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Suit says BP official resigned over safety issues

A shareholder lawsuit against BP asserts that a BP drilling exec, Kevin Lacy, known for his strong record on safety with Chevron quit BP because of his concerns about safety there. When Lacy resigned four out five of BP's top drilling positions in the Gulf were held by people with only a few months on the job. I'm not sure why Mr. Lacy took the job in the first place considering BP's lengthy and unbroken track record of talking about safety as a PR exercise without ever bothering to practice it.

The lawsuit also claims that BP cut safety budgets and personnel. I find it curious as to why it is that plaintiff's attorneys were able to discover this news about Mr. Lacy while the government commissions investigating the Deepwater Horizon either didn't know or did not call Mr. Lacy as a witness.

A former official with BP's drilling operations in the Gulf of Mexico resigned just months before last year's oil spill because of disagreements with the oil giant over its commitment to safety, according to a class-action federal lawsuit related to the spill.

Documents filed Monday night in Houston claim Kevin Lacy, BP's former senior vice president for drilling operations for the Gulf of Mexico, reached a mutual agreement with the company to resign in December 2009 because he believed the company was not adequately committed to improving safety protocols in offshore drilling operations to the level of its industry peers. The Deepwater Horizon rig explosion occurred on April 20, 2010, killing 11 workers and causing the worst oil spill in U.S. history.
...
Public pension funds in New York and Ohio are the lead plaintiffs in the suit, which also includes individual investors and the Oklahoma police pension system. Similar lawsuits by the different plaintiffs originally were filed in New Orleans but were consolidated and moved to Houston federal court.

The amended complaint claims that a company reorganization that began in 2007, which resulted in numerous layoffs and cuts to safety budgets, "would materially affect the Company's ability to drill safely in the Gulf of Mexico."

"Lacy's departure from the Gulf of Mexico drilling unit in December 2009 coincided with other additional and extensive reshuffling of personnel in the BP Gulf of Mexico drilling unit. such that by the time of the Deepwater Horizon incident, four out of five of BP's senior drilling officials for the Gulf of Mexico had only been in their posts for a few months," according to the lawsuit.
...
The suit said Lacy, an experienced drilling engineer who had implemented a rigorous drilling safety program while at Chevron, had been recruited to join BP in 2007 to improve and standardize its drilling policies and protocols.


Suit alleges BP cut back on safety before oil spill

WaPo has more on the pension fund lawsuit. Earlier articles indicated that Dziubinski was squeezed out for basically trying to fix critical safety issues in BP's operations in Alaska. There is no information in the WaPo story that indicates who read the internal BP document pointing out serious safety shortcomings.

From Curtis Jackson's LinkedIn page it looks like he was still with BP as of June of last year. That was after the spill so I'm not sure how he fits in to the lawsuit. Curtis belongs to a couple a Amoco groups so he probably was working for them when BP and Amoco merged.

Curtis Jackson’s Experience

HSSE Director
BP
(Pétrole et énergie industry)
2005 — 2010 (5 years )
Drilling Manager/HSSE Manager
BP
(Société cotée en bourse; BP; Pétrole et énergie industry)
janvier 1999 — juin 2010 (11 years 6 months)


The New York State comptroller, the Ohio state pension funds and other large investors have alleged that BP made cost-saving cutbacks in its safety operations prior to last year's major oil spill and that it disregarded safety warnings from its own managers.

The new documents in a securities fraud class action suit allege that the company "terminated" Curtis Jackson, then a senior manager for Gulf of Mexico operations, and Phil Dziubinski, a senior safety official at BP Alaska who warned of worker fatigue from extensive overtime.
...
The investors, represented by the firms Cohen Milstein Sellers & Toll of Washington and Berman DeValerio of Boston, produced what they said was an internal BP document that said: "It's become apparent that process-safety major hazards and risks are not fully understood by engineering or line operating personnel. Insufficient awareness is leading to missed signals that precede incidents and response after incidents, both of which increases the potential for and severity of process-safety related incidents."


Gulf oil wells 10 miles from Deepwater Horizon site leaking since 2004

Big kudos to Ben Raines of the Mobile Press-Register for following up on this story he initially wrote in June. For some reason these wells were allowed to leak since 2004 and they are just now getting around to capping them.

The Coast Guard is habitually underfunded but allowing wells to leak for going on seven years is totally unacceptable. To add major insult to injury it doesn't appear as though the offending company has had to pay any fines.

There is no mention in the article about whether fishing has been forbidden in the affected area. I have a real queasy feeling we may already know the answer that question. Gulf seafood anyone?

