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' Greed devastated the gulf,' prosecution says as BP trial opens

BY JULIE CART

NEW ORLEANS -- With the drilling of its deepwater Macondo well running behind schedule and $50 million over budget, energy giant BP was under intense financial pressure to save money, setting in motion a reckless disregard for safety that led to the largest oil spill in American history, the prosecution said as the company' s long-awaited civil trial got underway.

Lawyers for the prosecution gave a dramatic recounting of the April 20, 2010, blowout 50 mi offshore of the Deepwater Horizon rig in the Gulf of Mexico. The explosion and fire killed 11 crew members, and the resulting spill severely damaged the waters and economies of five states.

The company’s hasty decisions and corporate culture were excoriated by a succession of lawyers, representing the federal government and gulf coast states. BP officials were portrayed as placing profits over safety and encouraging a “culture of entrepreneurial risk-taking."

“BP was blinded by greed,” said Luther Strange, Alabama’s attorney general. “To BP, money mattered most. Greed devastated the gulf.”

In the days before the blowout the scene on the troubled rig -- which some workers dubbed the “well from hell” -- became increasingly chaotic, said Jim Roy, an attorney representing the plaintiffs’ steering committee. He promised that future testimony would illustrate “gross and extreme departure from the standards of good oilfield practice.”

The captain of the vessel, Roy said, had never been trained in operating the rig’s emergency systems. In fact, the Deepwater Horizon’s emergency systems -- with their required audible alarms -- were disconnected out of concerns that the claxons would wake the crew.

BP wasn’t alone in the spotlight in the morning’s opening statements. The first phase of the complex trial will examine the role of BP and three companies it contracted with to drill its Macondo well: Transocean, the owner of the Deepwater Horizon, Halliburton, hired by BP to cement the well hole, and Cameron International, which manufactured the blowout preventer that failed to shut down the flow of oil in an emergency.

While nearly 50 attorneys crammed into Judge Carl Barbier’s courtroom -- and filled three adjacent courtrooms -- settlement talks continued elsewhere.

According to numerous media reports, the Department of Justice has an offer on the table allowing BP a plea bargain requiring the company to pay $16 billion -- $6 billion to settle the Clean Water Act violations, $9 billion for resource damage, and $1 billion to fund unforeseen environmental issues.

The company faces as much as $17 billion in fines should it be found recklessly negligent, $4.5 billion if its actions are found to be simply negligent. Barbier will decide whether BP’s actions on the drilling rig were negligent -- as has already been determined in the criminal case -- or grossly negligent, which could force the company to pay significantly higher fines.

The company pleaded guilty to criminal charges, and last month a judge approved a plea agreement to pay $4 billion in fines, the largest environmental penalty in U.S. history. States affected by the spill receive the lion’s share of the fines to assist in ongoing restoration efforts.

The second part of the trial, expected to begin in late summer, will attempt to determine how much oil was released. That difficult accounting will determine the size of the federal fine, which could be as little as $4.5 billion.

The company would be required to pay $1,100 for each spilled barrel under the Clean Water Act. But that fine would rise to $4,300/bbl if BP were found to be grossly negligent.

L.A. TIMES

 

02/26/2013

 

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