Mitsui unit to pay $90 million over Gulf oil spill

WASHINGTON Fri Feb 17, 2012 6:44pm EST

Oil is burned off the surface of the water near the source of Deepwater Horizon oil spill where BP will begin to test a new cap placed over the leak in the Gulf of Mexico off the Louisiana coast July 13, 2010. REUTERS/Lee Celano

Oil is burned off the surface of the water near the source of Deepwater Horizon oil spill where BP will begin to test a new cap placed over the leak in the Gulf of Mexico off the Louisiana coast July 13, 2010.

Credit: Reuters/Lee Celano

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WASHINGTON (Reuters) - Mitsui & Co Ltd's MOEX Offshore agreed with the U.S. Justice Department to pay at least $90 million to settle some of its liability in the Deepwater Horizon oil spill, the first government settlement involving the BP Plc Macondo well.

MOEX will pay $70 million in civil penalties for violations of the Clean Water Act and spend at least $20 million on conservation projects in the Gulf states, the Justice Department said on Friday.

The settlement comes just 10 days before the civil trial starts in New Orleans to assign blame for the disaster, the largest offshore oil spill in U.S. history. The accident, which led to almost 5 million barrels of oil spilling, killed 11 people aboard the drilling rig.

BP itself has set aside more than $40 billion to cover spill-related costs. The company has been trying to reach its own settlement with the Obama administration, but whether it can succeed by the February 27 trial is still uncertain.

"We believe that all parties would like to settle before the trial date. However, we believe it is still not a given that all of the parties can meet and resolve the various issues," said Angie Sedita, a managing director of equity research at UBS.

Separately, BP and Schlumberger-owned drilling fluids specialist M-I Swaco agreed to dismiss Deepwater Horizon-related claims against each other, pending court approval.

In the MOEX settlement, $45 million of the civil penalties will go to the federal government and the remaining $25 million will go to the states affected by the oil that polluted their Gulf waters and washed up onshore: Louisiana, Texas, Mississippi, Alabama and Florida.

The Justice Department said it was the largest civil penalty under the Clean Water Act and emphasized the MOEX settlement did not affect others involved in the Deepwater Horizon spill.

"This landmark settlement is an important step - but only a first step - toward achieving accountability and protecting the future of the Gulf ecosystem by funding critical habitat preservation projects," Attorney General Eric Holder said in a statement.

The company, which previously owned a 10 percent stake in the Macondo well, settled with BP last year and agreed to pay $1.1 billion toward the cleanup costs.

"MOEX held only a small share of the Macondo well and had no role in the Deepwater Horizon tragedy," said David Uhlmann, a professor at Michigan University Law School and former chief of the Justice Department's environmental crimes section.

"It makes sense that MOEX is not paying billions in penalties, but the settlement amount is extremely small given the enormous economic losses and natural resource damages caused by the Gulf oil spill," he said.

The proposed settlement was filed in federal court in Louisiana and is subject to approval by a judge.

The case is In re: Oil Spill by the Oil Rig "Deepwater Horizon" in the Gulf of Mexico, on April 20, 2010, U.S. District Court, Eastern District of Louisiana, No. 10-md-02179.

(Additional reporting by Braden Reddall in San Francisco and Jonathan Stempel in New York; editing by Gerald E. McCormick, Phil Berlowitz, Andre Grenon and Richard Chang)

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Comments (1)
BillReeder wrote:
Oil Spill Eater II

