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FACTORS IN THE MATRIX THAT SHAPED BP OIL SPILL RECOVERY: LAWS AND LAWSUITS PowerPoint Presentation
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FACTORS IN THE MATRIX THAT SHAPED BP OIL SPILL RECOVERY: LAWS AND LAWSUITS

After the spill, America was left asking: What do we do now? Though the average American thought the answer was simple (clean up the oil and pay people for damages as soon as possible), there was much more to the story that seemed to go unconsidered. American laws, acts, and regulations, as well as exaggerated damage claims and lawsuits, heled to play a significant role in the delay of the BP spill cleanup and recovery.

* Citations for collage images can be found on the works cited pages.

overview what will be covered
Overview: What Will Be Covered
  • Laws and regulations which caused poor response actions and limitations:

▪ The Jones Act

▪ EPA Regulation

▪ The Death on the High Seas Act

  • Problems with lawsuits, claims, and compensation.

▪ False or exaggerated claims

▪ Conflicts of interest

▪ Corruption in organizations

  • Lessons to be learned
laws associated with the spill
Laws Associated With the Spill
  • Oil Pollution Act of 1990
  • Securing Protections for the Injured from Limitations on Liability Act (SPILL)
  • The Federal Water Pollution Control Act of 1972
  • The Clean Water Act
  • The Migratory Bird Treaty Act of 1918
  • The Jones Act
  • The Death on the High Seas Act of 1920
  • The Endangered Species Act
  • The Outer Continental Shelf Lands Act
  • The Energy Policy Act of 2005
the oil pollution act of 1990
The Oil Pollution Act of 1990
  • Maritime injury law passed to prevent civil liability in the event of future U.S. coastal oil spills.
  • Created in response to the Exxon Valdez Spill in March of 1989.
  • Under this Act, a $75 million cap limitation is set to pay for private party losses.

▪ After the BP spill it was proposed (by both Democrats

andRepublicans) to raise this cap to $10 billion, but this

proposal was rejected.

the jones act
The Jones Act
  • Section 27 of the Merchant Marine Act of 1920: requires that American-built and American-run vessels must be used to transport any and all goods within the waters of the United States.
  • This act prevented the American Government from initially accepting technological aid from foreign nations in Europe, such as the Netherlands, and specifically the Dutch(Bader, 2010) including:

- Sand berms

- Oil skimmer-equipped ships

- extra dredging tools

http://green.blogs.nytimes.com/2010/07/22/stop-the-sand-berms-scientists-plead/

http://www.fastcompany.com/1656122/does-it-make-sense-to-construct-sand-barriers-off-the-louisiana-coast

epa regulations and limitations
EPA Regulations and Limitations
  • An Environmental Protection Agency Regulation clearly states: “pumping water back into the sea with oil residue is not allowed.”

▪ Despite the Dutch offer to provide skimmers, the American

Government declined their assistance because these

skimmers put the cleaner, though still oil-residue filled,

water back into the ocean.

▪ As of June 8th, BP had claimed to have cleaned up nearly

65,000 barrels of oil  The skimmers from the Netherlands

could have collected that much in a single day (“Inflexible EPA

regulations prevented oil spill cleanup”).

http://www.blueoceantackle.com/oil_spill_containment.htm

death on the high seas act 1920
Death on the High Seas Act (1920)
  • This act covers any deaths which take place at least three nautical miles from any U.S. shoreline.
  • Benefit: pecuniary compensation or providing the families of the deceased with paychecks that the deceased would have earned.
  • Drawback: does not provide compensation “for loss of care and comfort,” or non-pecuniary damages. (Searcey, 2010).

http://www.google.com/imgres?imgurl=http://houstonmaritimeattorney.com/images/maritime-lawyer-5.jpg&imgrefurl=http://houstonmaritimeattorney.com/death-on-high-seas-act.php&usg=__m4YqZwbQYJMQMAXIzaAO4LBLrn4=&h=281&w=475&sz=35&hl=en&start=80&zoom=1&tbnid=JoSHCLpUCtgQAM:&tbnh=118&tbnw=200&ei=Z1dtTf-aFIPGlQfH8Pj-BA&prev=/images%3Fq%3Ddeath%2Bon%2Bthe%2Bhigh%2Bseas%2Bact%26um%3D1%26hl%3Den%26biw%3D1440%26bih%3D799%26tbs%3Disch:10,2008&um=1&itbs=1&iact=hc&vpx=546&vpy=447&dur=689&hovh=173&hovw=292&tx=149&ty=115&oei=JFdtTc7GKML48Abel7iODQ&page=4&ndsp=27&ved=1t:429,r:15,s:80&biw=1440&bih=799

compensation funds
Compensation Funds
  • British Petroleum set aside a $20 billion dollar fund for compensation of property damage, business loss, injury, etc.
  • The Oil Spill Liability Trust Fund is a government maintained system which is supported by industry fees and can provide a maximum of $1 billion to people and businesses during an incident. The Energy Policy Act of 2005 raised this cap to $2.7 billion.

If all of this money was available . . .

why did personal payout and compensation take so long

?

