of management, but the system surpasses that of the three companies involved. As a matter of fact, whether you analyse the cases of Enron, the old Barings Bank, Lehman or the Royal Bank of Scotland, similar conclusions would be drawn. All these firms and managers operated conditioned by the economic context in which they operated. And since the Presidential Commission is unlikely to change that very context, we will be facing more such corporate disasters of the same kind at some point in the future.
Mississippi has released its own report on Gulf restoration, commissioned by Gov. Haley Barbour.
Bill Walker, co-chairman of the Mississippi Gulf of Mexico Commission, said the report focuses on three areas: a sustainable environment, sustainable economy and programs to address mental health issues associated with the spill.*
The report calls for quickly starting a comprehensive habitat restoration plan in key bays, estuaries and rivers, and promoting the region as a destination spot. The report also recommended the continued testing of marine habitats to restore consumer confidence in coast seafood.
The report recommends Congress provide financial incentive programs to develop and restore the region's economy, including tax-exempt bonds and other tax breaks. The report also recommends the Federal Emergency Management Agency forgive Hurricane Katrina disaster recovery loans to spur economic recovery.
Another goal was to develop long-term, sustainable mental health programs to address stress related to Katrina, the oil spill and other disasters. Those projects would target early intervention and treatment.
While Mississippi looks ahead to restoration, other Gulf communities are still struggling with clean-up efforts.
The beach at South Island is clean, the sky is blue and rare shorebirds are back, foraging along the pristine water's edge. Over there is a stout, black-banded Piping Plover, one of fewer than 10,000 keeping the species from extinction.Elsewhere, in an indigenous community, there is far less progress.
But looks can be deceiving, cautions Noel Britain MacDowell, foreman of the 10-man cleanup crew stationed on a sandbar he calls "Ground Zero" - so named because it got hit first with the worst.
And here's how: with a single scoop of his shovel, MacDowell breaks through the tawny sand to reveal the mattress of toxic black goo under our feet. Like dust swept under a carpet, remnants of the Deepwater Horizon disaster may be out of sight. But not gone. Not by a long shot.
After months of painstaking hand-to-hand combat, bagging the mess with shovels, tar ball by tar ball, a fleet of diesel-powered "marsh hoes" - amphibious excavators - is en route to turn the sand under the careful guidance of federal wildlife officials and the U.S. Coast Guard. In this spot, at least, the pace of cleanup is about to quicken.
But elsewhere, local authorities are getting antsy over what some describe as a sudden downscaling of resources, as the BP cleanup effort shifts from emergency to long-term recovery.
Ken Bond, response supervisor with the Coast Guard's Gulf Strike Team [says...] "You can't just come in and start scraping everything off. We had to take it slow, learn what works and what doesn't, keeping in mind bird nesting seasons and what the vegetation and grasses can withstand. We're learning as we go."
"The subsurface oil you saw on South Island is probably the worst. It is where this work began and it is probably where it will end," said [Coast Guard Lt.-Cmdr. Carolyn] Beatty.
"But looking more broadly at the areas affected, we need to move more gradually as the work becomes more complex. That might frustrate some people. But the fact is that dealing with oil inside the marshes is incredibly sensitive work and the concerns aren't just environmental, but in some cases archaeological. The techniques vary step by step, with some solutions better than others."
Indeed, the broader BP cleanup that peaked with 48,000 workers last fall has dwindled to barely 6,000 today, with the massive offshore effort now over.
An airboat ferries the Toronto Star deep into the weeds on the north shore of nearby Pass a L'Outre, where another patch of Delta marsh grass is surrounded by a ring of faded red containment boom. It too was badly soiled last May, but the idea then was to lay out boom not to keep the oil out, but to keep it in, rather than let tiding flushing risk spreading it further still into the sensitive wetlands.
The strategy of containment appears to have worked, here at least. Airboat captain Minus Perez, a native of Lafayette, describes how months of careful mopping have improved the scene to what we see today, with no surface oil and only a trace of dark stain on the Roseau cane grasses that make up the fragile marsh.
