Beyond

Petroleum:
The Coexistence of the Oil and Fishing Industries: At What
F
Cost?
From the Mouths of Babes

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Deepwater Horizon Disaster
April 20, 2010

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The Damage Done

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BP has said this “accident”
was unforeseeable…

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 Notice
Ixtoc Oil Spill 1979

On June 3, 1979, the Mexican government's oil company

Pemex was drilling a deep oil well in the Gulf of Mexico
when the well suffered a blow out resulting in one of the
worst oil spills in human history. At the time of the
incident the drilling was conducted at about 11,800 feet
below the sea floor.
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 Notice
Ixtoc Oil Spill 1979

In the initial stages of the spill, an estimated 30,000 barrels of oil per day
were flowing from the well. In July 1979, the pumping of mud into the well
reduced the flow to 20,000 barrels per day, and early in August the pumping
of nearly 100,000 steel, iron, and lead balls into the well reduced the flow to
10,000 barrels per day. A total of 3.3 million barrels entered the Gulf of
Mexico as a result.
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Compare current BP 2010 disaster: 60,000 barrels a day
 Notice
Ixtoc Oil Spill 1979

An average of about 10 to 30 thousand barrels a day were discharged into

the Gulf. The well was finally capped on March 23, 1980, nearly 10 months
later. Ultimately, 71,500 barrels of oil impacted 162 miles of U.S. beaches.
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 Safety Violations

 2000 – In February, BP crew in the Gulf of Mexico pushed

the wrong button severing the rig from the blowout system
causing an oil leak.
- Mineral Management Service Safety Alert No.186, March 3, 2000

 2002 – California officials allege BP falsified inspections of

fuel tanks at a Los Angeles refinery and more than 80% of
the facilities didn’t meet requirements to maintain storage
tanks without leaks or damage. BP settled a lawsuit brought
by the South Coast Air Quality Management District for more
than $100m.
- Reports at BP over years find history of problems,
The Washington Post, June 8, 2010,
by Abraham Lustgarten and Ryan Knutson 9
 Safety Violations

 2005 – A BP Texas City refinery exploded, killing 15 people.

The investigation uncovered that a warning system failed and
that “significant process safety issues exist at all five U.S.
refineries, not just Texas City.”
 2006 – In March, more than 200,000 gallons of oil spilled from a
corroded hole in the Prudhoe Bay pipeline in Alaska.
Inspectors found that several miles of the steel pipe had
corroded to dangerously thin levels. BP had received multiple
warnings about their Alaskan pipelines since 2002.
- Reports at BP over years find history of problems,
The Washington Post, June 8, 2010,
by Abraham Lustgarten and Ryan Knutson

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 Safety Violations

 October 25, 2007, the Justice Department settled with BP at $20 million
in penalties and three years' probation, $12 million of criminal fine.
- May 19, 2010 Panel I of a Hearing of the House and
Transportation and Infrastructure Committee
 2008 – In September, a section of gas pipeline on an Alaskan slope blew
apart, flying nearly 1000 feet through the air before landing on the tundra.
 2009 – Three separate accidents plagued the same Alaskan pipeline
system, one of which was a near-catastrophic explosion. Congress sent
a letter to BP stating these accidents were a result of malfunctioning
safety and backup equipment.
- Reports at BP over years find history of problems,
The Washington Post, June 8, 2010,
by Abraham Lustgarten and Ryan Knutson

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 Safety Violations

The blowout preventer is BP’s “key failsafe

mechanism”
Testimony of Lamar McKay, President of BP
May 19, 2010, Panel I of a Hearing of the House
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and Transportation and Infrastructure Committee
 Safety Violations

Deepwater Horizon seamen discovered a BOP leak

two weeks before the blowout in early April of 2010.

On July 21, 2010 it was revealed that 45% of BOP's fail.

- Regulators Failed to Address Risks in Oil Rig Fail-

Safe Device, New York Times,
June 20, 2010.

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Tony Hayward, CEO of BP

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 BP’s Public Statements – Day 9

“What the hell did we do to deserve this?”

BP Chief Tony Hayward
Oil Spill’s Blow to BP’s Image May Eclipse Costs,
New York Times, April 29, 2010

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 Safety Violations

 “First is this whole issue of the ultimate safety device, the blowout
preventer failing. If the blowout preventer had functioned as intended,
we would be dealing with a very serious industrial accident, but we
wouldn’t be dealing with an oil spill.”
BP CEO Tony Hayward
In His Own Words: Forbes Q&A with BP’s Tony Hayward,
Forbes.com, May 18, 2010, by Christopher Helman 16
 BP’s Public Statements – Day 24

“The Gulf of Mexico is

a very big ocean. The
amount of volume of
oil and dispersant we
are putting into it is
tiny in relation to the
total water volume.”
Tony Hayward, BP CEO - May 14, 2010

