IRELAND oil spill costs £0.5 million: Limerick County Council search for liability

The cost of cleaning up the 18 January 2012 spill is estimated at £500,000. 2,000 litres of oil spilled into the River Deel at the Crecora Mills plant – a feed manufacturing company – in Castlemahon, west Limerick, Republic of Ireland.

Broken Deel

Broken Deel

The Deel provides water to homes along its course. The largest proportion of the costs were from emergency potable water supplies that were needed. Limerick County Council was forced to provide water tankers in Askeaton, Creeves, Kilcornan, Foynes and Shanagolden as the public water supply was restricted for over two weeks.

Previously, Limerick’s greatest infamy was as Europe’s murder capital – at 7 killings per 100,000 inhabitants.

Further indirect costs included service businesses shutting coupled with lost and lower production across the manufacturing sector. These costs have not been included in the cost estimate. These indirect costs will inflate this figure into the millions. If negligence is proven, and civil cases are waged, then the potential liability for identified perpetrators will be into the millions.

To date, some 300,000 Euro has been paid out. Image.

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NORTH SEA gas leak: Total wipeout as cost estimate tops £12 billion

The gas leak at Elgin field in the North Sea off Aberdeen looks set to cost French company Total over £12 billion.

Share prices have tanked (-£7 billion), relief wells are being planned (-£250 million), leaving the field unexploited (-£5.5 billion). Daily costs are estimated at £2 million.

That’s not to mention the CO2e of almost one billion tonnes of carbon. At an emissions tax of £20 per tonne, that’s a further headache for Total – if the emissions were taxed appropriately at some point in the future.

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Oil Spill Costs: Stopping US tax breaks for polluters

BP stands to save $10 billion from their contribution to oil spill costs in the Gulf Of Mexico owing to exploitation of tax breaks in the USA.
 

Slick operators

Representative Alcee Hastings, (D-FL), introduced a bill that would abolish write-offs oil companies take on their tax returns for the costs of cleaning up their oil spills in the USA.

 
Rep. Hastings says in a statement that “a big oil company can treat the costs of an oil spill as if it was the same as purchasing a stapler or paying a phone bill. I believe that an oil spill should not be considered ‘ordinary.’ From a fiscal standpoint, from a policy standpoint, and from a moral standpoint, even a small oil spill is an extraordinary and terrible mistake with far-reaching consequences.”
 
At the Slick Economist, we have repeatedly advocated for this in the case of BP. Its good to see the politicians and legal framework are now being interrogated to make this a reality. Oversight of all oil spill costs is needed next in the USA, Canada, then globally.
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NIGERIA oil spill: Bonga to cost billions

Nigeria’s worst oil spill in a decade of over 40,000 barrels at its Bonga oil field is set to cost the beleaguered Nigerian economy further billions.

Floating economy?

Bonga was discovered in 1993, first oil in 2004, and cost $3.6 billion constructed by Samsung 120km offshore in deepwater. Bonga’s target was to produce 225,000 barrels of oil and 150 million standard cubic feet of gas per day. It is operated by SNEPCo – 55% on behalf of the Nigeria National Petroleum Corporation (NNPC) under a Production Sharing Contract (PSC). SNEPCo has a Joint Operating Agreement (JOA) with Esso 20%; Nigerian Agip Exploration Limited (NAE) 12.5% and Elf Petroleum Nigeria Limited 12.5%.

Nigeria’s production has fallen at Bonga and a serious of other minor spills including at Shell’s $1.1 billion Nembe Creek Trunkline – mostly attributed to “vandalism” – is causing increased political tension and slimmer government coffers at a time of national angst at fuel subsidy withdrawal compounding the international economic slowdown.

At this time, the total costs are unclear, but there is strong evidence that it is directly impacting fisherman, and has doubled the price of fish at markets. Coupled with other economic turmoil in Nigeria, a tightening of environmental governance is vital to restore belief that the resource curse can be beaten.

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WASHINGTON OIL SPILL: costing $11 billion every 1000 years?

A major spill at the mouth of the Columbia River or in the Strait of Juan de Fuca could cost Washingtonstate 165,000 jobs and $10.8 billion in economic losses, and is more likely to occur as enforcement by the state’s oil spill program has been slashed.

Risky business?

Over 15 billion gallons of oil transit through the are and it is increasing. Each tanker can carry about 36 million gallons of crude oil and another million gallons of heavy bunker fuel to power the ship.

