Tuesday Morning Reads: BP Goes on Trial over 2010 Deepwater Horizon Oil Spill

Fire boat response crews battle the blazing remnants of the off shore oil rig Deepwater Horizon on April 21, 2010. The blowout in the Gulf of Mexico killed 11 people and sent 4.9 million barrels of oil gushing from the sea floor into the Gulf (Houston Chronicle).

See more photos of the Gulf oil disaster at the Houston Chronicle.

Good Morning Sky Dancers!!

From the UK Guardian:

BP went on trial over the 2010 Deepwater Horizon disaster on Monday, after the failure of efforts to reach a last-minute settlement.

US district judge Carl Barbier opened proceedings in New Orleans with a warning that it would be a “lengthy trial”….

The trial is designed to identify the causes of BP’s well blowout and assign percentages of fault to the companies. That will help determine how much more each has to pay for their roles in the environmental catastrophe.
Months of negotiations have failed to produce a settlement that could have averted the trial.

BP has said it already has racked up more than $24bn in spill-related expenses and has estimated it will pay a total of $42bn to fully resolve its liability for the disaster that killed 11 workers and spewed millions of gallons of oil.

But the trial attorneys for the federal government and Gulf states and private plaintiffs hope to convince the judge that the company is liable for much more.

The Guardian quotes Columbia law professor John Coffee as saying that there could still be a settlement, because BP obviously does not want to deal with the adverse publicity that would go along with a month’s long trial with damaging information about the company in the headlines day after day.

Read live tweets from the trial by Dominic Rush of the Guardian here.

Bloomberg Businessweek reports: BP, Transocean Accused of ‘Reckless’ Actions in Spill.

The mishandling of an oil-rig safety test by BP Plc (BP/) and Transocean Ltd. (RIG) officials was a major cause of an explosion that led to the 2010 Gulf of Mexico oil spill, lawyers for the U.S. and spill victims said at a trial.

BP and Transocean supervisors’ failure to properly interpret results of a pressure test on the Macondo well off the coast of Louisiana cost 11 rig workers their lives and sent millions of gallons of oil spewing into the Gulf, Michael Underhill, a U.S. Justice Department lawyer, and Jim Roy, an attorney for plaintiffs suing the companies, told a judge yesterday.

“BP put profits before people, profits before safety and profits before the environment,” Underhill said in opening statements that began this morning [Monday] in New Orleans in a trial before U.S. District Judge Carl Barbier, who is overseeing litigation over the spill….

BP executives’ “missteps and reckless decisions” about the safety test were prompted by pressure to generate billions in profits regardless of the costs, Underhill said in his statement.

Read the entire Bloomberg article for an excellent summary of the issues in the case.

Through their attorneys, BP, Transocean, and Halliburton pointed fingers at each other. NOLA.com:

Opening day at the long-awaited civil trial against BP and its partners in the ill-fated Macondo oil well at times sounded like a group of youngsters blaming everyone but themselves for a bad deed. That’s not an unexpected beginning in the first phase of a federal trial aimed at determining each of the companies’ financial liability for the accident.

The trial at the federal courthouse in New Orleans began Monday morning with opening arguments by Plaintiff Steering Committee attorneys, representing private parties who sued BP and its partners for damages; the U.S. Justice Department; and the states of Louisiana and Alabama, whose attorneys outlined their views of how the accident occurred and whether BP or any of its partners were guilty of gross negligence or willful misconduct, which could result in an eventual four-fold increase in fines under the Clean Water Act and the awarding of punitive damages for the private plaintiffs….

The federal, state and private party attorneys took aim at BP, which owned the drilling lease for the Macondo well; Transocean, which owned and staffed the ill-fated Deepwater Horizon drilling rig; and Halliburton, which provided an unusual, lightweight cement that was used to block the flow of oil in the well.

Among the recurring story lines and accusations:

That BP made the ultimate decisions for drilling operations on the Deepwater Horizon rig, was more concerned with profits than safety as it ran behind schedule and over-budget on the well, and that BP rig supervisors botched a crucial safety test before the April 2010 drilling-platform explosion;

That Transocean had not properly trained its crew, which missed clear signals that a blowout was about to occur;

That Halliburton’s use of a cement made lightweight with nitrogen bubbles was known to be risky, and the mixture did not succeed in sealing the well.

Other takes on the opening of the trial:

Wall Street Journal: Accusations Fly as Trial Over Gulf Oil Spill Begins

Transocean, which owned the drilling rig, failed to train its crews properly and didn’t maintain key safety equipment, said Jim Roy, a lawyer for hundreds of businesses suing the energy companies that were drilling the ill-fated well.