Last May, he said, the oil was like chocolate syrup. Since then, techniques ranging from low-pressure washing to the application of chemical cleaners to manual raking of oil-soaked debris have worked to varying degrees. On this day, a crew is deployed with gas-powered weed-whackers, carefully removing a layer of stained grass in the hope it will sprout anew in the spring.
"This was a real mess. But a lot of effort went into getting to where we are now," said Perez. "The biggest trick has been to keep the birds away while the cleanup continues."
This kind of work is literally for the birds. And well worth the fuss, says Bond, the Coast Guard response supervisor.
"When people think of birds dying in an oil spill, they picture a creature completely covered in oil. But even a little smudge is a risk because it can damage the bird's ability to regulate its body temperature. Everything becomes harder for the bird, lethargy can set it, a kind of slow downward spiral," said Bond.
"There's a lot of effort going in to making sure that doesn't happen, as we struggle to finish this thing."
For a thousand years, Rosina Philippe and her aunt Geraldine Philippe's families fished and hunted in the Louisiana bayou. As members of the Atakapa-Ishak Nation, they have thrived along the lush marshes and canals of Mississippi River delta, surviving on the fertile environment that sustains and nurtures their lifestyle.*
Then the BP oil disaster struck last summer, and things have never been the same.
Listen to Louisiana bayou residents Rosina and Geraldine Philippe talk about the impact of the BP oil disaster on their fishing community[...], the latest installment in a partnership between StoryCorps, NRDC and Bridge the Gulf--"Stories from the Gulf: Living with the BP Oil Disaster."
When the BP well began gushing millions of gallons of oil into the Gulf each day, Rosina realized her lifestyle was seriously threatened. The volcano of oil took a while to reach the bays near their small community in Grand Bayou, LA, but Rosina remembers the exact day it arrived.
"Day 46 we were watching the news as everything unfolded, day after day not knowing where it was going to go. And we kept running patrols wondering when it would come in. On day 46 a member of the community was out on his boat and it came rolling into the bay, I mean tons of it, thick, orange. It was horrible and it just came in and kept coming and there was nothing to stop it. The guy that ran out there to run the patrol ran into a bunch of pelicans caught up in it, and he knew that everything it touched was going to die. And that’s just what happened."
I think the reason why they used dispersants is because they were trying to hide it. Why not leave the oil. It will float up and pick it up, why use the chemicals...without dispersants I really believe the fish and shrimp and seafood would still be clean and the ability to harvest would be there, but with all these chemicals you do not know.
Rosina says people are still spotting oily sheen, tar balls and dispersant-like foam coming into the bays and coastal shores across the Gulf. [...] Rosina doesn't trust the safety of the seafood anymore, and people in her community are starting to plant gardens to grow food from the land instead of relying on their traditional bounty of the sea.
But for all the problems and challenges ahead, Rosina and Geraldine remain resolute that they can get through this ordeal.
"I believe Grand Bayou is going to survive the oil spills and all the other stuff that happened because someone cares, somebody wants to hear about life on the bayou, pass our stories, our lives on...and let them know that life on the bayou is a wonderful life."
In Australia, environmental groups are raising hell about BP's newly purchased presence in what is supposed to be a marine sanctuary.
Resources Minister Martin Ferguson claimed this week that Australia had "one of the world's most effective petroleum regulatory regimes" after he awarded four ultra-deep exploration permits in the Great Australian Bight to BP, the company responsible for last year's Gulf of Mexico oil spill -- the worst in US history.
Ferguson's statement won't go unchallenged. The commission of inquiry he launched into the 2009 Montara oil spill in the Timor Sea revealed gaping holes in the oversight of what was a routine operation in shallow water.
Regulation of offshore oil activities is still yet to be overhauled.
The Montara and gulf spills have not slowed Australia's quest for frontier oil. With the award to BP, there will be 20 offshore blocks where oil exploration is taking place in deep water, thereby qualifying for a special 150 per cent tax write-off.
