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BP and contractors face "pathetically inadequate" fines. BP convinces a federal judge to let them avoid some lawsuits. BP refuses to help clean beaches. Family oil-support business still struggling after gusher. The newly-split BOEMRE names leadership. New Orleans Times-Picayune editorial: Hold BP accountable. The Federal probe might not help much, but sets stage for some new rules.  

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Michael Bromwich, the current head of the Bureau of Ocean Energy Management, Regulation and Enforcement, soon to be chief of the Bureau of Safety and Environmental Enforcement (BSEE) says the fines to be assessed on BP and its contractors involved in the Deepwater Horizon blowout are "pathetically inadequate".

The notice of the fines for non-compliance in violation of seven offshore drilling regulations will be sent to BP, Transocean and Halliburton in the coming week.

The action marks the first time federal regulators have moved to sanction contractors for violating offshore regulations, a departure from the government’s traditional focus squarely on the oil and gas companies working on the outer continental shelf.

Although the initial notices may not specify the civil penalties that will be assessed against each of the three firms, fees last year were capped at $35,000 per incident, per day.

In the case of the oil spill, violations may have covered 87 days — the time crude was gushing into the Gulf — or longer, creating a potential tab per incident of $3.05 million. Collectively, the bill for all seven companies could be as high as $39.59 million, based on 87 days of violations.

The civil penalties that will be assessed by the ocean energy bureau for violating offshore regulations are separate from Clean Water Act fines and other penalties facing companies that worked at the Macondo well.

The investigation by the Coast Guard and the BOEMRE found that the three companies violated seven regulations, such as failing “to take necessary precautions to keep the well under control at all times.” The breakdown of the infractions has BP in violation of all seven; Halliburton and Transocean were found to have violated three.

(To read the report, please click here. It's 244 pages long, and very dry...)

The joint committee maintains that BP and its contractors, Transocean and Halliburton, violated the following federal regulations, with the first one looking like a total disregard for everything in general...
   

 30 CFR § 250.107 – BP failed to protect health, safety, property, and the environment by (1) performing all operations in a safe and workmanlike manner; and (2) maintaining all equipment and work areas in a safe condition.    

    30 CFR § 250.300 – BP, Transocean, and Halliburton (Sperry Sun) failed to take measures to prevent the unauthorized release of hydrocarbons into the Gulf of Mexico and creating conditions that posed unreasonable risk to public health, life, property, aquatic life, wildlife, recreation, navigation, commercial fishing, or other uses of the ocean.

    30 CFR § 250.401 – BP, Transocean, and Halliburton (Sperry Sun) failed to take necessary precautions to keep the well under control at all times.

    30 CFR § 250.420(a)(1) and (2) – BP and Halliburton failed to cement the well in a manner that would properly control formation pressures and fluids and prevent the release of fluids from any stratum through the wellbore into offshore waters.

    30 CFR § 250.427(a) – BP failed to use pressure integrity test and related hole-behavior observations, such as pore pressure test results, gas-cut drilling fluid, and well kicks to adjust the drilling fluid program and the setting depth of the next casing string.

    30 CFR § 250.446(a) – BP and Transocean failed to conduct major inspections of all BOP stack component.

    30 CFR § 250.1721(a) – BP failed to perform the negative test procedures detailed in an application for a permit to modify its plans.

Bromwich says the fines assessed for the abject flaunting of all known safeguards by BP and its contractors are not enough, given the amount of money the companies make and their ability to pay said fines.

“The fine structure has got to be increased,” Bromwich added, so that there are “meaningful dollars” attached to violating offshore drilling regulations.

Bromwich declined to give a specific figure, but said “it’s got to start in the six figures, not five figures.” He added:

    “It’s in everyone’s interest that you have system of fines and penalties that serves as a deterrent to bad conduct, a specific deterrent so the violator gets smacked and knows that they are at risk of losing a significant amount of money. Other operators see what happens to that one operator and say ‘Gee, this is really serious, we need to take the extra steps that are necessary to avoid being cited ourselves.’”

Well, duh... Your heart may be in the right place for the most part, Mr. Bromwich, but good luck with the situation regarding oil companies ever changing.


BP has found a federal judge in Houston to dismiss several lawsuits brought by institutional investors of the company on the grounds that the suits should have been filed in the United Kingdom rather than in the United States, because BP is a British company. (Could this be the beginning of a legal gambit to enable BP to weasel out of even more litigation? Stay tuned...)

U.S. District Judge Keith P. Ellison in Houston agreed with BP’s arguments that the claims should be filed in U.K. courts because the company is based in London. Ellison said he may reverse this dismissal if English courts “refuse to accept jurisdiction” for reasons other than the plaintiffs’ failure to comply with procedural requirements.

