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BP Spill, fossil fuels, gulf of mexico clean-up, Gulf restoration, marine pollution, ocean pollution, offshore oil

HoumaToday.com: Research links health, oil spill & Mississipppi River Delta.org.: Conservation Organizations demand BP Accountability for Gulf Oil Disaster & wtok.com: Oil Spill Claims Investigation

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By Xerxes Wilson
Staff Writer
Published: Saturday, September 28, 2013 at 6:01 a.m.
Oil spill cleanup workers could be at risk for developing liver and blood disorders, according to new research published in the American Journal of Medicine. The study, conducted by the University Cancer and Diagnostic Centers in Houston, found that participants exposed to oil had altered blood profiles and liver enzymes, and other symptoms compared to an unexposed group.

In the months following the 2010 Deepwater Horizon Oil Spill in the Gulf, BP hired a small army of locals and others to help deploy protective measures and gather oil that has spewed from the runaway well. Since some research has linked exposure to oil to health issues, more long-term research of the issue is underway. The study estimates that more than 170,000 workers contributed to cleanup efforts.

This latest research looked specifically at the link between oil exposure and blood and liver functions in people who had participated in the cleanup, said Mark D’Andrea, lead investigator for the University Cancer and Diagnostic Centers.
The center compared 117 people who had been exposed to the oil and dispersants used in the aftermath with a control group at least 100 miles away from Louisiana’s coast. Their various blood and liver functions, plus other benchmarks, were tested.
“Oil and secondary products are easily absorbed and can produce damage,” D’Andrea said, especially with people’s bone marrow, livers and kidneys.

The research found there were no significant changes in white blood cell counts. But platelet counts, blood urea nitrogen and creatinine levels were “substantially lower” in the exposed groups. The study also found other indicators of liver damage by comparing other biochemical benchmarks, D’Andrea said. “Phosphatases, amino transferases and dehydrogenases play critical roles in biological processes. These enzymes are involved in detoxification, metabolism and biosynthesis of energetic macromolecules that are important for different essential functions,” D’Andrea said. “Alterations in the levels of these enzymes result in biochemical impairment and lesions in the tissue and cellular function.”

In the months following the spill, much was made about the potential health problems the nearly 2 million gallons of dispersants such as Corexit spread in the aftermath to break down the oil. Corexit is banned in the United Kingdom because of potential risk to cleanup workers.

A series of interviews by the Government Accountability Project released earlier this year noted those involved in cleanup reported health problems such as kidney and liver damage, heart palpitations, bloody urine and memory loss. The report also took issue with the method and monitoring conducted by BP in its use of dispersants. At least some of the symptoms are shared with subjects of D’Andrea’s research. Those participants also reported headaches most frequently, followed by shortness of breath, skin rash, cough, dizzy spells, fatigue, painful joints, night sweats and chest pain.

D’Andrea said the research doesn’t specifically hinge on exposure to dispersants because some participants claimed they were heavily exposed to them and others noted they had little to no contact with the compounds. “The results of this study indicate that oil spill exposure appears to play a role in the development of hematologic and hepatic toxicity. However, additional long-term follow-up studies are required to understand the clinical significance of the oil spill exposure,” the study says.
The findings, like much of the research tied to the spill, are limited by a lack of pre-spill data for comparison, the report notes. Conclusions are also limited by the short-term snapshot nature of the project. “If they haven’t been screened they need to do some screening. Some we saw right after the screening and the others were perhaps years later. It will probably be a lifelong following. Who knows when that incident will cause an aberration in the DNA?” D’Andrea said.

A long-term study into the potential effects of oil and dispersant exposure is being conducted by the National Institute of Environmental Health Sciences. That organization has recruited more than 33,000 people who had some connection with the oil spill cleanup. “We actually know very little about very little exposures to oil, such as what someone who would have experience in cleanup would see,” said Dale Sandler, the study’s chief of epidemiology and principal investigator. “So it is important that we invest in this and do it right.”

