Oil Boom Means More Spilling and Drilling
Just a couple of weeks after BP agreed to fork over $7.8 billion to settle 110,000 claims by Gulf Coast residents affected by the Deepwater Horizon spill, another of the so-called supermajor oil companies, Chevron, has been fined and censured due to sizable ongoing spills.
Several incidents at Chevron rigs in the Frade oil field (roughly 230 miles northeast of Rio de Janerio) since late last year—and as recently as this week—have oozed more than 3,000 barrels of crude into the Atlantic Ocean. Brazilian prosecutors have filed an $11.2 billion civil suit against both Chevron and, voila, its drilling partner Transocean Ltd., for the accidents. Add that to previously assessed fines topping $100 million.
“A sizable oil leak was first detected last November; today (March 20) the company admitted to a “new small seep.” An anonymous source tells Brazilian officials many more spills are imminent.”
Frade is the largest foreign-run oil field in Brazil, producing more than 80,000 barrels of crude oil a day. Though Chevron, the biggest foreign oil company working in Brazil, has temporarily shut down its production operations in the country, there’s talk among local politicians about banning Chevron from Brazil’s oil riches if it doesn’t shape up. Along those lines, 17 employees of Chevron and Transocean had their passports confiscated this week and are banned from leaving Brazil until a full accounting of the recent accidents is made.
According to a report in The New York Times, Brazil’s state-controlled oil giant Petrobas reported 66 oil leaks in the country in 2011, which spilled more than 60,000 gallons. Brazil’s boom, and leaks, are a reminder of just how closely tied drilling and spilling are:
1) While the future of the Keystone XL pipeline is still being hotly debated, a new report by Cornell University claims that spills from tar sands—a heavier and more corrosive oil product that puts greater stress on pipelines—are three times more likely to occur than conventionally accessed oil. The existing Keystone 1 pipeline, operating since 2010, has had 35 spills in its 2,100-mile run.
2) We reported here in 2010 about a one-million-gallon oil spill from tar sands into Michigan’s Kalamazoo River that eventually drifted 40 miles upstream. More than 130 houses have since been abandoned along the river; hunting, fishing and other recreational activities in the area have been forbidden; and the cleanup has cost twice what pipeline operator Enbridge, Inc. originally estimated, so far topping $725 million.
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3) With the two-year anniversary of the Deepwater Horizon explosion on the horizon (April 20), BP was happy to get that $7.8 billion worth of payoffs behind it. But as deepwater drilling picks up off the Gulf Coast, some drilling within Mexican and Cuban waters and out of U.S. cleanup jurisdiction, the company is far from off the hook. The Wall Street Journal reports that civil penalties of $1,100 to $4,300 per barrel (the total spilled was 4.9 million barrels) and additional penalties under the Clean Water Act could cost the company another $21 billion. BP needs to keep on drilling in order to pay off its fines, including ramping up its five deepwater rigs still operating in the Gulf and the three more coming online before year’s end.
4) In the boldest move yet in the exploitation-versus-environmental protection tug-of-war, Shell Oil has preemptively sued 13 environmental groups (Audubon Society, Oceana, Greenpeace, Sierra Club and more) before even drilling its first well. Though the company has spent $4 billion since 2007 on its Chukchi Sea project without sucking a drop of oil from the floor of the Arctic Ocean, it is requesting a federal court to declare in advance that its cleanup response plans are sufficient. The cynical lawsuit suggests the company is preparing not for if an accident may occur, but when.