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Wednesday, Dec 15, 2010 7:25 PM UTC

Obama Justice Department sues BP for Gulf oil spill

Administration's lawsuit names nine companies, seeking damages and civil penalties under Clean Water Act

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Topics: Gulf Oil Spill, Department of Justice,

The Justice Department on Wednesday sued BP Exploration and Production Inc. and eight other companies in the Gulf oil spill disaster in an effort to recover billions of dollars from the largest offshore spill in U.S. history.

The Obama administration’s lawsuit asks that the companies be held liable without limitation under the Oil Pollution Act for all removal costs and damages caused by the oil spill, including damages to natural resources. The lawsuit also seeks civil penalties under the Clean Water Act.

An explosion that killed 11 workers at BP’s Macondo well last April led to oil spewing from the company’s undersea well — more than 200 million gallons in all by the government’s estimate. BP disputes the figure.

The department filed the suit in federal court in New Orleans.

The other defendants in the case are Anadarko Exploration & Production LP and Anadarko Petroleum Corp.; MOEX Offshore 2007 LLC; Triton Asset Leasing GMBH; Transocean Holdings LLC and Transocean Offshore Deepwater Drilling Inc. and Transocean Deepwater Inc.; and BP’s insurer, QBE Underwriting Ltd./Lloyd’s Syndicate 1036.

Anadarko and MOEX are minority owners of the well that blew out. Transocean owned the rig that BP was leasing.

QBE/Lloyd’s can be held liable only up to the amount of insurance policy coverage under the Oil Pollution Act and is not being sued under the Clean Water Act.

The lawsuit alleges that safety and operating regulations were violated in the period leading up to April 20.

It says that the defendants failed to keep the Macondo well under control during that period and failed to use the best available and safest drilling technology to monitor the well’s conditions. They also failed to maintain continuous surveillance and failed to maintain equipment and material that were available and necessary to ensure the safety and protection of personnel, equipment, natural resources and the environment, the suit charges.

Before Wednesday, potential class-action lawsuits had been filed in the Gulf oil spill by fishing and seafood interests, the tourism industry, restaurants and clubs, property owners losing vacation renters — even vacationers who claim the spill forced them to cancel and lose a deposit. So far, more than 300 suits have been spawned by the spill and consolidated in federal court in New Orleans.

Wednesday’s move by the Justice Department follows the Obama administration’s decision not to open new areas of the eastern Gulf and Atlantic seaboard to drilling. That marked a reversal from an earlier decision to hunt for oil and gas, an announcement the president himself made last spring three weeks before the spill.

The staff of a presidentially appointed commission looking into the spill has said that the disaster resulted from questionable decisions and management failures by three companies: BP, the well owner and operator; Transocean, the owner of the Deepwater Horizon rig; and Halliburton.

The panel found 11 decisions made by these companies increased risk. Most saved time, and all but one had a safer alternative.

Separately, an administrator is doling out money to Gulf oil spill victims from a $20 billion fund of BP money.

The Justice Department isn’t the first government entity to sue BP. Alabama Attorney General Troy King filed federal lawsuits in August on behalf of the state against BP, rig owner Transocean, cement contractor Halliburton Energy Services Inc. and other companies that worked on the ill-fated drilling project.

U.S. District Judge Carl Barbier is presiding over most of the consolidated federal suits. In September, Louisiana Attorney General James “Buddy” Caldwell’s office asked Barbier to create a “government case track” to handle government-related suits separately from other claims. The judge hasn’t ruled on that request yet.

Other companies that were not targeted by the Justice Department lawsuit could be added later if the department decides that the evidence warrants it.

Among the other companies whose names have emerged in the aftermath of the spill are Halliburton, which handled the cementing of the well; and Cameron International, which made the blowout preventer that apparently failed to stop the gusher after the rig exploded last April 20.

More Associated Press.

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Fire and oil in the Gulf of Mexico, April 29, 2010

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