Sandler said researchers are trying to create a systematic examination over about a decade to yield results that can accurately depict exposure risk and can be used to characterize risk in other oil exposure situations.
But coming up with such thorough and accurate results takes time. Participants in the study will be observed in different ways over different periods of time. Some will be part of phone interviews. Others have participated in in-home visits, and about 4,000 people will take part in a more rigorous clinical examination. Results will be released through the course of the research, Sandler said.

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Conservation Organizations Demand BP Accountability for Gulf Oil Disaster
September 27, 2013 | Posted by Elizabeth Skree in BP Oil Disaster, Media Resources
FOR IMMEDIATE RELEASE
Contact: Elizabeth Skree, Environmental Defense Fund, 202.553.2543, eskree@edf.org
Erin Greeson, National Audubon Society, 503.913.8978, egreeson@audubon.org
Emily Guidry Schatzel, National Wildlife Federation, 225.253.9781, schatzele@nwf.org
Conservation Organizations Demand BP Accountability for Gulf Oil Disaster
Deepwater Horizon civil trial resumes, groups reinforce need to restore

(New Orleans, LA-Sept. 27, 2013) On Monday, Sept. 30, phase II of the Deepwater Horizon civil trial will begin to determine how much BP will be required to pay in fines for the biggest oil spill in U.S. history. Today, leading national and local conservation organizations Environmental Defense Fund, National Wildlife Federation, National Audubon Society and the Lake Pontchartrain Basin Foundation released the following statement:

“Nearly three and a half years since the Deepwater Horizon rig explosion killed 11 men and caused the largest environmental disaster in U.S. history, the Gulf still waits for restoration. BP’s misleading advertising campaigns omit truths and facts: Gulf Coast communities, wildlife and ecosystems are still harmed and need to be restored. Tar mats continue to surface, miles of Louisiana shoreline remain oiled and the full effects of the oil spill may not be known for years to come.

“It is time for BP to accept full responsibility for the Gulf oil disaster. The natural resources of the Gulf, which sustain and bolster regional and national economies, need restoration now. We cannot wait any longer for our ruined wetlands and barrier islands to be restored.

“Restoration cannot begin in earnest until BP is brought to justice. The company has not paid a penny in Clean Water Act civil fines, which it owes for the millions of barrels of oil it spilled into the Gulf. These fines will be the primary funding for Gulf restoration projects under the RESTORE Act.

“A portion of the RESTORE Act funding, overseen by the Gulf Coast Ecosystem Restoration Council, will be spent on large-scale ecosystem restoration projects. The Mississippi River Delta region was among the hardest hit by the oil disaster and is essential to regional and national economies, including navigation, energy and seafood. The delta is invaluable to our communities and our environment; it provides vital habitat for hundreds of species of wildlife and birds along the Mississippi and Central Flyways, world-class fresh- and saltwater fishing opportunities and a home to millions of Americans. The Mississippi River Delta is truly a national treasure and one of the most important areas in North America.

“BP must be held responsible for its actions so that Gulf Coast ecosystems and economies can recover and rebuild. It’s been nearly three and a half years. We have waited long enough.”

– See more at: http://www.mississippiriverdelta.org/blog/2013/09/27/conservation-organizations-demand-bp-accountability-for-gulf-oil-disaster/#sthash.fapeli5v.dpuf

Oil Spill Claims Investigation
By: Andrea Williams – Email
Updated: Fri 5:56 PM, Sep 27, 2013

Meridian, Miss. An investigation is continuing into some settlement claims for people who were affected by the 2010 BP Oil Spill. Within the last week Meridian police have received numerous calls about solicitors collecting personal information and money from citizens to file claims. One businessman from California says he is now in Meridian to set the record straight.
The Meridian Police Department is spearheading the local investigation. In all, 11 people including a man from Neshoba County were killed in that 2010 explosion in the Gulf of Mexico. Carlos Crump is a Regional Claims Manager for the company, ClaimsComp. Aside from the fatal victims, he says that many other people were affected by the spill in various ways. In turn, he says those individuals are eligible for compensation.