Yet, funding is being cut – with personnel down 10% in FY11 – to below $15 million per year.

Outrage has been expressed by the workers, indigenous communities and other stakeholders who cannot understand the mis-match between tanker traffic and enforcement.

This conundrum seeks answer to the question of risk from oil spills. Is the chance of a catastrophic oil spill at the mouth of the Columbia River more than 1 in 1,000 years? The state has decided not … or has it realised that the chances of it happening during the next political cycle are very low indeed? This feels like risky business to the Slick Economist.

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BRAZIL oil spill: who will bear the costs of Chevron’s poor engineering decisions?

Engineers are cast as bad guys in the latest costly oil spill to unnerve a major international oil company drilling in deepwater.

Cost that and samba

An estimated 110,000 gallons of oil have been spilt by Chevron exploration on a Transocean rig off Brazil. Yet, in a remarkable shift since the Gulf of Mexico oil spill, Chevron have identified the problem and publicly accepted responsibility. One (unfounded) reason posited for this early admission of guilt might owe to an alleged infraction of drilling over 500m deeper than they were allowed to.

Indeed, for this oil spill, it is less about the total cost of the oil spill, clean-up, remediation and compensation. Rather it is about how the industry and the responsible parties manage the oil spill that are being watched anxiously in Latin America andAfrica.

As of Monday 21 November, environmental concerns have lessened with news that the surface oil slick – estimated  at only 65 barrels by Chevron, with 18 cleaning vessels in attendance  – is moving away from the coast, but with whales migrating through the channel.

Experts said the main common thread between the BP oil spill and this one is the slow flow of information and different explanations for what happened and the severity of what happened.

“There’s a pretty long track record of all the people involved in spills underestimating at least initially the size of the spills… I would suspect they literally don’t know, so they are trying to figure out” said Ed Overton, a Louisiana State University professor.

The Chevron leak is smaller than those Brazilhas seen in the past. Brazil’s worst oil disaster was in 1975, when an oil tanker from Iraq dumped more than 8 million gallons of crude into the bay and caused Rio’s famous beaches to be closed for nearly three weeks. In 2000, crude spewed from a broken pipeline at the Reduc refinery in Rio de Janeiro’s scenic Guanabara Bay, spewing at least 344,400 gallons into the water. Just a few months later, more than 1 million gallons of crude burst from a pipeline state-controlled oil company Petrobras into a river in southern Brazil. The Sinclair Petrolore that Ludwig built in 1955, was at 56,000 long tons not only the largest freighter in the world, but also a self-unloading ore-oil carrier, the only one of that type ever built. It exploded on 6 December 1960 near Brazil — likely because of cargo leakage in the double bottom — resulting in the largest spill until then with 60,000 tons.

Yet, this oil spill is emblematic of the latest chapter in oil industry history: expansion into new countries, often developing ones. IOCs are increasingly pitched in battle with the fledgling governance infrastructures of these nations, who sit on the knife edge between vast riches, and the knowledge that the resource curse and a collapsed economy await the unwise and unlucky.

The discovery of Brazilian oil fields in 2007 marked the beginning of a scramble to prove reserves along the eastern Latin American and western African seaboards. There are legitimate concerns by environmental and economic commentators that weaker governance in these countries of oil industry will open the doors to exploitation, ruinous contracting arrangement, graft and riskier exploration activities.

For this reason, Chevron’s response to this oil spill is to be applauded: admission of guilt from a corporate perspective albeit with an undercurrent of blaming their engineers and the contractors at Transocean who supplied it with the Sedco 706 rig.

Chevron’s management of its oil spills has been questioned before. In the USA, Chevron recently agreed to a $4.5 million settlement with Utahenvironmental officials for two oil spills that polluted a creek and city pond. While, in Ecuador, Chevron is in open conflict with the Ecuador government over the Amazon Chernobyl $18 billion settlement for legacy oil spills by Texaco.

Fines have already been talked of by Carlos Minc, the Rio de Janeiro state environment minister, said that Chevron, which is a partner with Petrobras on the well, likely faces fines of at least $5.5 million.

The Slick Economist is aware that this latest chapter in exploration and production for the oil industry will require a new set of engineering standards to be applied, both conspicuously and internally for the industry. This will incorporate new and different risks, opportunities, governance issues. We spy an opportunity for engineers to be at the vanguard of ensuring that risks taken in these relatively new, often developing countries, are appropriate, accord with international standards and work in seamless collaboration with the people and environments of these nations.