The tax break acknowledges the fact that deep sea exploration is expensive; what makes it expensive is that companies need to have bigger and more costly equipment because these activities are inherently risky.
What BP is planning for the Bight will prove to be very challenging indeed. [...] BP will have to contend with huge swells in the Bight buffeted by the Roaring 40s -- the same conditions that forced Woodside to abandon a drilling operation in 2003.
It will also be operating in a pristine marine environment, as the Bight is the home of whales, dolphins and bluefin tuna, among many other types of marine life. The Great Australian Bight Marine Park overlaps two of the permits, covering more than half the area in each of them.
The report of the Montara inquiry released last November highlighted glaring lapses in regulatory oversight by Australia's federal-state regime. It says the Northern Territory Department of Resources is "not a sufficiently diligent regulator", adopting a "minimalist approach to its regulatory responsibilities".
Undoubtedly, BP thinks the region is worth the investment. It plans to carry out a seismic survey over an 11,000 square kilometre area [nearly 7,000 square miles], and then drill four exploration wells. Ferguson boasts that its work program represents "the most comprehensive geological analysis ever undertaken in the Bight basin".
The seismic work will have to pay special attention to the marine life. Tingay says Woodside's seismic survey of the Bight about a decade ago had a dozen people at a time looking out for marine life. If any were sighted the seismic work would be shut down.
Should BP hit the big time, Ferguson will earn himself national hero status. Should anything go spectacularly wrong, he will be demonised for all time.
Southern right whales, humpbacks, the great white shark and southern bluefin tuna could be at risk after the federal government gave BP permission to explore for new oil reserves, environment groups say.*
Conservation groups are concerned about the risks to endangered species in the rough, deep waters of the Great Australian Bight.
Michelle Grady from the Save Our Marine Life alliance says the exploration permits sit on top of the Great Australian Bight marine park and have been placed "very pre-emptively" over an area that is being assessed for new marine parks.
"This is jumping the gun on a federal government process that will see decisions made on marine sanctuaries," she said today.
Endangered fish and whales could be impacted by the noise and movement and be at risk if there is an accident in the water that is up to four kilometres deep [roughly two-and-a-half miles], unlike the 1.5 kilometre [a mile] deep Gulf of Mexico, she said.
"As is seen with the oil and gas industry ... deep water is something that takes them beyond the limits of technology, they made it clear that they can't guarantee that there won't be further spills."
[Humane Society International] spokeswoman Alexia Wellbelove said it was "astounding" that the government claimed to be making efforts to conserve threatened whales while approving projects that would directly impact upon their vital feeding and breeding areas.
The UK is about to have the same fracking problems we do, in the city of Blackpool -- "As if living in Blackpool, the only place in the world where you can ride a carousel and witness a mugging at the same time, wasn't stressful enough..."
Cuadrillo Resources, a mining company with the influential former BP chief and cross-bench member of the House of Lords Lord Browne on board, is getting excited about the "first true shale gas" find in Europe - and it's near those other Northern Lights, in Blackpool.
Shale gas is big business in the United States already, with Halliburton just one corporation ready to make and take big bucks using hydraulic fracturing, or "fracking", to make the most around deposits.
Last November TechEye exposed how hydraulic fracturing is screwing up rural folk with careless projects that inexplicably were given the go-ahead.
The problem with fracking is that natural gases and chemicals involved in the process have an awkward tendency of finding themselves in the local water supplies. Robert Evans late last year says: "Over 250 different chemicals have been discovered in that 'fluid' so far, including carcinogens like benzene, arsenic and polycyclic aromatics."
Not to mention the presumably unwanted side effect of, literally, setting your tap water on fire.
The Union of Concerned Scientists in the States rubbished an Environmental Protection Association (EPA) study which suggested fracking poses "little or no threat" to drinking water.
According to the Guardian, the Department of Energy and Climate Change is unlikely to change its mind on decisions to wave through shale development. "Cuadrilla, currently operating near Blackpool, has made it clear that there is no likelihood of environmental damage resulting from its shale gas project, and that it is applying technical expertise and exercising the utmost care as it takes drilling and testing forward."