While the Deepwater Horizon well has been capped since July, another group of wells about 10 miles away has been leaking oil into the Gulf since 2004, according to federal records.

Citing litigation, federal officials refused last week to answer a series of questions about the ongoing leaks, including how many wells are involved, how much oil has escaped into the Gulf and whether any fines have been issued to Taylor Energy Co, LLC, the company that owns the wells.
...
A Taylor Energy production platform near the mouth of the Mississippi River was toppled by a mudslide during Hurricane Ivan, according to federal reports. The platform was tied to 26 wells, though it is unclear how many are leaking. The company is reportedly in the process of drilling relief wells to staunch the flow.

The ongoing leaks gained national attention during the BP spill after the government released highly detailed satellite images of the Gulf’s surface. Skytruth, a watchdog group that uses satellite images to monitor environmental problems, first called attention to the ongoing spill.

In response to a Press-Register story about the leak, the Department of Interior and the U.S. Coast Guard suggested at the time that the leak volume was as small as 13 gallons a day.

But John Amos, president of Skytruth and a former oil industry engineer, reported the slick associated with the Taylor spill was 10 miles long June 18. Using a standard method of estimating how much oil is present in a sheen on water based on work by scientists at the University of Florida, Amos reported the slick contained a minimum of 3,157 gallons of oil.

“If the Coast Guard is right and the average leak rate was 14 gallons a day, it would take 225 days at that rate to accumulate 3,157 gallons of oil on the surface,” Amos said Friday. “That means no biodegradation, no waves, no current, no thunderstorms to break it up. It is simply not plausible that oil collected on that spot for 225 days.”
...
“We’re losing confidence in the NRC data, as to whether those official estimates are doing a good job of informing the public about what is happening offshore,” Amos said. “How much oil is coming out of Taylor’s wells, that’s a good question.”
...
The Clean Water Act fine associated with the 3,157 gallons estimated by Skytruth on June 18 would be more than $80,000. Federal officials declined to address whether any fines have been levied against Taylor.
The Press-Register could not find any record of Taylor fines during an examination of criminal and civil penalties assessed in the Gulf oil field by the federal government between 2003 and 2010.


Toxic Nevada mine lawsuit seeks $5M from BP, ARCO

Unsatisfied with wreaking havoc with their unsafe practices in the oil businesses BP is also deliberately using its mining operations as weapons against the environment and human health.

Neighbors of a toxic mine in northern Nevada have filed a class-action lawsuit against BP America and Atlantic Richfield Co. accusing them of intentionally and negligently concealing the extent of the contamination leaking off the abandoned site for decades.

The suit filed in U.S. District Court in Reno on Monday seeks a minimum of $5 million on behalf of at least 100 residents in the rural town of Yerington where the old Anaconda copper mine opened in 1941.

The plaintiffs say the wells they once used for drinking water are polluted with uranium, arsenic and other metals in a plume of groundwater that slowly has migrated off of the site that covers 6-square miles - an area equal to the size of about 3,000 football fields - about 65 miles southeast of Reno.

The lawsuit says that even after whistleblowers started to publicize previously secret records documenting the dangers, the corporations refused to cooperate with state and federal regulators trying to clean up the radioactive and other hazardous waste the past 10 years.
...
"Despite their knowledge of the serious health and environmental effects associated with exposure to toxic and hazardous substances and despite orders and warnings form health and environmental regulators, (BP and ARCO) intentionally masked the true extent of the contamination, thereby enabling (them) to avoid taking all appropriate steps to properly remediate the toxic and hazardous substances or to mitigate the dangers created by their release, discharge, storage, handling, processing, disposal of and dumping of toxic and hazardous substances," the suit said.
...
The U.S. Environmental Protection Agency has determined over the years that uranium was produced as a byproduct of processing the copper and that the radioactive waste was initially dumped into dirt-bottomed ponds that - unlike modern lined ponds - leaked into the groundwater.

Officials for BP and its subsidiary Atlantic Richfield, which bought Anaconda Copper Co. in 1978, have provided bottled water for free to any residents who want it over the past few years. But they have insisted that uranium naturally occurs in the region's soil and, until recently, they argued there was no way to prove that a half-century of processing metals there was responsible for the contamination.

However, a new wave of EPA testing first reported by The Associated Press in November 2009 found that 79 percent of the wells tested north of mine have dangerous levels of uranium or arsenic or both that make the water unsafe to drink.

"You now have evidence of mine-impacted groundwater," Steve Acree, a highly regarded hydrogeologist for the EPA in Oklahoma brought in to examine the test results, told AP at the time.