“They can qualify for something called a business economic loss claim, an individual economic loss claim, and a real estate property claim. Those are the only claims that we are even focusing on, but they must be gainfully employed; they must be in certain industries.”

Crump says his company is filing settlement claims. Although he contends that his agency is legitimate, he says others may not be. “If someone is asking you for money to submit a claim, run because they’re not supposed to do that. I flew from Los Angeles, California to Little Rock and drove from Little Rock to Meridian to show my face to show that there is integrity out here and we’re going to still keep pushing. We’re going to help people become aware that they can possibly qualify.”
Meanwhile, Meridian police are advising residents to use extreme caution when filing for claims.

“I would advise everyone in Meridian, to not give out personal information until you are absolutely sure that this is a legitimate claim,” says MPD Chief James Lee. “Protect your information: your name, your social security number and your date of birth. In today’s environment that’s worth money in the bank. Please Meridian, be careful!”

At this time the final day to file for settlement claims is April 22, 2014. For more information on the BP Oil Spill Settlement log onto deepwaterhorizonsettlement.com.

Find this article at: http://www.wtok.com/home/headlines/Oil-Spill-Claims-Investigation-225537022.html

Special thanks to Richard Charter

gulf of mexico clean-up, Gulf restoration

CBS/AP:Researcher: Extent of BP oil spill’s damage to sea-floor life “astounding”

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http://www.cbsnews.com/8301-205_162-57604706/researcher-extent-of-bp-oil-spills-damage-to-sea-floor-life-astounding/

CBS/AP/ September 25, 2013, 9:13 PM

NEW ORLEANS
The vast 2010 Gulf of Mexico oil spill damaged the tiny animals that live on the sea floor for about 57 square miles around the blown-out BP oil well, with severe damage in about nine square miles of that area, says a researcher from Texas A&M-Corpus Christi.

Pollution and damage to animal life was severe nearly two miles from the wellhead and identifiable more than 10 miles away, Paul Montagna wrote in a report published Tuesday in the online journal PLOS One.

Montagna, a professor of ecosystems and modeling, said the refrigerator-cold water a mile beneath the surface means oil takes longer to decay than in shallower waters, where spill recovery has taken years to decades. That means full recovery could take a generation or more, he said in an interview Tuesday.

“This is the first large-scale examination of the impact on the soft bottom, which is the largest habitat in deep water,” said Robert Carney, a deep-sea ecologist and professor in Louisiana State University’s department of oceanography and coastal sciences. Carney, who was not part of this study, said Wednesday that it was well done.
He said he wasn’t surprised by the extent of the damage, given the size and reach of the plume of oil. BP PLC’s Macondo well blew wild for nearly three months starting April 20, 2010, when an explosion on the Deepwater Horizon drilling rig killed 11 workers.

“The plume … drifted all over the place,” so oil that became heavy enough to sink could cover a large area, Carney said.

The study is part of the Natural Resource Damage Assessment that will help decide what damages BP must pay. Montagna said he expects to be subpoenaed as part of the litigation spawned by the oil spill, since he was working for the National Oceanic and Atmospheric Administration and with NOAA scientists.

BP issued a statement expressing skepticism about some details of the report.

“The paper provides no data to support a claim that it could take decades for these deep sea species to recover. In fact, the researchers acknowledge that little is known about recovery rates of these communities following an event such as this,” BP said. It said the paper “confirms that potential injury to the deep sea soft sediment ecosystem was limited to a small area in the immediate vicinity of the Macondo well-head” first identified in December 2010.

Because it was the nation’s first deep-sea spill, “we’re in uncharted territory,” said Montagna, who took seabottom cores in September and October 2010, looking for oil. The well had been capped July 15, but cleanup and other vessels kept the survey boats from checking some spots where they wanted samples, Montagna said.

