NEW ORLEANS – An executive for the BP subsidiary that faces billions of dollars in possible fines for the 2010 Gulf of Mexico oil spill testified Tuesday that it is uncertain whether other BP entities would step in to help pay a steep penalty.
The day’s first witness was Richard Morrison, regional president and chairman of the board for BP Exploration and Production, often referred to in court as BPX&P. He acknowledged three times since the spill when BP entities have aided his corporation with loans or equity purchases but added that he had no way of knowing whether parent corporation BP PLC or other entities would provide more help.
“They have to consider the overall business environment that we’re going into,” Morrison said. “The ability of not only BPX&P, but all of their businesses around the world to generate cash from their operations at oil prices less than 50 bucks a barrel.”
Morrison and others testified as BP attorneys sought to convince U.S. District Judge Carl Barbier that BP should pay far less than the estimated $13.7 billion maximum penalty for the deadly 2010 disaster. Justice Department attorneys last week outlined their case that the environmental, economic and social damage caused by the spill warrants a penalty at or near the maximum.
The April 20, 2010, explosion of the Deepwater Horizon rig killed 11 workers at BP’s Macondo well and sent oil spewing into the Gulf for 87 days.
The trial is expected to last into next week, and a ruling from Barbier isn’t expected until April at the earliest.
Morrison described a “move-heaven-and-earth” response to the spill, working with the U.S. Coast Guard and state and local governments. BP lawyers walked him through charts and financial reports, seeking to bolster the argument that a high penalty would put an undue financial strain on the company.
An environmental expert testifying for BP said Tuesday that only about 2 per cent of water samples taken in the months after the spill showed levels of oil that exceeded Environmental Protection Agency benchmarks for safety of aquatic life.
The testimony from Damian Shea of the University of North Carolina was aimed at countering last week’s testimony by experts for the Justice Department that the spill did widespread potential harm, as well as the observed harm in the form of oiled birds and other wildlife.
Shea said findings that few water or sediment samples exceeded EPA benchmarks came as no surprise, given the type of oil spewed — a light crude — and the action of the Gulf. He testified that only 16 of more than 5,000 water samples showed above-EPA-benchmark levels for a potentially harmful chemical found in dispersants, a figure he said was similar to the government’s own studies.
Late Tuesday, Elliott Taylor, an oil spill expert with an oceanography doctorate, said Gulf shorelines have recovered well, including delicate coastal marshes. “Most of the marshes look very comparable to un-oiled areas,” Taylor said. He said oil remains in some heavily oiled marshes where the oil is being allowed to naturally diminish. He also said his analysis found no relationship between the oiling of marshes and acceleration of coastal erosion.
BP has argued that the government has failed to use its own data in pressing for a heavy fine. BP lawyers also have argued that some $42 billion in other spill-related costs faced by the corporation have already done much toward fulfilling Clean Water Act goals of encouraging a strong response and deterring future risky practices.