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Topics: Blowout could spill 58 million gallons of oil in Arctic, federal agency says; Arctic oil spill clean-up plans are 'thoroughly inadequate', industry warned; BP Is Fined $25 Million For ’06 Pipeline Spills; High-pressure deepwater well capping stack unveiled at offshore conference; BP investigates oil mats off Perdido Key; Attorneys in oil spill litigation now debate how trial should proceed; Anadarko may settle some Macondo spill claims, BP claims office closing, ARCO, BP Gas Station Operators Sue BP

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Shell wants to gamble the fragile Arctic environment against what they term a "minimal" risk of a worst case blowout. I guess Shell would like everyone to ignore the the fact that big oil couldn't even muster a pitiful response to the Deepwater Horizon blowout where weather conditions are a great deal friendlier than they are in the Arctic. One would expect that this embarrassing fact is why any mention of Shell's proposed spill response having been tested in Arctic conditions is completely AWOL in the story.

In the wake of the BP catastrophe Shell has chutzpah to use "minimal" risk as an argument to be allowed to take risks that they do not have the capability to handle. Also, AWOL from the story is any mention about the ability of any government entity having the equipment and qualified personnel to competently supervise any cleanup effort. The Coast Guard has a whopping three icebreakers. The two that can handle heavy ice were stuck in port with mechanical problems last June. The other is being retrofitted and won't be back at sea until 2013.

Environmental groups routinely have had to sue the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) in order to try to get them to do the environmental reviews that they are supposed to be doing. When even the industry captive BOEMRE says that Shell isn't ready for Arctic drilling it should send off flashing neon warning signs.

Blowout could spill 58 million gallons of oil in Arctic, federal agency says

The federal agency overseeing offshore drilling in Alaska says the worst-case scenario for a blowout in the Chukchi Sea lease could result in a spill of more than 58 million gallons of oil into Arctic waters.

That's about a quarter of the Deepwater Horizon spill, which put 206 million gallons of oil into the Gulf of Mexico. But it's far more than Shell Oil -- the major leaseholder in waters off Alaska's northwest coast -- says it could handle under its current response plan.

When applying for exploratory permits, Shell was required to prepare for a maximum spill of 231,000 gallons per day. The company says its fleet of on-site responders -- including boats, barges, skimmers, and a tanker that can hold 21 million gallons of recovered liquids -- can handle a spill of 504,000 gallons per day.

But according to the memo prepared by the Alaska office of the Bureau of Ocean Energy Management, Regulation and Enforcement, a worst-case scenario blowout could initially discharge about 2.6 million gallons per day.

Shell has consistently said that the chance of a blowout in the area's relatively shallow waters is minimal.
The company anticipates drilling in 120 to 150 feet of water to depths of up to 10,000 feet. The Deepwater Horizon rig operated about a mile below the water surface and drilled nearly 3.5 miles below the ocean floor.
The discharge at the hypothetical well in the report would decline rapidly as the oil reservoir depressurized and fall to about 790,000 gallons per day after a month, according to the report from the agency formerly known as the Minerals Management Service.

But the cumulative discharge over the quickest period estimated for drilling a relief well -- a span of 39 days -- would mean a discharge of 58.1 million gallons into environmentally sensitive Arctic waters.
Shell says it can deploy a containment system within two weeks, including a cap for a subsea blowout and a containment dome. Company officials also have continuously said Shell would ramp up spill response capability as exploratory wells progress into production.
Critics also claim federal agencies routinely accepted oil company claims that the chance of a catastrophic spill in Arctic waters is minimal.
The Minerals Management Service, already the target of lawsuits for its decisions in the Arctic, was reorganized and renamed after the Deepwater Horizon disaster.

In one of those lawsuits, U.S. District Court Judge Ralph Beistline of Anchorage in July ruled that the federal government failed to follow environmental law before it sold leases in the Chukchi in 2008.

Ocean Energy Management officials in March announced that as part of the court-ordered environmental review, they would study how a "very large oil spill" would affect the Chukchi. They also emphasized that calculation of a "very large oil spill" differs from "worst case discharge" at a specific well site picked by an oil company. The improbability of a discharge was not considered in the analysis.

Meanwhile, back in the reality-based world the good people at Pew Research pointed out Arctic spill response challenges in November. Shell's Arctic response plan is more delusional than BP's was for the Deepwater Horizon.