It is possible to safely go ahead with shale gases, but the utmost care is required. If there is a risk of poisoning an entire city, perhaps more than promises are needed.
The demand to halt shale gas drilling comes amid rising concerns about the chemicals used in fracking causing ground water contamination and which has led to a temporary ban imposed in New York state. A new film, GasLands, which includes clips of homeowners turning on their taps and igniting gas in areas where shale reserves are being extracted, has heightened campaigners' concerns.Over on this side of the pond, Shareholders Demand Some Fracking Answers:
"We are calling for a moratorium on any further exploitation of shale gas which will allow the wider environmental concerns to be fully exposed and addressed," said Neville Richardson, chief executive of The Co-operative Financial Services.
Kevin Anderson, professor of energy and climate change at the Tyndall Centre at Manchester University who wrote the report, believes the shale gas should be left in the ground. "In an energy hungry world any new fossil fuel resource will only lead to additional carbon emissions. In the case of shale gas there is also a significant risk its use will delay the introduction of renewable energy alternatives."
[T]he UK's Department of Energy and Climate Change appears unlikely to introduce a moratorium, at least in the near term. [It...] is aware of reports from US of environmental and health issues linked to some shale gas projects but regards the risks as slim.
"We understand that these are only in a few cases and that, when carried out correctly, shale gas exploration and development does not pose a threat to aquifers or local communities," DECC said in a letter.
The specter of BP's Deepwater Horizon disaster last year, and the subsequent oil spill in the Gulf of Mexico, hasn't been put to rest. This year, shareholders are tightening the screws on major oil and gas companies regarding the controversial and possibly harmful practice of hydraulic fracturing, popularly known as "fracking."*
[...A] coordinated group of shareholders has filed a slew of resolutions at publicly traded companies that use fracking, demanding more disclosure on how these corporations plan to handle the risks associated with the practice. The Environmental Protection Agency is also assessing fracking-related risks, and New York State has halted its use.
New York State Comptroller Thomas DiNapoli, one of the leaders of the anti-fracking effort, contends: "Oil and gas firms are being too vague about how they will manage the environmental challenges resulting from fracking. The risks associated with unconventional shale gas extraction have the potential to negatively impact shareholder value. I urge companies working in this field to share their risk mitigation and management strategies with investors and the public."
Last year, the number of shareholder resolutions related to climate change surged by 40% from those filed in 2009. As 2010 unfolded, it wasn't too hard to predict that shareholder resolutions focused on environmental issues were destined to gain an even higher profile this year.
BP's recent troubles revealed just how unprepared that company was for a worst-case scenario, giving environmentally minded shareholders further ammunition to demand better risk management and planning. Last year, BP shareholders shot down activist investors fighting the controversial Sunrise oil sands development in Canada; they also defeated a proposal criticizing CEO Tony Hayward's sizeable compensation.
The fact that some BP shareholders had tried to draw attention to those issues created quite an ironic foreshadowing of future events; the Deepwater Horizon disaster struck just days after BP's annual meeting. Shareholders later noted the parallel risks of these risky technologies, and [listed] reasons to apply greater scrutiny. One argued: "As with oil sands, the technology for deepwater drilling has not caught up with the potential environmental impact. This disaster means socially responsible investors may well end up putting deepwater drilling in the same category as oil sands."
Environmental groups are wasting no time protesting BP's new claim to a vast area of arctic real estate via its new deal with Russia's Rosneft.
In Britain, BP's tie-up with Rosneft yesterday was criticised by Labour's leader, Ed Miliband, and environmental campaigners.
"I'd be pretty worried about this," Miliband told the BBC's Andrew Marr Show. "I think the lesson of the Deepwater Horizon, the Gulf oil spill, should be that... the task for all of us, private companies, government and so on, is not to just keep digging and digging deeper and deeper for oil. It is actually to find those alternative forms of energy that can help us move forward in a clean way."
