Transocean becomes second Gulf oil spill perpetrator to take guilty plea

Transocean Deepwater, Inc., which owned and operated the deepwater drilling rig that leaked nearly five million barrels of water into the Gulf of Mexico in 2010, has been convicted of a criminal violation of the Clean Water Act.

The company entered an agreement to plead guilty in January to one misdemeanor violation of the CWA. On Feb. 14, a federal judge approved the deal and sentenced the company to pay $400 million in fines and penalties.

That punishment is the second-most severe sentence ever imposed on a corporation for an environmental crime committed in the United States.

BP holds the record for the most severe criminal punishment in those circumstances, having earlier been sentenced to pay about $4 billion in fines and penalties after entering its own guilty plea arising from the Gulf oil spill.

According to a U.S. Department of Justice press release, $150 million of the penalty assessed against Transocean will be paid to the National Fish and Wildlife Foundation during the next three years for use to purchase, restore, and preserve areas along the Gulf coast that were adversely affected by the spill and to restore barrier islands and coastal wetlands in Louisiana and Mississippi. 

Another $150 million will fund oil spill prevention and response programs in the region. That money will be paid to the National Academy of Sciences over a five-year period.

About $100 million of the money paid by Transocean will go to the U.S. treasury.

Transocean also agreed to a five-year term of probation.

A separate agreement between Transocean and the federal government to resolve Washington's civil Clean Water Act claims against the firm would require Transocean to pay a $1 billion civil penalty under the CWA - a record amount - and to implement measures aimed at preventing another spill.

That agreement was approved Tuesday by U.S. district judge Carl J. Barbier of the Eastern District of Louisiana.

 

Reuters: Plea bargain in BP oil spill case could come today

Reuters reports this morning that a plea deal could come as soon as today in the criminal case arising from the 2010 Gulf of Mexico oil spill.

The report said that BP itself is expected to plead guilty to criminal charges arising from the incident and pay a record fine.

BP, in a press release issued today, confirmed that it is in discussions with federal authorities. The company's statement also said that any deal with the U.S. Department of Justice would have no impact on any federal or state efforts to invoke civil penalty provisions of environmental laws or private lawsuits not already settled.

A plea deal may also cover allegations that BP violated criminal provisions of federal securities law, according to the BP statement.

Reuters also reports that two BP employees may be indicted in connection with the incident, which was the largest oil spill accident in history. Eleven people were killed, while 17 more were injured, when the Deepwater Horizon drilling rig exploded.  

UPDATE (10:00 AM MST) - BP said this morning that it will plead guilty to 14 criminal charges and pay a record $4.5 billion in fines and fees.

"All of us at BP deeply regret the tragic loss of life caused by the by Deepwater Horizon accident as well as the impact of the spill on the Gulf Coast region," Bob Dudley, BP's Group Chief Executive, said in a statement. "We apologize for our role in the accident, and as today's resolution with the U.S. government further reflects, we have accepted responsibility for our actions."

BP will pay $4 billion for violation of U.S. environmental laws over the next five years. It will also pay $525 million to resolve criminal allegations under federal securities laws.

The company will also take an additional $3.85 billion charge against income. That follows a $38.1 billion hit against the company's bottom line already experienced since the Deepwater Horizon incident.

Transocean says 2010 Gulf oil spill is BP's fault

The owner of the well that spewed oil across the Gulf of Mexico last year says the accident was BP's fault.

Transocean Ltd., in an investigative report released today, said that the British oil company caused the blowout of the Macondo Well and Deepwater Horizon drilling rig because its decisions increased the risk of a catastrophic failure.

"The Macondo incident was the result of a succession of interrelated well design, construction, and temporary abandonment decisions that compromised the integrity of the well and compounded the risk of its failure," Transocean said in the executive summary of the report. "The decisions, many made by the operator, BP, in the two weeks leading up to the incident, were driven by BP’s knowledge that the geological window for safe drilling was becoming increasingly narrow."

BP's own report, which was released last September, blamed Transocean and Halliburton, which did contracting work on the construction of the well, for the disaster.

The federal government has cast blame on all three companies involved in operating the rig.

