published Tuesday, February 26th, 2013

Who’s to blame? High-stakes trial begins over BP oil spill in gulf

he Deepwater Horizon oil rig burns in the Gulf of Mexico, more than 50 miles southeast of Venice on Louisiana's tip, in this April 21, 2010 file photo. A high-stakes trial to assign blame and help figure out exactly how much more BP and other companies should pay for the spill began Monday.
he Deepwater Horizon oil rig burns in the Gulf of Mexico, more than 50 miles southeast of Venice on Louisiana's tip, in this April 21, 2010 file photo. A high-stakes trial to assign blame and help figure out exactly how much more BP and other companies should pay for the spill began Monday.
Photo by Associated Press /Chattanooga Times Free Press.

THE GULF OIL SPILL

The spill began after a well in the Gulf of Mexico owned by London-based oil giant BP PLC blew out on April 20, 2010, triggering an explosion of the Deepwater Horizon rig that killed 11 workers and spewed what the federal government estimates at about 172 million gallons of oil. Much of it spilled into the Gulf.

THE LATEST TRIAL

The trial is divided into two phases: The first will determine what caused the blowout and divide the blame among BP, Transocean and Halliburton. The second will look at what efforts the companies made to stop the spill. U.S. District Judge Carl Barbier will rule on how much more money the companies owe.

NEW ORLEANS — BP bears most of the blame for the disastrous 2010 spill in the Gulf of Mexico because it cut corners and put profits ahead of safety, a U.S. Justice Department attorney charged Monday at the opening of a high-stakes trial that could result in the oil company and its partners being forced to pay billions more in damages.

The London-based oil giant acknowledged it made “errors in judgment” before the deadly blowout, but it also cast blame on the owner of the drilling rig and the contractor involved in cementing the well. It denied it was grossly negligent, as the government contended.

The civil case went to trial after attempts to reach an 11th-hour settlement failed.

Eleven workers were killed when the Deepwater Horizon rig leased by the BP exploded on April 20, 2010. An estimated 172 millions of gallons of crude spilled into the Gulf over the three months that followed.

Justice Department attorney Mike Underhill said the catastrophe resulted from BP’s “culture of corporate recklessness.”

“The evidence will show that BP put profits before people, profits before safety and profits before the environment,” Underhill said in opening statements. He added: “Despite BP’s attempts to shift the blame to other parties, by far the primary fault for this disaster belongs to BP.”

BP attorney Mike Brock acknowledged that the oil company made mistakes. But he accused rig owner Transocean Ltd. of failing to properly maintain the rig’s blowout preventer, which had a dead battery, and he claimed cement contractor Halliburton used a “bad slurry” that failed to prevent oil and gas from traveling up the well.

BP already has pleaded guilty to manslaughter and other criminal charges and has racked up more than $24 billion in spill-related expenses, including cleanup costs, compensation for businesses and individuals, and $4 billion in criminal penalties.

But the federal government, Gulf Coast states and individuals and businesses hope to convince a judge that the company and its partners in the ill-fated drilling project are liable for much more in civil damages under the federal Clean Water Act and other environmental regulations.

U.S. District Judge Carl Barbier is hearing the case without a jury and — barring a settlement — will decide months from now how much more money BP and the other companies must pay.

During opening statements, attorney Jim Roy, who represents individuals and businesses hurt by the spill, said BP executives applied “huge financial pressure” to “cut costs and rush the job.” The project was more than $50 million over budget and behind schedule at the time of the blowout, Roy said.

“BP repeatedly chose speed over safety,” Roy said, quoting from a report by an expert who may testify.

Roy said the spill also resulted from Transocean’s “woeful” safety culture and failure to properly train its crew. And Roy said Halliburton provided BP with a product that was “poorly designed, not properly tested and was unstable.”

BP’s partners pointed the finger at the oil company and at each other.

Brad Brian, a lawyer for Transocean, said the company had an experienced, well-trained crew on the rig. He said the Transocean workers’ worst mistake may have been placing too much trust in the BP supervisors on the rig.

“And they paid for that trust with their lives,” Brian said. “They died not because they weren’t trained properly. They died because critical information was withheld from them.”

A lawyer for Halliburton defended the company’s work and tried to pin the blame on BP and Transocean.

“If BP had shut in the well, we would not be here today,” Halliburton’s Donald Godwin said.

Underhill, the Justice Department attorney, heaped blame on BP for cost-cutting decisions made in the months and weeks leading up the disaster. He said two BP rig supervisors, Robert Kaluza and Donald Vidrine, disregarded abnormally high pressure readings that should have been glaring indications of trouble.

Kaluza and Vidrine have been indicted on federal manslaughter charges.

Brock, the BP lawyer, said Transocean employees on the rig also played roles in misinterpreting the “negative pressure test.”

“It was a mistake made by several men from two different companies,” Brock said. “They were trying to get it right. They were trying to do the right thing.”

Hundreds of attorneys have worked on the case, generating roughly 90 million pages of documents, logging nearly 9,000 docket entries and taking more than 300 depositions from witnesses who could testify at trial.

“In terms of sheer dollar amounts and public attention, this is one of the most complex and massive disputes ever faced by the courts,” said Fordham University law professor Howard Erichson, an expert in complex litigation.

One of the biggest questions facing the judge is whether BP acted with gross negligence.

Under the Clean Water Act, a polluter can be forced to pay a minimum of $1,100 per barrel of spilled oil; the fines nearly quadruple to about $4,300 a barrel for companies found grossly negligent, meaning BP could be on the hook for nearly $18 billion.

The judge plans to hold the trial in at least two phases. The first phase, which could last three months, is designed to determine what caused the blowout and assign percentages of blame to the companies involved. The second phase will determine how much crude spilled into the Gulf.

The spill fouled marshes, killed wildlife and closed fishing grounds. Scientists warn that the disaster’s full effect may not be known for years. But they have reported dying coral reefs and fish afflicted with lesions and illnesses that might be oil-related.

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