Arctic oil spill clean-up plans are 'thoroughly inadequate', industry warned

Thursday 11 November 2010 10.31 GMT

The next big offshore oil disaster could take place in the remote Arctic seas where hurricane-force winds, 30ft seas, sub-zero temperatures and winter darkness would overwhelm any clean-up attempts, a new report warns.
But the report, Oil spill prevention and response in the US Arctic Ocean, by the Pew Environment Group, warns that oil companies are not ready to deal with a spill, despite the lessons of the BP disaster in the Gulf of Mexico.

"There is a lot of pressure by Shell to drill this summer," Marilyn Heiman, director of the US Arctic programme at Pew said. "But the oil companies are just not prepared for the Arctic. The spill plans are thoroughly inadequate."
The consequences for the Arctic's environment would be dire, it said, wiping out populations of walrus, seal and polar bear and destroying the isolated indigenous communities that depend on hunting to survive.

Getting to the scene of a spill would be a challenge. The nearest major port, Dutch Harbor, is 1,300 nautical miles away from the drilling areas in the Chukchi and Beaufort seas, and what few air landing strips exist are not connected to any road system. There are no coast guard vessels in either sea, and the nearest coast guard station is 950 miles by air away in Kodiak Alaska.

Response teams would confront gale-force winds, massive blocks of ice and turbulent seas, total darkness for six weeks of the year, and extreme cold. Cranes would freeze and chemical dispersants, such as those used to break up the BP spill, might not work.

Then there is the ice. Left undetected, a pipeline leak could spread oil beneath the surface of sea ice. Ice floes could carry oil hundreds of miles away from the source. At freeze-up, oil can become trapped within ice within the space of four hours, remaining there until spring. If it becomes trapped within multi-year ice, oil could stay in the environment for years, or even a decade, the report said.
The report also says that any spill response has to be tailored to the extreme Arctic conditions, and that oil companies be required to real-life test runs of their containment efforts.

"We can't be training them the moment the oil hits the water and the ground like we did in the Gulf," Heiman said. "There is much more work that needs to be done to protect the Arctic."

If ever there was an argument for strengthening spill penalties to include meaningful fines and/or prison sentences as well as actually lowering the debarment hammer this case is it. BP continued to willfully ignore laws requiring them to properly maintain the Alaska pipeline after their first spill.

The $25 million fine is chump change to BP and it seems delusional to think that BP would pay any more attention to a third party babysitter than it has to regulators. Debarment and prison sentences for execs is likely to only way that BP could be persuaded to change its evil ways.

BP Is Fined $25 Million For ’06 Pipeline Spills

BP will pay $25 million in civil fines to settle charges arising from two spills from its network of pipelines in Alaska in 2006 and from a willful failure to comply with court orders to properly maintain the pipelines to prevent corrosion, federal officials announced on Tuesday.

The fine is the largest per-barrel assessment ever levied against an oil company in a spill case and represents a new blow to BP’s corporate treasury and reputation.

The aggressive approach of federal prosecutors in this case could portend huge fines and penalties from BP’s much larger spill in the Gulf of Mexico last year. That case, which is still under investigation, could cost the British oil giant more than $20 billion if the company is found grossly negligent, as it was in the Alaska pipeline matter.

“This penalty should serve as a wake-up call to all pipeline operators that they will be held accountable for the safety of their operations and their compliance with the Clean Water Act, the Clean Air Act and the pipeline safety laws,” Ignacia S. Moreno, head of the environmental enforcement division at the Justice Department, said in a conference call with reporters. “This agreement will help prevent future environmental disasters and protect the fragile ecosystem of Alaska’s North Slope.”
As a result of corrosion and poor maintenance of its pipelines in Alaska, BP was found responsible for the discharge of more than 5,000 barrels of oil onto the Arctic tundra and into a lake on the North Slope in March 2006; a much smaller spill occurred in August of that year. The company paid more than $20 million in criminal fines and restitution and was ordered to perform extensive repairs on its system of 1,600 miles of pipelines.

The Department of Transportation’s pipeline safety division determined that BP had failed to fully comply with the order to clean and replace miles of pipeline, and the government sued the company again in 2009.

The consent decree announced on Tuesday requires BP to develop a program to maintain the safety and integrity of its pipelines and will subject the company to enhanced surveillance of its operations by federal regulators. The company also will be required to hire an outside monitor to ensure that it is regularly inspecting and maintaining its pipelines.