“Because this derivative lawsuit involves the internal governance of an English corporation, the convenience of the parties and the interests of justice favor England as a more convenient forum,” Ellison said yesterday in a 31-page decision.

Investors maintain that BP was in the wrong when they knowingly put profits ahead of safety, a claim upheld by the BOEMRE in the National Response Team's report.

Judge Ellison ruled that US law does not hold in the suits; that English law governs the dispute.

“The primary concern of this derivative litigation is the internal affairs of an English corporation, and the suit seeks to recover damages for the benefit of BP only,” Ellison said in his ruling. “English law governs this dispute and will determine whether the individual defendants breached their fiduciary duties and harmed BP in the process.”

I am not a lawyer (IANAL) but this sounds to me like a real stretch on Judge Ellison's part. (See: conference table, money under?) Maybe a lawyer-type person can explain...


The beaches bordering the Alabama town of Gulf Shores are dirty again after Tropical Storm Lee churned the ocean and threw up a new crop of oil and tar balls. Local crews are working longer shifts in an effort to once again clean up the mess. Grant Brown, city spokesman for the town, says BP has not been very helpful with this current cleaning project, agreeing to send a few representatives, but declining to make any of the specialized cleanup equipment available, as the company did shortly after the spill.

Neighboring Orange Beach has also requested help.

Phillip West, the city's coastal resource manager, said shovels and rakes often aren't enough to remove the oil and tar soaked in the sand by the storm's surge. He said the beach needs a thorough cleaning and a crewman with a shovel may not do the trick.

The spokesman for BP, Ray Melick, said the crews would "go out and get an assessment of what's needed to handle the cleanup."


A family-run drilling support business is struggling to stay afloat more than a year after the BP gusher.

R&D Enterprises in Harvey, Louisiana, saw its business drop by 80 percent after the Deepwater Horizon blowout initiated a moratorium on deepwater drilling in the Gulf.

Leslie Bertucci and her husband, Dan Ness, founded R&D 11 years ago in their house in Metairie to manufacture and rent specialized equipment to deepwater drillers. When the moratorium clanged down and the Gulf went quiet, Bertucci said revenue plunged 80 percent almost overnight.

The company survived, in part, by enforcing furious economies, Bertucci said.

The couple slashed their own salaries by 75 percent. Months later they eliminated them entirely, and then began shoveling personal savings into company operations.

Bertucci said they slashed every discretionary nickel, ended their practice of cookouts or gifts for customers, cut off all charitable contributions.

Remarkably, over the course of 18 months, R&D has held on to its small workforce of a dozen or so employees.

"We didn't lay off anybody but ourselves," she said.

Bertucci says their firm was informed it did not qualify for a slice of the $20 billion BP fund, although more than $144 thousand dollars worth of their businesses' equipment that was on the Deepwater Horizon rig is now lying on the floor of the Gulf.

"We haven't received a penny. Not a penny," she said.

However, since the spring, business has inched back up, "but it's excruciating how slow it is."

"I didn't think a year and a half ago I'd be excited to have the numbers I have today," she said. "They're not great. But they're creeping back up slowly."

Bertucci said she and Ness are back on the payroll, but business is still down more than a third of what it was before the oil spill. The day of the BP disaster, Bertucci said her company had equipment on 23 deepwater rigs; today they're on 12.

If her projections work out, Bertucci expects that next summer the business will be where it was in June of 2010.


Yeah, it's the BOEMRE press release, but that's as good a place to start as any...

Secretary Kenneth Salazar names Michael R. Bromwich and Tommy P. Beaudreau to lead new DOI bureaus.

Secretary of the Interior Ken Salazar today named current Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) Director Michael R. Bromwich to lead the newly formed Bureau of Safety and Environmental Enforcement (BSEE) and current BOEMRE Senior Advisor Tommy P. Beaudreau to lead the newly formed Bureau of Ocean Energy Management (BOEM).

Bromwich and Beaudreau have both been highly involved in the creation of the two new bureaus, as well as the Department’s efforts to strengthen the oversight of offshore oil and gas exploration and development. BSEE and BOEM will be officially established on Oct. 1, 2011.

Bromwich has agreed to serve as the BSEE Director until a permanent director is selected. The Department has launched an aggressive, nationwide recruitment effort to find a permanent director. Beaudreau will serve as permanent BOEM Director.

“We have moved quickly and thoughtfully to create strong and separate agencies to manage offshore energy development, collect energy revenues, and to oversee safety and environmental protection on the Outer Continental Shelf,” said Secretary Salazar. “Director Bromwich is a top-flight manager with a track record of solving problems and implementing reform, in the private sector, in the public sector, and his time at BOEMRE. Tommy Beaudreau has been an engine behind the many changes BOEMRE has made to raise the bar for safety and environmental protection in energy operations – he will be a strong, tireless, and effective leader for BOEM.”

