Statement of Tyson Slocum, Director, Public Citizen’s Energy Program
Public Citizen applauds U.S. District Judge Carl Barbier’s long-awaited ruling that BP acted with gross negligence in setting off the biggest offshore oil spill in U.S. history. The ruling underscores that BP’s intolerable recklessness was the root cause for an accident that left 11 workers dead and devastated five Gulf Coast communities and that the company should not be trusted to operate in U.S. waters.
Oil from the Deepwater Horizon spill approaches the coast of Mobile, Ala., May 6, 2010
The finding means that BP will have to pay significantly larger fines to the federal government for causing oil to spew into the Gulf over the course of 87 days in the summer of 2010.
Instead of accepting responsibility, BP has been engaging in drawn-out legal fights. The company has already stated that it will appeal today’s decision and, even worse, is still actively fighting oil spill victims pursuing claims against the corporation under a settlement the company entered into voluntarily. It is time for the corporate criminal to accept responsibility and end the legal fights. It should stop shelling out millions to its defense lawyers, stop challenging the settlement to which the well-lawyered company agreed and start paying appropriately imposed fines.
BP has an abysmal history of negligent disregard for worker safety and the environment. Holding BP truly accountable and deterring this corporation from continuing its reckless course means using all the tools available. Time and again, fines alone have not prevented BP from acting recklessly. In April, the U.S. Environmental Protection Agency (EPA) lifted its suspension of BP entities from federal contracts, deeming the corporation once again fit to do business with the government. Today’s gross negligence finding by Judge Barbier should trigger a review of the EPA’s premature decision to reinstate BP as a federal contractor.
Today is a victory for the victims of the BP Gulf disaster, but, by itself, it is insufficient to deter misconduct and compensate the many people injured by the BP disaster.
Domestic Fossil Fuel Abundance Fails to Deliver Cheap Energy For Americans
House Republicans plan votes before July 4 on at least three bills (HR 6, HR 3301, HR 4899) to increase domestic fossil fuel production and facilitate their export, with a “Drill Baby Drill” mantra designed to inspire a return to lower gas prices. Political parties can be forgiven for failing to update their rhetoric in the face of changing market dynamics. But the antiquated bombast designed during a period of relative energy scarcity is downright silly in today’s era of energy abundance. Domestic fossil fuel production is at record highs, and in less than two years we’ll be the largest oil producer in the world. Despite the fact we’re awash in domestically-produced fossil fuels, Americans continue to pay more for gasoline. That’s because petroleum prices are set by energy traders based on global events—so our prices will go up even if these GOP bills pass as long as Chinese demand and Middle East unrest fuel speculation. Particularly problematic is HR 6, which will make it easier to export natural gas, threatening higher prices for American consumers.
Lost in the House effort to reduce regulations over oil drilling is their willful amnesia of the 2010 BP Deepwater Horizon tragedy: why on earth is the House GOP trying to relax offshore drilling safety and environmental standards that the bipartisan commission found to be too weak? And of course none of the legislation recognize the need to deal with greenhouse gas emissions.
Eviscerating regulations over fossil fuel production and encouraging their export is a poor excuse for an energy policy. Progressively pricing carbon and investing billions into a sustainable energy infrastructure is the most cost-effective path to get our energy system working for families.
Tyson Slocum is Director of Public Citizen’s Energy Program. Follow him on Twitter @TysonSlocum
I’m a firm believer in 2nd chances. Everyone makes mistakes. And depending on the seriousness of said mistake, one act shouldn’t necessarily define the character of a person or a corporation. But what if a person or company keeps making the same mistake, over and over and over again? Some say that a definition of insanity is doing the same thing over and over again and expecting different results. If that’s true, than it’s time to introduce BP to a straight jacket and a padded cell.
Today we filed comments in an enforcement proceeding at the Federal Energy Regulatory Commission where 4 different BP subsidiaries are accused of manipulating the Houston Ship Channel-Katy Hub natural gas price spread over several months in late 2008. FERC has proposed a $28 million fine, plus disgorgement of $800,000 in unjust profits.
