Hi. I’m old enough to remember the Santa Barbara oil spill in 1969. I worked on the Exxon Valdez litigation and know about the Oil Pollution Act of 1990 that was enacted as a result of that accident. As a lawyer for NRDC, I’ve handled litigation under the National Environmental Policy Act (“NEPA”). I’ve been following the BP oil rig blowout and blogging about the legal issues involved. Here are a few things I’ve noticed.
Regulatory capture. Know what this is? It’s when a regulated industry dominates or captures the agency that is supposed to be regulating it. Let’s face it: you’ve been captured. Your lax treatment of offshore drilling under NEPA is a disgrace. Allowing the oil industry in the Gulf to police itself has led, literally, to disaster. To fix this will require more than the ethics training that some of your staff had to undergo after some indiscretions with industry personnel. You need to start over.
Conflict of interest. My colleage Lisa Speer has blogged about this. It’s a mistake to have your regulatory function and royalty-collecting function under the same roof. As Lisa wrote, fixing this is a good first step – but there is much left to do.
Industry practices. You may know what “technology forcing” is. The US EPA does it frequently under the federal Clean Air Act. EPA does not just accept industry practices as the best that can be done and stop there – as you have done. You need to learn from EPA.
NEPA. NEPA requires environmental review and a public process for most federal projects, or projects on federal property like the OCS. You have allowed BP and others to get away without any environmental review of Gulf of Mexico exploration and drilling plans. There was no independent NEPA review of the lease sale to BP that led to the Gulf oil drilling disaster. Incredibly, you have kept up this behavior after the BP oil rig blew up. This needs to stop – now.
Safety moratorium. President Obama has implemented a short-term moratorium on new drilling. This needs to be extended until we can be sure that all offshore rigs are really safe.
Retrofitting. It’s not enough to make sure that new wells are safe. Whatever lessons are learned from the this oil drilling failure should be applied to existing wells also. It would be foolish not to.
Safety. Sometimes necessary safety features cost money. You need to stop caving in to industry when they complain about this.
Science. The New York Times is reporting that internal agency opinions unfavorable to the oil industry were suppressed and that MMS repeatedly failed to consult with, or heed the opinions of, the National Oceanic and Atmospheric Administration, as required by the Endangered Species Act and the Marine Mammal Protections Act. This lawless behavior needs to stop.
Black Swan events. These are low-probability, very high risk events. You need to make oil companies plan for these rather than ignore them as unlikely. Nuclear plant meltdowns are unlikely but comprehensive planning for a disaster is required by federal statute. You need to learn from this.
As we say in the legal world, I look forward to your early response. In public. If these issues can’t be addressed quickly, MMS needs to be abandoned like a dry well and we need to start over.
]]>One is if the incident was caused by gross negligence or reckless behavior. These two terms mean basically the same thing. We all know what ordinary negligence is: you back your car into a pole that you didn’t see. If you race another driver at triple-digit speeds in the rain on a curvy mountain road, that’s grossly negligent or reckless behavior.
We don’t yet know what caused the Deepwater Horizon blowout, so what I’m about to say is speculation. One potential cause that is under discussion is a failure in the cementing process by which the well casing is cemented in place in the bore hole. The contractor for that job on the Deepwater Horizon project was Halliburton, which has a long history of working in the “oil patch.” The Deepwater Horizon “patch,” though, was under 5,000 feet of water. In 2009, an underwater well blew out off the coast of Australia; the investigation, which is not yet complete, has focused on the cementing process. The contractor there was Halliburton. If it turns out that Halliburton had a known problem with its deepwater cementing process and didn’t correct it, a judge or jury might find that to be grossly negligent conduct.
Another potential avenue to a finding of gross negligence is the decision of the owner and operator of the Deepwater Horizon rig, Transocean Ltd., not to have a backup blowout preventer installed. This redundant system is required in the North Sea and off Brazil, but not (yet) in the United States. There is some history of blowout preventers failing. There have also been comments that Transocean should have had a backup acoustic trigger for the blowout preventer – basically a mechanism, not on the rig, that would send a loud noise down to the blowout preventer which would trigger it to close. Depending on what the findings on causation turn out to be, a judge or jury could find gross negligence for failure to use these backup systems.
The second theory for busting through the liability cap is to show that the incident was caused by the violation of an applicable Federal safety, construction, or operating regulation by BP or its agents. Because we don’t know yet what caused the blowout, it’s impossible to say whether this theory will apply. Nonetheless, it is important for policy purposes to keep in mind that the federal Minerals Management Service (“MMS”), which is tasked with regulating facilities such as the Deepwater Horizon rig, has been viewed by many as being far too cozy with industry in terms of safety and operating regulations. That needs to stop, now.
