Obama administration sues BP, others over Gulf spill

WASHINGTON Wed Dec 15, 2010 6:14pm EST

1 of 3. An oil-covered brown pelican sits in a pool of oil along Queen Bess Island Pelican Rookery, 3 miles (4.8 km) northeast of Grand Isle, in this Louisiana June 5, 2010 file photo.

Credit: Reuters/Sean Gardner/Files

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WASHINGTON (Reuters) - The Obama administration on Wednesday launched a legal battle against BP Plc and its partners by suing them for the worst offshore oil spill in U.S. history, which could cost the companies billions of dollars.

The lawsuit seeks damages from the well owners BP, Anadarko Petroleum Corp and Mitsui & Co Ltd unit MOEX, and well driller Transocean Ltd and its insurer QBE Underwriting/Lloyd's Syndicate 1036, part of Lloyds of London, for their roles in the Gulf of Mexico disaster.

"While today's civil action marks a critical step forward, it is not a final step," U.S. Attorney General Eric Holder told reporters at a news conference.

"Both our criminal and civil investigations are continuing, and our work to ensure that the American taxpayers are not forced to bear the costs of restoring the Gulf area -- and its economy -- goes on," he said.

The suit, the first by the U.S. government after the April 20 explosion aboard the drilling rig in which 11 workers died, was filed in a New Orleans federal court which is considering private lawsuits against BP and the others for the spill.

BP, which returned to profitability in the third quarter of 2010, has begun selling assets and amassing a massive warchest to pay for damages caused by the oil spill, which the oil concern has estimated could reach as much as $40 billion.

The oil company said on Wednesday it was weighing the sale of its Canadian natural-gas liquids business.

In response to the lawsuit, BP said it is "solely a statement of the government's allegations and does not in any manner constitute any finding of liability or any judicial finding that the allegations have merit."

"BP will answer the government's allegations in a timely manner and will continue to cooperate with all government investigations and inquiries," the company said.

SETTLEMENT IS A POSSIBILITY

Legal experts have said they expect the two sides to settle eventually but it could take years. In comparison, Exxon XOM.N> settled government claims over the spill by its Valdez tanker in Alaska in 1991, two years after the oil hit the coast.

The lawsuit against BP and others warned that "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."

Shares in the companies targeted in the lawsuit fell in the wake of the lawsuit.

The stocks trimmed early losses to close off their lows, with BP down 1.3 percent at $43.86 and Anadarko Petroleum down 2.3 percent at $67.41. Halliburton, which wasn't named in the suit, closed near session lows, down 3.1 percent at $39.79.

The Deepwater Horizon drilling rig blowout spilled about 4.9 million barrels of oil over several months. It fouled resort beaches and fishing grounds and led to hundreds of lawsuits over lost revenues and wages.

"This is about getting a fair deal for the region that suffered enormous consequences from this disaster," said Lisa Jackson, head of the Environmental Protection Agency.

The lawsuit accused the companies of violating safety and operating regulations in the period leading up to the disaster, including keeping the well under control, failing to use the best available and safest drilling technology and failing to maintain continuous surveillance of the well.

The government claimed the companies violated the U.S. Clean Water Act and the Oil Pollution Act, but the lawsuit does not request a specific dollar amount for damages.

For every barrel of oil spilled into the Gulf of Mexico, there could be a fine of up to $4,300 if gross negligence is found. That would equal a fine of at least $21 billion. If no gross negligence is found, the fine could be up to $1,100 per barrel or almost $5.4 billion.

It will be up to the judge to weigh the evidence presented in court to determine if the defendants were grossly negligent in their conduct, a Justice Department official said.

The Justice Department could also seek additional fines for harm to any animals protected by the Endangered Species Act and the Migratory Bird Treaty Act, among other environmental laws.

The lawsuit did not name Halliburton, which did the cementing for the well, or Cameron International which provided well equipment, but Justice Department officials made it clear more defendants and charges could be added later.

BP HAS TAKEN RESPONSIBILITY

BP has taken responsibility for the cleanup but has questioned government estimates of how much oil came out of the well. BP co-owned the Macondo well with Anadarko and MOEX.

After the lawsuit was filed, its partners said the blame and liability laid squarely on BP.

Anadarko said it was not responsible for the decisions and operation for the well and therefore BP should be held responsible. Transocean, which drilled the well, also tried to pin the blame on BP.

"The responsibility for hydrocarbons discharged from a well lies solely with its owner and operator," Transocean said in a statement, adding it was "indemnified in this matter."

BP has estimated it may cost as much as $40 billion to pay for the spill, including the cleanup and penalties. The London-based oil firm has been selling numerous assets to raise as much as $30 billion to cover those costs.

The Justice Department asked a federal judge in New Orleans overseeing the litigation to hold the companies liable, except for Lloyds, for unlimited damages, beyond the $75 million cap under the Oil Pollution Act.

The judge in Louisiana, Carl Barbier, has been overseeing the hundreds of private lawsuits involving thousands of plaintiffs against BP and its partners. He has a status hearing set for Friday.

A lawyer for private individuals suing BP over the spill said the new lawsuit by the Obama administration would not hurt their efforts.

"We look forward to continued cooperation with the U.S. government in pursuit of justice for all victims of the Deepwater Horizon tragedy," said the lawyer Steve Herman. "(I) think it demonstrates confidence and momentum in the Court proceedings as we approach the February 2012 trial."

