In predictable “better late than never” fashion, the federal government is finally demanding answers to a question that has kept the Gulf Coast on edge for more than a month: Why is there fresh oil surfacing at the site of last year’s 200-million-gallon spill?
In the face of growing public pressure, the U.S. Coast Guard has ordered Transocean – owner of the Deepwater Horizon rig that exploded and sank to the Gulf floor on April 20, 2010 – to determine the source of oil floating atop the Macondo wellsite. The anxiously awaited investigation is, of course, welcomed and applauded, but there is some confusion as to why the feds put Transocean and not BP on the hook. It is, after all, BP’s oil. But the fact that Transocean owns the rig that BP was leasing at the time of the deadly explosion sets up a tangled web of legal jurisdictions and liabilities.
The Coast Guard announcement that Transocean will bear the brunt of the burden in determining the source of the new leak has set off a firestorm of legal back and forth. Here’s how the Mobile Press-Register’s Ben Raines sets it up in his Sept. 27 report:
Coast Guard Capt. John Burton, commanding officer of the Morgan City Marine Safety Unit, said the agency routinely issues Notices of Federal Interest to companies believed to be responsible for sheens found floating on the Gulf’s surface. He said federal officials do not believe the well is leaking [based on video footage of the well head].
Burton said the Press-Register samples, coupled with repeated sightings of sheens in the area by [On Wings of Care pilot Bonny] Schumaker and interviews with LSU chemist Ed Overton, suggested that oil originating from BP’s well was making its way to the surface.
The notice stated that the oil on the surface suggests “the possibility of a release from the riser pipe or other debris on the ocean floor from the April 20, 2010, Deepwater Horizon incident.”
“They did the survey of the well, and it doesn’t seem to be coming from there, so we’re looking at other sources. One of the possible sources is the wreckage of the Transocean rig,” Burton said. “One option is to send down a remote vehicle. Certainly a survey of the wreckage, a survey of the riser pipe is appropriate.”
Not unexpectedly, Transocean – one of the largest offshore drilling contractors in the world – fired back, saying the ultimate responsibility lies with BP as the “owner” of the Macondo oil and everything else that emanated from the well. From a Sept. 27 Wall Street Journal report:
A Transocean spokesman confirmed the company has been contacted by the Coast Guard concerning the oil sheen and said it’s “committed” to investigate the report. But Transocean, which the owned rig that BP PLC was using to drill the Macondo well, said BP may be the one ultimately responsible.
“If a volume of oil has remained in the riser, there is no question that it is oil from BP’s Macondo well,” said Transocean’s spokesman Brian Kennedy. “As owner and operator, BP is the responsible party for all fluids that emanated from the Macondo well head, and BP has repeatedly acknowledged that responsibility.”
To give you a little better idea of what Mr. Kennedy and Capt. Burton are talking about, here is a BP rendition of what the damaged riser looked like before the well was capped back in July of last year (see below). Before things went terribly wrong, the riser pipe was connected to the (poorly named) blowout preventer (BoP) on the seafloor. The riser extended from the BoP some 5,000 feet straight up to what is known as the “moon pool” on the Deepwater Horizon. When the rig exploded and sank on April 20, 2010, the enormous weight snapped the riser piping, triggering the release of 200 million gallons of crude. What the Coast Guard has ordered Transocean to do is to determine whether oil trapped inside the damaged riser is now making its way to the surface.
Both companies, BP and Transocean, know how much is at stake here. The Coast Guard laid it out very clearly: “The responsible party may be financially accountable for debris removal costs and damages resulting from the pollution incident.” And just to clarify: The fact that the Coast Guard has ordered Transocean to find the source, doesn’t mean Transocean is ultimately responsible for the new leakage or the resulting pollution damages. USCG Capt. Burton simply said this of the possibility that either the damaged riser or the Deepwater Horizon wreckage is the culprit: “Transocean will come up with the best way to determine if they are the responsible source.”
So where does BP stand in all of this? Pretty much ducking for cover, as usual. BP spokesman Ray Melick was quick to say the company would work with the Coast Guard, but he also made sure to shrug off blame. “As we have said and the U.S. Coast Guard now confirms, the Macondo well is not leaking oil and is not the source of the sheens,” Melick said. “We will continue to cooperate with the Coast Guard to investigate other possible sources, including Transocean’s riser.”
My guess is we’ll know the source of the oil relatively quickly, and we can only assume that appropriate action will be taken to minimize the impact on the Gulf ecosystem. What will be much harder to determine who is ultimately responsible and how that party will be held accountable.
Part of this process should be the immediate public release of BP’s video of the Macondo wellhead. If there’s no leak, BP should jump at the chance to show the world.
In closing, I’d like to offer big kudos to Ben Raines and the Press-Register for staying on top of this story (that we broke here, if I haven’t already mentioned that fact), and forcing the federal government to demand answers to a question that has brought more unease to an already beleaguered Gulf Coast.
Read the Press-Register report here: http://blog.al.com/live/2011/09/feds_order_transocean_to.html
Read the full WSJ report here: http://online.wsj.com/article/SB10001424052970204831304576597231170674512.html
© Smith Stag, LLC 2011 – All Rights Reserved
[…] can drive a stake through. As veteran New Orleans litigator and oil industry nemesis Stuart Smith describes in his blog; Both companies, BP and Transocean, know how much is at stake here. The Coast Guard laid it out […]