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Four years ago this month, BP's BP Deepwater Horizon oil rig exploded. The accident killed 11 people, injured 17 more and sent oil gushing into the Gulf of Mexico.
For three months, engineers struggled to stop the leak. When they finally succeeded, millions of barrels of oil had poured into the Gulf.
Today basic questions about the spill -- how big it was, the damage it caused and who has to pay whom -- still remain.
How Big Was The Spill?
How many millions of gallons of oil entered the Gulf? Depends who you ask.
The National Oceanic and Atmosphic Administration estimated 4.1 million barrels in its April 2012 assessment of the damage done. Bloomberg reported that, at stage 2 of the civil trial, the U.S. Government said 4.2 million gallons spilled. BP argues that number is "severely flawed and substantially overstated" -- and estimates about 2.5 million barrels of oil entered the Gulf.
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Regardless of the number, the spill is enormous -- the Exxon Valdez spill was "only" about 262,000 barrels, or 11 million gallons. BP's Gulf estimate is more than nine times that.
Still, the difference matters enough to litigate. The size of the spill, and the degree of bad acting involved, determines the size of the civil penalties under the Clean Water Act. Just for having the oil spill, the companies could be charged $1,100/barrel. If they were "grossly negligent", that penalty would rise to $4,300/barrel.
Unless the companies settle with the government, the size of the penalty won't be known until 2015. The relevant part of the trial won't even begin until January 2015, explains the Times-Picayune at Nola.com.
The Criminal Pleas And Pending Cases
In 2012 BP agreed to plead guilty to 11 counts of manslaughter, one count of obstructing Congress, and environmental crimes. As part of the plea, BP paid $4 billion in criminal fines and agreed to hire experts to monitor its safety procedures. Simultaneously BP settled with the SEC, paying $525 million for publicly and repeatedly underestimating how much oil was leaking.
Three BP supervisors face criminal charges. Donald J. Vidrine and Robert Kaluz are being prosecuted for involuntary manslaughter for the 11 deaths. David Rainey, a former BP executive, had been facing trial for lying to Congress but that is on hold while litigation over the indictment is pursued, the AP reported. Kurt Mix, an ex-BP engineer was convicted last December on one count of obstruction of justice for deleting messages from his cell phone. Although the spill is routinely referred to as a "BP" spill, three other companies played major roles in the disaster: TransOcean RIG, Halliburton HAL and Anadarko APC. A fourth company, Matsui & Co. was a small investor and has resolved its liability already. Both TransOcean and Halliburton pled guilty to criminal charges.
TransOcean was responsible for drilling the well, and has pled guilty to ignoring evidence the well was unstable while it was being drilled, among other things. Taking the plea in 2013, TransOcean paid a $400 million criminal penalty and accepted five years' probabtion. Along with resolving the criminal charges, the deal involved $1 billion in civil Clean Water Act fines.
Halliburton was responsible for the cement that failed during the accident. Reportedly, both BP and Halliburton knew of the cement's instability before the accident. In 2013, and one of its managers pleaded guilty to relating to its tests of the cement. Halliburton paid a $200,000 fine and "voluntarily" gave $55 million to the National Fish and Wildlife association, plus accepted three years probabtion. As with TransOcean, the deal ended criminal investigations of the company relating to the spill, but not all possible liability.
Anadarko owned 25 percent of the project that included the Deepwater Horizon. Although the company has portrayed itself as a "passive investor," Bloomberg reported on emails -- showing Anadarko pushing to drill even deeper at the Deepwater Horizon, while BP resisted on safety grounds.
Anadarko paid BP $4 billion and gave up that 25 percent when it settled with BP in October, 2011. In exchange, BP dropped its claims against the company and agreed to fully indemnify Anadarko for certain claims. However the indemnification does not reach "fines and penalties", and Anadarko could face civil fines under the Clean Water Act. Anadarko has not faced criminal charges.
State Lawsuits
Alison Frankel reported for Reuters that some 20 institutional investors, including the pension funds of Louisiana, Maryland and Texas, brought fraud claims against BP because of BP's public statements about the spill in its early days. As Frankel details, these cases may blaze a trail for securities fraud litigation against foreign companies after a Supreme Court decision essentially ended such cases.
Expensive Class Action Settlements
In 2012, BP entered a civil settlement with classes of victims. One part was for health claims; the other was for economic losses.In February 2014, the "medical benefits" part of the class action "settlement" became effective. Until February, 2015 clean up workers and people living in certain areas in 2010 can file claims. These class members can get paid for certain health impacts, and receive medical monitoring.
The Damage Remains
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