A federal judge on Thursday rejected BP’s request to cap its Deepwater Horizon oil spill liabilities at a level lower than the $4,300-per-barrel maximum U.S. prosecutors are seeking for environmental penalties.

U.S. District Judge Carl Barbier in New Orleans sided with the prosecutors, who had argued environmental regulators were instructed by Congress to raise statutory maximum fines to account for inflation.

Barbier said he hasn’t yet determined the actual amount of the civil penalty stemming from the Gulf of Mexico spill, which could run as high as $13.7 billion.

The judge also ruled the highest fines that could be leveled against Anadarko Petroleum Corp., which owned 25 percent of the Macondo well, was $1,100 a barrel.

“We disagree with the court’s decision, and continue to believe that neither the EPA nor the Coast Guard has the power to independently inflate the maximum penalty as Congress intended,” BP spokesman Geoff Morrell said in an emailed statement.

BP had wanted the judge to cap its fines at $3,000 per barrel, the level Congress had set in 1990, arguing only the U.S. attorney general had the authority to raise the fines — a task no attorney general had ever taken up.

But Barbier ruled the Environmental Protection Agency has the authority to adjust fines for inflation, pointing to “the very first section of the (Clean Water Act).”

The judge said the administrator EPA has jurisdiction over the fines to comply with the Inflation Adjustment Act, which requires federal agencies to raise deterrent penalties in line with inflation. Barbier also noted BP didn’t dispute EPA’s calculations were incorrect under that law.

Accepting BP’s position “would invalidate nearly every agency’s attempt to inflate civil penalties that can be sought in federal court,” Barbier said.

The EPA has set maximum environmental fines for oil spill liabilities at $4,300 per barrel of crude spilled. The Coast Guard set the penalties at $4,000 a barrel. Barbier had ruled in September BP was grossly negligent in the lead up to the spill, exposing the British oil company to the highest possible environmental fines.

“At the very least,” Morrell said, “fair notice was never provided as to which of those two agencies possessed the authority to inflate the penalty amount.  We, therefore, believe the original statutory maximum penalty of $3,000 per barrel in the case of a gross negligence finding should remain in force and are considering all of our legal options.”

Originally published by Collin Eaton of Fuel Fix.

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Oil from the Deepwater Horizon blowout in 2010 may have created a vast zone on the Gulf of Mexico floor where marine life is much sparser than before toxic petroleum settled there, according to studies presented Monday at a Houston conference on the BP oil spill.

Sperm whales are no longer feeding in a vast area of the Gulf of Mexico affected by the oil spill, an indication that there is nothing there to feed on, said Bruce Mate of the Hatfield Marine Science Center at Oregon State University, one of the scientists who conducted the study of 54 sperm whales from 2010 to 2013. Whales that typically made repeated dives over the area before the oil spill afterwards shunned large parts of it and made few dives around its edges as they searched for squid. Those areas are where millions of gallons of oil sank to the seabed, leading researchers to surmise that many organisms have perished over a 1,500 square-mile area.

Mate said he suspects the problem has to do with the food chain at the bottom of the Gulf, where there are no longer organisms to support the squid that are sperm whales’ main food source. Mate said the zone could become a serious problem for marine life if it fails to heal. ''My sense is that we’ve got a little bit of a tiger by the tail,'' he said. ''I think we need to be concerned about how long this lasts.''

The study was one of several presented by scientists at the 2015 Gulf of Mexico Oilspill and Ecosystem Science Conference. The conference at the Westin Galleria Hotel is scheduled to end Thursday. The spill, the largest in U.S. history, dumped 4.1 million barrels into the Gulf of Mexico, much of it broken up by chemical dispersants that caused the oil to spread in vast underwater plumes and sink to the bottom.

 BP studies ongoing

 A BP spokesman said, ''BP and the trustees continue to study the Gulf’s deepwater environment to gain a better understanding of how the current quantity and composition of deep sea marine species compare to those prior to the accident. Preliminary observations of the sea floor have identified marine life in, on and above the sea floor, both before and after the accident. Work to identify and document any changes in species type or abundance is ongoing.''

 The possibility of an undersea expanse with diminished marine life was supported by another study showing a dramatic decline of fish on two oil-stained reefs. The number of fish on the Alabama Alps and the Roughtounged reefs dropped significantly in 2010 and continued to decline in 2011, said K.J. Sulak, a researcher with the U.S. Geological Survey.

 Sulak said the decline showed a cascading effect, where the death of organisms lower on the food chain caused a die-off of larger animals that use them for food, which in turn affected the animals that prey on them.

 Full impact not yet known

The studies and others presented are only nibbling at the edges of questions about the long-term effects of the oil spill on the health of the Gulf, said Pamela Plotkin, Monday’s conference organizer and director of the Texas Sea Grant College Program at Texas A&M University at College Station.

''We are not going to know the full impact for five to 10 years down the road,'' Plotkin said. ''We are just beginning to see the evidence that researchers are able to show to the public.''

Much of the key research into the effects of the oil spill is being kept under wraps because it is being funded under the Natural Resource Damage Assessment, which will be used by the U.S. government in court to determine how much BP should pay to restore the Gulf.