“What was astounding was we found effects out to many, many miles,” Montagna said.

He said he was surprised in spite of the extent of the spill, which closed about 88,000 square miles of federal waters to fishing.

“When the spill started, we were saying, ‘Oil floats. There won’t be effects on the deep sea or bottom. Obviously that wasn’t true,” he said.

The scientists analyzed core samples from 68 sites between one-third of a mile and nearly 78 miles from the Macondo wellhead, looking for animal life and for pollutants such as the toxic oil components called polyaromatic hydrocarbons and heavy metals such as barium from drilling mud used in unsuccessful attempts to shut the well.

Statistical analysis reduced it to one number – an index of high contamination and low biological diversity – used to map the effects.

The analysis took so much time because one step was counting and classifying animals less than one-hundredth of an inch long and comparing the numbers of nematode worms and the tiny crustaceans called copepods, which are more sensitive to pollution. That is still going on for samples from a follow-up cruise in spring 2011 and hasn’t even begun for 102 of the sites checked in 2010, Montagna said.

The team hopes for a spring 2014 cruise, he said.

Carney said “the neatest thing” is that the information is public.

“One of the frustrations for people who are trying to find out what has happened in the Gulf is the legal necessity of the secrecy of the NRDA data. To have this come out so it can get scientific review is great.”

BP announced in June that the U.S. Coast Guard was ending its clean-up effort along the shorelines of Mississippi, Alabama and Florida and transitioning the area back to the National Response Center.
Yet not everyone is convinced the clean-up is near completion. “I don’t think BP should be relieved of saying clean-up is over anywhere until there’s a lengthy period of time where there is no oil and we haven’t seen that yet,” Billy Nungesser, president of the Plaquemines Parish in Louisiana, told CBSNews.com.

Special thanks to Richard Charter

fossil fuels, gulf of mexico clean-up, marine pollution, ocean pollution, offshore oil

Rigzone: Black Elk Incident Reminder of Dangers from Hazardous Vapors

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Black Elk Energy is the lead proponent of the Rigs-to-Reefs program….. Richard Charter

http://www.rigzone.com/news/oil_gas/a/129120/Black_Elk_Incident_Reminder_of_Dangers_from_Hazardous_Vapors

by Karen Boman|
Rigzone Staff|
Wednesday, September 18, 2013

The November 2012 explosion at a Black Elk Energy-operated platform – which resulted from welders welding onto a pipe leading to a wet oil tank – serves as a reminder of the importance of educating workers on the dangers fire or explosions sparked by hazardous vapors, an offshore safety official told Rigzone.

A third party investigation found that the explosion and fire that occurred resulted from contractors failing to follow standard safety practices. Black Elk last month published the results of the investigation into the explosion and fire that killed three workers at the platform at West Delta Block 32 in the U.S. Gulf of Mexico.

The wet oil tank and pipework would have contained hydrocarbon gases that could have easily been ignited by an ignition temperature as the weld heat generated inside the pipe, said Tony Scott, general manager for the OCS Group, in an interview with Rigzone.
“If the workers knew more about the dangers around them the fatalities may well have been avoided,” said Scott.

To address part of this potentially fatal shortfall in training, the OCS Group now offers a Complex Mechanical course for mechanical workers. However, Scott believes that satisfactory Zone awareness training should be offered to all rig personnel throughout the industry.

A hazardous area is considered to be an area where an explosive atmosphere is or may be expected to be present. Thirty-five percent of rigs and drillships offshore will have this area broken down into zones or divisions. Zone Zero, potentially the most hazardous of the three risk areas mentioned, is where an explosive gas/vapor is present continuously for long periods. Zone Zero is not typically found on a rig, but in refineries and chemical plants; a Zone Zero can be found inside a tank where a gap exists at the top and vapor is trapped.

