It was reported last month in an article by David Prior in the Claims Journal that governments and the oil spill industry cannot effectively and ethically mitigate oil spills on the ocean. It was pointed out in the article that significant oil spills are still common in the United States even though they occur less frequently than they did 20 years ago. There have been significant charges in ships that transport oil. But while double-hull vessels are part of the solution, they can offer only limited protection from oil spills. As of January 1, 2010, single-hull vessels more than 5,000 gross tons aren’t allowed to operate in U.S. waters. As predicted, this new regulation has helped reduce the incidence of oil spills. But then here comes the Deepwater Horizon disaster in April of 2010 and we know from experience in the BP litigation what happened there after the spill. Clean-up operations have already cost more than $10 billion and there is much more to be done. As we reported last month, after three years the clean-up is not yet complete.
Recent events are evidence that large, modern ships do not eliminate the danger of oil spills. For example, on June 17, 2013, the recently built container ship MOL Comfort, which was 980 feet long, split in two for no apparent reason and sank. That was not the first time huge vessels have snapped in two. Unfortunately, based on reports, neither will it be the last.
Oil spills that occur in very sheltered waters are usually cleaned up effectively and economically using current mitigation techniques. But even San Francisco Bay is not sheltered enough for today’s oil spill technology to function in a satisfactory manner. In 2007 the container ship, Cosco Busan, hit the Bay Bridge and spilled fuel oil. The United States Coast Guard and oil spill industry could not operate in the currents and choppy water so they lost 60 percent of the spilled oil. There were $75 million in damages caused by that spill.
The fact that there have been no significant innovations in oil spill mitigation in the last 40 years is difficult to understand. It’s also totally unacceptable. After the Deepwater Horizon incident, the oil industry issued a report that stated:
Spill prevention remains a primary focus of the industry. Nonetheless, the current surface oil spill response system – as exhibited in the DWH incident (Deepwater Horizon) – continues to be effective.
The system they refer to is the very same system that failed miserably to prevent the blowout in the Gulf in 2010. Even more troubling is that a 3 percent success rate is considered by the industry to be “effective.” One might ask, what other industry could get away with that sort of success rate and still be in business?
If the American people knew how the current system really works they would demand an acceptable oil spill mitigation performance. The oil companies’ oil spill mitigation success rate is far from good and very little has been done by the federal government to make it better. The oil companies, by and large, do not clean up oil spills themselves. Instead, the companies subcontract this work out. As we have learned in the BP litigation, BP was paying the contractors by the hour, not by the barrel of oil brought ashore. That was a costly mistake. As a result, the contractors had revenues of approximately $100 million per day for months even though they only recovered about 3 percent of the oil. It appears all they had to do was show up for work with a rake and then rake in the money. Much of their performance, under BP’s supervision and direction, was for the benefit of the news media. We all saw reports on the nightly news on TV of folks working on the beaches looking for oil to clean up.
Because the contractors who do the clean-up don’t have technology that works effectively on the open water, the oil has to hit the shore in order for the contractors to make money. BP spent more than $10 billion trying to clean up the oil, and they have failed in large part. It was estimated that new and effective technology that could clean up the oil at sea before it hit the beach would have cost only 2 percent of the amount spent. Also, recovering the oil at sea would have avoided most all of the severe damage from the spill.
There is another very good reason for recovering the oil offshore. Untreated oil quickly and efficiently collected offshore can be recovered and refined. That keeps the oil from being just turned into colossal amounts of toxic waste. Since the new technology has a working life of 40-50 years, the costs can be amortized over many oil spills. This better technology is available now, but it was reported that the existing suppliers have locked the door.
One would think that both the oil industry and the federal government would have learned some valuable lessons since April of 2010. But it was reported that things have actually gotten worse since the BP spill. Not only has there been no improvement in actual oil spill cleanup ability, but things have taken a turn for the worse from an ethical perspective. It certainly appears that the damage that most concerns the federal government and the oil industry is public relations damage. A prime example involves the highly toxic dispersant “Corexit,” which was used by BP in the Gulf of Mexico. Corexit did make the oil disappear. A great deal of that chemical was used even though the chemical is toxic. Corexit poisoning is a big problem and it has actively affected folks on the Gulf Coast. For some reason, very little has been reported in the media about the problem. BP, and to a large extent the federal government, has worked hard to keep Corexit out of the news and away from the public.
It was reported that the oil industry intends to greatly expand the use of Corexit. In fact, Environment Canada has recently approved its use. A new oil well-capping system has been developed that injects dispersants deep undersea. The expanded containment system will include a 15k psi subsea containment assembly, dedicated capture vessels and a dispersant injection system. The federal government must get busy and force the oil industry to improve its capacity to clean up oil spills and to mitigate the damages from the spills.
Sources: David Prior, Law360.com and the Claims Journal
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