The Deepwater Horizon incident led to an 87 day-long release of oil into the sea.

As a result of the oil spill, the United States has sued BP, Transocean, and several other entities for violations of the Clean Water Act and restitution under the Oil Pollution Act of 1990.

The litigation is pending in federal court in New Orleans.

Multiple private lawsuits are also pending.

Allen shuts down Gulf spill incident command, gets ready for new job

The National Incident Command for the Gulf of Mexico oil spill was shut down Friday and its leader, retired U.S. Coast Guard Adm. Thad Allen, left his post.

Allen transferred oversight of the ongoing Gulf cleanup to the Coast Guard's New Orleans office, which is headed by Rear Adm. Paul Zukunft.

"Response operations will continue under transition plans that have developed with our state and local partners," Allen said in a statement. "Unity of effort must continue to be our common goal. Our commitment to this response and the people of the Gulf of Mexico remains and I am pleased that Rear Admiral Zukunft will continue his dedicated service. This response has been unprecedented in its scope and complexity and we cannot forget the 11 crew members that lost their lives."

Meanwhile, Rand Corp. announced that Allen will join the firm Monday. Allen will be a senior fellow specializing in homeland security, ocean policy, and defense issues. He will work out of the organization's Washington, D.C. office.

Allen retired from the Coast Guard in May. Before assuming his position at the head of the government's response to the oil spill, he was the service's commandant.

Homeland Security secretary Janet Napolitano complimented Allen on his last day of federal employment.

"The BP oil spill presented unique challenges and required an aggressive, all-of-government approach," Napolitano said. "As the National Incident Commander, Admiral Allen drew on his experience with major response efforts as well as his long career in the Coast Guard to help direct the aggressive efforts to stop the flow of oil from the Macondo well, mitigate the impacts of the spill on vital coastal areas, and hold the responsible party accountable.

Senate committee holds hearing on Gulf oil spill, Obama plans to expand off-shore drilling

A Senate committee is scrutinizing the massive oil spill in the Gulf of Mexico this morning, as well as President Obama's plans to expand oil drilling off the nation's coasts.

The Energy and Natural Resources Committee convened at 10 am EDT.

The committee's chairman, New Mexico Democrat Jeff Bingaman, said the explosion of the Deepwater Horizon oil rig on April 20 indicates that the country's energy extraction activities are plagued by deep-seeded problems.

“At the heart of this disaster are three interrelated systems – a technological system of materials and equipment, a human system of persons who operated the technological system and a regulatory system," Bingaman said in his opening statement. "These interrelated systems failed in a way that many had said was virtually impossible.”

The committee's ranking Republican member, Lisa Murkowski of Alaska, expressed regret about the spill but said oil drilling at sea should be pursued even if the environmental and economic costs are significant.

"Under anyone’s most optimistic scenario, our nation will need a lot of oil for a long time to come," she said.

One early witness defended the federal government's principal regulator of oil firms, the Department of Interior's Minerals Management Service, which has come under attack recently for an approach some critics consider too deferential to industry.

"Even when their own personal lives were disrupted, these people were on the job the next day," the agency's former head of offshore energy extraction regulation, Elmer Danenberger, said in reference to MMS employees work during hurricanes. “And ethics? These people won’t take a doughnut from industry. I know. I’ve tried to set them up."

In 2008 an investigation revealed that MMS employees had accepted financial gifts from the oil industry, engaged in financial self-dealing, and become involved in a sex and drug use scandal involving the companies they help to regulate.

Danenberger also said that the government must rely on the industry to self-regulate.

"There’s no number of volumes that is going to tell the operator precisely what to do in every situation," he said.

Under questioning from Murkowski, another witness said it is too early to say whether the oil spill could have been prevented through use of a device called a "blowout preventer."

"I don’t see that the conditions that this well was drilled into were severe or extreme relative to what the industry drills into," Dr. F.E. Beck, a petroleum engineering professor at Texas A&M University, said. “We’re capable of handling much higher formation pressures than my observation or deduction from the data tells us we encountered."

Beck also said it was not likely that the explosion was the result of a terrorist attack.