Why did Personal Payout and Compensation Take so Long?

?

?

?

http://www.google.com/imgres?imgurl=http://www.irunmybody.com/home/wp-content/uploads/Oil-Rig-with-Dollar-Sign.jpg&imgrefurl=http://www.irunmybody.com/home/extras/conscious-voices/the-bp-oil-spill-and-higher-oil-prices/&usg=__jmU2Z-upMtpB-Nst-Y8dEXaE-EY=&h=288&w=400&sz=27&hl=en&start=0&zoom=1&tbnid=1HejEA7EFdVtdM:&tbnh=142&tbnw=189&ei=zFhtTenfMs6s8AaCiY2PDQ&prev=/images%3Fq%3Doil%2Bcovered%2Bdollar%2Bsign%26um%3D1%26hl%3Den%26biw%3D1440%26bih%3D799%26tbs%3Disch:1&um=1&itbs=1&iact=hc&vpx=332&vpy=98&dur=7083&hovh=190&hovw=265&tx=141&ty=100&oei=zFhtTenfMs6s8AaCiY2PDQ&page=1&ndsp=31&ved=1t:429,r:1,s:0

suits and claims
Suits and Claims
  • A wide variety of suits and claims have been applied for including:

▪ bankruptcy of businesses (i.e. fishing, boating, bait)

▪ lost property and lost wages

▪ wrongful death and suits by family members of deceased

or illness from dispersants, oil, or fumes (Corexit).

▪ mental problems due to stress and personal injury

(including suicide cases)

▪ claims under the Endangered Species Act

▪ Gulf Wildlife legal action from groups including Save the

Manatee Club and the Gulf Restoration Network

▪ shareholders sue for being mislead about operational

safety.

▪ other class-action lawsuits

problems with suits and claims
Problems with Suits and Claims

▪ some applicants lacked proper documentation of their

losses or had no documentation at all.

▪ some applicants were simply ineligible.

▪ claims were exaggerated to get more money than they were

entitled to.

▪ In other instances, multiple claims were filed for the exact

same case.

-Initially these false claims caused delay and the true

claims were undercompensated.

*Some involved in these complications could face criminal fraud

charges.

(“Gulf Oil Well Rupture: Claims Against BP Take Time,” 2010, “Gulf oil spill claims process under fire,” 2011, and Restuccia, 2010).

problems with suits and claims1
Problems with Suits and Claims
  • Conflict of Interest: Many federal judges could not preside over the filed claims and court cases, leaving more cases for fewer judges. Jurist Carl J. Barbier, for example, has been given nearly 300 cases, which will obviously cause delay in providing people with the money and answers they want (“BP Gulf Oil Spill,” 2010).

http://www.google.com/imgres?imgurl=http://www.louisianarecord.com/content/img/f229360/SZ200_barbier.jpg&imgrefurl=http://www.louisianarecord.com/news/229360-deepwater-horizon-contractor-drops-bid-to-replace-barbier-as-mdl-judge&usg=__3PFaT0I1MjuOrPb47YnmV8F__Mk=&h=300&w=200&sz=13&hl=en&start=0&zoom=1&tbnid=MNgFJ6lgTkzT0M:&tbnh=157&tbnw=105&ei=P2ZtTfCPMIO78gbQhoWPDQ&prev=/images%3Fq%3Djurist%2Bcarl%2BJ%2BBarbier%26um%3D1%26hl%3Den%26biw%3D1440%26bih%3D799%26tbs%3Disch:1&um=1&itbs=1&iact=hc&vpx=716&vpy=257&dur=291&hovh=188&hovw=125&tx=67&ty=168&oei=P2ZtTfCPMIO78gbQhoWPDQ&page=1&ndsp=27&ved=1t:429,r:10,s:0

problems with suits and claims2
Problems with Suits and Claims

Kenneth Feinberg (leading the Gulf Coast Claims Facility) accused of:

▪ refusing to disclose information

about settlements

▪ hiding his money that BP is paying his

firm each month to run the GCCF:

$850,000

▪ encouraging applicants to avoid

other firms to file complaints with

and insisting that more money will

be awarded through the GCCF (which

takes away the right to sue BP, thus

saving the company more money)

(“Important Conflict of Interest Arises with Oil Spill Claims Process,” 2011).

http://www.google.com/imgres?imgurl=http://dealbreaker.com/images/thumbs/Picture%25201488.png&imgrefurl=http://dealbreaker.com/2009/06/meet-your-compensation-cop-ken.php&usg=__yMxLg8oPGp9OFP84mJ38eTuPI9A=&h=328&w=486&sz=169&hl=en&start=0&zoom=1&tbnid=6B7Pe6YeDNGMqM:&tbnh=159&tbnw=212&ei=Hb9tTZnwAcGp8AaDxJyODQ&prev=/images%3Fq%3Dkenneth%2Bfeinberg%26um%3D1%26hl%3Den%26biw%3D1440%26bih%3D799%26tbs%3Disch:1&um=1&itbs=1&iact=hc&vpx=147&vpy=110&dur=86&hovh=184&hovw=273&tx=135&ty=60&oei=Hb9tTZnwAcGp8AaDxJyODQ&page=1&ndsp=28&ved=1t:429,r:0,s:0

an interesting fact the u s corporate tax law
An Interesting Fact:The U.S. Corporate Tax Law
  • Under this law, companies are permitted to claim up to 35%

of any losses.

