On April 10 ConocoPhillips announced that it was suspending plans to drill for oil in 2014 off the north shore of Alaska. ConocoPhillips, which owns 98 oil exploration leases in the Chukchi Sea, had spent $650 million through the end of last year to prepare for Arctic drilling. The company cited regulatory uncertainties in the U.S. as a reason for suspending its drilling plans. After several mishaps last year, Royal Dutch Shell abandoned plans to drill in the Arctic in 2013 and Statoil ASA has delayed its planned Arctic drilling from 2014 to 2015. Two of Shell’s drilling rigs were damaged last year in the harsh Arctic environment, which features rough seas, high winds, and extreme cold that make drilling there particularly difficult. Ben Lefebvre & Tom Fowler, Conoco Halts Arctic Drilling Plans, Wall St. J., April 11, 2013, at B7.
Last week BP opened its defense in the trial of the federal government’s civil claims against it for the 2010 Deepwater Horizon oil spill. After six weeks of testimony by the government and other parties that BP had ignored warnings of problems with the drilling rig and had sought to reduce costs while speeding up the drilling process, BP offered testimony that it had followed standard drilling procedures in the industry. The crucial issue in the case is whether BP was gulity of “gross negligence,” which would result in the civil fines being three times larger than for simple negligence.
The battle between Chevron and Ecuadoran plaintiffs seeking to enforce an $18 billion judgment against the oil company for pollution in the Oriente region of Ecuador continues on several fronts. The U.S. Court of Appeals for the Second Circuit has scheduled oral arguments for next month on a petition by the plaintiffs for a writ of mandamus to force removal for bias of the judge hearing Chevron’s RICO suit against the plaintiffs. The judge, Lewis Kaplan of the federal district court for the southern district of New York, previously sought to block enforcement of the judgment anywhere in the world, but his injunction was reversed on appeal by the Second Circuit. Last week the environmental consulting firm Stratus, which had provided consulting services to the plaintiffs, settled a lawsuit brought against it by Chevron by agreeing to disavow its assessment of oil contamination that had been submitted to the Ecuadoran judge. Stratus reportedly was facing bankruptcy due to the cost of Chevron’s litigation against it. The Ecuadoran plaintiffs allege that the Stratus settlement represents another example of Chevron seeking to intimidate its critics. For example, on April 3 a federal magistrate in San Francisco quashed subpeonas Chevron had issued to the environmental group Amazon Watch on First Amendment grounds. It is unclear what effect the Stratus settlement will have on the case because the judgment issued by Ecuadoran Judge Nicolas Zambrano was based on evidence other than that provided by Stratus. In a bizarre twist, Chevron has filed an affidavit from Judge Alberto Guerra, who heard the case in 2003 and 2004, claiming that Judge Zambrano accepted a $500,000 bribe from the plaintiffs. Judge Zambrano denies the allegation but claims that Guerra previously informed him that Chevron would pay $1 million if he recanted his judgment. Clifford Krauss, Consultant Recants in Chevron Pollution Case in Ecuador, N.Y. Times, April 13, 2013, at B6. Plaintiffs allege that Chevron has paid Guerra several hundred thousand dollars. Guerra admits that he was paid $38,000 by Chevron for his affidavit and $12,000 a month to support his family who have relocated to the U.S.
After a three-month trial, a state court jury in New Hampshire found on April 9 that ExxonMobil had been negligent in supplying gasoline that contained MTBE, a possible human carcinogen, that widely contaminated drinking water in the state. The jury ordered ExxonMobil to pay the state of New Hampshire $236 million, the company’s 28.94% in-state market share applied to total damages of $816 million. The state sued 26 oil companies over MTBE contamination in 2003 and all the defendants except for ExxonMobil settled the cases. Testimony at trial showed that ExxonMobil’s own experts had warned it against using MTBE as an oxygenate for gasoline because it makes it easier for gasoline to travel in groundwater and is resistant to biodegradation. More than 40,000 drinking water wells in New Hampshire are contaminated with MTBE with 5,590 of these at levels exceeding the state’s standard for safe drinking water.
On Wednesday April 10, Mario Cordero, the newly-appointed chairman of the Federal Maritime Commission (FMC), spoke to my Global Environmental Law seminar about efforts to reduce the environmental impact of maritime shipping. Chairman Cordero gave an inspirational talk that started with a description of his own background as a child of Mexican immigrants who did not have the benefit of the education he was able to receive in the U.S. After graduating from the University of Santa Clara Law School he practiced law in California and was appointed to the Board of Harbor Commissioners for the Port of Long Beach. In that position he championed a Green Port Policy to reduce pollution from vessels and the trucks that load and unload their cargoes. Cordero became the first Latino member of the FMC when appointed by President Obama in 2010 and confirmed by the Senate in 2011. He has continued to champion the greening of shipping as a member of the FMC and on April 2 he was designated by the President to be the FMC’s new chairman.
On April 10 I made a presentation on “The Role of Civil Society in Environmental Governance in the U.S. and China” at an environmental workshop at the University of Maryland Department of Government and Politics in College Park. My presentation reviewed how U.S. environmental laws have emphasized public participation in the process of developing, implementing and enforcing the environmental laws, while civil society has played a much more limited, but growing, role in this process in China. I argued that one of the reasons why China has had more difficulty enforcing its environmental laws is precisely because they are not the product of hard-fought compromises between business and environmental interests. China’s highly decentralized enforcement structure and its lack of an independent judiciary are other contributing factors to the country’s enforcement problems. I will be jointly presenting a more detailed version of this talk with Professor Zhao Huiyu of Shanghai Jiaotong University School of Law, who is co-authoring a paper on the subject with me, at a conference in Nanjing, China on May 6-7.
As announced in last week’s blog posting, blog entries from students in my Global Environmental Law seminar are being posted daily in the “Students” section of my parallel blog at: www.globalenvironmentallaw.com. A total of 21 such entries now have been posted. They cover such diverse topics as opposition to building a new coal-fired power plant in Kosovo, bee colony collapse disorder, pollution from cruise ships, land tenure and the Amazon environment, the politics of Australia’s carbon tax, and comparative environmental standing. More student blog entries will be posted during the next week.