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163 undertaken or organised extensive clean-up operations, and by the end of June 2010 had removed some 28 million Deepwater Horizon US gallons of oil and oily liquids, largely by skimming and its Legal oil from the surface. Containment booms have been extensively deployed but their effectiveness can be Ramifications reduced by high winds and rough seas. One controversial aspect of the response has been the use of the dispersant * Corexit, which has been sprayed onto the surface and, Stephen Tromans QC with the approval of the US Environmental Protection Agency (USEPA), injected at the site of the leak. Concerns have been expressed as to the toxicity and the The facts effectiveness of the dispersant, and in May 2010 the The basic facts are these. On April 20, 2010 an explosion USEPA required BP to reduce the volumes of dispersant occurred on a mobile offshore drilling unit, the Deepwater used, and use an alternative product or justify the decision 4 Horizon, floating about 50 miles off the Louisiana coast, to continue using Corexit. In addition, various attempts in the Macondo Prospect oilfield in the Gulf of Mexico. have been made by BP to reduce or stop the spill, using It was owned by Transocean Limited and leased by BP. Remotely Operated Vehicles (ROVs), the attempted The unit was designed to be used in ultra-deep waters placement of various containment domes over the and at the time of the explosion was drilling an damaged wellhead, the diversion and capture of flow, the exploratory well in waters roughly a mile deep. BP had pumping down of heavy drilling fluids (“top kill”) and purchased the drilling rights from the US Minerals most recently the drilling of relief wells through which Management Service in March 2008. BP was the operator cement could be injected to plug the damaged well and principal developer of the Macondo Prospect, the (“bottom kill”). It may be that the endgame for stopping minority partners being Anadarko Petroleum Corporation the flow is in sight and that by the time this article is 5 (25 per cent) and Mitsui Oil Exploration (10 per cent). published BP will have been successful—or it may not. The unit was being operated by Transocean under contract for BP. Subcontractors were also involved: for example The effects Halliburton Energy Services was installing and cementing The effects are not only those visible on the surface, but the production casing.1 Only six BP personnel were on also the extensive underwater plumes of pollutants which board at the time. have been observed by academic researchers. By June The explosion appears to have been caused by a bubble the spill had reached the Louisiana coast and barrier of methane gas which escaped from the well, up the drill islands in Mississippi, Alabama and Florida. Various column, and ignited. It burst through the floor of the rig ecologically important national parks and wildlife refuges and an intense fire engulfed the platform. Eleven workers have been affected. At risk are important and increasingly perished in the blast and fire. The unit burned for over a scarce oyster reefs, large populations of migratory birds, day, sank on 22 April, and now lies at the bottom of the sea turtles and other marine mammals. As well as the Gulf of Mexico. The first reports of oil leaking from the environmental damage, the economic effects have been well came on 22 April, when a large slick was observed considerable and will continue to be so. The Gulf of by US Coast Guards. Initial attempts to cap the well using Mexico ecosystem provides some 40 per cent of the remotely operated underwater vehicles were unsuccessful. seafood consumed in the United States. During May, the Estimates as to the rate at which oil is gushing from the National Oceanic and Atmospheric Administration damaged wellhead have of course varied widely,2 but the (NOAA) closed affected federal waters to commercial incident must rank as one of the largest oil spills ever and recreational fishing, an area which steadily increased. encountered.3 A fisheries disaster for the states of Alabama, Louisiana and Mississippi was declared on 24 May. The impact on The response tourism and related services in Florida and other states The oil is unfortunately relatively heavy in comparison will no doubt depend on how much further oil comes with other oil drilled off the Louisiana coast, and is therefore more resistant to clean-up techniques. BP has * 39 Essex Street, London WC2R 3AT; [email protected]. It is difficult to keep up to date with the constant flow of information and new developments relating to the incident. This article includes developments up to July 11, 2010. 1 Other subcontractors working on the rig, though not necessarily at the time of the accident, were Schlumberger Ltd (wireline services) and MI-SWACO (mud engineers). 