The Houston conference follows the Second International Kemp’s Ridley Symposium in November where researchers presented evidence for the first time linking the oil spill to a dramatic decline in the endangered Kemp’s ridley sea turtle.

Some of the studies showed that several types of marine life are recovering. 

Originally published by Harvey Rice of the Houston Chronicle. 

A federal appeals court panel has reaffirmed its ruling that BP is liable for federal Clean Water Act damages stemming from the 2010 Gulf of Mexico oil spill, the latest loss for the oil giant as it fights court decisions that could ultimately bring $18 billion in penalties.

The three-judge panel of the 5th U.S. Circuit Court of Appeals rejected arguments that there were errors in its June 4 ruling on BP’s Clean Water Act liability. The ruling released Wednesday night is not the final say from the court. BP and its minority partner in the Macondo well, Anadarko Petroleum Corp., have a request pending for the full 15-member court to reconsider the issue.

The June order and Wednesday’s follow-up were issued by Judges Fortunato Benavides, Carolyn Dineen King and James Dennis. They upheld U.S. District Judge Carl Barbier’s ruling holding the well owners are liable.

BP and Anadarko had argued they were not liable because equipment failure on the leased rig Deepwater Horizon caused the April 2010 disaster. An explosion on the rig killed 11 workers and sent millions of gallons of oil spewing into the Gulf in what became the nation’s worst offshore oil disaster.

Barbier also has ruled that BP was “grossly negligent” in the disaster. BP has asked Barbier to reconsider that finding, which, if it stands, would be a factor in whether the water act penalties for the company reach an estimated $18 billion.

Under the Clean Water Act, a polluter can be forced to pay from $1,100 to $4,300 per barrel of spilled oil. The higher limit applies if the company is found grossly negligent — as BP was in Barbier’s ruling. But penalties can be assessed at lower amounts.

By Kevin McGill, Associated Press

At approximately 8:30 a.m. CST on Monday, December 8, 2014, the United States Supreme Court released it's Order from the December 5, 2014 conference. This Order denied BP's request to have the highest Court in the United States hear arguments regarding the interpretation and validity of the Deepwater Horizon Settlement Agreement, which was entered in 2012.

Results of a third-party audit of the oil spill settlement program released Tuesday (Nov. 25) by claims administrator Patrick Juneau show the settlement program has correctly processed 99.5 percent of claims. The audit concluded the program is "well-designed and appropriate" and made no major recommendations for improvement.

The audit, conducted by Chicago-based McGladrey LLP, has become a focal point for BP in its fight to remove Juneau and challenge the settlement program, which it claims is riddled with fraud and errors.

In late October, BP asked a federal judge in New Orleans to force Juneau to turn over the audit, which it said had ballooned in cost from $1.6 million to $14 million. The British oil giant accused Juneau of purposely hiding the results.

The public release of the findings comes two weeks after a federal judge in New Orleans rejected BP's request to remove Juneau from his post due to a conflict of interest. BP said it is considering its options for appealing that decision.

In a statement, Juneau said the audit reinforces the program is running properly. He encouraged the public to review its findings.

"I am very grateful to all of those people who worked so hard to make this happen. It speaks volumes as to what has been accomplished to date," Juneau said.

BP Vice President Geoff Morrell said in a statement that BP was in the process of reviewing the report.

"The audit took place over the course of a year, and we have just received the report," Morrell said. "We are reviewing the materials and will have further comment, as appropriate."

McGladrey examined 1,852 claims out of 53,512 submitted to the court supervised settlement program since it was approved in 2012.

The total value of the reviewed claims was $741 million. More than half of the claims were for individual or failed business losses.

The key takeaways from McGladrey's audit include:

Of the 1,852 claims reviewed, 122 had calculation errors resulting in about $2.1 million in miscalculated awards.
Within the group of claims reviewed, the settlement program had an error rate of about 0.3 percent.
When the findings were applied to the larger group of claims, the error rate edged up only slightly to 0.5 percent. That translates to about $17.5 million in calculation errors for more than $3.7 billion in total awards.
In a filing with the court, McGladrey auditors said an error rate of less than 1 percent was "a significant accomplishment" given the size and complexity of the claims process.

"By any objective measure, these error rates are extremely low," the audit report states.

In a statement, lead plaintiffs' attorneys Steve Herman and Jim Roy, echoed the auditor's comments.

"BP wanted to see the McGladrey audit, and here it is: the CSSP gets claims right 99.5 percent of the time," Herman and Roy said. That 'is a significant accomplishment,' as stated by the Claims Program's independent audit committee."

The McGladrey audit is the second review of the claims program's internal operations.

A previous audit initiated by Juneau and completed by Minneapolis-based Clifton Larson Allen last year found the program was running properly.

BP objected to the results of that audit, and in late 2013 asked for a second audit by a different auditor. McGladrey was hired in October 2013 to complete the second audit.

A separate, court-ordered investigation into the program found that isolated cases of claims fraud did not impact the integrity of the claims process as a whole.

Investigators said payments would be able to move forward fairly and efficiently under Juneau's leadership.

