First BP oil spill arrest: Why put the squeeze on a mid-level engineer?
The first criminal charges brought in the 2010 BP oil spill – against Kurt Mix, a former BP engineer – show that the government still seeks the answer to an essential question in the spill’s aftermath: Did BP tell the truth about what it knew about the size of the spill? At stake are billions in fines.
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One text message the FBI was able to extract from Mix’s cellphone was dated May 21, 2010 – during the top kill maneuver. “Too much flow rate – over 15,000 and too large an orifice,” it read. “Pumped over 12,800 bbl of mud today plus 5 separate bridging pills. Tired. Going home and getting ready for round three tomorrow.”Skip to next paragraph
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A week after the Deepwater Horizon explosion, Mix had also estimated the flow rate to be anywhere from 1,000 barrels of oil per day to 146,000 barrels. At the time, the company released estimates that about 5,000 barrels were leaking each day.
A month later, BP moved forward on the top kill, which had never been attempted at the depth of the Macondo well. BP officials, one eye on a major environmental disaster and the other on a wavering stock price, put an optimistic spin on the attempt. Days before the top kill, then-BP chief Tony Hayward said the efforts to stop the leak had been “extraordinarily successful.”
Special agent O’Donnell notes in the affidavit that BP’s stock price sank 15 percent the day after the company announced that the top kill had failed. Two months later, BP finally squeezed off the flow from the Macondo well. The company says about 4 million barrels of oil escaped; the US says it could have been about 5 million barrels.
That difference is crucial because the Clean Water Act allows the federal government to fine a company up to $4,300 per barrel, if the polluter is found to be grossly negligent. That's at least $21.5 billion total, if the higher spill estimate is applied and if gross negligence can be proved.
BP has said it wants to pay less than the low-end estimate for an accidental spill – about $5 billion – because of how hard it worked to stop the gusher and because of its willingness to put aside $20 billion to help those affected by the spill along the Gulf.
“The [Obama] administration would presumably like to get as much cash out of BP as possible,” writes Christopher Helman, an oil industry analyst for Forbes. “Thus we get this first indictment showing evidence of a concerted effort on the part of BP engineers to cover up their best estimates of the oil flow …. If the government can prove that BP was trying to cover up the extent of the flow rates, it will have an easier time convincing a court to settle on a higher number for the volume of oil spilled.”
The accident sparked a six-month moratorium on deep-water drilling in the Gulf and led to an overhaul of federal drilling regulations. Two years after the spill, many environmentalists remain unconvinced that the Gulf has been restored, even as drilling activity, sparked by high oil prices, is rapidly ratcheting up in the deep Gulf.
One big beneficiaries is BP, which turned a $3.3 billion loss in 2010 into earnings of $26 billion in 2011. The company has paid out $22 billion in damages and cleanup costs so far. A New Orleans judge is expected to rule Wednesday on whether to approve an additional $7.8 billion settlement that would be paid to 100,000 Gulf residents affected by the spill, including fishermen, restaurateurs, and hoteliers.
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