Bloomberg News

BP Says U.S. Withholding Evidence of Extent of Oil Spill

March 30, 2012

The U.S. estimated in August 2010 that 4.9 million barrels of oil, plus or minus 10 percent, spilled into the Gulf after a rig exploded. Photographer: Kari Goodnough/Bloomberg

The U.S. estimated in August 2010 that 4.9 million barrels of oil, plus or minus 10 percent, spilled into the Gulf after a rig exploded. Photographer: Kari Goodnough/Bloomberg

BP Plc (BP/) said the U.S. government is withholding evidence that would show the oil spill from the Macondo well in the Gulf of Mexico was smaller than claimed.

BP has identified 10,000 documents, out of more than 80,000 the government sought to suppress, that relate to estimates of the April 2010 spill, the London-based oil producer said in a filing yesterday in federal court in New Orleans. The U.S. estimated in August 2010 that 4.9 million barrels of oil, plus or minus 10 percent, spilled into the Gulf after a rig exploded.

“Despite the United States’ declaration that it was ‘ground truth,’ the Aug. 2 estimate was in fact the fourth official estimate” to be released, BP said in the court filing.

BP said March 2 it would pay at least $7.8 billion to resolve private plaintiffs’ claims for economic loss, property damage and injuries. A magistrate judge in New Orleans today predicted a multiphase trial over liability for the spill will still go forward.

David Nicholas, a BP spokesman, declined to comment immediately on the filing. Wyn Hornbuckle, a U.S. Justice Department spokesman, also declined to comment.

U.S. Attorney General Eric Holder said Feb. 28 that the U.S. has a “strong” case over liability for the explosion that ripped through the Deepwater Horizon drilling rig, killing 11 workers and triggering the biggest U.S. offshore oil spill.

Potential Fines

BP may face as much as $17.6 billion in civil pollution fines under the U.S. Clean Water Act, based on the government’s estimate of barrels spilled.

“The United States is using a privilege intended to protect discussions and deliberations in advance of policy determinations to shield documents reflecting discussions and deliberations concerning a factual issue, the amount of oil discharged,” BP said.

The law provides for fines of as much as $1,100 for each barrel of oil spilled as a result of simple negligence, often described as a failure to exercise ordinary care. The maximum fine will increase to $4,300 a barrel if BP or the other defendants are found to have been grossly negligent, meaning a conscious action or omission caused the spill.

BP said “fundamental fairness” requires the disclosure of documents that may help it in its defense.

“It is the United States that has brought this case, seeking large monetary penalties against BP,” the oil company said. “When the government seeks relief, it is fundamentally unfair to allow it to evade discovery.”

‘Going Forward’

U.S. Magistrate Judge Sally Shushan expects the liability case to proceed, she told lawyers for BP; Transocean Ltd. (RIG:US), the Venier, Switzerland-based owner of the Deepwater Horizon drill rig that exploded; and Halliburton Co. (HAL:US), which supplied cement for the rig, as well as attorneys for the federal and several state governments.

“I think we’re going forward with the remainder” of the liability case over the explosion, and then the government’s environmental claims will be heard in a separate phase of the trial on “source control” for the oil spill, Shushan said at a hearing today. “That’s my position and I’m sticking to it.”

“We’d be very interested in smoking out who wants to go forward and why?” BP attorney Rob Gasaway told Shushan.

Closed-Door Meeting

Shushan’s job is to make recommendations on evidentiary issues in the case to U.S. District Judge Carl Barbier, who is overseeing the consolidated spill litigation. Barbier is scheduled to hold a closed-door meeting with lawyers for the parties May 3 to discuss how to proceed with the case.

The accord BP reached this month with businesses and individuals is to be paid from a $20 billion trust set up in 2010 for victims. BP has set aside $37 billion to cover spill costs.

The case is In re Oil Spill by the Oil Rig Deepwater Horizon in the Gulf of Mexico on April 20, 2010, MDL-2179, U.S. District Court, Eastern District of Louisiana (New Orleans).

To contact the reporter on this story: Joe Schneider in Sydney at jschneider5@bloomberg.net; Allen Johnson Jr. in New Orleans at allenmct@gmail.com

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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  • RIG
    (Transocean Ltd)
    • $18.89 USD
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  • HAL
    (Halliburton Co)
    • $39.73 USD
    • 0.03
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