23 Years of Denial
Much of what was being reported about in 2011 as the aftermath of the Gulf Oil Spill has not covered an important point: Oil is still leaking from the seabed floor BP well zone and millions of barrels are still submerged and residing in the water column–HOW WILL THE TOXIC GULF BE CLEANED UP
There are many ongoing blog and media reports about the aftermath from the spill and millions being spent on studies to find out how marine life, water and other mediums have been affected. Further, as recent as Sept 13, 2011 reports on numerous sightings of new oil slicks in the vicinity of the original BP Spill are bringing attention back to the area. Lab tests showing it to be BP oil finally forced the admittance by the responsible oil company that it was their oil. Sadly, none of this coverage brings to light the most crucial issue; continued use of dispersants which do not remediate the oil and hence do not relieve the continued toxic stress on the ecosystem with adverse economic and health effects to Gulf Coast residents. And this cycle of new oil surfacing and repeatedly spraying Corexit to disperse it, has proven to compound environmental damage for which BP and government agencies enforcing destructive protocols should be held financially accountable.
The US Environmental Protection Agency (EPA) admits there are “trade-offs” to using Corexit, however their explanation of these and why they favor its use on their website, are absurd. (See EPA Link)
The combined events of the BP Oil Spill and the application of this [outmoded] cleanup method (millions of gallons of Corexit(R)) resulted in high toxicity levels persisting in the GOM region until as recent as March 201l* – levels well above earlier official safety threshold standards set in 1999 which, for some unexplained reason, were raised by much higher percentiles within a few months after the beginning of the Deepwater Horizon blowout. [a means of blinding people from identifying potential public health and seafood contamination risks] .These toxicity levels are still adversely affecting human health and marine life in the region.  

EPA and other federal agency statements announcing the clean up was successful and assuring the public that seafood was safe to consume and that the environment was safe to use were clearly premature and misrepresentative to the public, suggesting ineffective clean-up protocols and potential negligence on the part of the EPA.  The most recent scientific data on this issue are fact-based, and those facts are now being reported in scientific literature.  

More notably, BP had made formal requests to use bio remediation clean up technology to avoid these toxic trade-offs and initiated testing on a product called Oil Spill Eater II (already approved and listed on EPA’s National Contingency Plan for Oil Spill Response) to replace Corexit. BP’s request, along with those from gulf state officials, including Governor Jindal of Louisiana, were denied by EPA and Regional Response Team officials. The EPA denial letter cited science that erroneously grouped this ready-to-deploy, proven clean up product with “questionable” remediation products examined. In a June 2010 EPA letter, BP’s official request was denied, (correspondence relevant to the issue-Attachment 5, 6). Per Gulf Rescue Alliance sources BP’s Chief Council referenced that letter and stated in a recent meeting that their hands were tied where the use of bioremediation (OSE II ) was concerned – “BP is bound by it”—bound by the EPA mandate [to keep using Corexit]. Consequentially it is estimated that BP could have saved an estimated $36 billion in clean up costs if they had deployed the EPA approved alternative to Corexit.
Gulf Rescue Alliance (GRA) has voluminous documentation indicating the EPA arbitrarily blocked and continues to prevent the use of eco friendly bioremediation clean up technology in favor of Corexit despite ample science indicating it is fatally toxic to marine life and even humans.
Bottom line: Use of bioremediation could have saved BILLIONS in clean up costs and result in an end point to the disaster. (See Economic Comparison article) BP’s attempt to use an alternative is a significant point and the resultant damage caused by Corexit is proving to be quite concerning for escalating clean up costs.
We applaud Surfrider Foundation and the Center for Biological Diversity for its recent action of filing suit against the EPA over the use of dispersants reinforcing the case that EPA oil spill cleanup response protocols are wholly inadequate.
While the EPA, NOAA and Coast Guard remain in denial and continue to roadblock the use of Bioremediation, perhaps this suit will open the door for permitting the deployment of safe and effective cleanup methods available and ready for use right now to stop the killing in the Gulf Waters. And if one had no regard for the marine life and saving the ecosystem, possibly the continued threat of loss in BP Stock value will incite action.
While allowing Nalco Holding Company, the manufacturer of Corexit, to use up their existing stockpiles in the country, the UK has banned the product from further subsequent use. 

Feb 19, 2012 12:27am EST  --  Report as abuse
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