The US Supreme Court on Nov. 30 denied (PDF) certiorari in an appeal by Mexican states attempting to sue BP over the 2010 Gulf of Mexico oil spill. The court let stand a lower court ruling in Veracruz, Mexico, et al. v. BP, P.L.C., et al, finding that the states of Veracruz, Tamaulipas and Quintana Roo cannot bring suit against BP because Mexico's federal government owns the affected property. The lawsuit sought damages for the cost of responding to the spill, contamination of the water and shoreline and lost tourism. The Mexican federal government filed a similar suit in 2013, which is currently being heard.
Indigenous leaders and activists interrupted an auction of oil and gas exploration blocs overseen by the Brazilian Agency of Oil and Gas in Rio de Janeiro Oct. 7, seizing the stage to discuss climate change, indigenous rights and divestment. The intervention by indigenous leaders in face-paint and traditional head-dresses was followed by a delegation of unionized oil workers who also spoke against the auction. The auction was described as a failure by local media, with only 37 of the 266 blocs sold. Many of fracking blocs extend deep into the Amazon rainforest, including the territories of remote and vulnerable indigenous peoples. The most critical blocs for isolated indigenous peoples are in the Juruá Valley and Serra do Divisor of Amazonas state, and the Javari Valley of Acre. Registered bidders included BP, Shell and ExxonMobil. (EcoWatch, Oct. 9; Brasil ao Minuto, Oct. 7; The Ecologist, Oct. 6)
Georgia's Foreign Ministry on Aug. 20 protested a violation of the country's airspace by a Russian military helicopter near the border with the contested South Ossetia enclave. The incursion came as Russia is carrying out military exercises in the border zone, and is accused by Georgia of having unilaterally moved border markers last month. On July 10, Russian troops reportedly placed new demarcation signposts along the de facto boundary between Russian-controlled South Ossetia, which was separated from Georgia in the 2008 war, and Tbilisi-controlled territory. Critically, the newly seized territory includes a kilometer-long section of the Baku-Supsa pipeline, which brings oil from Azerbaijan to BP's Supsa terminal in Georgia. Russia is among a handful of countries that have recognized the "independence" of South Ossetia and Abkhazia. Both of the breakaway regions rely heavily on military and financial aid from Russia, which does not allow European Union monitors to access either enclave. (InterFax, Aug. 20; RFE/RL, Aug. 19; BBC News, Aug. 10)
BP on July 2 reached a settlement that will require the company to pay $18.7 billion in penalties and damages to settle all claims regarding the 2010 Gulf oil spill. The agreement, the largest corporate settlement in US history, will add to the $43.8 billion that BP had budgeted for penalties and cleanup costs, bringing the total cost of the spill for BP to $53.8 billion. The settlement with the US Department of Justice and the affected Gulf states specifically requires the company to pay at least $12.8 billion in penalties stipulated under the Clean Water Act and natural resource damages. Another $4.9 billion will go to the affected states. [An additional $1 billion will be paid to local governments.] Attorney General Loretta E. Lynch in a statement said, "Since the Deepwater Horizon oil spill—the largest environmental disaster in our nation's history—the Justice Department has been fully committed to holding BP accountable... The Deepwater trial team has fought aggressively in federal court for an outcome that would achieve this mission, proving along the way that BP's gross negligence resulted in the Deepwater disaster."
This week, the Obama administration released a draft of its next five-year plan for offshore drilling—opening up a previously off-limits area along the Southeastern coast, from Virginia down to Georgia, as well as offering many new oil leases in the Gulf of Mexico. And while it would protect some key areas north of Alaska from drilling, it would open other Arctic areas up. The plan designates 9.8 million acres of Alaska's Beaufort and Chukchi seas off-limits to oil-and-gas leasing, and asks Congress to set aside 12 million acres in the Arctic National Wildlife Refuge (ANWR) as "wilderness area," affording another level of protection. Daily Caller is outraged that the Alaskan waters are to be off-limits; Grist is outraged that the Southeastern waters are to be opened up; Bloomberg tries to play it objective. However, read the small print last line of the White House memo on the supposedly new polcy: "Nothing in this withdrawal affects the rights under existing leases in the withdrawn areas."
As we noted in September (when the price had just dipped below $100 a barrel), after an initial price shock when ISIS seized northern Iraq, the world oil price has since slumped. It now stands at around $60 a barrel. Recall that way back in late 2001, when the US was invading Afghanistan, it stood at a lowly $11. At that time, we predicted an imminent price shock to jump-start the planned industry expansion—both in the Caspian Basin and here at home, overcoming environmental concerns. Boy, were we right. The price of a barrel first broke the $100 mark in 2008, and has frequently crossed it in the years since then, although it never quite hit the much-feared $200-a-barrel. But now the petro-oligarchs are talking like $100 may be the new $200. Saudi Arabia's oil minister Ali al-Naimi last month answered "we may not" when asked if markets would ever lift prices to $100 again. (CNN, Dec. 23) How much of this are we to believe, and what is really behind the slump?
More than 100 Colombian farmers on Oct. 15 filed a lawsuit with the UK high court against British company Equion Energia, previously known as BP Exploration Colombia (BPXC), for alleged negligence when it built the Ocensa oil pipeline. The farmers are seeking around USD $29 million in compensation for environmental damage caused by the pipeline, including severe soil erosion, reduced vegetation coverage and damaged water resources. The farmers' lawyers said that the farmers did not understand the agreements they signed with BPXC and said that they were not provided full and fair compensation for environmental damage caused by the pipeline. The trial is BP's first in Britain for its overseas business.
The president of Colombia's Ecopetrol, Javier Genaro Gutiérrez, announced Sept. 24 that the state oil company will process licenses for the use of fracking technology. Gutiérrez upheld Texas as an example of successful fracking, saying, "I invite you to see the fracking tower next to a hospital for the elderly" in the US state. In the Ronda Colombia 2014, the country's latest round of auctioning oil leases on public lands, 19 of the 98 bids sold were for the development of fracking sites. In March, a law was passed to expedite the process for allowing "non-conventional" drilling sites. Ecopetrol in a partnership with Canadian-based Talisman Energy acquired the country's two largest natural gas fields from BP in 2010.