While Transocean Pays for Gulf Oil Spill, Shell Has Another Arctic Mishap

How’s this for ironic timing? As Shell fumbles once again in its push to drill in the Arctic, another settlement has been reached on the 2010 Deepwater Horizon oil spill in the Gulf of Mexico.

The US Justice Department announced that Transocean, which owned the drilling rig that exploded, will pay an unprecedented $1 billion in civil penalties and $400 million in criminal fines to resolve Clean Water Act claims and other environmental infractions.

The company is also required to adopt measures to improve  operational safety and emergency response systems at all  drilling sites in US waters.

"This resolution of criminal allegations and civil claims against Transocean brings us one significant step closer to justice for the human, environmental and economic devastation wrought by the Deepwater Horizon disaster," says US Attorney General Eric Holder. "This agreement holds Transocean criminally accountable for its conduct and provides nearly a billion dollars in criminal and civil penalties for the benefit of the Gulf States."

Under the settlement, $150 million of the criminal fines will go toward restoring marine and coastal habitats in the five Gulf states harmed by the spill.

The same amount will fund improved oil spill prevention and response efforts in the Gulf.

The record civil settlement will go toward funding the Restore Act, under with 80% will go toward ecological restoration.

In December, BP agreed to a record $4.5 billion criminal penalty for its role in the disaster – pleading guilty to obstructing Congressional investigation into the spill, lying about the volume of oil spilled, and for misconduct that resulted in the deaths of 11 people when the Macondo well blew out.

BP still faces civil fines and two of its managers have been charged with manslaughter. Halliburton faces a separate settlement. 

While the fines seem big, they cover a mere fraction of the clean-up costs. Here’s what Greenpeace senior investigator Mark Floegel said when BP’s $4.5 billion settlement was announced: 

"This fine amounts to a rounding error for a corporation the size of BP. Nothing in this proposed settlement gives any oil company incentive to be more careful in future operations. Cutting corners and skimping on safety will still be the rule of the day. Shell will now be eager to return to the Arctic Ocean in 2013, knowing that its inevitable oil spills will be met with similar slaps on the wrist. Indeed, if one looks at the fate of BP’s stock price – the only metric of value in the corporate world – it’s clear that far from a penalty, this proposed settlement would be a reward to BP."

Potential Arctic Spill Looms

These comments are all the more poignant because of Shell’s latest mishap off the coast of Alaska – under near-hurricane-force winds, the company’s oil rig ran out of control on New Year’s Eve.

Crews cut it loose when they couldn’t control it in one of the most pristine areas off the Alaskan coast, and it ran aground.

Why was Shell towing a rig from Alaska to Seattle on New Year’s Eve during such bad weather? If Shell had been in Alaskan waters on January 1, it would have been subject to state taxes of $6 million to $7 million. 

"In just one year, Shell has proven over and over again that they are completely incapable of safely drilling in the Arctic. Their ships have caught fire and lost control, they’ve damaged their own spill containment equipment, and they’ve been caught entirely unprepared for the challenges of the Arctic. Now, they’ve actually run a ship carrying tens of thousands of gallons of oil aground in Alaska," says Michael Brune, executive director of Sierra Club. 

"This is the last straw. We should judge Shell not by their assurances or their PR tactics, but by their record – and Shell’s record clearly demonstrates that letting them operate in the Arctic is an invitation for disaster.

America’s Arctic – whether offshore or in the Arctic Refuge – is the last place we should be drilling for oil and gas. If we are serious about fighting climate disruption and protecting our wild places, the President should immediately cancel Shell’s drilling permits before it is too late, and ensure the Arctic is off-limits for new oil and gas leasing and drilling this year and every year," says Brune.

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