BP (previously British Petroleum) has turn into one of the world most controversial giant firms because of its involvement in a series of major environmental and industrial accidents. The company has been the target of intense criticism for its function in the April 2010 explosion at a drilling platform in the Gulf of Mexico that killed 11 workers and brought on an underwater leak that spewed tens of millions of gallons of crude oil into the ocean, creating essentially the most critical environmental catastrophe in U.S. historical past.The corporate later pled guilty to manslaughter and other criminal fees and paid billions in fines, penalties and settlements.
This incident within the Gulf occurred whereas BP was nonetheless contending with the authorized and public relations fallout from a deadly explosion at a refinery in Texas, oil spills within the Alaskan tundra, and expenses of manipulating vitality commodities markets. BP has additionally faced human rights prices in nations equivalent to Indonesia, Turkey, and Colombia.
BP bought its begin exploring for oil in Persia (now Iran), the place, in the 1950s, it enlisted the help of the American CIA to overthrow a populist leader who had nationalized the company belongings within the nation. Over the previous quarter-century BP has solidified its position as one of the premier global oil firms with a sequence of acquisitions within the United States: Customary Oil of Ohio (1987), Amoco (1998) and Atlantic Richfield (2000).
Environment and product security
Starting about 2000, BP tried the tough feat of depicting itself as an environmentally friendly oil company. A few of its initiatives were merely symbolicdopting a sunburst logo and claiming that its initials now stood for eyond Petroleum€攚hile others were concrete steps, reminiscent of (modest) investments in solar power. BP marketing campaign was all the harder due to its involvement in controversial Alaskan oil and gas production, and since its environmental compliance file was far from unblemished.
For instance, in 1990 BP agreed to pay a $2.Three million fantastic as part of a settlement of an $eleven million swimsuit that the U.S. Environmental Protection Company (EPA) introduced towards the company in connection with unlawful discharges from BP’s Marcus Hook refinery into the Delaware River. Several months later the state of California sued the company over a four hundred,000-gallon spill of crude oil that occurred in February 1990 close to Huntington Seashore.
In July 1991 BP was one in every of ten major oil firms the EPA cited for discharging contaminated fluids from service stations into or straight above underground sources of drinking water. BP agreed to pay a tremendous of $seventy four,000, and to clean up the contaminated water sources by the top of 1993.
In 1992 the EPA charged BP Chemicals with violating hazardous waste legal guidelines at its plant in Lima, Ohio, and sought nearly $600,000 in penalties.
In 2000 a federal choose imposed a $500,000 criminal wonderful on BP for failing to report the illegal disposal of hazardous waste on Alaska North Slope. The corporate was additionally ordered to ascertain a national environmental management system to prevent future violations. The overall value to the corporate from this and a related civil matter was said to be more than $20 million.
In 2002 BP was fined 拢1 million by UK authorities for violating security regulations in reference to a number of accidents at a refinery in Grangemouth, Scotland (later bought by BP).
In 2003 California South Coast Air Quality Management District filed an omnibus complaint towards BP, searching for $319 million in penalties for thousands of air pollution violations over an eight-12 months interval on the company refinery in Carson. BP acquired that facility through its purchase of Atlantic Richfield in 2000. The company later filed another go well with towards BP for $183 million. In 2005 the events reached a settlement beneath which BP agreed to pay $25 million in money penalties and $6 million in past emissions charges while spending $20 million on environmental enhancements at the refinery and $30 million on group applications targeted on asthma analysis and therapy.
In 2005 BP was accused of making an attempt to cover up deficiencies within the anti-corrosion coating on the 1,000-mile-lengthy Baku-Tbilisi-Ceyhan pipeline that carries oil from Azerbaijan to the Mediterranean. BP is the lead participant within the joint enterprise that operates the pipeline, the largest shareholder within the consortium that owns it, and the operator of the oil fields that supply it.
In March 2006 greater than 250,000 gallons of crude oil spilled at BP Prudhoe Bay operations within the Alaskan tundra. Several month later, the corporate shut down the large Prudhoe Bay oil area because of extra leakage caused by corrosion in the transit line that carried crude oil to the Trans-Alaska Pipeline. There were press experiences that BP had been warned of the problem greater than two years earlier. In Might 2007 the Home Power Committee launched paperwork suggesting that cost-slicing pressures weakened preventive upkeep and other safety practices in the period leading as much as the leaks.
In October 2007 BP agreed to pay a total of $60 million in fines to the EPA. The amount included $50 million for violations of the Clean Air Act in reference to the 2005 explosion at the Texas Metropolis, Texas refinery by which 15 workers have been killed. The company also pleaded guilty to a felony violation of the act and was to serve three years of probation. Other than the tremendous, BP agreed to spend $265 million for a facility-vast research of its safety valves and a renovation of its flare system to prevent excess emissions.