Zone 1 is where an explosive gas/vapor is likely during normal operation; with Zone 1, gas will be present but it is diluted by air. Zone 2, the least potentially hazardous of the three risk areas mentioned – is where an explosive gas/vapor is unlikely to occur in normal operation. If an explosive gas/vapor does occur in Zone 2, it is likely to do so infrequently and existing for short periods. Zone 2 accounts for approximately 28 percent of the total hazardous area of the rig.

Sources of accident ignition include welding, burning and static, which can occur even through nylon clothes. Welding activity could generate an ignition that could be considered an ignition temperature, or when material ignites without an external source of ignition such as a spark. This type of ignition could cause the gas/vapor inside a pipe to explode if someone was welding on the pipe.

“People erroneously assume that a spark is needed to cause ignition but this is not the case,” Scott noted. “When a spark causes ignition, this is called the Flash Point and is different to an ignition temperature. A Flash Point is where the minimum temperature at which a substance gives out sufficient vapor to form an explosive atmosphere is reached. A spark from an aluminum ladder on a rusty beam could generate a Flash Point and cause a gas or vapor to explode.”

The problem with hazardous areas is that offshore workers can be unaware that they are entering a potentially explosive area. Electricians and electronic technicians are likely to have received training to gain a full understanding of the hazardous area zones and their importance where electrical equipment is concerned. However, the rig safety preparatory courses offered to many other groups of rig workers, including welders, mechanics, scaffolders, and riggers, don’t give workers adequate in-depth knowledge of the rig zones and their potential for explosive gases and vapors.

The courses available for offshore workers are good but lightweight on hazardous vapors, an area that Scott feels has been almost neglected in training.
“You almost need separate, half day training session to talk on the dangers of vapors,” Scott commented.

While workers are trained to find muster stations in case of a fire, workers with backgrounds outside of electrical/instrumentation jobs are not given enough training in recognizing the dangers of hazardous vapors, Scott noted. The lack of understanding surrounding hazardous areas presents an issue for both offshore and onshore oil and gas facilities.

For example, a rigger going into a hazardous area on and offshore rig and breaking a junction box while trying to use the box as a foothold. These workers need to be warned on the dangers of a spark.

Scott said it wasn’t clear whether the pipe that blew up on the Black Elk platform was in a zoned area. If it was located in a zoned area, it would likely have had a hot work permit and controls to guard against sparks.

“All it takes is for a spark or hot surface to explode,” said Scott. “People don’t and should understand these hazards.”

Better training and better systems for conveying the dangers of hazardous vapors are definitely needed to fill the knowledge gap. While regulations in the U.S. Gulf of Mexico have tightened since the Macondo incident, in Scott’s opinion, the oil and gas industry is not doing enough to alert workers to the dangers of hazardous vapors, beyond the training and electrical and mechanical inspections. The failure of the Deepwater Horizon rig’s blowout preventer was the root but not the cause of the Macondo incident. Instead, the rig blew because gas that was floating around the rig found a spark or a hot surface.

Besides training, another option could be for rigs to clearly inform workers when they are entering a hazardous area which has zones or divisions that could be explosive, such as the signs used in European Union rigs under the Potentially Explosive Atmospheres Directive (ATEX). The directive, which came out in 2003, established what equipment and work environment is allowed in an explosive atmosphere in order to protect employees from explosion risk.

“I would love to go onto a rig and know that I’m going into a hazardous area,” Scott commented, noting that the times he’s been on offshore rigs, he’s found out about a rig’s hazardous areas by accident.

OCS has done one course for the Bureau of Safety and Environmental Enforcement (BSEE) and will conduct another course for BSEE on ignition sources and hazardous areas.

