Last week BP agreed on the eve of trial to settle claims by more than 100,000 private plaintiffs for damages caused by the 2010 Deepwater Horizon oil spill in the Gulf of Mexico. BP estimates that the settlement will cost it approximately $7.8 billion, which will be taken from the existing $20 billion Gulf Coast Claims Facility it had established. The Facility will be replaced by a new court-supervised process that will provide $2.3 billion in compensation for fishermen and a separate process for assessing claims by those who allege that their health has been damaged by the spill. The settlement does not resolve claims against BP brought by the federal government or by the five Gulf states, nor does it cover claims by the private parties against Transocean, which owned the oil rig, or Halliburton, which provide support services for the drilling operation. BP already has set aside more than $3 billion for civil penalties, but the fines could reach more than $17 billion if the company is found to have been grossly negligent. The government also may seek criminal penalties against BP.
On Monday February 27 I did a live TV interview about the prospects for a BP settlement from the Washington studio of Canada’s Business News Network (BNN). The network was buzzing with the news that the TransCanada Corporation had announced plans to move ahead with the 435-mile Gulf Coast leg of the Keystone XL pipeline with the endorsement of the White House. I had been scheduled also to appear on Al Jazeera the same day to discuss the BP trial, but the program was canceled after the trial was postponed.
On February 28 a Brazilian judge denied a request by a federal prosecutor to suspend offshore oil drilling operations by Chevron and Transocean in response to a November spill off the coast of Brazil that released 3,000 barrels of oil. The Brazilian government is seeking nearly $12 billion in damages for the spill, even though the spill was less than one thousandth the size of the BP spill. The judge stated that the companies should not be punished until after they have had a chance to defend themselves in court. Jeff Fick, Brazil Rejects Injunction in Case Over Oil Spill, Wall St. J., February 29, 2012, at B7.
On Tuesday February 28 I attended the oral argument before the U.S. Supreme Court in Royal Dutch Petroleum v. Kiobel, the case raising the question whether corporations can be held liable under the Alien Tort Statute (ATS) for violating the “law of nations.” The Nigerian plaintiffs accuse Royal Dutch Petroleum of collaborating with the Nigerian military in human rights abuses for protesting environmental damage caused by the company’s oil extraction. Plaintiffs, supported by the federal government, urged the Justices to reverse a decision by the U.S. Court of Appeals for the Second Circuit holding that only nations and individuals, but not corporations, can be held liable in tort for violations of international law. Stanford law professor Kathleen Sullivan, representing the oil company, did an impressive job of making the case against corporate liability. The Justices seemed more inclined than ever to signal how they intended to vote in the case, making a 5-4 ruling in favor of the Dutch oil company likely. Justice Kennedy, the crucial swing vote, seemed impressed with an amicus brief by Britain and the Netherlands arguing that it would be inconsistent with international law for a U.S. court to hold a foreign company liable for actions that occurred outside of the U.S. In an unusual move, the Court announced today (March 5) that it would hear reargument of the case devoted to the question whether the ATS "allows courts to recognize a cause of action for violations of the law of nations occurring within the territory of a sovereign other than the United States." This suggests that the Court may not embrace the Second Circuit's notion of blanket corporate immunity for human rights abuses, a proposition rejected by several other U.S. Courts of Appeal, and instead hold only that a foreign corporation cannot be sued in the U.S. courts under the ATS for violations of the law of nations committed in another country.
Following the oral argument several of my students who had attended the argument came to lunch at my house, a short walk from the Court. After the lunch I drove to College Park with Professor Zhao Huiyu, Maryland’s visiting Chinese environmental scholar, to conduct a workshop on environmental law for environmental officials from Anhui Province, China. The officials are in the U.S. for two weeks as a part of a training program sponsored by the Maryland China Initiative. They seemed particularly interested in comparing how environmental permits are written in China and the U.S. On Thursday I am leading a group of 36 Maryland law students and alums on a trip to China. We will be visiting Beijing, X’ian and Shanghai, meeting with several Chinese environmental lawyers and law students, and participating in a workshop with the All China Environmental Federation before returning to the U.S. on March 18.
While the Supreme Court was hearing Kiobel, the U.S. Court of Appeals to the D.C. Circuit was hearing the first of two days of oral argument on consolidated challenges to EPA’s finding that emissions of greenhouse gases (GHGs) endanger public health and welfare and the various rules the agency has promulgated for controlling GHGs. Last November at a dinner of prominent environmental practitioners (see Nov. 6, 2011 blog post) virtually everyone (including several prominent industry lawyers) agreed that EPA’s endangerment finding would be upheld by the D.C. Circuit. Many thought EPA would beat back all of the legal challenges to its regulation of GHG emissions. However, some others, including a few prominent supporters of EPA, believed that EPA’s tailoring rule could be struck down. While predictions are always hazardous, these still seem like good bets.
In an article published last week in the New York Review of Books, William D. Nordhaus, the Sterling Professor of Economics at Yale, presents a powerful response to the January 27, 2012 Wall Street Journal op-ed by 16 climate skeptics. William D. Nordhaus, “Why the Global Warming Skeptics Are Wrong,” available online at: http://www.nybooks.com/articles/archives/2012/mar/22/why-global-warming-skeptics-are-wrong/ He rejects all six arguments made by the skeptics, argues that they misrepresent the science and his own work, and concludes that the “claim that cap-and-trade legislation or carbon taxes would be ruinous or disastrous to our societies does not stand up to serious economic analysis.”
China’s investment in new wind power capacity is slowing. In 2011 the amount of newly-added wind power capacity in the country fell by 5% and it is expected to decline by even more in 2012. Yet China remains the world’s largest market for wind power and Barclays Capital still estimates that the country’s wind power capacity will double by the year 2015. A Blow for China, Financial Times, March 5, 2012, at 14.
On February 29 I gave the luncheon keynote address at the conference of the Association of California Water Agencies (ACWA). The audience included some of the 450 California water agencies that are members of the ACWA. There was considerable talk during lunch about H.R. 1837, a bill sponsored by Rep. Devin Nunes that passed the U.S. House of Representatives that day. The bill would trump national and California environmental restrictions on water transfers. It is considered unlikely to pass the Senate. I spoke to the group on “China and the Global Environmental Challenge,” with a particular focus on China’s water problems, which often have been cited as a perhaps the most significant factor constraining that country’s future growth. Professor Zhao also came to Washington for the lunch. When asked whether my assessment was correct that most people in China now consider the Three Gorges Dam to have been a mistake, she emphasized how complicated it is to make such assessments, while allowing that the public did not have much say in the project. Later in the day Professor Zhao gave an introductory lecture on Chinese environmental law to my seminar on Global Environmental Law.