2 The official estimates of rates of release produced by the Flow Rate Technical Group of relevant US regulatory bodies and outside academics have increased as the incident has progressed and more information has become available, but there are huge difficulties in measuring or estimating the flow rates at such a depth. 3 The Ixtoc I spill in 1979, also in the Gulf of Mexico, involved an estimated 30,000 barrels of oil per day at its worst and an estimated 3 million barrels overall, but was shallower and less extensive. The Gulf War losses of oil in 1991 could have been up to 6 million barrels, and the massive Lakeview Gusher spill in California in 1910 involved 9 million barrels. Certainly President Obama was unequivocal in his Oval Office speech on June 15, 2010 that the BP oil spill is “the worst environmental disaster America has ever faced”. However, it is a moot point whether the damage even approaches that caused by ongoing spills in the Niger delta: see The Observer, May 30, 2010, “Nigeria’s agony dwarfs the Gulf oil spill. The US and Europe ignore it.” 4 http://www.epa.gov/bpspill/dispersants.html#qanda2 [Accessed July 20, 2010]. 5 “BP Heads for the Endgame — in the Gulf and in the Boardroom” The Times, July 9, 2010. [2010] I.E.L.R., Issue 5 © 2010 Thomson Reuters (Legal) Limited and Contributors 164 International Energy Law Review ashore. The same may be true of real estate values in been directed not only at BP, but also at the MMS for affected locations and of cruise ship operations in the failing to require provision of a remote control blowout Gulf. prevention device, operated by radio signal, of the sort required in Norway and Brazil since the 1990s,10 and The investigations which might11 have achieved activation of the system even though the rig and associated pipes and cables were BP’s website does not provide an explanation of the destroyed.12MMS was apparently influenced by the cost explosion, or of the failure of blowout prevention systems of such devices (US $500,000) and the contingency plans to avoid the escape of oil. The US Coast Guard and the in place for response using ROVs. There is concern that Minerals Management Service (MMS) began an the MMS has relied unduly and uncritically, or has been investigation into the incident on April 22, 2010. Issues swayed by, oil industry assurances in this regard.13 Other to be addressed include the cementing procedure being complaints include the routine overruling of staff used at the time of the explosion, and any possible biologists and engineers within the MMS when raising deficiencies in the blowout preventer and its back-up concerns, as to safety and environmental issues of drilling failsafe systems. Other investigations are in hand. These in the Gulf and Alaska, failure to require that lessees include the criminal investigation opened by the US obtain the permits required from the National Oceanic Attorney General on June 1, the work of the National and Atmospheric Administration under the Endangered Commission established by the President’s Executive 14 6 Species Act and the Marine Mammal Protection Act Order on May 22, and of course the House of and the exemption of BP’s Gulf operations from Representatives Sub-Committee hearings at which BP environmental impact assessment under the National and other oil company representatives appeared in June Environmental Policy Act (NEPA).15 Since the disaster 2010. The Sub-Committee on Oversight and there has been a fundamental restructuring of the MMS, Investigations indicated in no uncertain terms to Tony which by order of the Secretary of State for the Interior Hayward, BP’s Chief Executive, before his appearance, was renamed the Bureau of Ocean Energy Management, their view that BP had “… repeatedly chosen risky Regulation and Enforcement, with a new Director. The procedures in order to reduce costs and save time and 7 reforms include the somewhat obvious step of separating made minimal efforts to contain the added risk.” They the functions of leasing and regulation from that of raised a number of issues on which it was suggested 16 8 revenue generation, now with the Office of Natural corners had been cut in order to speed finishing the well, Resource Revenue, and a separate Bureau of Safety and including the well design of the final section, using a Environmental Enforcement. Whilst the Outer Continental single string casing which could be more vulnerable to Shelf Lands Act mandates consideration of both the leaks, and whether BP had ignored recommendations economic and environmental values of outer Continental from Halliburton, its cementing contractor, as to the use Shelf resources, and the potential impact on of oil and of an adequate number of centralisers to ensure proper gas exploration on the marine, coastal and human positioning of the casing and avoid potential gas flow environments,17 there was an obvious tension in the same problems.

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