The company has recommended to the Coast Guard a collection of information needed to demonstrate that certain specific requirements have been undertaken with U.S. Gulf and international requirements. The document proposed would contain electrical equipment in hazardous locations documents contain data on previous inspections and maintenance of electrical equipment. The document also would contain Hazardous Area Equipment Register (HAER), supplied by a third party, including Remedial Actions, an Emergency Shut Down register, also supplied by a third party.
The document in the form proposed by OCS also would include:
* A register of Hazardous Areas qualified staff certified by the American Petroleum Institute, International Association of Drilling Contractors, or CompEx
* Mobile Offshore Drilling Unit or Vessel Hazardous Area classification drawings
* Record of Special X conditions for any equipment marked accordingly with certificates of reference
* Notified incident records within the Hazardous Areas and any potential gas/vapor catastrophes outside of Hazardous Areas
* Details of Fire, First Aid and Rescue Services
* Emergency Shut Down register, supplied by a third party

The dossier would be held on the rig or vessel and be easily accessible by the Coast Guard when they visit. The company that operates the rig or vessel or a third party would maintain the data, which would be introduced into the companies’ quality system. The data could be compiled on certified table so the Coast Guard could check against any of the items on the Hazardous Area Equipment Register.

Under the current Safety and Environmental Management Systems (SEMS) 2 requirements, a third party audit of offshore rigs and vessels. The SEMS II final rule enhances the original SEMS rule, or Workplace Safety Rule, issued in October 2010.

SEMS II was passed to provide greater protection by supplementing operators’ SEMS programs with employee training, empowering field level personnel with safety management decisions and strengthening auditing procedures by requiring third parties to conduct auditing activities. The U.S. Coast Guard’s role with SEMS II is to act as police, following up with visits to rigs and vessels to ensure that third party audits have been conducted.

“As a company that performs Ex inspections, in our experience, we know that sometimes Remedial Action’s aren’t closed out,” OCS said in an Aug. 22 letter to the Coast Guard.

In June of this year, the Coast Guard proposed to amend the electrical engineering regulations for electrical installations in hazardous areas that would expand the list of acceptable national and international explosion protection standards. The IEC System for Certification to Standards relating the equipment for use in Explosive Atmospheres also would be added as an acceptable independent third-party certification system for testing and certifying electrical equipment.

The proposed regulations would apply to foreign and U.S. mobile offshore drilling units, floating facilities and vessels that engaged in activities on the Outer Continental Shelf for the first time after the regulations’ effective date. They would also allow owners and operators of U.S. tank vessels to choose the compliance regime in existing regulations on the proposed regulations.

When the ATEX Directive came out in Europe in 2003, complaints arose that equipment had to be classed as in service to be used. What started to happen was that equipment that would be used in non-risk areas could be certified by the company. The self-certification was good for mechanical people. But the ATEX self-certification process slipped out of Europe into the United States, Scott noted. This led to confusion on the Coast Guard’s behalf that companies would self-certify equipment for Zone 2 work, not only mechanical but electrical equipment as well.

Karen Boman has more than 10 years of experience covering the upstream oil and gas sector. Email Karen at kboman@rigzone.com.

Special thanks to Richard Charter

BP Spill, gulf of mexico clean-up, Gulf restoration, marine pollution, natural resource management, ocean pollution, offshore oil, oil pollution

Maritime Executive: NOAA Releases Millions of Chemical Analyses from Deepwater Horizon Oil Spill

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http://www.maritime-executive.com/article/NOAA-Releases-Millions-of-Chemical-Analyses-from-Deepwater-Horizon-Oil-Spill-2013-09-12/

September 12, 2013

Includes data on underwater hydrocarbon plume, dispersants
BY MAREX

NOAA announced the release of a comprehensive, quality-controlled dataset that gives ready access to millions of chemical analyses and other data on the massive Deepwater Horizon Oil Spill. The dataset, collected to support oil removal activities and assess the presence of dispersants, wraps up a three year process that began with the gathering of water samples and measurements by ships in the Gulf of Mexico during and after the oil release in 2010.

NOAA was one of the principal agencies responding to the Macondo well explosion in the Gulf of Mexico, and is the official ocean data archivist for the federal government. While earlier versions of the data were made available during and shortly after the response, it took three years for NOAA employees and contractors to painstakingly catalog each piece of data into this final form.

