GULF SPILL:

Macondo drillers appeal violations

Greenwire:

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The companies that drilled the failed Macondo well that caused the nation's worst oil spill have appealed all of the violations handed down by the Interior Department last fall, the Obama administration confirmed.

The appeals from BP PLC, Halliburton Co. and Transocean Ltd., which are currently locked in litigation over who carries blame for the spill and who should pay for damages, will be decided by an administrative panel know as the Interior Board of Land Appeals.

The panel and oil companies agreed to not take up the appeals until a decision is reached in multi-district litigation. BP has previously said it has spent $42 billion cleaning up the spill, which released nearly 5 million barrels of crude into the Gulf of Mexico.

The outcome of the violations could prove significant if they are used in lawsuits seeking to assign responsibility for the spill.

Interior's Bureau of Safety and Environmental Enforcement last October issued 15 notices of noncompliance, including seven to BP and four each for Halliburton and Transocean, for alleged violations in drilling the Macondo well (Greenwire, Oct. 13, 2011). It was the first time Interior issued violations to drilling contractors.

The agency last month issued five additional notices to BP for alleged failure to conduct an accurate pressure test and failure to suspend operations when appropriate. BP at the time said it planned to appeal the notices, arguing they played no "causal role" in the Macondo accident (Greenwire, Dec. 7, 2011).

The appeals drew swift criticism Friday from Rep. Ed Markey (D-Mass.), the top Democrat on the Natural Resources Committee.

"These companies shouldn't be appealing, they should be apologizing for their violations," Markey said in a statement. "Multiple investigations have shown the neglect, shortcuts and mistakes that led to this disaster, and the three companies should accept these violations as an already small punishment for the huge harm they inflicted on the people of the Gulf."

At the time of the Deepwater Horizon spill, Interior was authorized to issue violations of $35,000 per incident, per day, an amount that former BSEE Director Michael Bromwich has argued is a pittance for major oil firms.

An offshore oil rig can cost $500,000 to $1 million a day to operate. Legislation in both the House and Senate would allow Interior to significantly raise civil penalties.