Skip to main content

Oil Spills, Divestment and COP26. Ethan Li, American University

Just 13 inches of damage in a pipeline near California severely harmed the local wildlife and ecosystem, in addition to costing millions of dollars to cleanup. Oil spills are some of the most visible and consequently environmental issues. The Deepwater Horizon oil spill is still imprinted in the collective American consciousness, and it also carried with it some of the most severe fines in American history, with BP paying more than $60 billion in fines. Yet, with World leaders meeting to discuss environmental issues at COP26, how much has truly changed? The recent oil spill in California, while significantly less impactful than the Deepwater Oil Spill, offers a look changes over the last decade has brought. 

Southern California’s troubles first started with an October 1 report of sheen on the water. Due to difficulties in recognizing this sheen at night, it was not until the morning of October 2nd that the Coast Guard, an Orange County Sheriff, and a Coast Guard supporting aircraft investigated. That same morning, at 2:30 AM, PT Beta Offshore, the subsidiary operating the damaged pipeline, received a low-pressure alarm, which indicated possible failure. Three and a half hours later, the subsidiary reported they shut down the pipeline, and, after another 3-hour delay, reported the crude oil leak to the National Response Center. Over the next two days, Huntington Beach officials estimated that 126,000 gallons of crude oil spilled, noted dead fish and marine life coated with oil, and divers found that 4,000 feet of the pipeline had been displaced 105 feet and discovered a 13 inch split in the pipe. (See the map above of the incident. Also see: CNN(https://www.cnn.com/2021/10/06/us/huntington-beach-california-oil-spill-timeline/index.html). 

The following weeks proved the disaster wasn't as bad as previously expected. Estimates of the leakage were lowered from 126,000 gallons to between 25,000 and 132,000 gallons, with the results likely being far closer to 25,000 gallons. Similarly, the effect on animals was not as bad as expected. Significantly fewer birds were affected, given that the spill occurred after nesting season and before migratory birds moved in. Furthermore, teams from LA, Orange, and San Diego reported they are documenting fewer and fewer live oiled animals each day. Still, the consequences of oil exposure are severe. Every part of the food chain is vulnerable, and while birds are the most vulnerable, marine mammals also suffer chronically. Scientists do not yet totally understand the effects of oil spills on plankton and invertebrates. Furthering the investigation, officials stated they are relatively certain the pipeline was damaged by a ship’s anchor many months before the catastrophe.

The first lawsuit against the parent company responsible for the pipeline, Amplify Energy, was filed within 48 hours of the spill. Federal prosecutors, other federal agencies, and the Coast Guard have launched investigations that may lead to criminal charges, civil penalties, and most noteworthily new laws and regulations. The Coast Guard is currently searching for the ships that damaged the pipeline and has already boarded two ships to inspect them. Other investigators and reviewing pipeline inspection records for evidence of negligence and falsification of information.  Attorney Rohan Virginkar, who helped prosecute BP during the Deepwater Horizon Oil Spill, stated that “really in these environmental cases, it’s about finding somebody who’s going to pay for the cleanup.” Importantly, this goal has been significantly helped by the Oil Pollution Act, passed after the Exxon Valdez Tanker spill in Alaska, which requires the organization responsible for spilling the oil to pay for any cleanup. Since federal prosecutors have five years to bring felony charges, they will likely wait until their investigations turn up more information and they can calculate the total cost of the damage to put into place any penalties.

Now that federal prosecutors and other agencies are beginning to investigate, it is important to review the consequences of the Deepwater Horizon Spill. The primary benefit of the case against BP was the trend of larger penalties it started. The $4.5 billion that BP paid just for criminal penalties was many times larger than the previously largest penalty for environmental crime, which was just $125 million in 1990. This would prompt Washington to implement harsher penalties, with Volkswagen paying $30 billion for cheating environmental standards and the larger banks paying billions in fines for the 2008 financial crisis. Unfortunately, unlike previous oil spills such as the 1969 Santa Barbara oil spill, which resulted in the passage of the Clean Water Act, or the Exxon Valdez spill of 1989, which resulted in the Oil Pollution Act of 1990, the Deepwater Horizon Spill did not create any significant laws. While Congress did pass the RESTORE Act in response to the tragedy, this legislation only ensured that the fines would be shared with Gulf Coast states and did nothing to promote harsher consequences or higher safety regulations. So while BP did pay for its tremendous error, little was done to prevent another oil spill from occurring.

