Beyond Petroleum:

1
Beyond Petroleum
The Coexistence of the Oil and Fishing
Industries At What Cost?
F

2
From the Mouths of Babes
3
Deepwater Horizon Disaster
April 20, 2010
4
The Damage Done
5
BP has said this accident was unforeseeable
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NoticeIxtoc Oil Spill 1979
On June 3, 1979, the Mexican government's oil
company Pemex was drilling a deep oil well in the
Gulf of Mexico when the well suffered a blow out
resulting in one of the worst oil spills in human
history. At the time of the incident the
drilling was conducted at about 11,800 feet below
the sea floor.
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NoticeIxtoc Oil Spill 1979
In the initial stages of the spill, an estimated
30,000 barrels of oil per day were flowing from
the well. In July 1979, the pumping of mud into
the well reduced the flow to 20,000 barrels per
day, and early in August the pumping of nearly
100,000 steel, iron, and lead balls into the well
reduced the flow to 10,000 barrels per day. A
total of 3.3 million barrels entered the Gulf of
Mexico as a result. Compare current BP 2010
disaster 60,000 barrels a day
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NoticeIxtoc Oil Spill 1979
An average of about 10 to 30 thousand barrels a
day were discharged into the Gulf. The well was
finally capped on March 23, 1980, nearly 10
months later. Ultimately, 71,500 barrels of oil
impacted 162 miles of U.S. beaches.
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Safety Violations

• 2000 In February, BP crew in the Gulf of Mexico
  pushed the wrong button severing the rig from the
  blowout system causing an oil leak.
• - Mineral Management Service
  Safety Alert No.186, March 3, 2000
• 2002 California officials allege BP falsified
  inspections of fuel tanks at a Los Angeles
  refinery and more than 80 of the facilities
  didnt meet requirements to maintain storage
  tanks without leaks or damage. BP settled a
  lawsuit brought by the South Coast Air Quality
  Management District for more than 100m.
• - Reports at BP over years find
  history of problems,
• The Washington Post, June 8,
  2010,
• by Abraham Lustgarten and Ryan Knutson

10
Safety Violations

• 2005 A BP Texas City refinery exploded, killing
  15 people. The investigation uncovered that a
  warning system failed and that significant
  process safety issues exist at all five U.S.
  refineries, not just Texas City.
• 2006 In March, more than 200,000 gallons of oil
  spilled from a corroded hole in the Prudhoe Bay
  pipeline in Alaska. Inspectors found that
  several miles of the steel pipe had corroded to
  dangerously thin levels. BP had received
  multiple warnings about their Alaskan pipelines
  since 2002.
• - Reports at BP over years find
  history of problems,
• The Washington Post, June 8,
  2010,
• by Abraham Lustgarten and Ryan Knutson

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Safety Violations

• October 25, 2007, the Justice Department settled
  with BP at 20 million in penalties and three
  years' probation, 12 million of criminal fine.
• - May 19, 2010 Panel I of a Hearing of
  the House and
• Transportation and Infrastructure
  Committee
• 2008 In September, a section of gas pipeline on
  an Alaskan slope blew apart, flying nearly 1000
  feet through the air before landing on the
  tundra.
• 2009 Three separate accidents plagued the same
  Alaskan pipeline system, one of which was a
  near-catastrophic explosion. Congress sent a
  letter to BP stating these accidents were a
  result of malfunctioning safety and backup
  equipment.
• - Reports at BP over years find
  history of problems,
• The Washington Post, June
  8, 2010,
• by Abraham
  Lustgarten and Ryan Knutson

12
Safety Violations

• The blowout preventer is BPs key failsafe
  mechanism
• Testimony of Lamar McKay, President of BP
  May 19, 2010, Panel I of a Hearing
  of the House and Transportation and
  Infrastructure Committee

13
Safety Violations

• Deepwater Horizon seamen discovered a BOP leak
  two weeks before the blowout in early April of
  2010.
• On July 21, 2010 it was revealed that 45 of
  BOP's fail. 
• - Regulators Failed to Address
  Risks in Oil Rig Fail-Safe Device,
  New York Times, June 20, 2010.

14
Tony Hayward, CEO of BP
15
BPs Public Statements Day 9

• What the hell did we do to deserve this?
• BP Chief Tony Hayward
• Oil Spills Blow to BPs Image
  May Eclipse Costs, New York Times,
  April 29, 2010

16
Safety Violations

• First is this whole issue of the ultimate safety
  device, the blowout preventer failing. If the
  blowout preventer had functioned as intended, we
  would be dealing with a very serious industrial
  accident, but we wouldnt be dealing with an oil
  spill.
• BP CEO Tony Hayward
• In His Own Words Forbes QA with BPs Tony
  Hayward,
• Forbes.com, May 18, 2010, by
  Christopher Helman

