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Survey to wellhead completed; no info released. Louisiana will be a major player in BP litigation. Shell considers BP bid. BP sell chunk of North Sea field. Lawsuit to challenge plans for offshore leases. The truth could land you in jail. Fish are showing more problems that can be directly related to traces of oil.

You are in the current Gulf Watchers BP Catastrophe AUV #602. AUV #601 is here.



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Part one of the digest of diaries is here and part two is here.

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After several reports earlier this year of oil sheen in the areas around the Macondo wellhead, the Coast Guard confirmed that sheen was apparently from oil with the Macondo "fingerprint" and planned a subsea survey.

That survey was completed on Saturday (Dec. 15). Yesterday, the Coast Guard confirmed the inspection was over, but would not release any information.

The Coast Guard's Capt. Duke Walker, coordinator for the Deepwater Horizon response, said the "only" place oil could be was in the containment dome, or other wreckage from the blowout.

Walker says that thousands of barrels of oil - each barrel containing 42 gallons - could be trapped in wreckage and equipment from the Deepwater Horizon disaster. The places of "high suspicion" include the containment dome and the so-called riser pipe.

"The other thing [BP] added to the target package this time that we have not looked at previously is the rig wreckage itself, which may contain some small pockets of oil," Walker said.

It's the fourth time BP has gone underwater to look for leaks among the wells and wreckage spanning about a mile, according to Walker. He added that as of Friday, there was no evidence of active leaks from the wells, which he said spewed an estimated 4.9 million barrels of oil in 2010. But he says BP planned to look at the wells again Friday night or Saturday "out of an abundance of caution."

Walker says there could be up to 2,000 barrels of oil (84,000 gallons) in the "riser pipe" in the wreckage, and 1,330 barrels (55,860 gallons) in the containment dome.

"During all three of our previous missions, we found no indications on any of the three well head sites, particularly the primary, that there was anything to be concerned about, and there was no sign of leaking oil," he said. "Out of an abundance of caution, every time we're down there, we'll look again to verify that that's the still case."

U.S. Reps. Ed Markey, D-Mass., and Henry Waxman, D-Calif., members of House energy committees, have called on BP, the Coast Guard and other concerned parties to disclose what they've learned about the latest incidents, and to be more open about the findings.  

BP asked to be open about gulf accident.

Well, duh.

"There is no statute of limitations or protections for a crime against the environment, and BP should immediately hand over any and all information related to this new chapter in their oil spill disaster," Markey said in a statement.
Markey also pointed out that the ROV used to survey the site had to be brought in "from overseas" and the mission had to be delayed for a week due to weather, and that did not inspire confidence in BP's ability to handle another spill.

Another duh...

Okay. Can we have an ROV go and check every so often then? With an open, unedited, real-time feed we can watch? Can Ed and Henry put some more pressure on to keep them going back and checking...and checking....and checking...


Louisiana is the 800-pound gorilla in BP oil spill litigation.

In a settlement or in a trial, the price that the state of Louisiana may demand from BP could potentially be more that the oil giant can afford. Or, at least that is the contention of some observers.

Louisiana officials contend that the cost of restoring the state’s beaches, wetlands and other natural resources will far exceed widely reported estimates that BP will pay $15 billion to $20 billion to settle federal and state civil claims.

“The dollars that have been reported in the press, there is absolutely no way that you could reconcile that level of funding with the liability that BP has outstanding,” said Garret Graves, executive assistant to Louisiana Gov. Bobby Jindal for coastal activities. “There is no way you can stand up before the people in the Gulf and try to defend those numbers, when you look at what is happening and the natural resource injuries.”

Those injuries are a big part of what could drive up damages due Louisiana, under a provision of the Oil Pollution Act of 1990 that requires a polluter to fund the expense of restoring the environment to its prior condition.

One bone of contention is the amount of oil that came out of the blown Macondo wellhead. The US government contends the well spewed at least 4.9 million barrels (approximately 200 million gallons) of crude. BP disputes the claim, but has not settled on an actual amount released, which is the key factor in an assessment of damages - a dollar figure is attached to each uncontained gallon.

BP officials say, however, that they are ready to defend the company's position in court.

“BP will vigorously defend against those claims, which must be tethered to reality and based on actual environmental and economic damages,” said Scott Dean, a company spokesman.

Graves declined to say how much Louisiana is seeking for its natural resource claims, but cited fines for other oil spills in the last 20 years for comparison.

The settlement for the 1989 Exxon Valdez tanker spill in Alaska’s Prince William Sound came to $5,842 per barrel adjusted for inflation, Graves said.

At that rate, based on the government’s Gulf spill estimate, parties responsible would owe more than $28 billion for natural resource damages alone.

Additional damages to natural resources would be added to the fines under the Clean Water Act, with a higher price tag assessed if gross negligence is found. (I would think that any incident that has already accrued criminal charges could be considered "gross negligence", right?)

The 4.9 billion barrel estimate could yield additional fines under the Clean Water Act of $5 to $20 billion.