BP's Atlantic Richfield to pay $6.7 mln Idaho settlement

More mine evildoing by BP. At least the EPA is trying to clean the mess up although it sure seems to be too little, way too late.

A BP affiliate will pay over $6.7 million for cleanup and damages stemming from mining and smelter operations that caused heavy metal pollution in Idaho, the U.S. Attorney in the state said on Monday.

The federal government sued Arco in 1990 for contamination from the now defunct Bunker Hill Mining and Metallurgical Complex near Kellogg in the Silver Valley, a historic lead, zinc and silver mining area along the Coeur d'Alene River.
...
BP in 2000 acquired Arco. Under the Superfund law, BP assumed part of the environmental liability for any cleanup and damages linked to the defunct Bunker Hill operation.

Bunker Hill's smelter releases, waste piles and processing caused water, air and soil contamination by such toxic metals as lead and arsenic, according to the Idaho Department of Environmental Quality.

EPA documents say residents near the Bunker Hill complex were exposed to dangerous levels of lead, which can affect the nervous system and cause developmental abnormalities.

The EPA estimates that between 70 million and 100 million tons of mining waste is spread throughout the area's streams, flood plains and lakes, with contaminated sediments found in Lake Coeur d'Alene and the Spokane River.

A cleanup effort, one of the largest in the nation's history, has restored inland sockeye salmon to Coeur d'Alene River stretches that, for decades, were devoid of life because of heavy metals, according to the Idaho Department of Environmental Quality.

Blood testing indicates lead levels have been dropping in children who live near the site, the agency said.


BP Solar ditching San Francisco headquarters

More lip service from BP about the "Beyond Petroleum" PR hogwash. Solar work is being bought from others overseas with BP only taking a marketing role. There doesn't seem to be an industry that's too filthy and dangerous for BP to embrace but they run away from solar like it has scary cooties. - h/t Yasuragi

It's been a short, strange trip for BP Solar in San Francisco.

The solar division of the energy giant is moving its headquarters back to Houston from San Francisco, its home for the past three years. As my colleague noted, "That's like a 4-star restaurant moving to Tuscaloosa."

The truth is, BP — which has been doing solar for decades — has never figured out what its solar division should be, let alone where it should live.

BP at one time was one of the world's largest producers of solar panels and has been in the business longer than pretty much all of its competitors today.

At the end of 2008, BP Solar moved its headquarters to San Francisco from Frederick, Maryland, preempting an announcement by the company that it would close its solar panel factory there and lay off all of its workers, plus workers at offshore factories as well.
...
The move from Frederick to San Francisco, as it turned out, was part of a larger shift for BP away from making solar panels, to marketing panels made by offshore partners under the BP name.

BP hired CEO Reyad Fezzani at the end of 2008 and he had big plans to make BP Solar a respected contributor to BP's balance sheet. During an interview with the Business Times in May 2009, Fezzani said BP had never been all that interested in the profit potential of the solar business, only in exploring the market opportunity. But that was about to change, he said.

...
Then, sometime in 2010, Fezzani was gone. And Mike Petrucci had been moved in to replace him. I requested an interview but he was "hard to nail down." That's because Petrucci is based in Houston, Texas and now that's where BP Solar will be based. A BP Solar spokesman said a handful of employees will transfer to Houston but BP will keep a sales and marketing office in San Francisco where it has about 23 employees today.


BP Headed for Trial Over Royalty Dispute

Perhaps we need a new legal definition of "malice." It seems like pretty near everything BP does is malicious including, in this case, cheating people out of money. h/t Yasuragi

Some 4,000 lease-holders who sued BP America over royalty payments on natural gas leases in New Mexico are not eligible for punitive damages, a federal judge ruled. But the fairness of the company's 25 percent fee to process raw gas at its own plant will be for a jury to decide.

     The judge tossed the lease-holders' demand for punitive damages, finding that, though BP may have breached a five-year-old settlement agreement by using unfair fees to underpay royalties, there was no evidence that it did so maliciously.

     But the judge said a jury would have to weigh in on the fairness of a 25 percent fee BP charges to extract natural gas liquids (NGLs), such as propane and butane, from the raw gas at a processing plant it partially owns.
...    
     This is the third time around for the parties. A similar class action against BP in Santa Fe County in 2000 won a reduction in the processing fee from 39 percent to the current 25 percent.


Obama budget would charge oil companies for inspections, drilling permits

The Obama administration has proposed sensible increases in fees to finance the grossly underfunded Bureau of Ocean Energy Management, Regulation and Enforcement. Naturally, industry and Senator Landrieu are shrieking objections. It doesn't seem to embarrass industry the slightest to complain about the paltry sum they contribute to the treasury in comparison to their obscene profits. Click through if you want to read the whining.