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BPs Public Statements Day 24
The Gulf of Mexico is a very big ocean. The
amount of volume of oil and dispersant we are
putting into it is tiny in relation to the total
water volume. - May 14, 2010
Tony Hayward, BP CEO
18
Willful and Wanton Conduct

• The oil is on the surface
• There arent any plumes.
• BP sampling showed no evidence
• that oil was suspended in large masses
• beneath the surface.
• Meanwhile, a twenty-two mile long, six mile wide
  and more than a thousand feet deep plume was
  being reported by the University of South Florida
  and other Southeastern educational institutions.
• BP CEO Tony Hayward
• BP CEO disputes claims of
  underwater oil plumes,
• AP, May 30, 2010

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BPs Public Statements Day 28
Tony Hayward, BP CEO I think the environmental
impact of this disaster is likely to be very,
very modest. - May 18, 2010
20
BPs Public Statements Day 27

• The Gulf of Mexico spill response plan is four
  inches thick. Its approved every two years.
• BP CEO Tony Hayward
• In His Own Words Forbes QA with BPs Tony
  Hayward,
• Forbes.com, May 18, 2010, by
  Christopher Helman

21
BP Oil Spill Response Plan

• The covers of the five response plans are 4
  different colors, but the content is 90 percent
  identical. Like BP, three other companies include
  references to protecting walruses, which have
  not called the Gulf of Mexico home for 3 million
  years.

• the only technology the oil companies seem to
  be relying upon is a Xerox machine to put
  together their response plans
• - Representative Edward J. Markey
• Drilling Down on Americas Energy Future
  Safety, Security, and Clean Energy
• Hearing before the Committee on Energy and
  Commerce
• June 15, 2010

22
Transocean

• MR. HAYWARD This wasn't our accident. This was a
  drilling rig operated by another company. It was
  their people, their systems, their processes.
•   We are responsible, not for the accident, but
  we are responsible for the oil and for dealing
  with it and cleaning the situation up.
• MR. STEPHANOPOULOS You're not responsible for
  the accident?
• MR. HAYWARD The drilling rig was a Transocean
  drilling rig. It was their equipment that failed.
  It's their systems and processes that were
  running it.
• - ABC Good Morning
  America Interview with Tony Hayward,
  British Petroleum Chairman Subject Gulf Coast
  Oil Spill, May 3, 2010

23
Who is Responsible?
THE CORPORATIONS
Halliburton Energy Services Inc, provided
drilling services on the rig. Halliburton was in
the process of cementing the wellhead when the
blowout occurred.
Owners of Mississippi Canyon Block 252 license
where the well was drilled.
As for BP, The Partners are liable for costs in
proportion to their holdings.
BP Leased the Deepwater Horizon rig from
Transocean, The worlds largest offshore drilling
firm based in Switzerland.
The Blowout equipment which failed on the
Deepwater Horizon rig was maintained by Cameron
International Corp, a subsidiary of Transocean.
24
Corporate Finger-pointing
25
Tony Haywood, BP CEO

•  Id like my life back.
• BP CEO Tony Hayward
• Business Insider, June 2, 2010,
  by Gus Lubin
•  

26
Selling the Fund

• The BP Fund Kenneth Feinberg Mr. Fairness
• The Oil Protection Act 1990
• Multi-District Litigation New Orleans, LA

27
BP Claims Process
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BP's USA Today full page AD on the Claims Process
June 10th, 2010

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Whats happening within the BP Claims Processing
  "When we talk, we'll help people determine what
documents they need. We will be in touch in four
days or less and can issue them a check right on
the spot. - June 10, 2010
50 million dollars spent by BP on advertising
alone in May 2010.
30
Whats really happening within the BP
Claims Processing

• Compare what our clients were told by BP claims
  officials the same time this full page national
  ad and PR campaign ran

• Well, we dont actually have any checks yet
  6/10/2010 (BP claims personnel)
• We may get checks next week 6/11/2010
  (BP claims personnel)

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Whats really happening with the BP
Claims Processing

• While BP was claiming it was making this
  right, BP had policemen and police cars at every
  distribution center to welcome the fishermen.
• And for those trying to forget Hurricanes Katrina
  or Wilma or Ivan? Think of me like an
  adjuster 6/10/2010
• (BP claims personnel)

32
BP Claims Process

• BPs adjusters are given a script and using a
  matrix and intentionally beating down people in
  need.
• As of Tuesday, June 15, 2010, BP adjusters had
  paid less than 12 (twelve percent) (71 million
  dollars out of an estimated 600 million) of
  submitted claims for relief by individuals and
  businesses impacted in the Gulf.
• - House of Representatives,
• Committee on the Judiciary,
• 6/15/2001

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BP Fund
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BP Fund
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BP Fund
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BP Fund
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BP Fund
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BP Fund
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Stabilizing the Industry

• Lifting the Moratorium on Drilling October 2010
• Threats of Pulling out of Gulf
• 11 of BPs Revenue from the Gulf
• Are the rigs any safer?
• Is the fishing industry any more secure?