http://www.wsws.org/en/articles/2013/01/08/tran-j08.html
Transocean settles for $1.4 billion in criminal and civil charges
By Bryan Dyne
8 January 2013
Transocean Deepwater Inc. has settled for only $1.4 billion towards
all criminal and civil claims relating to the company's Deepwater
Horizon oil rig explosion in 2010, which leaked 4.9 million barrels
of crude oil into the Gulf of Mexico and killed eleven workers. The
settlement was announced by the Department of Justice on Thursday.
The settlement, which must still be approved by US District Judge
Carl Barbier, precludes other criminal fines that would have arisen
if Transocean went to trial in New Orleans over the spill, which was
set to begin February 25. Furthermore, the settlement will not
require Transocean to plead guilty to any crime relating to the
deaths of the eleven workers killed on the oil rig, in contrast to
BP, which pleaded guilty to eleven counts of manslaughter.
The deal consists of criminal penalties and fines of $400 million.
$150 million of the criminal settlement goes towards restoring the
habitats in the Gulf of Mexico that were affected by the spill and a
further $150 million will go towards oil spill prevention and
response research in the Gulf. The criminal penalties are from a
charge of "negligence" against Transocean by the Justice Department.
The more serious charge of "gross negligence," defined as "wanton and
reckless conduct," was not levied.
The civil settlement is $1 billion in civil penalties for violations
of the Clean Water Act. $800 million of that will be directed by the
RESTORE Act of 2012 and will be used to fund environmental and
economic projects for Gulf states. The civil resolution also reserves
the claims for natural resource damages and clean-up costs.
Much has been said about the record amount of civil penalties that
Transocean is required to pay, more than BP settled for last
November. Attorney General Eric Holder called the settlement
"significant" and claimed that it is "justice for the human,
environmental, and economic devastation wrought by the Deepwater
Horizon disaster."
However, as with the $4.5 billion BP settlement, Transocean is being
required to pay a paltry amount, over the course of five years, for
its part in the 2010 explosion. It compares to the estimated worth of
the Gulf region of more than $1 trillion, ignoring long-term
environmental and economic effects. Transocean's fund for claims from
individuals and business for damages relating to the spill is only $2
billion.
The "justice" that is being meted out is merely a further signal by
the Obama administration to oil drilling companies that the fines
imposed for an oil spill, no matter how damaging, are not punitive
but merely the cost of doing business.
The response of the market to Transocean's settlement was favorable.
The shares of Transocean Ltd. rose 6.4 percent Thursday and rose
again Friday, by 5.3 percent, closing at $51.82.
The current settlement by Transocean does not include charges against
any Transocean officials. In fact, the settlement places the blame on
the crew of the Deepwater Horizon. The settlement states that
Transocean's crew "were negligent in failing fully to investigate
clear indications that the Macondo well was not secure and that oil
and gas were flowing into the well."
This statement is designed to shield and absolve Transocean and BP of
any responsibility for the explosion. It ignores the mass of reports
that surfaced in the weeks and months after the explosion that the
actions of Transocean and BP were directed towards making up cost
overruns caused by delays in drilling, which drove the companies to
ignore safety concerns around the backlog of necessary maintenance
for the oil rig and to attempt to cap the Macondo well with
substandard materials.
There were also reports that revealed that BP had advance warning of
the explosion, but chose to continue operations to avoid another
$500,000 per day rental fee on the rig. Another report indicated that
the Deepwater Horizon was drilling for oil at 25,000 feet below the
seabed, 5,000 feet deeper than allowed by its permit.
Placing the responsibility for the explosion on the Transocean crew
also allows the US government, particularly the Minerals Management
Service (since renamed the Bureau of Ocean Energy), to avoid any
responsibility. From January 2005 to April 2010, there were sixteen
fewer inspections of the Deepwater Horizon than there should have
been. Inspections from 2010 had data "whited out" without explanation.
Such actions coincide with the policy of the Bush and Obama
administrations, which have both done their utmost to protect the oil
industry from civil and criminal suits. BP's fund for compensation
for the entire Gulf coast was only $20 billion. BP has been doing its
best to avoid paying even that amount.
In addition, the Obama administration has allowed oil drilling to
expand. BP has seven operational oil rigs in the Gulf of Mexico and
plans to bring two more operational this year. Shell Oil's Arctic
drilling efforts are ongoing despite a series of accidents over the
last year, including the most recent, in which one of its oil rigs
ran aground in the Gulf of Alaska.
The next significant settlement dealing with the 2010 spill will most
likely involve the full scope of the civil penalties facing BP. A
trial is set for February 25. The company faces civil suits for a
maximum of $90 billion for the estimated 4.9 million barrels of crude
oil that spilled into the gulf. A settlement is possible before this
date.
The author also recommends:
BP settles for $4.5 billion in criminal charges
http://wsws.org/en/articles/2012/11/sett-n17.html
[17 November 2012]
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