Here’s the problem: at the time of the natural gas price manipulation alleged here, BP was under at least two different special monitoring programs as a punishment for other market manipulation.
On October 25, 2007—less than one year before the violations outlined in the August 5, 2013 Show Cause order detail—BP had to pay a $7 million civil fine, and agree to a “compliance monitoring plan,” which, among other duties, required BP to report to FERC Enforcement Staff “a detailed update of all compliance training administered and compliance measures instituted.” This was required to settle allegations that BP engaged in “thousands” of anti-competitive practices by its natural gas units.
Also in October 2007, the US Department of Justice required BP to pay $303 million to settle allegations that the company manipulated propane markets. In addition, Justice forced BP to hire an outside “compliance monitor” to ensure that the company’s energy trading divisions were behaving themselves.
BP has demonstrated a consistent pattern of market manipulation. Past remedies ordered by the US Department of Justice have included third-party compliance monitors—to no avail. It is clear that FERC must consider suspending or revocation of BP’s blanket natural gas marketing certificates. It’s time to stop the insanity.
Tyson Slocum is Director of Public Citizen’s Energy Program. Follow him on Twitter @tysonslocum
Robert Weissman is president of Public Citizen.
The BP disaster taught us many things: Giant corporations cannot be trusted to behave responsibly, and have the ability to inflict massive damage on people and the environment. We need strong regulatory controls to curb corporate wrongdoing. We need tough penalties to punish corporate wrongdoers. There is no way to do deepwater oil drilling safely. And it is vital that citizens harmed by corporate wrongdoers maintain the right to sue to recover their losses.
Unfortunately, Congress and the Obama administration have refused to learn the lessons from the BP disaster:
1. BP’s reckless actions and inactions caused the Deepwater Horizon disaster — a reminder that corporations cannot be trusted to police their own activities.
BP made a conscious decision not to install a $500,000 safety device that could have prevented the blowout. BP pressured its contractors to skirt safety measures, and those contractors made multiple mistakes leading up to the disaster.
The lesson that corporations can’t be trusted to police themselves should be blindingly obvious. Yet the Obama administration is now proposing to take government inspectors out of poultry processing plants — and give Big Chicken responsibility for ensuring poultry safety.
2. Strong regulatory controls over corporate activity are necessary to ensure health, safety and planetary well-being.
To its credit, the Obama administration acknowledged that the pre-BP disaster oil drilling regulator — the Minerals Management Service, probably the most compromised regulatory agency in Washington — couldn’t be reformed, specifically because it had the duty both to collect oil royalties and regulate oil drilling. It split the agency apart, creating the new Bureau of Ocean Energy Management, Regulation and Enforcement (BOE) to regulate drilling. But Congress has failed to ratify the change in law, which means it could easily be undone by subsequent administrations.
You just can’t make this stuff up.
The government announced today that it is going to let BP do exploratory deepwater drilling in the Gulf of Mexico. Yes, BP — the oil giant that in April 2010 was at the helm of the worst environmental catastrophe in our history. That BP. It was awarded $27 million of leases by the Interior Department.
This happened on the same day that the National Academy of Engineering and National Research Council said in a report that more needs to be done to prevent another Gulf drilling catastrophe. I am not making this up.
The National Journal story about this development quoted Michael Bromwich, the former head of the main offshore energy regulator, as saying in October that the BP disaster was just “one incident” that did not justify “the administrative death penalty.”
As Tyson Slocum, director of Public Citizen’s Energy Program, said in a statement released today, calling the BP disaster an “incident” is like calling Katrina a little rainstorm.
Yes, the federal agency charged with overseeing offshore oil drilling got an overhaul after the BP spill, but Congress never acted on the package of measures developed after the disaster to boost environmental and worker safety in the Gulf. Those were critical to helping stave off further oil gushers. God forbid lawmakers should anger the big oil giants.
Read Slocum’s full statement here.