On trial for Gulf oil spill, BP faces the price of profit

Updated
File - Fire boats battle the blazing remnants of the off shore oil rig Deepwater Horizon, off Louisiana, in this April 21, 2010 handout file photo.
File - Fire boats battle the blazing remnants of the off shore oil rig Deepwater Horizon, off Louisiana, in this April 21, 2010 handout file photo.
File photo U.S. Coast Guard/Handout/Reuters

In New Orleans, the first phase of one of the largest environmental trials in U.S. history is underway.

Three years after the devastating Deepwater Horizon oil rig explosion, the civil trial will determine the share of liability for companies involved. Finger-pointing among oil rig operators BP, Halliburton, and Transocean continues.

The explosion about 50 miles off the coast took the lives of 11 men. It spewed oil across the Gulf of Mexico and onto miles of beaches from Louisiana to Florida. Crews weren’t able to stem the flow of oil for 87 days. The disaster eventually released as much as 206 million gallons of oil into the sea, wreaking havoc on the region’s ecosystem.

The Justice Department and five states (Alabama, Florida, Louisiana, Mississippi, and Texas) are bringing the suit against BP. The company faces fines under the Clean Water Act and penalties for environmental damages under other laws.

BP’s lawyer Mike Brock sought to diffuse the share of the blame and said that the disaster was caused by a series of mistakes made by all of the parties aboard the rig. “There were a number of mistakes and errors in judgment that were made by BP, Transocean and Halliburton,” he said at the start of the trial last week.

According to the Associated Press, a former rig supervisor testified Wednesday that he never felt compelled to put profit over safety. BP well site leader Ronnie Sepulvado explained, ”I don’t believe in pushing people to keep schedules. I’m just not going to do it, especially if safety is involved.”

If found guilty of “gross negligence,” BP could be fined as much as $18 billion. But some question whether the settlement price tag would be large enough, Colorlines.com investigative reporter Brentin Mock said at Sunday’s Melissa Harris-Perry panel. “I know that a lot of advocates on the Gulf are saying, ‘no they need to pay like upwards of $50 billion to make it right,’” he said.

In November, BP pleaded guilty to felony manslaughter and environmental crimes. They paid $4.5 billion on top of a $7.8 billion settlement to people affected by the disaster. The company has spent upwards of $14 billion on cleanup and restoration costs, while also pushing an extensive PR campaign about the region’s comeback.

BP was once the 2nd largest major western oil company in the world. Now it’s the smallest of four.

The company will face another civil trial on August 25, 2014 against its own shareholders. According to Reuters, the lawsuit claims BP committed fraud before and after the disaster in misleading its shareholders about its ability to respond to an accident. The plaintiffs claim they lost up to 40% of their investments in the six weeks following the disaster.

The financial costs of the spill are high, but the company’s profits have nonetheless been able to stay afloat. Last year, BP turned in a net profit, adjusted for non-operating items and accounting effects, of $3.984 billion, down from $4.986 billion a year earlier.

The oil industry plays a big role in the Gulf Coast economy. Politicians in the area face a delicate balance between environmental problems like this and a local economy that is closely tied to the oil and gas industries.

“There are five large oil companies that everybody enjoys beating up on,” said Democratic Sen. Mary Landrieu of Louisiana. “But this is no reason to go after them, singling them out, particularly because of the 9.2 million Americans that are working in and around and for them and the thousands of independent companies and suppliers that work in partnership with them.”

But the question remains whether politicians have the political capital to reject the oil companies and instead push for more regulation. Buddy Roemer, former Louisiana governor and current chairman of thereformproject.org, said some politicians are too close to the companies to regulate them.

“Washington’s not broken, Melissa. It’s bought,” he told the msnbc host. “The money that comes in contributions to politicians is a scandal. Now, there is an economic reality here. I think BP is one of the worst players in the Gulf.”

“And they ought to pay,” he said.

Roemer acknowledges the significance of BP to Louisiana’s economy. The question, he says, is “Do we have the courage to regulate them?”

Because of this dichotomy, The Roosevelt Institute’s Mike Konczal underscored why the trial is so important. “This is ultimately the last form of regulation we have,” he said.

The trial’s first phase could take up to three months.

On trial for Gulf oil spill, BP faces the price of profit

Updated