Indeed, the Slick Economist is sure that wise engineering coupled with appropriate risk management and wise decision-making will be the foundation stones for profitable and sustainable oil industry development simultaneous with economic development for the decades ahead in Africa and Latin America.

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FISHERMEN compensation from oil spills: why do oyster farmers double shrimpers?

Oil spill compensation czar Alan Feinberg is poised to announce more compensation for Gulf of Mexico fishers affected by the oil spill.

Slick tastes

It is clear that the science of how fish and fishing are affected by oil spills and slicks, and the attendant scales of compensation remain unclear.

Compensated has been based on economic impact amounting to a maximum of double business’ documented 2010 losses in exchange for waiving their rights to sue or seek future spill compensation.

Yet, oyster harvesters get a different deal — as much as seven times their 2010 losses — owing to lingering effects of the spill.

Shrimpers are no different, say the shrimpers’ attorneys. Shrimp migrate as juveniles to estuaries still tainted with oil.

It seems Feinberg is all ears and is poised to change the two-times-losses formula.

And so he should be. In Alaska, post-Valdez, it took five years for the price of salmon to return to pre-spill levels, and four years after the spill, the herring population completely disappeared and hasn’t returned since.

So far, the “$20 billion fund” has the fund has paid $5.5 billion to 213,408 claimants, While over 300,000 have been denied compensation.

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YELLOWSTONE Oil Spill Costs Triple to $135 million

Exxon Mobil have admitted spiralling costs of clean-up and compensation for their July 2011 oil spill in the Yellowstone River, Montana.

Bear oil

The company reports it has reached compensation agreements with 95% of property owners. Although it is being sued by some for an alleged “haphazard, sloppy” cleanup.

The EPA believes “raging high waters” from excessive snowmelt caused the pipeline rupture.

The $135 million is a tripling from previous estimates and remains an estimate of costs but includes overall emergency response and cleanup efforts including personnel, equipment, landowner claims and projects associated with the restart of the pipeline such as the horizontal directional drill. 

Horizontal directional drill” refers to the process the company used to bore a new route for the pipeline dozens of feet beneath the riverbed. That move was mandated by federal pipeline regulators.

Interesting co-investment figures from State agencies show that during October 2011, $900 000 was spent on the spill and clean-up.

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OIL SPILL INFOGRAPHIC: social analysis of how we all reacted online to Gulf of Mexico oil spill

An infographic from late last year by SocialSphere aggregating information on social network impact of the Gulf of Mexico oil spill.

Quote: “This June, while engineers in the Gulf were trying to stop the destructive flow of oil from BP’s well, SocialSphere was tracking the spread of a different kind of substance – information. We analyzed over 240,000 relevant news articles, blog posts, Tweets, Facebook updates and other social media mentions during the month of June, focusing on comment volume and linking patterns of eight of the most influential sources of both old and new media. With the help of Harvard Berkman Center fellow Miriam Meckel and talented designer Tiffany Farrant, we put together this infographic summarizing our key findings. No one was surprised by the online conversation about the oil spill – it was huge, fast, and angry – but our infographic did illustrate a point we’ve been making more clearly than any report we have so far produced: information online flows in sometimes unexpected ways (and shocking quantities). Arianna Huffington, not Tony Hayward, is the unexpected star of this analysis – and with 227,000 on-topic comments during the peak period of coverage and seven times as many inbound links as the New York Times, the Huffington Post is succeeding in a space where inflexible old media titans once roamed. And if there’s anything we’ve learned over our years of navigating social media, it’s that the way information flows online is always changing. This infographic is just a snapshot in time.”

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NIGERIA oil spills: $1 billion compensation sought from Shell

The people of Ogale in the Eleme local government area of Nigeria filed the $1 billion compensation case at a court in Detroit, USA.

Billionaires row

Contamination of drinking water sources is extreme. In Ogale a United Nations environmental report found people drinking water contaminated by oil spills with carcinogens at 900 times the World Health Organization’s safety limit.

Ogale is emblematic of Nigeria’s resource curse from its exploitation of its oil resources. It was in Ogale that the first operational oil fields were discovered in Nigeria, and where the nation’s first shipment of 22,000 barrels of crude oil exported to Europe.

The one billion dollars is the estimated cost of cleaning up the oil spills, according to their lawyer, Benjamin Whitfield Jr.

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