THE BLOG
11/15/2012 09:39 am ET Updated Jan 15, 2013

'Circle of Trust' at BP Did Not Include the Government

We may know later today what criminal penalties the U.S. government will impose on BP for its tragic blowout and subsequent oil spill that polluted the Gulf Of Mexico in 2010. FuelFix, the energy blog for the Houston Chronicle, and Reuters are reporting that settlement has been reached, and the fine could be the largest in U.S. history, rising into the billions. Anonymous sources are also reporting the two BP employees may also face manslaughter charges in connection with the deaths that occurred on the rig on April 20, 2010.

As I wrote at the time of the blowout, knowing the actual volume that flowed into the Gulf was critical in calculating the fines that BP would face. After months of flowing oil into the ocean environment, BP succeeded in getting the well shut in without actually measuring the total flow rate from the well. Even though the government later estimated that 4.9 million barrels of oil flowed into the Gulf, BP has never admitted to that volume or given its own calculation beyond the ridiculously low 5,000 barrels per day flow rate it has asserted since the blowout occurred.

In a closed door deposition last month, Marcia McNutt, head of the U.S. Geological Survey, testified that BP did not disclose critical information to the government about the flow rate, and company emails clearly instructed BP employees to not disclose information outside the "circle of trust." Said circle obviously didn't included members of the government who were actually in BP's offices overseeing the efforts to get the well killed and the flow rate measured.

This testimony and evidence that has been disclosed to date confirms what we suspected back in the summer of 2010 as BP's Macondo well roared oil into the ocean environment 5,000 feet below the surface of the Gulf of Mexico: BP intentionally withheld information from the government and the public, intentionally understated the flow rate and slow-played getting containment equipment installed on the well so all of the flow could be captured and then measured. By not measuring actual flow, BP succeeded in obfuscating the volume, thus forcing the government to negotiate ultimate liability without full information.

We can't forget that BP's actions caused the largest environmental disaster in U.S. history. The damage, which continues to this day, is virtually incalculable. Add that damage to the deaths of 11 good men on the night of April 20, 2010, along with the deleterious effects on the health and well being of thousands of Gulf Coast residents in the ensuing years, brings one to the conclusion that no amount of money in fines will compensate for the damage created. We can only hope that lessons learned will prevent another disaster in the future. Unfortunately, our political leaders didn't lead, and fundamental offshore drilling reform was successfully avoided by the industry. Even though well containment equipment is in place and attention is more focused on safety, we continue to drill the deepwater with the same well control equipment, the same rigs and the same safety systems that failed so completely on that fateful night.

We can do better.