“We are not just going to take BP at its word,” said Cynthia Giles, director of the Environmental Protection Agency’s office of enforcement and compliance assurance. “This requires an independent monitor to assure that BP is fully complying with the terms of today’s settlement. This case sends a clear message that we are vigorously enforcing the nation’s environmental laws.”

Big oil, yet again, demonstrates its inability to grasp the irony of its own behavior. Their Helix Well Containment Group frets about locating its new whiz-bang containment toy away from the wrath of hurricanes but totally ignores the fact that surface ships needed to keep pressure off a capped well will have to leave a blown out well to spew during rough seas.

The risk of putting pressure on a blown out well is that the formation will fail leaving no way to contain the well short of emptying the entire formation which could take years. This is not a negligible risk in the Gulf where the geological formations are notoriously brittle.

High-pressure deepwater well capping stack unveiled at offshore conference

...The Helix Well Containment Group is a cooperative effort of 24 Gulf oil companies. They have banded together and invested in spill-response technology to convince the federal government that they could return to drilling in the deep sea and stop a leak like last year's BP disaster, in which the massive device known as a blowout preventer failed to close in the well.

Helix Well Containment Group's participating companies succeeded in getting several new wells approved in recent months, mostly because they had access to the consortium's capping stack, something like a mini-blowout preventer that could attach to the top of a failed blowout preventer and block hydrocarbons flowing through it at pressures of up to 10,000 pounds per square inch.

At the annual Offshore Technology Conference in Houston today, Helix Well Containment Group unveiled a second capping stack model, which promises to safely shut in flows of up to 15,000 psi. That's a significant increase in capabilities that the industry hopes can pave the way to deeper drilling.

Like the 10,000 psi model that was unveiled in late February -- and led to the first new deepwater well permit approval a day later -- the new capping stack will be housed in North Houston and can be at the site of a blowout offshore in less than 48 hours, according to Helix Well Containment Group.

The consortium's well containment plan states that if there's no debris blocking the well bore, the stack can be attached and shut off flow in three to four days. But other complications could delay final closure. If the capping stack is not enough to stop all flow and containment vessels and systems are necessary to carry oil to the surface, it could take as long as 17 days, consortium spokeswoman Danielle Allen said.
Asked why Helix Well Containment Group is keeping its equipment in Houston when the vast majority of deepwater oil and gas prospects are off the Louisiana coast, Allen said the threat of hurricanes played a major role in the company's decision.

"The Louisiana coast has some vulnerability in the event of a hurricane surge," she said. "Houston is close enough to the port, but would not put it in the path of a hurricane surge and would allow for access to other ports via land."

Over a year after BP launched its oil assault on the Gulf it seems that there is still not a timely procedure in place for removing oil mats from offshore. The mats break up in pieces and wash ashore on beaches when left to their own devices not to mention what evil they may be doing to the ocean environment if left in place.

BP investigates oil mats off Perdido Key

A BP operations team at the Florida Gulf Coast Restoration is investigating two more sunken oil mats discovered in the Gulf of Mexico just off of Perdido Key beach.

These oil mats, discovered last week by BP surveillance teams, are in the same area as the oil mat that was removed in March near Eden Condominiums, Craig Savage, BP's Florida district spokesman said.

But they are not believed to be a part of that oil mat, he said.

An operations team, working from BP's Mary Esther offices, is pulling together a plan to determine "the net environmental benefit" for removing the oil mats, Savage said. If it is determined that the best course of action is to remove them for the restoration of the environment, a team will then create a scope of work plan.

But the assessment and determination for removal and the scope of work will be a collective among BP, and federal, state and local government officials, Savage said.

Litigants are wrangling over what aspects of the complex BP oil spill case should be included in what part of the the trial and when. Something is amiss in the American legal system when the court going through three depositions a day is considered to be an admirable achievement. Justice denied by being delayed seems to be baked into the system. Victims deserve better.

Attorneys in oil spill litigation now debate how trial should proceed

With more than 100,000 claims filed by last week's deadline for the February 2012 trial over the Gulf of Mexico oil disaster, attorneys in the case are now confronting their most difficult question yet: what, exactly, should that trial encompass?

The trial proposals, which will be discussed at Friday morning's monthly status conference before U.S. District Court Judge Carl Barbier, are all over the map.