This Deepwater Horizon Oil Spill dataset, including more than two million chemical analyses of sediment, tissue, water, and oil, as well as toxicity testing results and related documentation, is available to the public online at: http://www.nodc.noaa.gov/deepwaterhorizon/specialcollections.html.

A companion dataset, including ocean temperature and salinity data, currents, preliminary chemical results and other properties collected and made available during the response can be found at: http://www.nodc.noaa.gov/deepwaterhorizon/insitu.html.

The Deepwater Horizon Oil Spill response involved the collection of an enormous dataset. The underwater plume of hydrocarbon — a chemical compound that consists only of the elements carbon and hydrogen — was a unique feature of the spill, resulting from a combination of high-pressure discharge from the well near the seafloor and the underwater application of chemical dispersant to break up the oil.

“The size and scope of this project — the sheer number of ships and platforms collecting data, and the broad range of data types — was a real challenge. In the end, it was a great example of what can be accomplished when you bring together the expertise across NOAA, making this quality-controlled information easily available to the general public for the first time,” said Margarita Gregg, Ph. D., director of the National Oceanographic Data Center, which is part of NOAA’s Satellite and Information Service.

The effort to detect and track the plume was given to the Deepwater Horizon Response Subsurface Monitoring Unit (SMU), led by NOAA’s Office of Response and Restoration, and included responders from many federal and state agencies and British Petroleum (BP). Between May and November 2010, the SMU coordinated data collection from 24 ships on 129 cruises.

The SMU data archived at NOAA’s National Oceanographic Data Center (NODC) is already being used by researchers at NOAA and in academia for a range of studies, including models of oil plume movement and investigations of subsurface oxygen anomalies. In addition to NODC, other parts of the NOAA archive system such as NOAA’s National Geophysical Data Center and the NOAA Central Library contain important holdings. Recently, the library’s Deepwater Horizon Centralized Repository won recognition from the Department of Justice “as one of the best successes in the Freedom of Information Act (FOIA) world last year.”
By law, these data will remain available through NOAA’s archive systems for at least 75 years. Additional data from the Deepwater Horizon/Macondo spill can be found at the NOAA oil spill archive website: http://www.noaa.gov/deepwaterhorizon/ and data collected in the on-going Natural Resource Damages Assessment can be found at: http://www.gulfspillrestoration.noaa.gov/.

Special thanks to Richard Charter

BP Spill, energy policy, fossil fuels, gulf of mexico clean-up, Gulf restoration, marine pollution, national ocean politics, natural resource management, ocean pollution, offshore oil, oil pollution

The Lens Opinion, Times-Picayune: Royalty-screwed: Big Oil likes to confuse severance taxes with cleanup costs

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Royalty-screwed: Big Oil likes to confuse severance taxes with cleanup costs

The Lens
Nola.com

OPINION By Mark Moseley, Opinion writer September 10, 2013 5:00pm

In August, Sen. Mary Landrieu argued that Louisiana deserves a greater share of oil royalty payments, maybe even rates equal to those received by mineral-rich states in the interior, such as Wyoming. With the additional proceeds from offshore production, Landrieu argues, the state can fund its urgent coastal restoration needs:

“Failure is no option. I don’t know if anybody knows where any other money is, but I don’t. If we do not get this [royalty] money, we cannot secure this coast and build the levees we need.”
In fact, Landrieu was well aware of another possible source of money. BP is about to be on the hook for a massive fines related to the 2010 oil spill, and Louisiana will use its share of those billions to jumpstart restoration projects.

Also, the Southeast Louisiana Flood Authority-East’s coastal erosion lawsuit against 97 oil, gas and pipeline companies had been announced in July and – importantly- Landrieu signalled tentative support when she said, “I think we should seek justice everywhere we can find it.”