Having missed the opportunity generated by Deepwater Horizon, now, with the momentum of public opinion, it is crucial that we push for increased regulations in the oil industry. Already we can see this with increased attention being placed on fossil fuel divestment. Also, a recent publication by the LA Times examined the logistics of closing down these ocean wells. We can take this sentiment among the people as an opportunity to educate the public on the dangers of fossil fuels and the oil industry and to move public opinion towards promoting renewables. 

Sources:

https://www.latimes.com/environment/story/2021-10-08/offshore-oil-cost-to-end-california

https://www.cnn.com/2021/10/06/us/huntington-beach-california-oil-spill-timeline/index.html

https://theconversation.com/bp-paid-a-steep-price-for-the-gulf-oil-spill-but-for-the-us-a-decade-later-its-business-as-usual-136905

Get Bitcoin at https://etoro.tw/3O7fFeW

Popular posts from this blog

Maternal Health Financing Facility for Black Women: A Solution to an Urgent Problem

Maternal mortality is a significant issue in the United States, with Black women disproportionately affected. Research conducted by the Centers for Disease Control and Prevention (CDC) has shown that Black women are more likely to die from pregnancy-related causes than their white counterparts. However, the issue is not new, and despite the increasing amount of data available, the disparities have remained unaddressed for far too long.  Creative Investment Research (CIR) is among the organizations that believe there is a solution to the problem. Through our proposed impact investing vehicle , the Maternal Health Financing Facility for Black Women (MHFFBW), we aim to tackle the mortality gap and support Black women during childbirth, which will, in turn, benefit their communities. The Facility, based on legally binding financing agreements containing terms and conditions that direct resources to individuals and institutions capable of addressing supply-side conditions at the heart of

BRICS Summit 2023: Navigating the Transformation of Global Finance

Recent developments in the global financial landscape have captured the attention of the finance world, promising a new era of integration, transformation, and collaboration. Amidst the excitement, however, it is essential to acknowledge the formidable obstacles that stand in the way of realizing these ambitions. The 2023 BRICS Summit , slated to convene amidst this shifting landscape, is poised to be a significant juncture that could have profound implications for the future of international finance. The resurgence of Bitcoin, marked by an impressive, if smaller, year-to-date price surge, has underscored its enduring relevance. Similar concerns surround the exploration of central bank digital currencies (CBDCs). The UK's digital pound initiative, while forward-looking, raises questions about stability, security, and privacy and potential economic power imbalances. The notion of a BRICS digital currency, potentially extended to include several countries, reflects a desire to chall

Projected Impact of Gun Laws on Corporate Profits in Texas

More Fortune 500 companies are located in Texas than in any other state. Texas successfully used low taxes and minimal regulations as bait to recruit companies like Tesla and Oracle. The state promoted these “advantages” in ads highlighting their “free-market” environment and criticizing the "tax and spend policies of liberal leadership" in Democrat-run states. Four million people migrated to Texas over the past ten years. Our economic models predict a reversal, however. State of Texas corporations on the Fortune 1000 list generate $2.2 trillion in revenue, $158 billion in profit. They have a market value of $3.8 trillion and employ 2.5 million people nationwide. We continue to believe this increased corporate presence in Texas imposes a tax on the nation as a whole. Texas allows anyone 21 or older to carry handguns without training or licenses, and maintains lower gun purchase age limits. Beyond the recent abortion bill, which allows people to sue those who "aid and abe