But David Uhlmann, a former head of the Justice Department’s environmental-crimes section, says the dollar amount may not reach the levels Louisiana officials demand.

“The natural resources damage claim is likely to be in the single-digit billions, not the double-digit billions,” Uhlmann said. “BP is a very wealthy company but they do not have unlimited resources, and it’s not realistic to expect BP to agree to pay anywhere close to $20 billion for natural resource damages. You can’t extract in settlement negotiations sums of money that a court would never award if the case went to trial and BP lost on every claim.”

In contrast to Clean Water Act fines, natural resources damages are tied an assessment of the actual costs associated with restoring an environment harmed by a spill.

“Under the Clean Water Act, the civil penalties are just that – penalties,” said Blaine LeCesne, a tort law professor at Loyola University, who has closely followed the case. “But the natural resource fines are remedial – they are used to pay for damages.”

One of the drawbacks, as in the Exxon Valdez spill, is that the scope of the total environmental impact may take years to develop. Numerous environmental studies have been undertaken to measure the spill’s effect on animals from microorganisms to whales, and on air and water quality, which would be used to calculate the cost to restore Louisiana's coast. The state is also demanding a “re-opener” agreement, which would give them the right to ask for more money at a later date if additional money is needed for restoration.

In addition to potential environmental impact settlement monies, Louisiana is also making punitive damage claims based on maritime laws, and alleging it lost more than $1 billion in tax revenue as a result of diminished economic activity.

While these claims could add up to a startling total, LeCesne said the individual components all have a strong legal basis, and probably are complicating efforts at negotiating a global settlement between BP and federal and state governments.

“The cost of restoring coastline which has eroded at an accelerated rate, the destruction of the wetlands, the effects on the wildlife and the potential long term effects on the fishing industry – those are very expensive propositions,” LeCesne said.

Well, if you go into negotiations asking for way more than you expect to get, you might come out with more that you'd hoped for.

Wonder what plans Mississippi, Alabama, and Florida might have in the works?


Well, one of those plans might be to just sell everything you've got, or maybe just cease to exist altogether...or at least morph out of your present form.

Shell Reignites Rumors Of A BP Takeover.

While buying your biggest rival might have advantages, don't you think twice if your rival has enough heavy baggage to sink the Titanic twice?

That might not be enough to stop Shell from shelling out to buy BP. Shell executive Peter Voser has told a German newspaper that the company was interested in purchasing BP in the past, but declined comment as to whether that deal could still be done.

"I can't imagine that there was anyone in our industry that didn't have a look at it. At the end of the day we're all business people," Voser is quoted as saying.

Former BP chief executive John Browne revealed in his memoirs that discussions had taken place between the two companies in 2004 when Shell was smaller by market capitalisation.

But Voser's comments that Shell considered making a bid for BP in the past two years, according to an advance copy of Frankfurter Allgemeine Zeitung, will inevitably rekindle excitement in the City that a mega-merger could still be on the cards. Voser noted that following the oil spill in the Gulf of Mexico in April 2010, BP's share price fell sharply, and still had not completely recovered.

Equity analysts have speculated over the past 18 months that a BP wounded by the Deepwater Horizon accident was dangerously vulnerable to a foreign predator.

But big state-owned groups from China and Russia were seen as the most likely potential buyers, with all the political ramifications that would come with those kinds of approaches.

BP has recently agreed a multibillion-pound share swap and exploration deal with Russia's state-controlled oil company, Rosneft, but there would be nothing to stop a Shell bid for BP's wider share capital.

BP continues to sell off some of the company's global assets in preparation for the cost of fines and litigation...

Well, it's not quite Filene's basement on wedding-dress-sale-day, but still...and Filene's didn't survive in the end either.

BP selling stake in North Sea gas field for $288M.

British oil giant BP is selling its 50 percent stake in a gas field in the North Sea off the United Kingdom for $288 million in cash as part of a plan to divest certain non-operated assets.

The company said Monday the sale of its interest in the Sean gas field to SSE PLC is expected to be completed during the first half of 2013, subject to regulatory approval.
BP said that in the last two weeks it has completed the sale of non-operating stakes in the Alba and Britannia fields to Mitsui and the Draugen field in Norway to Shell. Those deals were announced earlier this year.

Let's see...$288 million...

Sort of in the drop in the bucket region, is it not? I guess BP is going on with the "a little here, a little there" plan.


Environmentalists to challenge US plan on offshore leases.

Lawyers with New York University’s Institute for Policy Integrity plans to file a lawsuit in the United States Circuit Court for the District of Columbia on behalf of the Santa Fe, N.M.-based Center for Sustainable Economy to ask the Court to require the US Department of the Interior to abandon the current structure for selling offshore oil leases, and to revise said program.

The legal challenge takes direct aim at the Interior Department’s plan to hold more than a dozen offshore drilling lease sales in the Gulf of Mexico and waters around Alaska before June 30, 2017.

