December 16, 2010

US Files Lawsuits Over Gulf Spill

BP and eight other companies have had lawsuits brought against them for the first time by the United States for billions of dollars in damages from the massive oil spill in the Gulf of Mexico, which has been labeled the worst oil disaster in US history.

The complaint was filed by the US Justice Department with a federal court in New Orleans, where thousands of individuals and small businesses have already sued the British oil company.

Attorney General Eric Holder said the complaint alleges that "violations of safety and operational regulations" caused the explosion on the Deepwater Horizon oil rig back on April 20, 2010, which killed 11 workers and sent almost five million barrels of oil spewing into the Gulf of Mexico.

"We intend to prove that these violations caused or contributed to the massive oil spill and that the defendants are therefore responsible under the Oil Pollution Act for government removal losses, economic losses, as well as environmental damages," said Holder.

"We're also seeking civil penalties under the Clean Water Act which prohibits the unauthorized use of oil in the waters," he added.

Holder listed a series of failures by those involved in the disaster.

Necessary precautions were not taken to secure the well, the safest drilling technology was not used to monitor the well's condition, continuing surveillance of the well was not maintained, and the safety equipment used was defective, said Holder.

The defendants in the lawsuit include BP Exploration and Production Inc; Transocean Deepwater Inc.; Transocean Offshore Deepwater Drilling Inc; Transocean Holdings LLC; Anadarko Exploration and Production LP; Anadarko Petroleum Corporation; MOEX Offshore 2007 LLC; Triton Asset Leasing GMBH; and QBE Underwriting Ltd/Lloyd's syndicate 1036.

The Justice Department said that QBE/Lloyd's, an insurance company, was not being sued under the Clean Water Act and can only be held liable for up to the amount of Transocean's insurance policy coverage.

Transocean was the owner of the Deepwater Horizon rig. The Macondo well is owned by multiple shareholders. BP owns 65 percent, Anadarko Petroleum Corp. owns a 25 percent share, and MOEX Offshore owns 10 percent.

BP has been selling off assets to raise 30 billion dollars to cover both clean-up and compensation costs of the spill. It has estimated its exposure at nearly 40 billion dollars.

The rig's collapse ruptured the underwater well, causing a massive amount of oil to foul the Gulf region waters and coast for more than three months before being capped for good in September.

The US complaint states the full extent of potential damage and loss "is not yet fully known and may not be fully known for many years."

But among losses it did list were "hundreds of miles of coastal habitats, including salt marshes, sandy beaches, and mangroves; a variety of wildlife, including birds, sea turtles, and marine mammals."

In the Gulf itself, the potential damage extended to "various biota, benthic communities, marine organisms, coral, fish, and water-column habitat," it said. And the spill resulted in lost opportunities for "fishing, swimming, beach-going, and viewing of birds and wildlife," it added.

"Even though the spill has been contained -- even though it is no longer the focus of round-the-clock news coverage and the subject of front-page headlines -- the Department's focus on investigating this disaster, and preventing future devastation, has not wavered," said Holder.

"As our investigations continue, we will not hesitate to take whatever steps are necessary to hold accountable those responsible for this spill," he said. "The full extent of potential injuries, destruction, loss and loss of services is not yet fully known and may not be fully known for many years."


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