The Obama administration's proposed fiscal 2012 budget would provide $500 million to restructure the regulatory and oversight regime for offshore drilling, strengthening enforcement in the wake of the Deepwater Horizon oil disaster in the Gulf and charging oil companies user fees for inspecting their operations and processing their drilling permits.

The new fees, recommended by the National Oil Spill Commission, would net the Bureau of Ocean Energy Management, Regulation and Enforcement about $65 million, an increase of $55 million over past levels, and would apply to offshore drilling rigs for the first time. Interior Secretary Ken Salazar said an inspection of a deepwater rig would cost an operator $16,700.
...
The call for inspection fees comes in a budget blueprint that renews the Obama administration's call to end billions of dollars in oil and gas tax breaks and incentives. On all counts, the budget plan was panned by industry.

..."I'm very concerned about the president's attack on the oil and gas industry in the request he sent up today," Landrieu said. "This part of the president's budget doesn't win many friends in the House and it doesn't meet my approval."

Luthi [president of the National Ocean Industries Association] said that in 2010, the industry paid $4 billion in royalties, $245 million in rent and $979 million in lease bids, and that the "$500 million to restructure BOEMRE and to increase personnel could be more than covered by that existing revenue."

But the National Oil Spill Commission had recommended that the energy producers could easily afford the additional coast of paying for the new regulations that would help reduce a risk of a repeat of last year's immensely costly oil disaster, and that, at a time when federal dollars are especially hard to come by, having industry pay for more capable regulation makes perfect sense.


Ken Feinberg's Gulf oil spill claims criteria blasted by congressional members

“We appreciate their input,” and “It’s not like she’s living out of her car,” are unjust and unwarranted responses to lawmakers legitimate complaints about the unfair and arbitrary claims process. No sane person could possibly make heads nor tails of what is going on with the Gulf Coast Claims Facility process other than victims are being routinely screwed by Feinberg and BP.

Ken Feinberg today heard from three angry members of the Gulf Coast congressional delegation, including U.S. Rep. Jo Bonner, who accused the oil claims czar’s spokeswoman of lying to the public.
Bonner, R-Mobile, and U.S. Sen. Richard Shelby, R-Tuscaloosa, fired off letters to Feinberg blasting his criteria for determining whether a claim from a BP PLC-funded compensation fund is eligible for payment. U.S. Rep. Steven Palazzo, R-Biloxi, met personally with Feinberg and pledged to keep the pressure on him.

Through a spokeswoman, Feinberg issued a terse response: “We appreciate their input.”

Bonner complained that Feinberg and his team appear not to recognize the “economic interdependence” of every business in a tourism economy. He argued that Feinberg routinely has denied claims even though the businesses filing them have been damaged as a result of last summer’s spill caused by the explosion of the Deepwater Horizon drilling rig.

Bonner noted that Feinberg’s spokesman, Amy Weiss, told the Press-Register earlier this month that businesses must document their losses but that none were automatically ineligible for payment.

“This statement is an outright lie, for we have e-mail after e-mail sent to our office by your people confirming there are ineligible industries,” Bonner wrote.

He cited several examples and also wrote that Feinberg, himself, left a message on the congressman’s cell phone saying that title companies are not eligible for compensation.

Weiss declined to comment.

Shelby, a frequent critic of Feinberg, noted that more than 57 percent of Alabama residents and businesses who have pending claims have received no compensation.

“While I understand that in this environment some fraud will exist, the overwhelming majority of claims are based on real, documented losses,” the senator wrote. “Yet, the processing of claims since the beginning of the year has basically come to a stop. Only a handful of claims per day are being processed while 57,682 remain outstanding in Alabama alone.”
...
Bonner also alleged “arrogance” on the part of Jim Walker, who has been hired by the Gulf Coast Claims Facility as a troubleshooter for Alabama claims.

Bonner cited the case of a woman who was denied her claim for damages. According to Bonner’s letter, Walker had focused on the fact that the claimant was well-dressed and lived in an expensive house. According to Bonner, Walker said, “It’s not like she’s living out of her car.”


BP Claims Czar Called on the Carpet

I hope that Florida lawmakers are able to persuade BP and Kenneth Feinberg to change their grossly unfair ways but, so far, no one else has prevailed in doing that.

