Category Archives: oil spill

BP’s Criminal Fines

The US Department of Justice announced yesterday that it had reached a landmark settlement with BP Oil for its massive oil spill 2 years ago.

BP has agreed to pay $4.9 billion in criminal fines and plead guilty to criminal charges of manslaughter resulting from the deaths of 11 employees on the drill rig. A vice president of BP has been indicted for lying to Congress when he allegedly provided false information about the amount of oil spilled to the government. He told Congress the amount spilled was about 5000 barrels a day when he had knowledge that it was almost 10 times that amount, according to the indictment.

Two drill rig supervisors (the most senior persons on the platform when the incident occurred) were also indicted for manslaughter. The government alleged in the indictment that they ignored repeated danger signs that the rig was about to blow up and failed to consult with company experts prior to the incident.

The maximum amount of criminal fine under the Clean Water Act could be as high as $20 billions based on findings of criminal negligence.


Is groundwater “navigable waters” under SPCC?

You have to prepared a SPCC plan if you have more than 1320 gallons in shell capacity AND the potential to impact navigable waters of the United States.

Many people ask the question” “Is groundwater included in the definition of navigable waters under the Spill Prevention Control Countermeasures regulation?”

The short answer is NO.

However, keep in mind that groundwater could act as a conduit for spilled oil to reach navigable waters of the U.S.

Here is what EPA stated in its SPCC Inspection Guide: Facilities should consider “certain underground features (e.g., power or cable lines, or groundwater), (that) could facilitate the transport of discharged oil off-site to navigable waters.”

EPA reached largest Clean Water Act settlement in the Gulf Oil Spill case

EPA just announced the first major settlement with a company connected with the BP oil spill in the Gulf.

MOEX Offshore 2007 LLC has agreed to settle its liability in the Deepwater Horizon oil spill in a settlement with the United States valued at $90 million, announced the Department of Justice, the U.S. Coast Guard and the U.S. Environmental Protection Agency (EPA) today.  Approximately $45 million of the $90 million settlement is going directly to the Gulf in the form of penalties or expedited environmental projects.

According to the terms of the settlement, MOEX will pay $70 million in civil penalties to resolve alleged violations of the Clean Water Act resulting from the spill and agreed to spend $20 million to facilitate land acquisition projects in several Gulf states that will preserve and protect in perpetuity habitat and resources important to water quality and other environmental features of the Gulf of Mexico region.  At the time of the spill, MOEX was a minority investor in the lease for the Macondo well. It no longer owns any share of the lease.

This is the largest Clean Water Act penalty to-date. MOEX owned 10% interest in the Macondo well and settled for $90 million. Just imagine how much BP will pay in final settlement.

When do you have to revise your SPCC?

The regulations say that you must revise your SPCC plan if there are “material changes” in your operation. What exactly is “material change”?

If the petroleum product  you store on site changes from diesel to gasoline, you have made a material change in your operation. You have gone from a combustible product to a flammable product. You must revise your plan. If you change your grade of gasoline from one octane to another, that would not be considered to be a material change.

Another point to remember about SPCC is that it refers to the amount of petroleum product you have onsite at any given time. So you are a marketer of gasoline and you purchase 5500 gallons at one time and then you deliver smaller quantities to your customers over the year until you have 500 gallons left onsite. You are still required to have a SPCC plan since you have more than 1320 gallons during the year.

We discuss SPCC requirements at our 2-day environmental seminars.

Emergency Preparedness and Preparation

If you generate more than 100 kg of hazardous wastes in a calendar month, you are either a small or large quantity generator under federal hazardous waste regulations. A large quantity generator is someone who generates more than 1000 kg of hazardous wastes in a calendar month. That’s roughy equal to five 55-gallon containers a month.