In 2006, Landrieu successfully shepherded legislation that, beginning in 2017, will increase Louisiana’s royalties from our vast offshore assets. Unfortunately, a $500 million cap prevented the act from being the coast’s saving grace. Landrieu wants to rectify that by removing the cap.

State coastal czar Garret Graves identified increased royalties as a prong in the state’s strategically sequenced tripartite coastal strategy. (It’s a complicated affair.) The other two prongs include BP oil spill money (natch), and “battling with the Army Corps of Engineers over its management of the Mississippi River.” It’s apparently a delicately balanced little stratagem, and Graves is hopping mad at the flood authority lawsuit because it has disturbed the Jindal administration’s priority sequence of coastal restoration funding mechanisms.

One thing is clear, though: The Jindal administration, the oil and gas lobby, and presumably the majority of the state Legislature are not thrilled by the flood authority’s lawsuit. They would prefer that the state’s $50 billion Master Plan to restore the coast be funded through an increased share of oil and gas royalties.

The royalty issue takes on increased importance in light of BP’s recent transformation from “contrite to combative.” Perhaps alarmed by increased potential expenses related to the oil spill, the once-apologetic oil giant has gone from vowing to “make things right” to basically mounting a PR campaign to say it is being victimized by fraudulent Louisianans. Thus it seems that BP will not be paying additional fines or judgements, without first exhausting all of its legal options. And that will likely mean years of delay.

So the royalty option assumes more importance. And this suits the oil and gas companies fine. Restoring the coast with oil and gas royalties gives the illusion that oil giants are paying to fix the coast that they helped to disappear (by slicing it apart with pipelines and navigation channels).
However, they’re not paying anything more than than they used to. Increasing royalties for Louisiana come out of the federal government’s share, not Big Oil’s coffers. It’s additional money for the state, and less for the federal budget.

Flood authority vice chairman John Barry explained in his masterful Lens op-ed:
The industry wants it [the coast] fixed, but they want taxpayers to pay for the damage they did, either in taxes or flood insurance rates. If we succeed in getting a bigger share of offshore revenue, we’re getting it from the federal treasury. From taxpayers in Rhode Island and Oregon – and in Louisiana. The industry won’t be paying a penny more.

This gets to the heart of the royalty dilemma. The rhetoric surrounding the argument Landrieu makes for increased royalties for Louisiana – “we deserve our fair share” and “we need this money to fix our coast” – subtly conflates two different issues.

Royalties, or more accurately, severance taxes, are compensation for the right to extract non-renewable mineral wealth. It’s for removing mineral assets, like oil, that can only be exploited once. Royalties are not a repair cost for extraction, or compensation for environmental impact.

Everyone who touts increased royalties as the smart play toward funding the coastal reconstruction Master Plan is misleading you. They are trying to link royalties and coastal restoration in the public’s mind, as a solution to the problem.

Don’t be misled. Louisiana’s fair share of the mineral wealth is one issue. If we should get a larger percentage of revenues – the same share interior states receive – that would be wonderful.

However, oil and gas companies’ responsibility for our coastal mega-problem is a separate issue. We would deserve increased royalties even if the coast was healthy and flourishing like it was a hundred years ago. As Barry says, Big Oil should pay more to fix the coast that they helped break. If the state acquires more royalty funds and directs them to restore the coast, instead of other urgent needs, that’s still a tremendous sacrifice.

Granted, the odds are long against the lawsuit being successful. Even if it were, oil and gas companies, like BP, will probably use every legal and political device at their disposal to avoid paying judgments promptly. So, increased royalties might become one of Louisiana’s last best politically feasible solutions to fund coastal restoration.

But don’t be fooled, if that’s how it plays out. Taxpayer’s will be paying for the destruction of our coast by the world’s richest corporate sector. Big Oil had a chance to step up, and instead they let the “little people” -as a BP exec once called us- take the hit.

I call that getting royalty-screwed.

Special thanks to Richard Charter