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 Willful and Wanton Conduct
“The oil is on the surface…”
“There aren’t any plumes.”
BP sampling showed “no evidence”
that oil was suspended in large masses
beneath the surface.
Meanwhile, a twenty-two mile long, six mile wide and more than a thousand feet deep
plume was being reported by the University of South Florida and other
Southeastern educational institutions.
BP CEO Tony Hayward
BP CEO disputes claims of underwater oil plumes,
AP, May 30, 2010

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BP’s Public Statements – Day 28

Tony Hayward, BP CEO:

“I think the
environmental impact
of this disaster is
likely to be very, very
modest.”
- May 18, 2010

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 BP’s Public Statements – Day 27

 “The Gulf of Mexico spill response plan is four inches thick. It’s approved
every two years.”
BP CEO Tony Hayward
In His Own Words: Forbes Q&A with BP’s Tony Hayward,
Forbes.com, May 18, 2010, by Christopher Helman

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 BP Oil Spill Response Plan
 The covers of the five response plans
are 4 different colors, but the content is
90 percent identical. Like BP, three
other companies include references to
protecting walruses, which have not
called the Gulf of Mexico home for 3
million years.”

 “…the only technology [the oil companies] seem to be relying upon is a

Xerox machine to put together [their] response plans…”
- Representative Edward J. Markey
“Drilling Down on America’s Energy Future: Safety, Security, and Clean Energy”
Hearing before the Committee on Energy and Commerce
June 15, 2010
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 Transocean

MR. HAYWARD: This wasn't our accident. This was a drilling rig operated by
another company. It was their people, their systems, their processes.
“We are responsible, not for the accident, but we are responsible for the oil
and for dealing with it and cleaning the situation up.”
MR. STEPHANOPOULOS: You're not responsible for the accident?
MR. HAYWARD: The drilling rig was a Transocean drilling rig. It was their
equipment that failed. It's their systems and processes that were running it.
- ABC “Good Morning America” Interview with Tony Hayward,
British Petroleum Chairman; Subject: Gulf Coast Oil Spill,
May 3, 2010

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 Who is Responsible?

THE
CORPORATIONS Halliburton Energy Services Inc, provided
drilling services on the rig. Halliburton was
in the process of cementing the wellhead
Owners of Mississippi when the blowout occurred.
Canyon Block 252 license
where the well was drilled.
As for BP, The Partners
are liable for costs in
proportion to their
holdings.
BP Leased the Deepwater Horizon rig from
Transocean, The world’s largest offshore
drilling firm based in Switzerland.

The Blowout equipment which failed on the

Deepwater Horizon rig was maintained by
Cameron International Corp, a subsidiary of
Transocean.

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Corporate Finger-pointing

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Tony Haywood, BP CEO
“I’d like my life back.”
BP CEO
Tony Hayward
Business Insider, June 2, 2010,
by Gus Lubin

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 Selling the Fund

 The BP Fund: Kenneth Feinberg “Mr. Fairness”

 The Oil Protection Act 1990
 Multi-District Litigation New Orleans, LA

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BP Claims Process

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BP's USA Today full page AD
on the Claims Process:
June 10th, 2010
What’s happening within the BP Claims
Processing

"When we talk, we'll help people

determine what documents they
need. We will be in touch in four
days or less and can issue them
a check right on the spot.“
- June
10, 2010
50 million dollars spent by BP on
advertising alone in May 2010.
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 What’s really happening within
the BP Claims Processing

Compare what our clients were told by BP claims

officials the same time this full page national ad
and PR campaign ran:

 “Well, we don’t actually have any checks… yet”

6/10/2010 (BP claims personnel)
 “We may get checks next week…” 6/11/2010
(BP claims
personnel) 30
What’s really happening with the BP
Claims Processing
 While BP was claiming it was
“mak[ing] this right,” BP had
policemen and police cars at
every distribution center to
welcome the fishermen.
 And for those trying to forget
Hurricanes Katrina or Wilma
or Ivan? “Think of me like an
adjuster…” 6/10/2010
(BP claims 31
 BP Claims Process

 BP’s “adjusters” are given a script and using a matrix and intentionally
beating down people in need.

 As of Tuesday, June 15, 2010, BP adjusters had paid less than 12%
(twelve percent) ($71 million dollars out of an estimated $600 million) of
submitted claims for relief by individuals and businesses impacted in the
Gulf.
- House of Representatives,
Committee on the Judiciary,
6/15/2001

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BP Fund

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BP Fund

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BP Fund

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BP Fund

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BP Fund

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BP Fund

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 Stabilizing the Industry

 Lifting the Moratorium on Drilling October 2010

 Threats of Pulling out of Gulf
 11% of BP’s Revenue from the Gulf
 Are the rigs any safer?
 Is the fishing industry any more secure?

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