As a waste generator, there are certain requirements pertaining to preparedness and prevention that you must adhere to:

  1. You must have an accessible communication or alarm system that is capable of providing emergency instructions to your plant personnel. In the event of an emergency, you must instruct your plant personnel to either evacuate the facility or relocate to a safe area.
  2. You must have the means to communicate your emergency and request assistance from local authorities such as the police department, fire department and emergency response team. A two-way communication device is needed.
  3. Your preparedness plan must clearly identify the locations of fire extinguishers, water hose stations, automatic sprinklers and other forms of fire control equipment. It should also include a plant layout showing all exit routes.
  4. You should also have a complete up-to-date list of spill control equipment such as pumps and absorbents that you keep on-site.
  5. Your plan must include procedures to test and maintained your emergency equipment to make sure that they are always in a state of operational readiness. It is also critical to assign someone the responsibility of replenishing any expended spill control material (such as sorbents) so that you will have adequate supply in the next spill.
  6. At the place where you store your hazardous wastes, you must maintain adequate aisle space to allow access for emergency and spill response personnel. The federal  regulation does not specify how large the aisle space need to be. As a general rule of thumb, the space should be at lease 24 inches or wide enough for a 55-gallon container to pass through.
  7. You must also store your waste containers in such a manner that each individual container is easily accessible to an inspector. The inspector must be able to read and inspect the label on each container without having to go through some physical contortion.
  8. You also need to have procedures in place to minimize the possibility of fire, explosion, or spills. That means that if you are storing highly flammable or ignitable wastes onsite, you need to have “NO SMOKING” signs posted at the storage area.
  9. The federal rule requires you to “make arrangement” with local authorities on providing emergency response. What that means is that you need to send a copy of your plan to the fire department, police station and local hospital and let them know what kind of wastes you are storing at your facility. Make sure you document any effort you have made to reach out to these local authorities because it is your responsibility to do so under federal law.
  10. If you have made contractual arrangements with a private emergency response company to handle any spills that you may have, make sure you include the contract in your preparedness plan.

One last point, the rule says that only large quantity generators need to have a WRITTEN plan. If you are a small quantity generator, you do not have to have a written plan – but you must have a plan nonetheless.


My advice is that you make a written plan regardless of your generator status. If you are going to have a plan, you might as well have it written out.

If you are a large quantity generator, you will also have to have a written RCRA Contingency Plan which will include the designation of an Emergency Coordinator who must have delegated authority from senior management to shut down operation in case of an emergency. This person must be accessible and reachable at all times. The Contingency Plan must also be kept up-to-date. Failure to keep a Contingency Plan up to date is one of the most frequently cited violations.

We discuss emergency response and preparedness at our 2-day environmental seminars.


Is BP liable under the Superfund Law?

The short and quick answer is NO. BP is not liable for the spilled oil (petroleum products) under the Superfund Law because of the “Petroleum Exclusion” clause in the law.

Section 101(14) of the Superfund Law specifically excludes “petroleum, including crude oil or any fraction thereof” from the definition of “hazardous substance”. You can only be liable under the Superfund Law if you release hazardous substances to the environment.

Now – does that mean BP is off the hook completely? Not at all. BP is liable under the Clean Water and the Oil Pollution Act – just to name a few environmental laws.

Read my earlier blog on BP’s potential liability.

New Mortal Sin!

Are you aware that polluting the environment is now officially a mortal sin according to the Catholic Church?

Bishop Gianfranco Girotti, head of the Apostolic Penitentiary, the Vatican body which oversees confessions and plenary indulgences, was quoted in the Vatican newspaper as saying the following:

“You offend God not only by stealing, blaspheming or coveting your neighbour’s wife, but also by ruining the environment, carrying out morally debatable scientific experiments, or allowing genetic manipulations which alter DNA or compromise embryos,” he said.

So think twice before you dump that 55-gallons of toxic waste in your neighbor’s backyard.

Other new mortal sins also included taking or dealing in drugs, and social injustice which caused poverty or “the excessive accumulation of wealth by a few”.