Environmentalists are centring their attention on the Arctic region, which they fear could be damaged by large-scale oil exploration and the opening up of trade shipping routes through the region.
John Sauven, executive director of Greenpeace, said: "BP has done little to address the issues raised by the Deepwater Horizon disaster, while last year the Greenland government refused to grant drilling concessions to the company because it wasn't convinced BP has rigorous enough safety. Now BP has bought its way into the Arctic by the back door.
Drilling near the North Pole was also dangerous, as the area is inaccessible most of the year, making it practically impossible to reach the location of any potential oil spill, Sauven said. BP has faced a wave of criticism since announcing the deal to great fanfare and with British and Russian government backing. In the US, where BP is still facing multibillion-dollar fines for the Deepwater spill, politicians have said the deal could jeopardise national security because BP supplies the US military.
The environmental group Bellona-Murmansk is calling for an Arctic oil drilling moratorium.Hard on the heels of those discussions comes the revelation that...
Nina Lesikhina, energy project coordinator with Bellona-Murmansk to BarentsObserver... says the oil and gas industry - in Russia as well as abroad - is yet unprepared to explore the hydrocarbon reserves of the northern seas, and BP is first of all.
"It is BP’s negligence that was a reason for tragedy in Mexican Bay. The scale of this accident is just going to be assessed, but it is obviously that undervaluation of environmental risks, usage of non-efficient technologies, saving of the materials and lack of adequate response actions had led to 'Oil Chernobyl'", says Nina Lesikhina.
In Bellona-Murmansk’s opinion the risks brought about by exploring oil and gas reserves in the Arctic are higher than anywhere else.
Until that time Bellona is calling for an Arctic oil drilling moratorium.
A 2008 risk assessment called for replacing the segment of a massive Alaska oil pipeline that leaked earlier this month, the operator of the pipeline said this week.And, not to spare non-arctic areas the pain:
A senior House Democrat said Friday that the new information raises questions about the pipeline system, one of the largest in the world, and he promised to continue monitoring it.
The section of the pipeline where the leak occurred -- a booster pump building that maintains the flow of oil through the line – is exceptionally difficult to inspect because the line running next to the station is encased in concrete and buried underground. Inspectors risk damaging the pipeline when removing the concrete for inspection, the operator of the pipeline said in a Jan. 18 letter to Rep. Edward Markey (D-Mass.).
As a result, an October 2008 risk assessment of the pipeline recommended replacing the pipeline rather than removing the concrete to inspect it. But the replacement of the pipeline was scheduled for later this year, after the leak was detected.
The section of pipeline that leaked was repaired last week and oil is not flowing through the pipeline again.
According to a spreadsheet provided to Markey by Barrett, there have been 20 spills on the pipeline since 2001. The spills, many of them small, have resulted in a total of nearly 400,000 gallons of spilled oil.
BP Plc’s refinery in Whiting, Indiana, released oil and hydrogen sulfide after a pipe developed a leak, according to a filing with the National Response Center.The incident report is here for your reading entertainment.
The Natural Resources Defense Council offers up a number of questions the media needs to ask about the spill, "in its role as government watchdog and voice of the disenfranchised."
Q. The economic impact of the BP disaster has hit the fisherman community especially hard, as their livelihood has been severely threatened. Many of these fishermen are subsistence fishermen who don’t keep meticulous records of their catch. How are they being compensated if they can’t provide adequate records? What safety net is there for people who have fallen through the cracks or have improperly been denied claims?*
Q. Many cleanup workers complained of illnesses and sickness after working on oil cleanup last summer. Some were hospitalized. Some workers complain they were let go and still have medical issues, yet can’t get compensation for their medical bills. Who is responsible and how can cleanup workers, many of them former fishermen, be compensated and treated properly?
Q. The FDA and the EPA have been reluctant to share all government test data with independent scientists. Some independent scientists are reporting higher levels of oil contaminants in seafood tests and in sediments, some at alarming levels. How can the government continue to insist the seafood is safe when independent tests are showing these discrepancies?
