Nelson says BP might not pay full economic damage of its oil leak
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05/05/10 Seán Kinane
WMNF Drive-Time News Wednesday | Listen to this entire show:

BP has reportedly begun to continually spray oil dispersant at the site of the Deepwater Horizon well blowout at an unprecedented depth. That the impact of these chemicals is not well known, but they could be hazardous.

Since the April 20 blast sent millions of gallons of oil gushing into the gulf, BP has unloaded at least 372,000 gallons of dispersant into the water. Researchers say the effects of such a massive application of dispersants is unknown. University of South Florida Biologist John Ogden says the stuff works like soap.

He says the idea is to reduce the concentration of crude.

Ogden added that the use of dispersants is intended not only to water down the oil that’s at sea, but also to keep some of it from washing ashore.

Despite copious application of the chemicals, oil reached the Chandeleur Islands Wednesday. And there’s another problem, Ogden said.

He added there’s no telling what the pieces of dispersed oil might do to ocean creatures that may mistake the small floating oil globules for food. Walter Jaap is an independent consultant for environmental consulting firm Entrix, a company that is advising BP in the wake of the slick. He said the path of the slick and the chemicals used to treat it may become a problem down the road.

Jaap said chemical oil dispersants in high concentrations are detrimental to coral reef ecosystems.

He added that the impacts of the dispersed crude itself should be of concern.

As of yet, scientists are not in agreement on whether the Gulf Loop Current will pick up the slick and everything that comes with it. Some, like University of Miami’s Hans Graber, say it’s already there. But the Florida Department of Environmental Protection says the current is too far south of the slick. Jaap said that however bad dispersants may be for reef systems, they’d likely be diluted once they reached the Keys.

Jaap added that reefs aren’t the only ecosystems at risk.

BP is also using methanol, a toxic alcohol, to prevent ice crystals from forming in a dome with which they plan to once again attempt to cap the leaky well.

Morre WMNF coverage of the Deepwater Horizon oil spill:

BP's track record on safety and are the chemical dispersants harmful to the environment?

Coast Guard holds secret meeting with environmental groups

Seabird sanctuary prepares for oil slick disaster in Tampa Bay

Officials give rosy view on oil spill recovery efforts

Sen Bill Nelson wants pause in exploration until cause of oil spill determined

Nelson says BP might not pay full economic damage of its oil leak

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Exxon appealed

http://en.wikipedia.org/wiki/Exxon_Valdez_oil_spill Litigation and cleanup costs Eagles rescued from the oil spillIn the case of Baker v. Exxon, an Anchorage jury awarded $287 million for actual damages and $5 billion for punitive damages. The punitive damages amount was equal to a single year's profit by Exxon at that time. To protect itself in case the judgment was affirmed, Exxon obtained a $4.8 billion credit line from J.P. Morgan & Co. This in turn gave J.P. Morgan the opportunity to create the first modern credit default swap in 1994, so that J.P. Morgan would not have to hold so much money in reserve (8% of the loan under Basel I) against the risk of Exxon's default. [2 Exxon appealed again. On May 23, 2007, the 9th Circuit Court of Appeals denied ExxonMobil's request for a third hearing and let stand its ruling that Exxon owes $2.5 billion in punitive damages. Exxon then appealed to the Supreme Court, which agreed to hear the case.[21] On February 27, 2008, the Supreme Court heard oral arguments for 90 minutes. Justice Samuel Alito, who at the time, owned between $100,000 and $250,000 in Exxon stock, recused himself from the case.[22] In a decision issued June 25, 2008, Justice David Souter issued the judgment of the court, vacating the $2.5 billion award and remanding the case back to a lower court, finding that the damages were excessive with respect to maritime common law. Exxon's actions were deemed "worse than negligent but less than malicious."[23] The judgment limits punitive damages to the compensatory damages, which for this case were calculated as $507.5 million.[24] Some lawmakers, such as Senate Judiciary Committee Chairman Patrick J. Leahy, have decried the ruling as "another in a line of cases where this Supreme Court has misconstrued congressional intent to benefit large corporations."[25]