Transocean Won't Carry More Blame for Oil Spill
(CN) - BP and Anadarko must pay fines for the oil that their well gushed into the Gulf of Mexico, even though another company's equipment should have prevented the 2010 disaster, the 5th Circuit ruled.
The Macondo Prospect, a well that BP and Anadarko co-owned, blew out on April 20, 2010, when its cement lining failed, causing a high-pressure release of oil, gas and drilling fluids.
Transocean owned Deepwater Horizon, the mobile rig that drilled the well, as well as the riser that connected the well to the rig, extending from the rig's platform to the seafloor. These pipes contain blowout preventers near the seabed that are supposed to protect against a sudden release of gas from the well, but Transocean's blowout preventer failed, and the fluids flowed up through the riser, onto the rig's deck and caught fire.
The resulting explosion killed 11 workers and capsized the rig, which severed the riser, causing oil to spill from the pipe for three months until it was capped.
BP estimates that 2.45 million barrels of oil gushed from the well. The Department of Justice says the figure is actually 4.2 million barrels. Either way the debacle was the worst offshore spill in U.S. history.
After U.S. District Judge Carl Barbier held Anadarko and BP liable in 2012 for penalties under the Clean Water Act, the companies told the federal appeals court that their facilities did not actually discharge the oil since it entered the Gulf of Mexico from Transocean's broken riser.
They also pointed out that the blowout preventer should have stopped the oil from flowing.
A three-judge panel with the 5th Circuit did not buy it and affirmed the oil companies' liability for the spill Wednesday.
"No one denies that there has been a discharge of harmful quantities of oil into navigable waters," Judge Fortunato Benavides wrote for the court in New Orleans. "Anadarko and BP further stipulate that the well is an offshore facility, and that they are the owners of that facility. The only question, then, is whether the well is a facility 'from which' the harmful quantity of oil was discharged. We find no dispute as to the question."
Benavides cited a ruling by the 1st Circuit that upheld the U.S. Environmental Protection Agency's fine against a factory owner over oil that spilled from a boiler gasket, into a drain, through a pipe and eventually into a creek.
"So oil need not flow from a facility directly into navigable water to give rise to civil-penalty under" the Clean Water Act, the 10-page opinion states.
Though Transocean escaped liability in the ruling, it pleaded guilty to a misdemeanor Clean Water Act violation last year and agreed to pay the government a $1 billion fine.
Barbier will hold a trial in January to determine how much Anadarko and BP owe in Clean Water Act penalties.
Anadarko paid BP $4 billion in 2011 to settle litigation from the oil spill, and BP has paid more than $12 billion so far.
Under the Clean Water Act, the companies are facing fines of "up to $25,000 per day of violation or an amount up to $1,000 per barrel of oil" spilled.