At the identical time, BP agreed to pay the EPA a $12 million wonderful in reference to the March 2006 oil spill in Alaska, pleaded guilty to at least one misdemeanor violation of the Water Act, and was ordered to serve three years probation on this offense as properly. The company was additionally required to substitute sixteen miles of pipeline at a price of $1.56 billion.
Later, in October 2010, BP agreed to pay $15 million in Air Act penalties in connection with violations at the Texas Metropolis refinery.
In 2008 BP and several other other oil majors agreed to pay $422 million to settle suits that had been brought by public water systems in 20 states and consolidated in federal court relating to the contamination of groundwater supplies by the carcinogenic gasoline additive MTBE.
At its annual assembly in mid-April 2010, BP confronted a barrage of criticism over its involvement in controversial tar sands oil manufacturing in Canada.
Deepwater Horizon
Solely days after that assembly, BP needed to take care of a much bigger problem: an explosion at its Deepwater Horizon oil platform in the Gulf of Mexico that killed eleven workers and opened an enormous underwater oil leak. While the catastrophe continued, authorities investigators had been looking into indications that BP pushed for work on the well to maneuver forward despite proof of unsafe situations.
BP additionally confronted criticism over its large use of chemical dispersants to treat the contaminated waters. Some critics charged that the company was using the productnown as Corexit (produced by Nalco)o mask the complete extent of the damage, whereas others pointed out that BP rejected using less toxic and more effective options. Corexit was prohibited by the United Kingdom to be used in oil spills. The final controversy over the use of Corexit had occurred two a long time in the past, when Exxon made heavy use of it during the cleanup of its tanker spill off the coast of Alaska. The oil involved in that 1989 disaster had handed by a pipeline operated by the Alyeska consortium, managed by BP.
As oil continued to gush into the Gulf of Mexico, extra information surfaced suggesting that negligence on BP half contributed to the explosion that trigged the catastrophe. The new Orleans Times-Picayune reported on Might 19 that only hours before the accident BP had instructed workers from the oil companies firm Schlumberger to depart the Deepwater Horizon with out performing a vital check of the power of the concrete that had been pumped into the nicely to seal it. On Might 25 the Home Power Committee reported that its preliminary overview of internal BP paperwork showed that there have been strong warning indicators of a severe downside in the ultimate hours earlier than the explosion.
On Could 27 the new York Occasions reported that several days before the explosion BP chose, partly for financial causes, to make use of a type of casing for the effectively that it knew was the riskier of two choices. Also on Might 27 the U.S. Geological Survey announced new estimates that put the circulation fee of the BP spill at 12,000 to 19,000 barrels per dayar higher than the figure of 5,000 that had been used for the previous month.
In the following days extra evidence got here to mild suggesting that BP was conscious of safety hazards in the drilling operation well earlier than the explosion. It was also reported that BP obtained permission from federal regulators to alter the design of the effectively thrice in a single day per week before the accident.
On June 1 the Obama Administration announced that it had begun civil and criminal investigations of the situation, with Legal professional Normal Eric Holder vowing to “prosecute to the fullest extent of the regulation.” Soon the administration was also criticizing BP’s plan to pay a dividend to shareholders amid the crisis and later acknowledged that the company’s obligations should embody paying the salaries of workers throughout the oil industry who had been laid off due to the moratorium on deepwater drilling imposed by the federal authorities. Given the rising liabilities, a movement referred to as Seize BP emerged to demand that the federal government take management of BP property to make sure these obligations can be met.
These events elevated the anxiety of buyers, who pushed BP’s inventory price low sufficient to generate widespread speculation that the company is likely to be taken over by another oil large. The brand new York Instances reported that funding bankers had been additionally drawing up eventualities for a bankruptcy filing for BP as a solution to restrict its liabilities.
Doubts about BP continued to be heightened by investigative experiences corresponding to one prepared by ProPublica revealing that senior BP managers apparently disregarded a series of internal stories about security and environmental hazards in the corporate’s operations produced over the past decade. And on June 10 a federal panel introduced new estimates indicating that the circulation of oil from the damaged effectively was a lot larger than BP had been claiming.
Because the strain mounted, BP gave in to demands from the Obama Administration that it put $20 billion in escrow to guarantee the financial compensation payments the corporate consented to make to Gulf Coast residents affected by the catastrophe. It additionally agreed to put $one hundred million into a fund to assist oil industry workers laid off because of the drilling moratorium imposed by the Obama Administration within the wake of the gulf accident. To assist finance these measures, BP agreed to suspend paying dividends to its shareholders.