Complaints over BP’s Claims process are reaching a fever pitch and state lawmakers in Florida have had enough. As Whitney Ray [reporter] tells us, they’ve invited the BP Claims Czar to Tallahassee to find out why Florida businesses aren’t getting paid.

Fed up because Floridians aren’t getting paid for the economic mess the BP oil spill created Representative Doug Broxson headed to Ohio.
That’s where BP hired eight hundred operators to handle Florida claims. Broxson says that’s just one of the problems with the way the oil giant is handling claims.

“It’s a beautiful plan that’s been put together by a masterful group of people to frustrate the claimants,” said Broxson.

Broxson will join state lawmakers Friday as they try to find out why the BP claims process is broken and how Claims Czar Ken Feinberg plans to fix it.
...
Carol Dover, President of the Florida Restaurant and Lodging Association says some of her members are happy with the process, but others are furious.

“Many of them haven’t survived. I mean you can turn around its about every week, we find another either restaurant or hotel that’s closing or letting staff go,” said Dover.
...
The Florida Restaurant and Lodging Association has set up a hotline for people seeking legal advice over mishandled claims. The advice if free to the association’s members. The website is www.weitzlux.com/florida-restaurant-oil-spill-lawyers_1962249.html


'It is the exact opposite of what we have been told'

Given the GCCF's miserable track record Feinberg had absolutely no cause to get upset about a lawmaker visiting the Ohio claims processing facility. That is just more evidence that there is no intention of making the GCCF claims process transparent despite Feinberg's assertions.

There is nothing in this article that confirms or refutes Broxson's assertion that only five people are making final decisions for claims.

State Rep. Doug Broxson traveled to Dublin, Ohio, on Monday to take a firsthand look at the Gulf Coast Claims Facility office there and discover why BP oil spill claims are not being paid.

He didn’t like what he saw.
...
“There has been no consistency in how the claims process has been handled,” Broxson said. “One person is paid and a similar claim by their neighbor is denied.
...
No BP claims are being processed at the Dublin, Ohio, office, despite being led to believe otherwise, Broxson said.

“This is not a claims center,” Broxson said. “This is an intake center. They don’t process one claim here.

“It is the exact opposite of what we have been told.”
...
After arriving in Ohio, Broxson says he quickly found out the GCCF’s 33 claims offices along the Gulf Coast were just using the Ohio office as a central repository for the forms filled out here.

Broxson said Gulf Coast Claims Facility Administrator Ken Feinberg “got pretty upset for me being in Dublin to begin with.”

“After some pretty harsh words from him, he did soften up and say that he was making plans to announce allowing local people to make more decisions to solve a lot of the problems,” Broxson said.
...
“Decisions of the GCCF are made by me and my staff in Washington or by Brown and Greer in Richmond, Va.”

Broxson said more than 500,000 claims have been filed and “only five people are making the decisions.”
...
“They have 800 people working at this center in Dublin and that is 800 jobs that could have been filled along the Gulf Coast.”


Oil spill claims 'quick pay' means more waiting, for some

Feinberg and his BP friends now have new tactic to not pay legitimate claims—investigating legitimate claimants for fraud when there is no reason to suspect fraud.

Kenneth Feinberg couldn't have been clearer: In December, the oil spill claims czar told claimants who had already received emergency payments from him that they could sign away their right to sue, collect one more check within 14 days and be done with the whole process, with "no further review."

Julie Queen of New Orleans, a housekeeping supervisor at Marriotts Residence Inn downtown was cleared to get her quick payment for damages resulting from the BP oil spill in the Gulf of Mexico, but not before she was kept in the dark for weeks.

But the truth is that some who sought the so-called quick payment -- $5,000 for individuals and $25,000 for businesses -- are definitely facing "further review." In fact, some are now under investigation for fraud, and not all deservedly so.

The Gulf Coast Claims Facility's website clearly states quick payments will be made within 14 days with no further review, so the apparent contradiction is confounding for some claimants, especially given the program's admitted lack of transparency. On the other hand, critics have said that offering a quick payment with no further review almost invites fraud.

Julie Queen of New Orleans, a housekeeping supervisor at Marriott's Residence Inn downtown who also works as a banquet hostess, has been cleared to get her quick payment for damages resulting from the BP oil spill in the Gulf of Mexico, but not before she was kept in the dark for weeks for an investigation that contradicted the GCCF's "no further review" protocol and ultimately proved unnecessary.

She sent in her tax returns, student loan documents and pay stubs, and got a $2,000 emergency payment in October to start recovering on her $11,000 claim. On Dec. 20, she signed her waiver promising not to sue, starting the clock on a $5,000 quick payment. It wouldn't cover her total loss, but it would be a big help and let her be done with BP.

