Specifics of its agreement with the government reveal BP PLC has not agreed, as is widely reported, to set aside a $20bn escrow fund for the Deepwater Horizon explosion that flooded the Gulf of Mexico with millions of barrels of oil. CNN reported Tuesday morning that University of South Florida researchers are calling the floor of the Gulf “a constellation” oil, based on preliminary observations of images (10:47):
18 Aug 2010 | InfoShop News
Specifics of its agreement with the government reveal BP PLC has not agreed, as is widely reported, to set aside a $20bn escrow fund for the Deepwater Horizon explosion that flooded the Gulf of Mexico with millions of barrels of oil. CNN reported Tuesday morning that University of South Florida researchers are calling the floor of the Gulf “a constellation” oil, based on preliminary observations of images.
Contrary to the government’s claims earlier this month that “federal scientists said that only about a quarter of the oil remained and the rest was either removed, dissolved or dispersed”, researchers with the University of Georgia “believe that roughly three-quarters of the oil (70% to 79%) still lurks under the surface,” The Huffington Post reported today. Worse, BP PLC has not agreed, as is widely reported, to set aside a $20bn escrow fund to cover damage claims.
This comes weeks after the discovery that BP’s Deepwater Horizon well explosion was gushing at over 12 times the rate of the government’s early publicized estimates. “New estimates released [August 2] by a government-led team of scientists found that as much as 62,000 barrels of oil were leaking from the well each day at its peak—far beyond the initial estimate of 5,000 barrels a day and more in line with what scientists told McClatchy it was,” Erika Bolstad and Lesley Clark reported.
Federal documents showed “heavy use of dispersants” over 54 days between the explosion and August 1, David Fahrenthold and Steven Mufson reported at The Washington Post, but whistleblower Fred McAllister revealed that BP was using the chemicals to sink the oil in order to deter visibility. Independent journalist Allison Kilkenny wrote August 3 at her blog, Unreported:
Fred McCallister, a whistleblower who claims BP is using dispersants to sink oil and hide it from the pesky media’s cameras, will testify before a Senate investigative panel this week.
For quite some time, many bloggers and journalists following the BP-Corexit story, including me, have made the allegation that BP may have been experimenting by dumping over a million gallons of toxic dispersants into the ocean because they were desperately trying to prevent the oil from hitting the beaches.
[...]
Everyone remembers what happened to Exxon’s public image the moment all of those adorable birds became coated in thick crude. And while BP has not been able to prevent oil from hitting all coastal birds, they have greatly diminished their PR liability by using dispersants like Corexit to coagulate the oil and sink it beneath the ocean’s surface where the media cannot photograph it, and BP won’t be fined for beach cleanup.
There, buried in the sea, the dispersants will likely alter the ecosystem—perhaps poisoning and killing ocean life—but by then BP will have fled the area, leaving future coastal generations to clean up their mess.
The government’s been aiding BP’s public relations nightmare since the explosion. Frankly, there has been no reason to believe that Washington or BP have ever made anything but marketing the first priority.
The damages from the April explosion are estimates well into the tens of billions and the initial scare was that, after cleanup, BP would only be held liable for $75m in damages and U.S. taxpayers inevitably footed with the rest of the bill. Playing damage control, the Obama Administration brokered a ‘voluntary’ $20bn holding fund that BP would set aside to cover future claims.
In reality, BP is expected to save nearly $10bn this year is U.S. and U.K. tax credits as it announced a $32.2bn provision for the spill. Worse, the $20bn escrow fund agreement is not directly with BP PLC, but with BP Exploration and Production Inc., a subsidiary of BP America Production, which is a distant subsidiary of BP PLC that deals primarily with production in the Gulf. Kate Sheppard at Mother Jones reported today:
BP America Production is a subsidiary of BP Company North America, which is a subsidiary of BP Corporation North America, which is a subsidiary of BP America Inc., which is a subsidiary of the parent company BP. In case you’re counting, that means the escrow deal is with a subsidiary five layers removed from BP PLC, the multinational oil giant. Because the deal is with a subsidiary way down the chain, it would be difficult to access additional funds from the corporate parent should the subsidiary collapse or simply not have enough funds to meet the obligation, since it’s the subsidiary, not the parent corporation, that’s legally on the hook, says Public Citizen.
Translation: if BP can’t drill in the Gulf, they can just tank BP Exploration and Production Inc. and the escrow agreement goes to the bankruptcy courts. Worse that what Ms. Kilkenny fears, U.S. taxpayers will be forced to deal with the mess and BP will not have run away, but will be drilling and collecting oil to sell back to the government a stone’s throw away. The government can’t afford to force BP to comply without risking that runaway and the bankruptcy of BP Exploration and Production Inc.
When BP was exploiting the people whose source of income they destroyed to clean up the beaches, the corporation set the condition that workers not wear safety goggles or use respirators because executives feared pictures would “spread hysteria“.
In July, as the Gulf was turning blacker and blacker every day, BP was publicly blaming “natural seepage“.
BP pockets billions of dollars every year fueling the U.S. war machine and there’s no end in sight to that guarantee. The government’s interest in playing damage control on the public relations end is clear: massive dumping of confidence in BP will raise the price it charges the government, though it’s guaranteed billions more over the next 20 years from the Iraqi government.
Nearly 5 million barrels of oil gushed from the well after the April explosion killed 11 workers and almost 2 million gallons of dispersants were sprayed over the Gulf since. Countless careers, property and lives have been crushed. The environmental effects carry no optimistic projections. BP PLC is projected to be just fine.
There’s a fixation on BP and what policy can be put in place to prevent man-made disasters of such magnitude and hold criminals liable for their destruction. Unfortunately, the narrative is ignorant of the systemic perpetuators of injustice. Until discussion about the illegitimacy of corporate personhood, regulatory caps on liability and Washington’s partnership with Corporate America and beyond are strictly scrutinized, we might have to wait until next time to actually witness justice being served. And that next time can result in monumental human demise as these injustices cross the energy and environment sector into the financial cartels, the healthcare industry and the military industrial complex.
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