The plaintiffs, the state of Alabama, and in a strange twist -- Transocean -- want a quick and far-reaching trial of liability issues for all parties encompassing everything from the blowout to efforts to stop the oil, to how much oil was spilled and economic losses. Their vision would include consideration of punitive damages.

BP wants to focus narrowly on the events leading up the blowout and sinking of the rig and leave out what happened after the gusher began. It envisions an extended trial in multiple phases with several-month breaks in between. It would not address questions of punitive or compensatory damages, efforts to control the well after the blowout, or how much oil was actually spilled.

Other parties are somewhere in between. The U.S. government's ideas are similar to the plaintiffs' and Transocean's, but it wants to take a rest between the events leading to the blowout and what happened afterward to keep up with document demands. Louisiana wants to keep its options open. Halliburton likes some of what BP has to say, but rejects the idea of focusing on the "initiation" of the flow of oil, and says that no economic loss claims should be part of the initial proceeding. Anadarko and Moex, the minor partners in the well, generally agree with BP. Cameron put forth a philosophical treatise on what legal issues are to be tried and how, and said that it wants to be tried under Louisiana law pursuant to the Outer Continental Shelf Lands Act before a jury.

While the clock ticks toward the trial ten months from now in the case that could be one of the largest and most complex corporate cases ever, the parties to the case have been meeting with Magistrate Judge Sally Shushan and Special Master Francis McGovern to try to work through their differences.

All of this is very, very far from what was originally contemplated for the opening event of the litigation on Feb. 27, 2012 -- the Monday after Mardi Gras.

In theory, the trial date is for an obscure maritime law proceeding brought by Transocean called the Limitation of Shipowner's Liability Act. Transocean, which owned the Deepwater Horizon rig, initially invoked the 1851 statute to try to limit its financial exposure to the $27 million value of the sunken rig. According to a Transocean statement when the case was filed last May in Houston, the case is supposed to deal only with matters of injury, death and property damage from the explosion.

But as a practical matter, it appears that Transocean has decided that it's in its interests to get the full picture of who's at fault out in the open as quickly as possible rather than be the only one in the spotlight.

Edward Sherman, a law professor at Tulane who studies complex litigation such as the oil disaster, said it also works well for Judge Barbier to take advantage of the limitation of liability proceeding to try to get as many issues on the table as possible. Barbier's role as a judge is to try to resolve disputes as efficiently as possible, so it would be a missed opportunity not to take advantage of the trial and anything that could push the parties toward settlement. But at the same time, whatever is ultimately put into the event must relate back to the original questions of limiting Transocean's liability.
BP and other defendants note that the court is already going at full-tilt taking as many as three depositions every day to get to the bottom of the events leading to the blowout and shoehorning more issues into the trial would require even more depositions by more people.
Ultimately, the issue may be less about the "trial plan" and more about the practical consideration of how quickly discovery can be scheduled for each phase of a long trial that would proceed chronologically through the disaster.

Whatever the ultimate form, it appears long and grueling. The plaintiffs propose a trial on comprehensive liability issues that would run Feb. 27 to May 15, 2012, a month break, and then a trial of experts that would run from June 15 to July 15, 2012.

BP proposes one big trial in multiple phases. The first would deal with liability and fault for the events leading up to the blowout on April 20 and the sinking of the rig April 22 that would last for about three months. A second phase dealing with efforts to control the flow of oil into the Gulf, cap the well, and questions of the volume of oil spilled and its geographic reach would begin in November and continue for about four months.

Other phases of the trial dealing with claims against oil spill responders, economic damages and penalties, relief and natural resource damages would occur later after appropriate amounts of discovery, BP said.

Andarko is signaling a willingness to consider a negotiated settlement with BP. It will be interesting to see if BP negotiates in good faith or tries to bigfoot Andarko the way they have the Gulf victims.

Anadarko may settle some Macondo spill claims

Anadarko Petroleum Corp (APC.N), part owner of BP Plc's (BP.L) (BP.N) blown out Gulf of Mexico well, said on Tuesday it may settle some oil spill claims even though the oil and gas company maintains it holds no liability for the accident.

"We feel very strongly about our position, but we're prepared to come to the table under the right circumstances," Jim Hackett, Anadarko's chief executive officer, told analysts on a conference call.