The two weeks passed: nothing. Finally, on Jan. 21, a month after GCCF received her quick payment claim, she received a letter stating the claims facility had re-reviewed the documentation she'd filed to support her emergency claim and found "insufficient reliable evidence to support your Quick Payment claim." Her file had been handed over to Guidepost Investigations, GCCF's anti-fraud subcontractor. Befuddled, she sent e-mail inquiries for weeks and was eventually put in touch with Mark Weinstein, a paralegal who works for Feinberg and once ran the Washington National Opera for part of Feinberg's term as the opera's president.

"He said he can't give me any more information, but all he knows is it's not for fraud," Queen said. "Mark said they just pull some people out (for Guidepost review) at random, like when you're going through security at the airport."

Feinberg later told The Times-Picayune that is "categorically untrue" and he didn't know why Weinstein was telling claimants that.


BP claims process 'unacceptable'

Senator Bill Nelson is unhappy with Feinberg and the claims process. However, more interestingly, a state Representative claims that only five people are making claims decisions even though there is no mention of how he knows this is true.

Calling the way the Gulf Coast Claims Facility has handled pay outs to those affected by the Deepwater Horizon oil spill “unacceptable,” Sen. Bill Nelson on Monday said if the process does not become more transparent and efficient, he will ask for Administrator Ken Feinberg to be replaced.
...
Nelson said Feinberg has not kept promises that the claims process would be open, quick and independent from BP. The oil giant set up a $20 billion compensation fund after the oil spill at the request of the government, but a mechanism to oversee the process was not set up. The GCCF does not have to meet open record laws.
...
Only two final settlements for long-term losses have been reached. The largest is a $10 million claim submitted by a BP associate, finalized at the request of BP.

“Over and over we have seen in my office people desperately calling us. They can’t get their claims paid. As a result, people are really hurting financially,” Nelson said.
...
“This is outrageous,” Nelson said. “I want the accountability; I want the transparency immediately forthcoming or else the president ought to consider putting someone else (in charge of) running the claims facility.
...
He said he wants to know more about the “highly suspicious” $10 million payout. “That’s when my patience runs out, and I want some changes and I want them fast,” he said.
...
About 490,000 claims have been filed, and about half of them have been turned down. The fund distributed $3.4 billion to 169,000 claimants, and nearly all the money paid has been either emergency payments or one-time checks paid in exchange for a promise not to sue, the news agency reported.

State Rep. Doug Broxson, R-Gulf Breeze, said he learned all decisions are made in Washington by Feinberg and four others.


Florida CFO Seeks Claimants' Feedback on BP Oil Claims

I don't know if would do any good but if any Florida business are having problems with their GCCF claims the state's CFO is asking for feedback.

Florida Chief Financial Officer Jeff Atwater is asking the state's business community and BP oil spill claimants for their input regarding the claims handling process of the Gulf Coast Claims Facility.

Specifically, Atwater wants to hear suggestions or concerns about the proposed methodology to compensate business and individuals who were affected by the Deepwater Horizon Oil Spill, which resulted from an April 20 explosion that destroyed a BP-lease oil rig in the Gulf of Mexico.

Ken Feinberg, BP claims administrator, recently made public his recommendations on how to calculate a final settlement offer to individuals and businesses affected by the spill. In the case of individuals, the fund projects a claimant's 2010 wages from May through December using an average of their actual wages earned during the same time period in 2008 and 2009. The fund then subtracts any wages actually earned in 2010 to arrive at a loss wage figure which is then multiplied by a recovery factor of two. That figure, minus any previous payments, results in the final settlement offer.

A similar formula is used to calculate a final payment to businesses.

In exchange for accepting the settlement offer, the claimant waives all rights to sue BP, the GCCF and any other party involved with the oil spill.


Russia Embraces Offshore Arctic Drilling

It's hard to imagine that there won't be catastrophic spills in the future in Russia's fragile arctic environment when Putin thinks that BP has learned their lesson about safety and a senior Russian official thinks a little radiation is a good thing.

Russia, where onshore oil reserves are slowly dwindling, last month signed an Arctic exploration deal with the British petroleum giant BP, whose offshore drilling prospects in the United States were dimmed by the Gulf of Mexico disaster last year. Other Western oil companies, recognizing Moscow’s openness to new ocean drilling, are now having similar discussions with Russia.
...
But as the offshore Russian efforts proceed, the oil companies will be venturing where other big countries ringing the Arctic Ocean — most notably the United States and Canada — have been wary of letting oil field development proceed, for both safety and environmental reasons.
...
The Russians, who control far more prospective drilling area in the Arctic Ocean than the United States and Canada combined, take a far different view.

