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High-stakes trial begins over 2010 gulf oil spill

NEW ORLEANS — BP put profits ahead of safety and deserves most of the blame for the disastrous 2010 spill in the Gulf of Mexico, a U.S. Justice Department attorney charged Monday at the opening of a trial that could result in the oil company and its partners being forced to pay tens of billions of dollars more in damages.

The London-based oil giant acknowledged it made "errors in judgement" before the deadly blowout, but it also cast blame on the owner of the leased drilling rig and the contractor involved in cementing the well. It denied it was grossly negligent, as the government contended.

The ruling on who was negligent and whether it constitutes gross negligence is the financial crux of the case.

Under the Clean Water Act, a polluter can be forced to pay a minimum of $1,100 per barrel of spilled oil; the fines nearly quadruple to about $4,300 a barrel for companies found grossly negligent, meaning BP could be on the hook for $17.5 billion.

U.S. District Judge Carl Barbier, who is hearing the case without a jury, plans to hold the trial in at least two phases. The first phase, which could last three months, is designed to determine what caused the blowout and assign percentages of blame to the companies involved.

The second phase will determine how much crude spilled into the gulf.

Justice Department attorney Mike Underhill said Monday that the catastrophe resulted from BP's "culture of corporate recklessness."

"The evidence will show that BP put profits before people, profits before safety and profits before the environment," Underhill said in opening statements. He added: "Despite BP's attempts to shift the blame to other parties, by far the primary fault for this disaster belongs to BP."

BP attorney Mike Brock acknowledged that the oil company made mistakes. But he accused rig owner Transocean Ltd. of failing to properly maintain the rig's blowout preventer, which had a dead battery, and he claimed cement contractor Halliburton used a "bad slurry" that failed to prevent oil and gas from traveling up the well.

Eleven workers were killed when the Deepwater Horizon rig leased by BP exploded on April 20, 2010. An estimated 172 million gallons of crude gushed into the gulf over three months.

During opening arguments, BP and its partners pointed the finger at each other in a tangle of accusations and counter-accusations. But BP got the worst of it, from its partners and the plaintiffs in the case.

Jim Roy, who represents individuals and businesses hurt by the spill, said BP executives applied "huge financial pressure" to "cut costs and rush the job." The project was more than $50 million over budget and behind schedule at the time of the blowout, Roy said.

"BP repeatedly chose speed over safety," Roy said, quoting from a report by an expert who may testify.

Roy said the spill also resulted from Transocean's "woeful" safety culture and failure to properly train its crew. And Roy said Halliburton provided BP with a product that was "poorly designed, not properly tested and was unstable."

Brad Brian, a lawyer for Transocean, said the company had an experienced, well-trained crew on the rig. He said the Transocean workers' worst mistake may have been placing too much trust in the BP supervisors on the rig.

"And they paid for that trust with their lives," Brian said. "They died not because they weren't trained properly. They died because critical information was withheld from them."

Eleven workers were killed when the Deepwater Horizon rig exploded.

A lawyer for Halliburton defended the company's work and tried to pin the blame on BP and Transocean.

"If BP had shut in the well, we would not be here today," Halliburton's Donald Godwin said.

Underhill, the Justice Department attorney, heaped blame on BP for cost-cutting decisions made in the months and weeks leading up to the disaster. He said two BP rig supervisors, Robert Kaluza and Donald Vidrine, disregarded abnormally high pressure readings that should have been glaring indications of trouble.

Kaluza and Vidrine have been indicted on federal manslaughter charges.

Brock, the BP lawyer, said Transocean employees on the rig also played roles in misinterpreting the "negative pressure test."

"It was a mistake made by several men from two different companies," Brock said. "They were trying to get it right. They were trying to do the right thing."

Hundreds of attorneys have generated roughly 90 million pages of documents, logging nearly 9,000 docket entries and taking more than 300 depositions from witnesses who could testify at this trial.

Sorting out all the BP payments

THE TRIAL THAT STARTED MONDAY

This civil trial focuses on fault and whether mistakes that led to the spill amount to gross negligence. If BP is found guilty, it could be forced to pay the maximum Clean Water Act fine of $17.5 billion, plus billions more in civil and punitive claims by those who have not accepted payments already.

March 2012 settlement

BP reached a settlement, now estimated at $8.5 billion, to resolve most private claims for property damage, economic loss and medical injuries. It excludes claims by state and local governments, casinos, financial institutions and by individuals or by companies in Florida and Texas.

Settling the criminal case

BP agreed in November to a deal with the Justice Department resolving its criminal liability for the spill. The company pleaded guilty to manslaughter and other charges and agreed to pay $4 billion in criminal penalties.

The original $20 billion trust fund

In June 2010, a few months after the spill, BP established a $20 billion fund to pay damage claims. Before the March 2012 settlement shut down this process, the fund had paid out $6.1 billion to more than 225,000 claimants.

High-stakes trial begins over 2010 gulf oil spill 02/25/13 [Last modified: Monday, February 25, 2013 11:34pm]

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