“It’s clear to us that the new offshore leasing program was hastily prepared to score political points,” said John Talberth, the Center for Sustainable Economy’s president and senior economist. Talberth noted that federal laws require a full cost-benefit analysis as well as environmental reviews.

The crux of the challenge is that Interior’s Bureau of Ocean Energy Management rushed ahead with new sales without fully evaluating the environmental and financial effects of the drilling, including whether the government would bring in or save more money by keeping the oil and gas locked up.

According to the group’s financial reasoning, oil and gas extracted from newly leased waters could be more valuable over time, if fossil fuels become more scarce. Talberth noted a current glut of natural gas from drilling on land. Gas recovered offshore would compete with those supplies, possibly further suppressing the relatively low price for that fossil fuel.

He also insists that additional oil and gas drilling should be considered only after moves to promote conservation, improving efficiency and investing in renewable energy.

“These offshore oil and gas resources have incredible value, and the government has a responsibility from an economic and an environmental perspective to manage these resources in a reasonable way that conforms with best practices,” said Jason Schwartz, legal director at Policy Integrity.

Federal law obligates the government to establish the five-year leasing programs and conduct a net public benefit analysis of the proposed sales.

The Center for Sustainable Economy is maintaining that the costs of deep-water drilling disasters, government subsidies, and carbon emissions tied to production and combustion of the fossil fuels should be taken into account before more leases are granted.
“The balancing of cost and benefits is more than just an academic exercise,” said Mike LeVine, the Pacific senior counsel for the conservation group Oceana, which is not a party to the lawsuit. “For places like the Arctic where the risks are great and the costs are high, a fair evaluation can have a very significant impact in the water.”

“When the government is selling public resources to private companies, it has an obligation to make sure the American public is getting fair value and decisions are being made in a transparent manner,” LeVine added.

The Department of the Interior has stated that rigorous analyses have been done in the areas subject to new leases, with safeguards to ecosystems and coastal communities at the highest level, citing that the new leases would be for targeted and regulated areas, and not for wide swaths of acreage and ocean floor as had been the norm.

Loren Steffy says not only will the truth not set you free, you might have to do hard time for it...

Telling truth may land BP employee in jail.

If the government has its way, Kurt Mix will go to jail for telling the truth.

That’s the only conclusion that can be drawn by comparing the government’s claims in two separate criminal cases related to the Deepwater Horizon – one against BP filed last month and one against Mix, the rank-and-file BP engineer who had nothing to do with the accident itself.

Mix was charged in April with allegedly deleting text messages that contained vital evidence about the rate at which oil was spewing from the ruptured Macondo well after the 2010 blowout.

In fact, Mix allegedly deleted two messages, each containing strings of texts, the electronic back-and-forth exchanges that constituted one conversation. He faces 20 years in prison if convicted, essentially a decade behind bars for each flick of the thumb.

More important, though, the government’s case against BP shows that the feds already had the information he purportedly destroyed.

The rest is here... and it is definitely worth the read.

Studies show that even low-level, short-term exposure to traces of oil remnants causes deformities and impairs the swimming ability of fish.

Research led by scientists with the University of Miami Rosenstiel School of Marine & Atmospheric Science and a study by Smith University scientists has shown that even small amounts of oil contamination at embryonic stages of fish development resulted in changes.

“We found that in more sensitive species the photo-enhanced toxicity could account for up to a 20-fold higher sensitivity,” said Dr. Martin Grosell, professor and associate dean of graduate studies for the Rosenstiel School. “This is an important part of the equation because it means that traditional toxicity testing performed under laboratory conditions will tend to underestimate the toxicity that might have occurred in the natural environment under the influence of sunlight,” he added.

The team collected freshly fertilized eggs from mahi mahi made available via UM’s Aquaculture Program, and exposed the embryos to low levels of different types of water mixed with DWH oil. In species like mahi mahi just 2 to 6 micrograms of total PAHs per liter of seawater were observed to reduce hatch rates and survival, and to result in impaired cardiac development.

The lab also tested newly hatched fish, observing them for deformities resulting from exposure to oiled seawater. Many hatchlings showed subtle heart abnormalities after only trace oil exposures in the egg that lasted only a day or so. After a month of raising these fish in clean water, the team put the resulting juveniles through the paces on their “fish treadmill” and they could only swim about 70 percent as fast as those that had never been exposed to oil.

“The severely reduced swimming performance we saw could impact the ability of these fish to catch sufficient prey, avoid predation, or travel the long distances that some migratory species require for survival,” Grosell said.

Wonderful... Can I hope the Maya calendar does mean the world ends Friday?

Thank you, Yasuragi, for being ever-vigilant in sending stories for these compilations.

I think it is safe to state here that we will be taking a holiday break, and will be back in January, where we will prepare for litigation intrigue and hijinks from all of the usual suspects...

Thanks to all of you for sticking with this oil-slicked and Corexit-soaked bunch.

signed...

Gulf Watchers

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