Another thing that needs to stop is the sloppy analysis in environmental documents about the low probability of serious oil spills in the Gulf of Mexico. The environmental review for the group of federal oil leases that includes the site of the Deepwater Horizon blowout assumed, as a worst case, one oil tanker spill totaling 14,600 barrels of oil in the 40-year period beginning in 2007. BP blew through that number in three days. And for offshore oil rigs, the same environmental analysis assumed, worst case, less than one spill per year, totaling 1,500 barrels. That number was exceeded on Day 1.
The bottom line for BP is that it didn’t have a plan in place for a serious oil spill from the Deepwater Horizon. That is exactly why BP now seems to be making it up as they go along. Whether that behavior is gross negligence, or violates federal safety, operating or construction laws may be a question that, one day, a jury may be asked to answer.
]]>When I was in private practice, I tried a case involving the American Trader oil spill off Huntington Beach, California. That spill, caused by human error, fouled Southern California beaches for weeks. Teams of workers in hazmat suits wiped oil off rocks and shoveled it off beaches. Ironically, the oil that was spilled belonged to BP, although BP had no role in the accident itself. I also had a very small role in the Exxon Valdez litigation, a situation where we saw workers wiping off rocks by hand as well as steam-cleaning jumbled beaches.
The Gulf oil spill brought these images back to mind. One huge difference, though, is that if the oil reaches the wetlands, marshes and bayous of the Gulf, it will be next to impossible to get it out. Those areas have no defined shoreline, few if any rocky sections, and precarious footing at best for workers. And what would hot, sweaty, hazmat-suited workers attack – every cattail, every blade of grass in the swamp? Sisyphus rolling the rock up the hill had an easier task than that; at least he knew where the rock was.
This is much more than an aesthetic problem. As my colleague Jon Devine points out, the main concern for impacts to wetlands themselves is that the oil can smother wetland grasses such that they are unable to photosynthesize. When vegetation dies off, it leaves the underlying soil -- which the grasses ordinarily hold in place -- vulnerable to erosion, and that exacerbates loss of wetlands and the animals that rely on the wetland habitat such as blue crabs, shrimp, oysters, and the uncountable numbers of migratory birds soon to arrive.
The only way to avoid this disaster is to keep the oil out. One thing that my experiences on the Exxon Valdez and American Trader cases taught me is that human efforts have little, if any, effect on the fate of a large oil spill into the ocean. Wind, weather and tides make the call.
As I pointed out in my last blog post, we don’t need to put up with situations like this. We need to move to a clean energy future as fast as we reasonably can. For some ideas on how you can help, take a look at this site. Let’s make it happen.
]]>The federal Oil Pollution Act (OPA), enacted after the Exxon Valdez spill in 1989, imposes strict liability on parties such as BP for an oil spill from an offshore platform. “Strict liability” in this sense means that no one needs to prove that BP was careless or negligent in order to recover damages under the OPA. Importantly, BP’s liability for cleanup costs under the OPA is unlimited.
By contrast, BP’s liability for other damages, such as property damage or lost profits from businesses affected by the spill, are limited under the OPA to $75 million. A proposal has surfaced in the Senate to raise this limit to somewhere in the billions; it’s not clear whether an increase in this liability limit would apply to the current situation in the Gulf. Damages for personal injury or wrongful death are not covered, or limited, by the OPA.
If you’re thinking that $75 million isn’t what it used to be, the check that BP will need to write for economic and property damage can be larger. The OPA expressly does not preempt claims under state law or common law. A potential problem for plaintiffs in those non-federal claims is that they may need to prove negligence, but the flip side is that there is, in general, no cap on damages.
The parties to litigation under the OPA and state law tend to fall into two groups: governmental bodies and private citizens. The federal government has remedies directly under the OPA, including federal cleanup costs and costs for natural resource damages such as injuries to marine mammals and seabirds. Typically, a state Attorney General will bring suit for loss of state resources, cleanup costs incurred by the state, or loss of recreational use of beaches and state waters. Some state laws also provide for fines on a per gallon basis. If the Exxon Valdez situation is any guide, we can expect to see class action cases brought on behalf of businesses that have lost profits and property owners whose land has been damaged or lost value because of the spill.
As a society, we don’t have to put up with situations like these. We need to transition to an economy based on renewable energy instead of oil. There is no such thing as a sunlight spill.
]]>It turns out that it took Russia 71 years to fully electrify the 5,750 mile long rail line. The electrification project started in 1929, not a happy time in Russian history, and was completed in 2002. Now, most freight in Russia is carried on electrified lines.
Russia is not the only country with electrified rail for carrying freight. England and France have the "Chunnel" train that travels under the English Channel. Netherlands and Germany share an electrified freight line that ends at the port of Rotterdam. The Swiss rail system is almost all electric.