Article by Jennifer Larino, published on Nola.com.

A panel of federal appeals court judges in New Orleans has refused to reconsider a ruling that BP and Andarko Petroleum Corp. must pay federal fines related to the 2010 Gulf of Mexico oil disaster.

BP and Anadarko, co-owners of the failed Macondo oil well, had sought to avoid penalties by blaming another company's failed equipment.

In an opinion issued Wednesday (Nov. 5), a three-judge panel of the U.S. 5th Circuit Court stood by its June ruling that oil from the disaster came from the Macondo well, making BP and Anadarko liable for Clean Water Act violations.

The panel had previously upheld a 2012 decision by U.S. District Judge Carl Barbier, who is overseeing the complex oil spill litigation.

BP and Anadarko have each asked the entire 5th Circuit Court to review the ruling.

Barbier is set to determine how much the companies are responsible for paying in Clean Water Act fines at a January trial.

In a September ruling, Barbier said BP's "gross negligence" was mostly to blame for the disaster, meaning the company could see as much as $4,300 in fines for every barrel of oil released, the maximum penalty under the federal Clean Water Act. BP's fines could reach up to $18 billion total.

Barbier also found Halliburton, a contractor on the well, and Transocean, the owner of the Deepwater Horizon drilling rig, partly responsible, though not grossly negligent.

For the past two years, BP and Anadarko have looked to the 5th Circuit to overturn what they say are misdirected fines.

The companies have argued that it was the failed blowout preventer on the Deepwater Horizon that caused the April 2010 explosion, killing 11 men and sending millions of gallons of oil spewing into the Gulf of Mexico.

The rig and the blowout preventer were owned by Transocean, which pleaded guilty last year to a misdemeanor Clean Water Act violation and agreed to pay a $1 billion fine.

BP and Anadarko had argued that while the oil from the disaster came from their Macondo well, it spilled into the ocean from a pipe linking the well and the rig, a pipe owned by Transocean.

The 5th Circuit panel rejected that argument in its June ruling. BP and Anadarko asked the panel to reconsider its decision.

The companies argued that the panel of judges relied on incorrect information that the Macondo well had been sealed with cement prior to the disaster to make its decision. The well was never successfully sealed, which means oil flowed upward and into the ocean through the broken Transocean pipe, they said.

The companies also argued that federal law only applies fines to the owner or operator of the vessel or facility where the oil was discharged. In their view, again, that is Transocean.

In their Wednesday opinion, the judges called the cement seal argument a "red herring" and "immaterial" to its finding. What matters is that the seal did not stop the flow of oil, whether it was successfully put in place or not, they said.

They also clarified that whatever Transocean may have done wrong leading up to the disaster, the Clean Water Act does not allow BP and Anadarko to escape liability.

Oil may have spewed into the Gulf at several points in the drilling system, but it started to go out of control in the well, the judges said. They maintained federal law holds all owners and operators, not a single party, liable in such a case.

BP and Anadarko must now wait to see if the full 5th Circuit Court will decide to review the decision.

Article originally published on Nola.com.

Officials in Florida, Alabama, Mississippi and Louisiana announced an $18.7 billion settlement with BP on Thursday that resolves years of litigation over the 2010 Gulf of Mexico oil spill.

According to Louisiana Attorney General Buddy Caldwell, more than $6.8 billion will be paid to the state of Louisiana. He said $5 billion would be for natural resource damage, $1 billion would be for economic losses, $787 million in Clean Water penalties via the Restore Act, and he said Louisiana would receive total reimbursement for attorneys' fees and other expenses.

The settlement announcement comes as a federal judge was preparing to rule on how much BP owed in federal Clean Water Act penalties after millions of gallons of oil spewed into the Gulf. Individual states also were pursuing litigation. Most of those penalties were to be distributed among the states for environmental and economic restoration projects along the Gulf Coast.

The settlement money will be used to resolve the Clean Water Act penalties; resolve natural resources damage claims; settle economic claims; and resolve economic damage claims of local governments, according to an outline filed in federal court Thursday morning.

In arguing against such a high penalty, BP has said its spill-related costs already were expected to exceed $42 billion - even without the Clean Water Act fine. It's also unclear how much BP will end up paying under a 2012 settlement with individuals and businesses claiming spill-related losses.

Costs incurred by BP so far include an estimated $14 billion for response and cleanup and $4.5 billion in penalties announced after a settlement of a criminal case with the government.

In 2012, BP reached the settlement with plaintiff's lawyers over economic and property damage claims arising from the spill. In its first-quarter earnings report for 2015, BP said it could estimate at least a $10.3 billion cost. But it also stressed that the cost could be higher, depending on how many legitimate claims were filed by a recently passed deadline.

Earlier this year, a federal judge in New Orleans concluded the third phase of a civil trial pitting the oil giant against the federal government. He had already made two key rulings: that BP acted with "gross negligence" in the rig explosion that resulted in the spill; and that 3.19 million barrels of oil - nearly 134 million gallons - spewed into the Gulf as a result. BP had appealed both those rulings, which set the stage for the a possible multibillion-dollar Clean Water Act penalty.

Article originally published on WWL 870.