Justice Department And Transocean Reach a $1.4 Billion Settlement Over Gulf Oil Spill

New Orleans, LA – A series of government probes has doled out blame for the nation’s worst offshore oil spill among corporate giants BP, Transocean, and Halliburton.

Thursday the US Justice Department reached a $1.4 billion settlement with Transocean Ltd., owner of the drilling rig Deepwater Horizon, that caused the massive 2010 Gulf of Mexico oil spill when it exploded and sank.

On the eve of April 20, 2010 the Deepwater Horizon was drilling in water a mile deep, about 80 kilometers southeast of the Louisiana coast, when it blew.

Engineers made attempts to halt the flow of oil from BP’s ruptured well. Nevertheless millions of gallons of crude surged out into the ocean. Marsh lands, coastal beaches, and fishing grounds across the northern Gulf were contaminated by crude. The rig burned for about 36 hours before sinking. Eleven workers were killed.

According to USA Today Transocean has agreed to plead guilty to a misdemeanor charge of violating the Clean Water Act. Therefore, the Switzerland-based company is required to pay $1 billion in civil penalties and $400 million in criminal penalties. Transocean will also have to implement a series of operational safety and emergency response improvements on its rigs. The $1.4 billion is intended to fund environmental restoration foundations and spill-prevention research. The company has two years to pay the $1 billion civil penalty.

The persistent Deepwater Horizon oil spill surpassed that of the 1969 Santa Barbara oil spill in Southern California and the Exxon Valdez oil spill that occurred in Prince William Sound, Alaska, on March 24, 1989.

BP Spill 1

The Environmental Protection Agency (EPA) oversees the provisions of the Clean Water Act (CWA). The CWA, enacted in 1948, was called the Federal Water Pollution Control Act, but was expanded and amended in 1972 as the Clean Water Act. The CWA makes it unlawful to discharge any pollutant from a point source into navigable waters, unless a permit was obtained. EPA’s National Pollutant Discharge Elimination System (NPDES) permit program controls discharges. The EPA enforces requirements under the Clean Water Act (CWA) and Safe Drinking Water Act (SDWA), which protect the quality of drinking water in the US. This law focuses on all waters actually or potentially designed for drinking use, whether from above or underground sources.

BP Spill 2

The settlement, upon approval of a federal judge, will conclude the department’s civil and criminal investigation of Transocean’s role in the Deepwater Horizon rig tragedy.

The Washington Post reports that BP PLC, which leased the rig from Transocean, has already agreed to pay a record $4.5 billion in penalties. BP pled guilty to manslaughter and other criminal charges related to the spill. The BP deal doesn’t resolve the federal government’s civil claims against the London-based oil company.

BP reported profits of more than $25 billion in 2011, but, for Transocean, the year resulted in a loss of about $5.7 billion.