On June 17 BP CEO Tony Hayward was grilled at a Congressional hearing and was repeatedly criticized for being evasive in his responses. But his efficiency was overshadowed by the exceptional apology to BP (later retracted) by Texas Republican Joe Barton for what he called a “shakedown” by the Obama Administration in pushing the escrow fund.
It took more than eighty days earlier than the circulation of oil from the properly, generally known as Macondo, was halted in mid-July. The practically 5 million barrels released into the gulf made it the world largest oil spill into marine waters.
BP then announced that it had set aside $32 billion for -up prices and legal liabilities. The corporate additionally mentioned that Tony Hayward could be replaced as CEO by Robert Dudley, the BP government accountable for the Macondo response. BP also traded accusations with Transocean Ltd., the company from which it leased the Deepwater Horizon, about which was extra to blame for the accident. In September 2010 BP issued the results of its inner investigation, which laid a lot of the blame on Transocean and on Halliburton, which was liable for cement work on the nicely. The following month, a federal commission appointed by President Obama concluded that each BP and Halliburton had been aware that the cement mixture they deliberate to use to seal the bottom of the well was unstable however they proceeded with the work nonetheless.
In December 2010 the federal government sued BP and eight other corporations in connection with the accident, charging them with violations of the Water Act and the Oil Pollution Act. Criminal fees had been later brought towards a former BP engineer for destroying evidence by deleting textual content messages that mentioned the quantity of oil that was leaking from the broken properly.
A federal report issued in September 2011 concluded that BP efforts to cut back prices connected to the Macondo nicely contributed to the situations that induced the blowout and the huge spill. In March 2012 BP agreed to pay $7.8 billion to settle a civil lawsuit introduced on behalf of 1000’s of people and businesses affected by gulf accident.
In November 2012 BP agreed to plead responsible to felony manslaughter, environmental and obstruction-of-Congress prices for its conduct related to the Macondo catastrophe. The company additionally consented to pay a report $4 billion in fines and penalties–the biggest criminal restitution in U.S. historical past. At the identical time, BP agreed to pay $525 million to settle Securities and Alternate Fee costs that it made deceptive statements to traders concerning the magnitude of the oil spill. Two BP supervisors engaged on the Deepwater Horizon had been charged individually for manslaughter whereas a third was charged with obstructing Congress and making false statements to legislation enforcement officials.
Later in November 2012, the federal authorities additionally briefly barred BP from acquiring new authorities contracts. In January 2013 Transocean agreed to pay $1.Four billion to settle the federal civil and criminal expenses that had been filed in opposition to the company. In July 2013 Halliburton pleaded guilty to a cost of destroying essential proof and was fined the utmost of $200,000; it additionally agreed to make a contribution of $fifty five million to the Nationwide Fish and Wildlife Foundation. A year later, Halliburton agreed to pay $1.1 billion to settle lawsuits introduced by Gulf Coast residents, local governments and businesses affected by the spill.
In September 2014 a federal choose in New Orleans, characterizing BP’s conduct as grossly negligent and reckless, concluded that the company was primarily liable for the disaster. In 2015 BP settled all remaining federal, state and local civil claims for a complete of $20.8 billion. The biggest parts of that quantity were a $5.5 billion Water Act penalty, $8.1 billion in pure sources damages and $four.9 billion in financial damages to state and native governments.
In July 2016 BP estimated that its costs referring to Deepwater Horizon would ultimately attain $61.6 billion.
Workplace Safety
BP has one of many worst worker safety information amongst giant industrial corporations operating in the United States. The biggest blot on its document came in March 2005, when 15 workers had been killed and about 180 had been injured in a massive explosion at the company refinery in Texas Metropolis, Texas. The company blamed employees for inflicting the accident, however each the Occupational Safety and Well being Administration (OSHA) and the Chemical Safety and Hazard Investigation Board pointed to deficiencies in company security insurance policies. In September 2005 OSHA announced a settlement below which BP agreed to pay a document $21.4 million in fines for practically 300 gregioussecurity violations and many other violations deemed willful and severe.
In its report, the investigation board found that cost-reducing measures implemented by BP administration contributed to a deterioration of security conditions at the refinery. Even a company-sponsored evaluation of the accident led by former U.S. Secretary of State James Baker was essential of administration.
In April 2006 OSHA proposed fines of $2.Four million after discovering unsafe conditions at BP refinery close to Toledo, Ohio, that were much like those that contributed to the Texas Metropolis catastrophe.
