In a 153-page order issued today, a federal district judge in Louisiana ruled that the Deepwater Horizon explosion and oil spill was the result of BP's recklessness. Heightening BP's culpability from negligence to recklessness could subject it to even greater fines.
Judge Carl Barbier's memorandum contains copious findings of fact and conclusions of law, the end product of two bench trials lasting eight months and consisting of In re Triton Asset Leasing GmbH, a suit consisting of thousands of civil claims, as well as impleader and interpleader actions by the various business entities involved with Deepwater Horizon, and United States v. BP Exploration & Production Inc., a suit against BP for civil penalties under various federal statutes.
It's Like Watching 'Titanic'
For 111 pages, Judge Barbier penned a tale of an oil rig doomed to failure by a series of poor decisions influenced by a profit motive. First, BP should have stopped drilling in March 2010 when it experienced "kickback" from the well. "BP's decision to drill faster than its geologists could analyze the data from the well, BP's decision to ignore the information it did have, or both. ... The Court agrees that the decision was dangerous and further finds that it was motivated by profit," Barbier wrote.
BP was going to temporarily seal the well and come back to it later. But this series of events, occurring over a span of several weeks, also contained bad judgment calls, which BP had reason to believe were bad. As Barbier explained, BP should have tested its cement cap to be sure it was successful, but didn't. Halliburton should have tested the integrity of its cement, but didn't. BP should have realized that an inconsistent pressure test meant the test failed and the well wasn't sealed, but didn't. And in the minutes before and after the explosion, BP could have taken measures to minimize the catastrophe, but didn't.
BP Was Grossly Negligent
After reciting these facts, the court found that BP was grossly negligent. It placed particular emphasis on the "negative pressure test," which was essentially a pass/fail test and critical to determining whether the well had been successfully plugged. BP officials on the Deepwater Horizon believed the test had succeeded, even as BP officials on land insisted it hadn't. This discrepancy would have let a reasonable person know that the test at least needed to be reconducted to confirm the pressure readings -- and with such a high risk of danger associated with continuing to cap the well in light of a failed test, BP's actions "constitute[d] an extreme departure from the care required under the circumstances."
Even if that act alone wasn't grossly negligent, the court found that the little acts of negligence occurring in the month up to the explosion, together added up to gross negligence -- and some of them "were profit-driven decisions."
Billions With a 'B'
The court found that everyone contributed to the disaster, with BP 67 percent at fault, Transocean 30 percent at fault, and Halliburton 3 percent at fault.
Ordinary negligence would subject the companies to a civil penalty of $1,100 per barrel of oil discharged under the Clean Water Act. Willful or gross negligence, however, shoots the penalty up to as much as $4,300 per barrel of oil. This could subject the defendants as much as $17.6 billion in fines, according to The Guardian's calculations. The court didn't name a final number for penalties.
Of course, BP is going to appeal the decision to the Fifth Circuit.
- The Deepwater Horizon Spill by the Numbers (Popular Mechanics)
- BP: Negligent, But Not Grossly? (Fortune)
- BP Prevails in Deepwater Horizon Insurance Dispute (FindLaw's U.S. Fifth Circuit Blog)
- BP's Bad Bargain Deepwater Settlement Stands, For Now (FindLaw's U.S. Fifth Circuit Blog)