Anadarko owns 25 percent of the Macondo well that ruptured last year and caused the world's worst marine oil spill. BP is the well's operator.

Anadarko also told analysts it recently sold 10 percent of its interest in offshore blocks in Liberia and and Sierra Leone to Japan's Mitsui.

In a clear demonstration of just how much Louisiana politicians care about the suffering of their own people the state is just now getting around to convening a legislative oversight panel for the Gulf claims process.

New BP Claims Panel Chair

A state lawmaker from Assumption Parish is the newest chairman of a legislative committee created to investigate the claims process associated with last year's Gulf oil disaster. State Rep. Joe Harrison, R-Napoleonville, said the Select Committee on Oversight of the Gulf Coast Claims Facility will probably meet for the first time over the next week or so.

"I think our first big gathering may even be in Terrebonne Parish," Harrison said. "Right now we're looking at a three-judge panel that would issue summary judgments based on claims so we can make some kind of informed demand of BP."
Four months after the April 2010 explosion of BP's Deepwater Horizon rig, which killed 11 people, the Gulf Coast Claims Facility was created. It is now overseen by claims chief Kenneth Feinberg, who developed the post-9/11 fund. Since that time, the facility has received about 851,000 claims from more than 500,000 individuals and businesses. More than $3.8 billion in emergency payments have been doled out, including $1.3 billion in Louisiana. However, the fund was created with a $20 billion revenue stream from BP, meaning most of the money is sitting unused.

State Sen. J.P. Morrell, D-New Orleans, a member of the legislative oversight committee, said similar committees in other Gulf states have been meeting for months, but Louisiana's panel has yet to meet. Once it does get under way, he predicted, the plights of commercial fishermen will pose the most significant challenges. "There are people who do very good work and live viable lives, but don't maintain records traditionally like other people do," Morrell said. "So that has caused some hardships in proving what those damages were."

According to House and Senate rules, the oversight committee will review "problems relating to claims filed by both individuals and businesses, examination of the appeals process for denial of claims, overseeing the protection of our citizens, our businesses and our state, and taking action necessary to ensure a systematic and fair process for claims payments."

BP further inconveniences its victims by closing a claims office. At this point BP isn't even pretending to care about its victims by putting up a PR front.

BP claims office closing

The Gulf Breeze office of the Gulf Coast Claims Facility — which processes claims for those who say they were damaged by last year's BP oil spill — will close on Monday, according to GCCF spokeswoman Amy Weiss.

The Gulf Breeze office is the only claims office in Santa Rosa County.
Dorothy Slye has had two claims denied, one for her Navarre Beach gift shop, Sandy Bottoms, and one for a beach front home she uses as a vacation rental. She bemoaned the closure.

"It will inconvenience people," she said. "The people who are financially affected, the last thing they need to do is drive another 20 miles with gas prices up."

Slye wishes the Gulf Breeze office would stay open at least a few days a week.

"If they're closing the facility (for low volume) it's because people are disgusted with them," she said. She plans to make a visit to the Gulf Breeze office to discuss her claims before it closes.

BP adds its own franchise owners to the humongous list of its victims. This vile practice also adds to the price consumers pay at the pump.

ARCO, BP Gas Station Operators Sue BP

Fifteen ARCO, BP, and am/pm franchise owners claim that BP manipulates gas supplies and prices, so as to deliver less gas when oil future prices are trending up and to deliver more gas at a higher price when oil future prices are trending down. The federal class action also claims that BP required franchisees to install a defective, centralized point-of-sale system that hurt their businesses and brought customer complaints.

The gas station owners say they bought ARCO franchises from BP because ARCO was known for a low-price strategy, mainly due to its 1980s decision to cut the price of gas for cash customers.

Besides pumping up the gas business, the lower gas prices brought the station operators more traffic in their am/pm convenience stores and car washes.

uture. We don't have to be idle! And thanks to Crashing Vor and Pam LaPier for working on this!

Previous Gulf Watcher diaries:

5-01-11 12:28 PM Gulf Watchers Sunday - Oil Biz Trade Show Touts "Safety" - BP Catastrophe AUV #512 Lorinda Pike
4-29-11 06:54 PM Gulf Watchers Block Party: It's Only Rock 'n Roll... Lorinda Pike
4-29-11 08:19 AM Gulf Watchers Friday - They're Baaaa-aak - BP Catastrophe AUV #511 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.

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