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.
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