(Additional reporting by Kristen Hays and Anna Driver in Houston and Tom Hals in Wilmington; Editing by Todd Eastham)

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Comments (7)
notatall wrote:
Something of interest: Every American should be able to read this. You need to read this. I new that rig just didn’t blow up on its own. Please read this and study it and think about it and then figure out what should we Americans do now that the truth is becoming to the surface for us to digest…….
A grim report circulating in the Kremlin today written by Russia’s Northern Fleet is reporting that the United States has ordered a complete media blackout over North Korea’s torpedoing of the giant Deepwater Horizon oil platform owned by the World’s largest offshore drilling contractor that was built and financed by South Korea’s Hyundai Heavy Industries Co. Ltd., that has caused great loss of life, untold billions in economic damage to the South Korean economy, and an environmental catastrophe to the United States.
Most important to understand about this latest attack by North Korea against its South Korean enemy is that under the existing “laws of war” it was a permissible action as they remain in a state of war against each other due to South Korea’s refusal to sign the 1953 Armistice ending the Korean War.
To the attack itself, these reports continue, the North Korean “cargo vessel” Dai Hong Dan believed to be staffed by 17th Sniper Corps “suicide” troops left Cuba’s Empresa Terminales Mambisas de La Habana (Port of Havana) on April 18th whereupon it “severely deviated” from its intended course for Venezuela’s Puerto Cabello bringing it to within 209 kilometers (130 miles) of the Deepwater Horizon oil platform which was located 80 kilometers (50 miles) off the coast of the US State of Louisiana where it launched an SSC Sang-o Class Mini Submarine (Yugo class) estimated to have an operational range of 321 kilometers (200 miles)
On the night of April 20th the North Korean Mini Submarine manned by these “suicidal” 17th Sniper Corps soldiers attacked the Deepwater Horizon with what are believed to be 2 incendiary torpedoes causing a massive explosion and resulting in 11 workers on this giant oil rig being killed outright. Barely 48 hours later, on April 22nd , this North Korean Mini Submarine committed its final atrocity by exploding itself directly beneath the Deepwater Horizon causing this $1 Billion oil rig to sink beneath the seas and marking 2010’s celebration of Earth Day with one of the largest environmental catastrophes our World has ever seen.
To the reason for North Korea attacking the Deepwater Horizon, these reports say, was to present US President Obama with an “impossible dilemma” prior to the opening of the United Nations Review Conference of the Parties to the Treat on the Non-Proliferation of Nuclear Weapons (NPT) set to begin May 3rd in New York.
This “impossible dilemma” facing Obama is indeed real as the decision he is faced with is either to allow the continuation of this massive oil leak catastrophe to continue for months, or immediately stop it by the only known and proven means possible, the detonation of a thermonuclear device.
Russian Navy atomic experts in these reports state that should Obama choose the “nuclear option” the most viable weapon at his disposal is the United States B83 (Mk-83) strategic thermonuclear bomb having a variable yield (Low Kiloton Range to 1,200 Kilotons) which with its 12 foot length and 18 inch diameter, and weighing just over 2,400 pounds, is readily able to be deployed and detonated by a remote controlled mini-sub.
Should Obama choose the “nuclear option” it appears that he would be supported by the International Court of Justice who on July 8, 1996 issued an advisory opinion on the use of nuclear weapons stating that they could not conclude definitively on these weapons use in “extreme circumstances” or “self defense”.
On the other hand, if Obama chooses the “nuclear option” it would leave the UN’s nuclear conference in shambles with every Nation in the World having oil rigs off their coasts demanding an equal right to atomic weapons to protect their environment from catastrophes too, including Iran.
To whatever decision Obama makes it remains a fact that with each passing hour this environmental catastrophe grows worse. And even though Obama has ordered military SWAT teams to protect other oil rigs in the Gulf of Mexico from any further attack, and further ordered that all drilling in the Gulf of Mexico be immediately stopped, this massive oil spill has already reached the shores of America and with high waves and more bad weather forecast the likelihood of it being stopped from destroying thousands of miles of US coastland and wildlife appears unstoppable.
And not just to the environmental catastrophe that is unfolding the only devastation to be wrecked upon the United States and South Korea by this North Korean attack as the economic liabilities associated with this disaster are estimated by these Russian reports to be between $500 Billion to $1.5 Trillion, and which only a declaration of this disaster being an “act of war” would free some the World’s largest corporations from bankruptcy.
Important to note too in all of these events was that this was the second attack by North Korea on its South Korean enemy, and US ally, in a month as we had reported on in our March 28th report titled “Obama Orders ‘Immediate Stand-down’ After Deadly North Korean Attack” and which to date neither the Americans or South Korea have retaliated for and giving one senior North Korean party leader the courage to openly state that the North Korean military took “gratifying revenge” on South Korea.
And for those believing that things couldn’t get worse, they couldn’t be more mistaken as new reports coming from Japanese military sources are stating that North Korea is preparing for new launches of its 1,300 kilometer (807 miles) intermediate range ballistic “Rodong” missile which Russian Space Forces experts state is able to “deploy and detonate” an atomic electromagnetic pulse (EMP) device, and which if detonated high in the atmosphere could effectively destroy the American economy for years, if not decades, to come. May 1, 2010

Dec 15, 2010 3:12pm EST  --  Report as abuse
notatall wrote:
If what I found is true (previous comment) we Americans have been shafted along with many others. Strange isn’t it…

Dec 15, 2010 3:23pm EST  --  Report as abuse
tmc wrote:
I think it was the Canadians with a LDHG! (long distance hang glider)

Dec 15, 2010 3:56pm EST  --  Report as abuse
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