Q. Minority communities such as Native American fishermen, Vietnamese shrimpers and African American oystermen have been hit especially hard, since they are not well plugged into the complicated claims process due to lack of education and professional assistance. Unemployment rates in some of these fishing communities is at 80%. These communities have few other options than fishing and living off the land as they have for generations. What has the government and BP done to reach out and help support these communities as they wait for their fishing business to return to normal?
Q. Shrimpers, oystermen and crab fishermen have reported oily substances turning up in some of their catches. Yet the government has only closed one area to one kind of fishing (royal red shrimp) when tar balls turned up in fishing nets. Many fishermen believe the oil is sitting on the bottom and will contaminate migrating bottom feeders such as shrimp. If these anecdotal reports of oil in seafood catches are true, why isn’t there more attention paid to them?
Q. The oil disaster has shined a spotlight on the Gulf marsh region that is rapidly disappearing. A huge amount of money is now being appropriated for Gulf restoration. Yet the political forces against restoring the marshes are still firmly in place: ship navigation up the Mississippi River; oyster fishermen who fight again increased fresh water flow; developers who stand in the way of restoration projects; etc. How is this restoration effort any different from the rest?
Q. Residents and cleanup workers continue to complain that chemical dispersants are being sprayed or used at night. Some Gulf coast activists claim Corexit compounds are still turning up in the water, and Corexit containers of dispersants were seen in dock areas long after the government and BP said they stopped using it. How can BP assure the public that its cleanup contractors are not continuing to use dispersants?
Q. After the Exxon Valdez disaster, research showed that over a period of years many communities were torn apart by social stresses, including increased divorce rates, mental health issues, crime rates and school dropouts. In areas hit hard by the oil disaster in the bayous, there is evidence this is starting to happen. What are government and social service groups doing about this problem and is BP paying for any of this?
**Oil Spill Commission Co-Chairs, Senator Bob Graham and William Reilly, will testify before the Senate Energy and Natural Resources Committee and the House Natural Resources Committee on January 26, 2011. The Commissioners will testify on the findings and recommendations, including recommendations for legislative action, outlined in the Commission’s recently released report.William K. Reilly, co-chairman of the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, will discuss his group's 380-page report Monday [at Duke University].
Reilly's talk starts at 5 p.m. in the RJ Reynolds Theater in Duke's Bryan Center. It is free and open to the public, but tickets are required and can be reserved on the box office website, tickets.duke.edu, or by calling 684-4444
QUICK HITS:From the Gulf Restoration Network: Gulf Tides 10: Damages, Denial & Disappointment - BP Drilling Disaster - Jan. 20, 2011
Also from GRN: Your Chance To Speak Up.
Public Comment Period For The Draft Restoration Plan Has Begun.
New book on the spill: In Too Deep.
BP digs deeper into Azerbaijan.
UK and China strike a deal on oil.
BP and Chevron runners up to Monsanto as Worst Corporations of 2010.
Assessing The Health Of The Gulf, Post-Spill on NPR's Science Friday.
PLEASE visit Pam LaPier's diary to find out how you can help the Gulf now and in the future. We don't have to be idle! And thanks to Crashing Vor and Pam LaPier for working on this!Previous Gulf Watcher diaries:
|1-21-11 08:15:29||Gulf Watchers Friday - Attack of the MMS Zombies - BP Catastrophe AUV #460||Lorinda Pike|
|1-19-11 06:00:48||Gulf Watchers - New Wikileaks Embassy BP/Russia Cable - BP Catastrophe AUV #459||peraspera|
|1-17-11 17:26:50||Gulf Watchers - BP To Drill Off Australian Coast - BP Catastrophe AUV #458||shanesnana|
|1-16-11 07:17:36||Gulf Watchers - Arctic Blast: BP's Deal With Russia - BP Catastrophe AUV #457||Yasuragi|
Previous motherships and ROV's from this extensive live blog effort may be found here.
Again, to keep bandwidth down, please do not post images or videos.