As its Siberian oil fields mature, daily output in Russia, without new development, could be reduced by nearly a million barrels by the year 2035, according to the International Energy Agency. With its economy dependent on oil and gas, which make up about 60 percent of all exports, Russia sees little choice but to go offshore — using foreign partners to provide expertise and share the billions of dollars in development costs.

And if anything, the gulf disaster encouraged Russia to push ahead with BP as its first partner. In the view of Russia’s prime minister, Vladimir V. Putin, BP is the safest company to hire for offshore work today, having learned its lesson in the gulf.

“One beaten man is worth two unbeaten men,” Mr. Putin said, citing a Russian proverb, after BP signed its Arctic deal with Rosneft, the Russian state-owned oil company. The joint venture calls for the companies to explore three sections in the Kara Sea, an icebound coastal backwater north of central Russia.

The BP agreement touched off little public reaction in Russia, in part because the environmental movement is weak but also because opposition politicians have no way to block or hinder the process.
...
While the United States and Canada balk, other countries are clearing Arctic space for the industry. Norway, which last year settled a territorial dispute with Russia, is preparing to open new Arctic areas for drilling.

Last year Greenland, which became semi-autonomous from Denmark in 2009, allowed Cairn Energy to do some preliminary drilling. Cairn, a Scottish company, is planning four more wells this year, while Exxon Mobil, Chevron and Shell are also expected to drill in the area over the next few years.
...
Following the template of the BP deal, Rosneft is negotiating joint venture agreements with other major oil companies shut out of North America and intent on exploring the Arctic continental shelf off Russia’s northern coast. That includes Shell, its chief executive said last month. Rosneft’s chief executive, Eduard Y. Khudainatov, said other foreign oil company representatives were lining up outside his office these days.
...
The waters of the Arctic are particularly perilous for drilling because of the extreme cold, long periods of darkness, dense fogs and hurricane-strength winds. Pervasive ice cover for eight to nine months out of the year can block relief ships in case of a blowout. And, as environmentalists note, whales, polar bears and other species depend on the region’s fragile habitats.
...
Until recently Russia regarded the Kara Sea, where BP and Rosneft intend to drill, as primarily an icy dump. For years, the Soviet navy released nuclear waste into the sea, including several spent submarine reactors that were dropped overboard at undisclosed locations.

Rosneft executives say their exploration drilling will not stir up radiation.

But in any case, Mr. Chilingarov, the advocate for Russian polar claims, said a little radiation was nothing to worry about. He said that his son was born on Novaya Zemlya, an Arctic testing site for nuclear weapons during the cold war, and is now “a bit taller than me.”

“In small doses,” Mr. Chilingarov said, “radiation is good for growth.”


Book Review: Blowout In The Gulf: The BP Oil Spill Disaster And The Future Of Energy In America By William R. Freudenburg And Robert Gramling

Sadly, one of this book's authors, William Freudenburg passed away shortly after the book was published. He was the Dehlsen Professor of Environmental StudiesUniversity of California Santa Barbara.

You can download the video of the presentation that Freudenburg gave on his book. h/t Yasuragi

For a century, America was the world’s biggest producer — and user — of petroleum. Today, the country remains the biggest user while supplying less than 7 percent of world demand. Although this book is nominally about the 2010 BP oil spill, it’s really a primer on the oil industry: where it started, the companies and regulations it spawned, and how it has seduced nations everywhere to think and act as if they can’t live without it.

The authors sifted through mountains of news accounts, reports and transcripts of hearings on the BP spill. They’ve woven statistics, quotes and observations into a riveting account of the accident, as well as the track record of the principal parties and the largely unfettered environment in which they were allowed to operate. Taken together, the evidence suggests that the April 20 blowout — or one like it — was just waiting to happen.


Kevin Costner Fights Back at Stephen Baldwin's BP Oil Spill Lawsuit

Costner is claiming that he never spoke to Baldwin. I wonder if Baldwin and friends bothered to watch Costner's testimony before Congress where he stated BP's intention to buy some of the centrifuges. It's impossible to sort out the truth of the matter but I would both sides are sporting some growing noses when they speak.

Kevin Costner has asked that a federal judge release him from a multimillion-dollar lawsuit over whether actor Stephen Baldwin and a business associate were tricked into giving up shares of a company that sold technology to clean up the oil spill in the Gulf of Mexico left by a BP drilling rig.

