2015 Fall Meeting of the Maritime Law Association of the U.S.

Marine Ecology and Maritime Criminal Law Committee

Deepwater Horizon / Macondo Well Update

Sean HousealWomble Carlyle Sandridge & Rice, LLP5 Exchange StreetCharleston, SC 29401shouseal@wcsr.com

Deepwater Horizon Relevant Timeline

• 2010, April 20 – Blowout / Explosion at Macondo Well

Dec. 15 – U.S. files civil complaint in E.D. Louisiana

• 2011, April 21 – BP agrees to pay $1 Billion for NRD early restoration projects

• 2012, March 2 – Class Action settlements announced between private individuals and BP

Nov. 15 – BP Criminal Plea Agreement with U.S. announced ($4 Billion total, + remedial order)

• 2013, Jan. 3 – Transocean settlements announced ($1.4 Billion total, civil and criminal)

• 2014, Sept. 4 – Court rules on Phase One trial, finding BP grossly negligent & wilful in its misconduct

• 2015, Jan. 15 – District Court rules on Phase Two trial, finding a discharge of 3.19 million barrels oil

Feb. 2 – Phase Three of trial is completed

July 3 – Agreement in principle between BP and the U.S. is announced

Oct. 5 – U.S. lodges Consent Decree with BP, the terms of which would resolve all federal and state claims against BP arising from the incident

60-day public comment period is underway

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Proposed Consent Decree

• October 5, 2015– U.S. lodges Consent Decree with BP arising from the

2010 Deepwater Horizon oil spill– The proposed settlement agreement would resolve all

pending federal and state claims against BP arising from the incident

– Public has 60 days in which to submit comments to U.S. DOJ on the proposed CD, in accordance with 28 C.F.R. 50.7. Comment period ends 12/4/15

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Terms of Proposed Settlement• Settlement exceeds $20 Billion - Largest settlement amount with a single entity in

U.S. history - In addition to the $44B BP has incurred in cleanup costs & legal fees

• BP has agreed to pay a $5.5 Billion penalty to resolve civil claims under the Clean Water Act, plus interest (CD paras. 10 – 14)

• BP has agreed to pay $8.1 Billion to resolve Natural Resource Damages claims under the Oil Pollution Act (CD paras. 15 – 17, 19)

• BP has reached a related, parallel agreement with 5 Gulf states (Alabama, Florida, Louisiana, Mississippi and Texas) to pay up to $5.9 Billion to the 5 Gulf states, and up to $1Billion to local governments to resolve Economic Damages claims

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CWA Civil Penalty of $5.5 Billion• BP has agreed to pay a $5.5 Billion penalty, plus interest, to

resolve civil claims under the Clean Water Act, plus interest (CD paras. 10 – 14)– Largest civil penalty in history of environmental law (U.S. DOJ)– Penalty is subject to the RESTORE Act, which allocates 80% to

environmental restoration, economic recovery projects, and tourism and seafood promotion in the 5 Gulf states

– Remainder of the civil penalties under the CWA will be paid to the Oil Spill Liability Trust Fund in accordance with OPA’90

– Penalty also resolves claims related to incidents of non-compliance that Dept. of Interior’s Bureau of Safety and Environmental Enforcement issued to BP concerning the well

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$8.1 Billion in Natural Resource Damages

• $8.1 Billion to resolve Natural Resource Damages claims under the Oil Pollution Act (CD paras. 15 – 17, 19)

• The $8.1B includes the $1B that BP had previously committed to pay for early restoration projects

• Designated federal and state NRD Trustees have agreed to an allocation of the funds among 5 different restoration goals designed to restore Gulf of Mexico natural resources injured by the spill – 13 restoration categories set forth at p. 3 of the Fact Sheet– Draft Natural Resources Damages Assessment and Restoration Plan is

available for public review

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Up to $5.9 Billion to the 5 Gulf states for Economic Damages claims

• BP has reached a related, parallel agreement with the 5 Gulf states (Alabama, Florida, Louisiana, Mississippi and Texas) to pay $4.9 Billion to the 5 Gulf states to resolve economic damages claims

• BP will pay up to an additional $1 Billion to local governments to resolve Economic Damages claims

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$350 Million in NRD Assessment Costs

• In addition, BP will pay $350 Million to federal, state, and local governments for their Natural Resource Damage assessment costs

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Up to $700M for Unknown Injury and Adaptive Management

• BP will pay up to $700 Million to address natural resource conditions that are presently unknown but may be discovered in the future, and for monitoring, adapting, supplementing, or replacing earlier restoration projects as needed– This amount is comprised of $232M, plus accrued

interest on the $8.1 Billion payment (CD Para. 21)

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$250M to reimburse the U.S. for response costs, lost royalties, and

to resolve an FCA investigation

• BP will pay an additional $250 Million in reimbursement costs to the United States for its response costs, lost royalties on oil, and to resolve a False Claims Act investigation (CD Paras. 22 – 24)

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• BP’s 2012 criminal guilty plea imposed comprehensive measures upon BP to improve BP’s drilling and safety protocols and corporate ethics. BP also entered into an agreement with EPA, imposing additional measures on BP to resolve the specter of debarment and suspension from further commercial dealings with the federal government.

• In entering into the CD, BP is acknowledging that it is in compliance with these comprehensive measures.

• BP has agreed to publish reports on a publically accessible website, documenting its progress

• (CD paras. 34 – 38, and Appendices 4, 5, 6 and 11)

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Injunctive Relief

• During the 60-day public comment period, federal and state trustees plan to hold public meetings in each of the 5 Gulf states and in Washington, D.C. to provide a forum for discussion and to provide further opportunity for public input regarding the terms of the CD and DARP

• After the close of the 60-day public comment period, the Trustees will consider the input received, and will determine whether to seek court approval of the CD

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Next Steps

• http://www.justice.gov/enrd/deepwater-horizon• Provides copy of Proposed Consent Decree

Documents, including: – Consent Decree – Summary of Consent Decree – Fact Sheet on Consent Decree– Deepwater Horizon/Macondo Well Timeline – Federal Register Notice inviting public comment on

Consent Decree

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DOJ Link/Resources

• Full text of the Draft PDARP/PEIS is available at www.gulfspillrestoration.noaa.gov– Comments on the Draft PDARP/PEIS must be received on or before December 4, 2015

• The 13 proposed restoration types are:1. Wetlands, coastal, and nearshore habitats2. Habitat projects on federally managed lands3. Nutrient reduction4. Water quality5. Fish and water column invertebrates6. Sturgeon7. Submerged aquatic vegetation8. Oysters9. Sea turtles10. Marine mammals11. Birds12. Mesophotic and benthic (lowlight and ocean floor) communities13. Provide and enhance recreational opportunities

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NOAA Link for Additional Information on Draft DARP/PEIS

Thank You!

Questions / Comments / Discussion

Sean HousealWomble Carlyle Sandridge & Rice, LLP5 Exchange StreetCharleston, SC 29401(843) 720-4622shouseal@wcsr.com

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