Brad Brian, a lawyer for Transocean, said that wasn’t true, noting that the Coast Guard, federal safety regulators and BP’s own management considered the Deepwater Horizon rig “what ‘good’ looked like.”

Michael Underhill, the Justice Department’s lead civil attorney, focused on a last-minute conversation between BP engineers on the rig and onshore that he said showed that the oil giant acted with gross negligence. The rig was not reviewed by hydraulic engineer to ensure that everything is safe.

But BP attorney Mike Brock argued the accident was caused by many mistakes made by all the parties aboard the rig, which exploded in April 2010, killing 11 workers and unleashing the worst offshore oil spill in U.S. history. “There were a number of mistakes and errors in judgment that were made by BP, Transocean and Halliburton,” Mr. Brock said.

LA Times: Greed caused BP’s gulf oil spill, lawyers argue

Energy giant BP, behind schedule and $50 million over budget drilling a deep-water well, emphasized cost-cutting over safety, causing the largest offshore oil spill in U.S. history, lawyers said Monday as the company’s high-stakes civil trial began.

Lawyers used PowerPoint presentations to provide a dramatic recounting of the April 20, 2010, explosion and fire in the Gulf of Mexico that killed 11 crew members. Workers were preparing to temporarily cap the Macondo well 4,100 feet underwater when it blew up. The 30-story drilling vessel about 50 miles offshore burned for two days before crumpling into the gulf.

The resulting spill of more than 4 million barrels of oil damaged the waters and economies of five states. And the responsible party was BP, according to the lawyers representing the federal government, Gulf Coast states and private parties.

Washington Post: Billions of dollars at stake for BP, other companies as trial opens for Gulf oil spill

One of the biggest questions facing U.S. District Judge Carl Barbier, who is hearing the case without a jury, is whether BP acted with gross negligence.

Under the Clean Water Act, a polluter can be forced to pay a minimum of $1,100 per barrel of spilled oil; the fines nearly quadruple to about $4,300 a barrel for companies found grossly negligent, meaning BP could be on the hook for nearly $18 billion.

The judge plans to hold the trial in at least two phases. The first phase, which could last three months, is designed to determine what caused the blowout and assign percentages of blame to the companies involved. The second phase will determine how much crude spilled into the Gulf.

The issues in the case are “massive” and “complex.”

Hundreds of attorneys have worked on the case, generating roughly 90 million pages of documents, logging nearly 9,000 docket entries and taking more than 300 depositions from witnesses who could testify at trial.

“In terms of sheer dollar amounts and public attention, this is one of the most complex and massive disputes ever faced by the courts,” said Fordham University law professor Howard Erichson, an expert in complex litigation.

The trial continues today.

AP via the Houston Chronicle: 1st witness to testify in Gulf oil spill trial

A University of California-Berkeley engineer who played a prominent role in investigating levee breeches in New Orleans after Hurricane Katrina is scheduled to be the first witness Tuesday at a trial involving another Gulf Coast catastrophe: the worst offshore oil spill in U.S. history.

Robert Bea, an expert witness for the plaintiffs who sued BP PLC and other companies involved in the Deepwater Horizon disaster, will share his theories about what caused BP’s Macondo well to blow out on April 20, 2010, provoking an explosion on the Horizon rig that killed 11 workers and spewed an estimated 172 millions of gallons of crude into the Gulf.

Bea’s testimony was scheduled for the second day of a civil trial that could result in the oil company and its partners being forced to pay billions of dollars more in damages. The case went to trial Monday after attempts to reach an 11th-hour settlement failed.

The second witness scheduled is BP America president Lamar McKay.

The high-ranking executive is likely to discuss corporate decisions that were made during the disaster. It was not clear if there would be time for his testimony Tuesday. Other BP officials were expected to give videotaped testimony.

In pretrial depositions and in a report, Bea argued along with another consultant that BP showed a disregard for safety throughout the company and was reckless — the same arguments made in opening statements Monday by attorneys for the U.S. government and individuals and businesses hurt by the spill.

Attorneys for BP tried to block Bea’s testimony, accusing him of analyzing documents and evidence “spoon-fed” to him by plaintiffs lawyers. BP accused Bea and another expert, William Gale, a California-based fire and explosion investigator and consultant, of ignoring the “safety culture of the other parties” involved in the spill, in particular Transocean Ltd., the drilling company running operations aboard the Deepwater Horizon.

It should be fascinating to follow this case, and I’m really hoping there won’t be a settlement. A trial could bring out valuable information that we haven’t heard about so far.

I thought the BP trial deserved its own post, but please consider this an open thread and post freely about any topic in the comments.