As we reported in December, Baldwin and Spyridon Contogouris sued claiming more than $14 million in damages after they gave up on Ocean Therapies Solutions, a joint venture meant to market Costner's technology that separated oil from water. The two claimed they divested their holdings upon word from some of the defendants that BP had failed to place an order, when in fact the company had leased 32 centrifugal oil separators to BP for an estimated $52 million. The plaintiffs claimed that the money that came from BP was used by Costner and one of his associates to buy Contogouris and Baldwin out of their interest in the venture.
..
Costner says he never spoke to Baldwin and Contogouris about BP's intent.

Instead, he points to the only statement in the complaint attributed to him -- a statement given to lawmakers during a June 9, 2010 congressional hearing "indicat[ing] that BP had placed an order for a number of [Separator] units."

Costner says that regardless of any misrepresentation given by others in the fold, his own true statement to Congress about a BP deal shows he wasn't part of the alleged fraud. Costner adds that allegations about the source of money that was used to purchase OTS shares aren't sufficient for purposes of stating a claim for relief.
The plaintiffs will soon have an opportunity to file their response to Costner's brief.


Kevin Costner lawsuit: Stephen Baldwin sues Kevin Costner over technology to fight oil spills

Costner now says that he doesn't even own any part of the company that manufactured the centrifugal oil separators he was hawking. The guy that seemingly owns the company claimed they worked well on barges but couldn't handle the really thick onshore oil. BP has dismantled the centrifuges and put them in storage.

I wish someone trustworthy would offer a public opinion about the whether or not the centrifuges were actually useful on the barges. I'm also scratching my head about why they tested the centrifuges on oil the consistency of peanut butter—seems more than an odd tool to use for that purpose.

In a complaint filed in U.S. District Court in New Orleans, Baldwin and a business associate say they were duped into cashing out their shares of Ocean Therapy Solutions, a Louisiana company that leased 32 centrifugal oil separators to BP for an estimated $52 million. Costner helped arrange the deal.

The suit, and interviews with parties involved, cast a different light on Costner's role in promoting what came to be known as the "Costner solution" to the oil spill in the Gulf of Mexico than was portrayed in the months after the accident. At the time, Costner appeared before Congress, imploring the oil industry to deploy a technology he had nurtured for years.

Few but Costner and his partners knew that Costner did not own the company making the centrifuges, and that he was operating as a celebrity salesman.
...
And the centrifuges that came to be known as the Costner solution have been dismantled, their parts placed in storage. "We do have six of them in a warehouse, and there are suspicions of more around someplace," BP spokeswoman Hejdi Feick said.
...
Unable to build a customer base, Costner in 2004 sold his centrifuge manufacturing company, CINC Industries Inc., of Reno — an acronym for "Costner in Nevada Corporation" — to Nevada engineer Bret Sheldon.
...
The lawsuit and interviews reveal that Ocean Therapy Solutions was formed a few days after the April 20, 2010, explosion on the oil rig, under an agreement that gave it exclusive rights to market CINC machines to BP. It also gave Baldwin and Spyridon Contogouris 10% and 28% interest, respectively, in OTS.

In May 2010, Costner emerged as a spokesman for OTS, focusing international attention on the devices' ability to separate oil and water. On June 8, the day before Costner was scheduled to testify before Congress on the effectiveness of the technology, BP signed a letter of intent to lease 32 CINC machines, according to court documents.

Initial tests conducted in southeastern Louisiana's Port Fourchon in front of BP and government officials produced mixed results.

"We tried the centrifuges out on emulsified oil the consistency of peanut butter," Sheldon recalled. "It gummed up everything. The oil wouldn't even drain out of 3-inch hoses. So we put four centrifuges on a barge in the vicinity of the Deepwater Horizon site. Out there, we got ideal results."
...
In the meantime, Costner and OTS officers continue to promote the technology, which thus far has shown the most promise in waste-water treatment. "Every time I look up, it seems Kevin and his folks are someplace else in the world trying to market our machines," Sheldon said with a smile. "They are working real hard, and I appreciate that. After all, he's got the name. I'm just a little guy in Nevada."


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:
2-14-11 06:34 PM Gulf Watchers Monday/Tuesday - “He preys on the poor and the helpless” - BP Catastrophe AUV #473 Yasuragi
2-11-11 19:33:50 GW Block Party --- The Last Harrah?  Some Memories Phil S 33
2-11-11 08:36:19 Gulf Watchers Friday - Egypt Turmoil Renews "Drill, Baby, Drill" - BP Catastrophe AUV #472 Lorinda Pike
The last Mothership has links to reference material.

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.
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