Why should we care about this? Big railyards in the U.S. are notorious polluters and railroad companies are famously resistant to local environmental laws. Railyards also tend to be located in or near low-income, minority communities that suffer heavy burdens from air pollution. There is one huge intermodal railyard (where containers that have been offloaded from ships and trucked to the railyard are put onto trains) near the Los Angeles ports; its owner proposes to double it in size, and another behemoth intermodal yard has been proposed for the same area.
The pollutant of concern from the railyards is diesel particulate matter, found in diesel exhaust. The simplest way to get rid of it would be to switch from diesel to electric locomotives - so long, of course, as we don't just trade locomotive emissions for emissions at a powerplant that generates electricity. In fact, the publicly-funded Alameda Corridor, a dedicated transportation corridor for trains from the ports to access the railyards near downtown Los Angeles, was built with electrification in mind.
Yes, it will be expensive to electrify rail lines. But think what a great "green" stimulus project this would be: lots of good jobs for many years, with potentially huge benefits in reduced air pollution. It doesn't have to take us 71 years like it took Russia. Let's get started now.
]]>This morning's workshop topic, featuring NRDC's Deron Lovaas in a repeat performance, was on "Reinventing The Auto Industry." Everyone who reads the papers knows that the domestic and foreign auto industries are bleeding money; January new car sales were down 40% over last year for the Big Three, and slightly less than that for Toyota and Honda. Annualized, January's rate yields less than 10 million new cars sold in the U.S. this year, a shockingly low figure - a figure that suggests that fleet turnover in favor of plug-in hybrid or electric cars will take even longer than people had thought.
Brad Marshall of the UAW opened the workshop. He did not find a receptive audience. After reminding us that the U.S. auto industry had lost 43% of its workforce since 2000 - a whopping 576,000 jobs -- Brad opined that the light duty vehicle segment of the industry was being asked to contribute more than its fair share of greenhouse gas emissions. He said that regulators should "find another sector to get reductions out of." Well, Brad, my money as a taxpayer is going to subsidize GM and Chrysler, and as part-owner of those businesses now, I think things need to change, and fast. $2 gas isn't going to last forever, and when it's at $4 or more again (Ingrid Matthaus-Maier said at yesterday's workshop that she pays $8 per gallon in Germany), the Big 3 need to be ready.
Deron followed Brad and talked about the three-legged stool of transportation CO2 reduction: vehicles, fuels and VMT, and the fourth "leg" of system efficiency such as reducing congestion. He is bullish on plug-in hybrids and noted that, if the grid is cleaned up to minimize the use of coal-fired generation, 600 million metric tons of CO2 per year can be eliminated. Deron reminded us that there will be an energy bill this year, along with the stimulus bill, the transportation re-authorization and a global warming bill. The opportunities for progressive change are enormous.
Charles Griffith from the Ecology Center in Michigan followed Deron and described the importance of keeping the $25 billion already authorized for retooling loans for U.S. automakers intact, and of using those funds in existing facilities and communities that have been hard hit by the tsunami of job losses. He, like other speakers, wants the new green jobs to be American jobs, and doesn't want to see, for example, batteries and transmissions for hybrid-electric cars made overseas, as they are now. For example, Chevy is importing the lithium-ion battery packs for its new extended-range electric car, the Volt, from Korea and assembling them in Michigan. The gasoline engines that kick in to recharge the Volt batteries will come from Austria. Ford may be bringing an all-electric car to market in 2011 with battery packs built in Canada. Chrysler is out to lunch.
Brad then took some more heat during the question period. He is clearly very sensitive to the (common) idea that the Big 3 build lousy cars and that's why their sales have dropped off a cliff. In fact, as I noted above, sales of Toyotas and Hondas are also way down. Brad did admit that the Big 3 took their eyes off the ball regarding mid-side sedans years ago, allowing the Japanese carmakers to take a huge chunk of the market share. He touted the new Chevy Malibu as the equivalent of an Accord or Camry, but having recently driven one, I disagree; I think it is approaching where the Japanese sedans were 10 years ago.
Brad's larger point was that the Big 3 have been losing market share steadily for 30 years and are continuing to lose it. In his view, their cars' poor fuel efficiency was the last straw when gas prices shot up last summer.
The fact on the ground is that the U.S. government is now socializing the domestic auto industry. Cars that are frills for a few, like the Corvettes I worshipped as a kid, may not have a purpose now that we, the taxpayers, are, or should be, calling the shots. As Deron pointed out, now is exactly the time to invest heavily in hybrid and all-electric technology before gas prices spike again. Let's hope Congress is traveling down that same road.
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