Okay, that's enough. You now know just about everything you need to know. Suffice it to say that it will probably be two-part harmony on the same old song rather than the solo we've gotten used to...


In today's editorial, the New Orleans Times-Picayune again says BP is responsible for death and destruction, and should pay...

Holding BP accountable for bad decisions that led to oil spill disaster: An editorial.

The federal government's most conclusive report on the Deepwater Horizon disaster reaffirms the crucial finding shared by some of the other probes into the tragedy: that BP's failure to assess the well's risks and the company's relentless drive to cut corners at the expense of safety were the main catalysts for the catastrophe. That unequivocal conclusion should demolish BP's efforts to deflect blame for the blowout and the subsequent oil spill, especially when it comes to determining payment of the massive fines related to the incident.

~snip~

Already, some environmentalists and Gulf advocates argue that the joint investigation report strongly supports a finding that BP was grossly negligent, a conclusion that would call for the maximum fines possible under the Clean Water Act.

Indeed, members of the joint investigative team clearly believe that BP personnel sacrificed safety in order to save time and money at the Macondo well. The report noted that at the time of the blowout, the project to drill Macondo was behind schedule and $58 million over budget. The document includes a chart specifically keying on seven critical decisions in the design of the well and the drilling process -- all made by BP managers.

~snip~

"BP's failure to fully assess the risks associated with a number of operational decisions leading up to the blowout," and the company's "cost- or time-saving decisions without considering contingencies and mitigation were contributing causes of the Macondo blowout," the report concluded.

An indictment of BP's decisions doesn't get any clearer than that.

~snip~

But the joint investigative team's report is a rebuke of BP's efforts to try to shift most of the responsibility for the disaster to its contractors. BP can protest all it wants, but this latest report -- and the findings from other investigations -- makes clear that the oil giant made the key decisions at the site and was more concerned with cost-cutting than safety.

Now the Justice Department must hold BP and its managers accountable for those decisions.

(Please click here for the whole thing. It's a good read.)


The Joint Commission's report may change the way offshore drillers do business...or not.

Spill report sets stage for new offshore rules.

The report provides fodder for legal battles over the disaster and sets a foundation for new government mandates on offshore wells and the emergency equipment that secures them.

Regulators are expected to seize on dozens of recommendations for stiffening drilling standards.

These include proposals for additional barriers within some offshore wells; more safeguards in blowout preventers designed as a last defense against surging oil and gas; and better monitoring of unexpected pressure changes – called “kicks” – that can precede more serious problems.

Now oil and gas companies only have to tell the government when they lose well control, said Andy Radford, a senior policy adviser for the American Petroleum Institute, who added that the additional requirement might improve tracking and evaluation of near-accidents.

“This would just allow more information and better ability for the regulator to gauge the risks of the activity,” Radford said.

The Bureau of Ocean Energy Management, Regulation and Enforcement soon will begin a long process to propose new drilling safety rules.

But others say that nothing will actually change.

Report may not add much to fight over spill blame.

A contention that BP has argued from the beginning is that they were not completely to blame for the blowout, and others - Transocean and Halliburton to be specific - should shoulder some of the financial blame. The report does include others in the blame, but has BP as the main culprit.

“It’s favorable to BP in that it doesn’t find BP solely at fault,” said Joseph Soliz, a Houston oil and gas attorney and law instructor following the case.

Yet the report still slams the British oil giant on many fronts – from putting workers at risk by operating outside accepted industry standards to cutting corners at the Macondo well to save time and money.

But experts are divided about how much the report will figure into other investigations, including a criminal probe by the Justice Department and hundreds of civil cases stemming from the accident.

David Uhlmann, a former head of the Justice Department’s environmental-crimes section who now teaches law at the University of Michigan, said the report, though largely consistent with other studies, will likely carry more weight with prosecutors because it was conducted by federal investigators.

“I would be very surprised if the Justice Department was not given the opportunity to review this report before it was released, since it now becomes the official position of the U.S. government on the causes of the Gulf oil spill,” he said.

Prosecutors still may tap outside experts for additional information for criminal and civil cases. “But on the points that the report addresses, Justice will be hard pressed to stray too far from the conclusions reached in today’s report,” said Uhlmann, who believes the report boosts chances that BP, Transocean, and Halliburton will face criminal charges.

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:

9-16-11 06:45 PM Gulf Watchers Block Party: Road Trip Edition BlackSheep1
9-14-11 04:00 PM Gulf Watchers Wednesday - Final Report on Spill Out Today - BP Catastrophe AUV #555 shanesnana
9-11-11 03:57 PM Gulf Watchers Sunday - BP Fouls Gulf Beaches Again - BP Catastrophe AUV #554 Lorinda Pike
9-09-11 06:59 PM Gulf Watchers Block Party: Burning State Editio BlackSheep1
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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