In October 2009 OSHA introduced that BP was not dwelling as much as its obligations below the settlement agreement referring to the Texas Metropolis catastrophe, and proposed a fair bigger advantageous 87.Four milliongainst the company for permitting unsafe circumstances to persist. BP challenged the high-quality and later agreed to pay $50.6 million.
In December 2009 a federal jury awarded greater than $100 million to 10 employees who said they were uncovered to toxic substances on the Texas City facility in 2007.
In March 2010 OSHA cited BP Toledo refinery, now run jointly with Husky Energy, for 42 willful violations and proposed a wonderful of greater than $three million.
BP enormous oil spill within the Gulf of Mexico started with an April 20, 2010 explosion at an offshore drilling rig that killed 11 staff. Following that incident, the middle for Public Integrity analyzed OSHA records and located that two refineries run by BPhe ones in Texas Metropolis and Toledoccounted for 97 % of all flagrant violations found in the refining industry over the past three years.
In July 2012 BP agreed to pay $13 million to resolve yet more violations in Texas City.
In October 2012 BP introduced that it had sold the Texas City refinery to Marathon Petroleum.
Human rights
BP was one in all about two dozen massive firms named as defendants in a lawsuit filed in U.S. federal court in 2002 that accused the businesses of aiding and abetting crimes towards humanity dedicated by the federal government of South Africa through the apartheid period. After surviving various challenges that went all of the strategy to the U.S. Supreme Court, the case continued and is pending.
Groups such because the Kurdish Human Rights Venture have criticized BP Baku-Tbilisi-Ceyhan pipeline not just for environmental causes but also for human rights abuses reportedly perpetrated on opponents of the pipeline undertaking in Turkey.
In 2004 some 300 non-governmental organizations and people sent a protest to the chairman of BP complaining that the company had failed to meet its commitments concerning the safety of human rights in reference to the Tangguh pure gas mission in Indonesia. Those deficiencies persisted, prompting advocacy groups to ship one other letter to high BP administration in 2008.
In 2009 a gaggle of Colombian farmers filed swimsuit against BP in British court docket, alleging that the company pipeline of their country brought about landslides and damage to soil and groundwater, thus harming their crops, livestock and fish ponds.
Anti-competitive Practices and Client Safety
In 2003 BP paid $2.5 million to settle costs brought by the brand new York Mercantile Trade alleging that the company had on quite a few events engaged in prohibited practices in oil buying and selling.
In 2006 the Commodity Futures Trading Commission (CFTC) accused BP of secretly and illegally cornering the U.S. propane market in 2004, driving up heating and cooking costs for thousands and thousands of Americans, especially in rural areas. In 2007 BP agreed to pay a record $303 million in penalties to the CFTC to resolve the charge. Expenses relating to manipulation of the propane market had been additionally introduced against a number of BP traders.
Also in 2006, it was reported that both the CFTC and the Justice Department have been investigating BP’s possible manipulation of the over-the-counter crude oil market in 2003 and 2004, and the gasoline market in 2002.
Royalty Disputes
In 2000 BP agreed to pay $32 million to resolve U.S. prices that had been introduced towards it beneath the False Claims Act alleging that the company had underpaid royalties on oil produced on federal and Indian leases since 1988.
Other Data Sources
Violation Tracker summary page
Watchdog Teams and Campaigns
Baku-Ceyhan Campaign
Meals and Water Watch
Associates of the Earth Worldwide
Greenpeace Worldwide
Worldwide Federation of Chemical, Energy, Mine and Normal WorkersUnions (ICEM)
Khulumani Assist Group
Kurdish Human Rights Undertaking
Oil Change International
Oilwatch
PLATFORM
Undertaking On Authorities Oversight
Publish What You Pay
Seize BP
TAPOL
United Steelworkers
Key Books and Studies
Adventure in Oil: The Story of British Petroleum by Henry Longhurst (Sidgwick and Jackson, 1959).
Drowning in Oil: BP and the Reckless Pursuit of Profit by Loren C. Steffy (McGraw-Hill, 2011).
Some Frequent Issues: Imagining BP Azerbaijan-Georgia-Turkey Pipelines System by PLATFORM et al. (2002)
The History of the British Petroleum Firm: The Developing Years, 1901-1932 by R.W. Ferrier (Cambridge College Press, 1982).
The Seven Sisters: The good Oil Companies and the World They Made by Anthony Sampson (Viking Press, 1975).
Green Phrases, Soiled Deeds: A PIRG Expose of BP Amoco’s Greenwashing by Athan Manuel of the U.S. Public Interest Analysis Group Education Fund (October 1999).