▪ Since BP lost roughly $30 billion yet overpaid in pervious

years, it would be possible for the company to claim

around $10 billion (Ironic that this was the newly proposed

Oil Pollution Act cap) (“BP seeks $9.9 billion tax credit for oil spill

costs,” 2010).

Answer:

From exactly where President Obama promised it would not . . . the taxpayers.

Question: Where would this $10 billion come from?

http://www.google.com/imgres?imgurl=http://3.bp.blogspot.com/_ydvZHEUgUWs/TP11BKuvO1I/AAAAAAAAAA4/1TUsngETx4Y/s1600/oil-money.jpg&imgrefurl=http://faisalibrahim1.blogspot.com/2010/12/collateralization-of-our-oil-money-is.html&usg=__SXS7NFJUPsn6h_QGOI9BBs9sPkY=&h=400&w=300&sz=16&hl=en&start=0&zoom=1&tbnid=HHFgSqXeq_FzFM:&tbnh=134&tbnw=95&ei=RVptTbmFLML48Abal7iODQ&prev=/images%3Fq%3Doil%2Bmoney%26um%3D1%26hl%3Den%26biw%3D1440%26bih%3D799%26tbs%3Disch:1&um=1&itbs=1&iact=rc&dur=536&oei=RVptTbmFLML48Abal7iODQ&page=1&ndsp=31&ved=1t:429,r:0,s:0&tx=17&ty=70

lessons to be learned how could the problems have been avoided and what changes need to be made
Lessons To Be Learned: How Could The Problems Have Been Avoided and What Changes Need To Be Made?
  • “To assure human safety and environmental protection, regulatory oversight of leasing, energy exploration, and production require reforms . . .” (Saxe, 2011).
  • In America, politics is always put first. If an event such as this were to happen again, the general welfare and safety of the American people should be put before politics (i.e., the Jones Act should have been waived).
  • Amendments need to be made to laws to include non-pecuniary compensation.
  • Specifically, the government and EPA need to step in and enforce more strict regulations and disaster plans, as well as punishment for failure to follow these new enforcements.

▪ i.e. In the Netherlands, a company is given 12 hours to handle an oil spill

before the government steps in and takes over the operation (Donovan, 2010).

http://www.google.com/imgres?imgurl=http://msnbcmedia.msn.com/j/MSNBC/Components/Slideshows/_production/ss-100618-cagle-toons/ss-100618-cagle-toons-09.ss_full.jpg&imgrefurl=http://citizensagainstproobamamediabias.wordpress.com/2010/06/page/2/&usg=__7bazXIHFyOdc0VxOem0duAKFN-g=&h=868&w=1200&sz=142&hl=en&start=0&zoom=1&tbnid=ftGh9ZQA7nekUM:&tbnh=148&tbnw=205&ei=3lxtTY26KIH98Ab8nKmPDQ&prev=/images%3Fq%3Dbp%2Boil%2Bjudge%2Bconflict%2Bof%2Binterest%2Bcartoon%26um%3D1%26hl%3Den%26biw%3D1440%26bih%3D799%26tbs%3Disch:1&um=1&itbs=1&iact=hc&vpx=545&vpy=449&dur=332&hovh=148&hovw=205&tx=119&ty=117&oei=3lxtTY26KIH98Ab8nKmPDQ&page=1&ndsp=25&ved=1t:429,r:15,s:0

http://www.dailyvsvidz.com/2010/06/president-obama-vs-bp-oil-spill-and.html

in closing
In Closing . . .
  • As previously stated: new strict guidelines and regulations need to be established and safety/recovery plans need to start being thoroughly reviewed before construction and operation should be allowed to commence.

- It’s better to be safe than sorry.

  • All information, documents, and plans should be made available to the public.
  • In disastrous events such as the BP oil spill it is crucial for people to help one another. As Geert Visser (Houston’s Consul general for the Netherlands) said: “Let’s forget about politics; let’s get it done” (Bader, 2010).
  • The Present Day:

- Legal claims still remain unsettled and many others have yet to receive

payments.

- Tar balls are still rolling onto the coastline.

- Marshlands are still full of thick oil, killing the grass and harming wildlife.

- Oil has been found settled (and not degrading) on the seabed.

  • Does this sound like the results of a successful recovery process?
slide18

The Take Home Message:

“Deepwater energy exploration and production, particularly at the frontiers of experience, involve risks for which neither industry nor government has been adequately prepared, but for which they can and must be prepared in the future” (Saxe, 2011).

“The technology, laws and regulations, and practices for containing, responding to, and cleaning up spills lag behind the real risks associated with deepwaterdrilling into large, high-pressure reservoirs of oil and gas located far offshore and thousands of feet below the ocean’s surface. Government must close the existing gap and industry must support rather than resist that effort” (Saxe, 2011).