BP Wins Most Pentagon Fuel Awards in Year After Gulf Explosion
http://www.bloomberg.com/news/2012-02-24/bp-wins-most-pentagon-fuel-awards-in-year-after-gulf-of-mexico-explosion.html
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http://www.news24.com/SciTech/News/Sick-fish-near-BP-oil-spill-site-20120419
Sick fish near BP oil spill site
A bird is mired in oil on the beach at East Grand Terre Island along the Louisiana coast. (Charlie Riedel, AP)
Barataria Bay - Open sores. Parasitic infections.
Chewed-up-looking fins. Gashes. Mysterious black streaks. Two years
after the drilling-rig explosion that touched off the biggest offshore
oil spill in US history, scientists are beginning to suspect that fish
in the Gulf of Mexico are suffering the effects of the petroleum.
The evidence is nowhere near conclusive. But if those suspicions prove correct, it could mean that the environmental damage to the Gulf from the BP disaster is still unfolding and the picture isn't as rosy as it might have seemed just a year ago.
And the damage may extend well beyond fish. In the past year, research has emerged showing deep-water coral, seaweed beds, dolphins, mangroves and other species of plants and animals are suffering.
"There is lots of circumstantial evidence that something is still awry," said Christopher D'Elia, dean of Louisiana State University's School of the Coast and Environment. "On the whole, it is not as much environmental damage as originally projected. Doesn't mean there is none."
Reports of strange things with fish began emerging when fishermen returned to the Gulf weeks after BP's gushing oil well was capped during the summer of 2010. They started catching grouper and red snapper with large open sores and strange black streaks, lesions they said they had never seen. They promptly blamed the spill.
Small percentage
The illnesses are not believed to pose any health threat to humans. But the problems could be devastating to some prized types of fish and to the people who make their living catching them.
There's no saying for sure what's causing the diseases in what is still a relatively small percentage of the fish. The Gulf is assaulted with all kinds of contaminants every day. Moreover, scientists have no baseline data on sick fish in the Gulf from before the spill. The first comprehensive research may be years from publication.
Still, it's clear to fishermen and researchers alike that something's amiss.
- A recent batch of test results revealed the presence of oil in the bile extracted from fish caught in August 2011, nearly 15 months after the well blew out on April 20, 2010, in a disaster that killed 11 men.
"Bile tells you what a fish's last meal was," said Steve Murawski, a marine biologist with the University of South Florida and former chief science adviser for the National Marine Fisheries Service. "There was as late as August of last year an oil source out there that some of those animals were consuming."
Bile in red snapper, yellow-edge grouper and a few other species contained on average 125 parts per million of naphthalene, a compound in crude oil, Murawski said. Scientists expect to find almost none of the substance in fish captured in the open ocean.
- Last year, a federally funded team of scientists conducted what experts say is the most extensive study yet of sick fish in shallow and deep Gulf waters. Over seven cruises in July and August, the scientists caught about 4 000 fish, from Florida's Dry Tortugas to Louisiana.
Parasites
About 3% of the fish had gashes, ulcers and parasites symptomatic of environmental contamination, according to Murawski, the lead researcher.
The number of sick fish rose as scientists moved west away from the relatively clean waters of Florida, and also as they pushed into deeper waters off Alabama, Mississippi and especially Louisiana, near where the Deepwater Horizon rig sank.
About 10% of mud-dwelling tile fish caught in the DeSoto Canyon, to the northeast of the well, showed signs of sickness.
"The closer to the oil rig, the higher the frequency was" of sick fish, Murawski said.
Past studies off the Atlantic Seaboard found about 1% of fish suffering from diseases, Murawski said. But he said that figure cannot really be used for comparisons with the Gulf, whose warmer waters serve as an incubator for bacteria and parasites that can cause lesions and other illnesses.
- Laboratory work over the past winter on the USF samples indicates the immune systems of the fish were impaired by an unknown environmental stress or contamination. Other researchers say they have come to similar conclusions.
"Some of the things I've seen over the past year or so I've never seen before," said Will Patterson, a marine biologist at the University of South Alabama and at the Dauphin Island Sea Lab. "Things like fin rot, large open sores on fish, those were some of the more disturbing types of things we saw. Different changes in pigment, red snapper with large black streaks on them."
Cause
Teasing out what might have been caused by the spill and what is normal will be tricky, and that's the challenge scientists now face. Deformities, diseases and sudden shifts in fish numbers are regular occurrences in nature. For example, scientists are not sure what to make of reports from fishermen of eyeless or otherwise deformed shrimp and crabs.
"I've heard everything but shrimp with two heads," said Jerald Horst, a marine biologist retired from LSU AgCenter who writes books about the Gulf. "I listen respectfully. Reports can be useful but are not proof in themselves of cause and effect."
Even if oil were pinpointed as the cause, it could be difficult to definitively tie the problem to the BP spill. The Gulf is strewn with wells, pipelines, natural oil leaks from the seafloor, and pollution from passing ships. And muddy, contaminant-laden water flows constantly into the Gulf from the Mississippi River.
Still, the more scientists look - thanks to millions of dollars in research money, much of it coming from a fund set up by BP for independent research - the more they're finding that may be off-kilter.
The evidence is nowhere near conclusive. But if those suspicions prove correct, it could mean that the environmental damage to the Gulf from the BP disaster is still unfolding and the picture isn't as rosy as it might have seemed just a year ago.
And the damage may extend well beyond fish. In the past year, research has emerged showing deep-water coral, seaweed beds, dolphins, mangroves and other species of plants and animals are suffering.
"There is lots of circumstantial evidence that something is still awry," said Christopher D'Elia, dean of Louisiana State University's School of the Coast and Environment. "On the whole, it is not as much environmental damage as originally projected. Doesn't mean there is none."
Reports of strange things with fish began emerging when fishermen returned to the Gulf weeks after BP's gushing oil well was capped during the summer of 2010. They started catching grouper and red snapper with large open sores and strange black streaks, lesions they said they had never seen. They promptly blamed the spill.
Small percentage
The illnesses are not believed to pose any health threat to humans. But the problems could be devastating to some prized types of fish and to the people who make their living catching them.
There's no saying for sure what's causing the diseases in what is still a relatively small percentage of the fish. The Gulf is assaulted with all kinds of contaminants every day. Moreover, scientists have no baseline data on sick fish in the Gulf from before the spill. The first comprehensive research may be years from publication.
Still, it's clear to fishermen and researchers alike that something's amiss.
- A recent batch of test results revealed the presence of oil in the bile extracted from fish caught in August 2011, nearly 15 months after the well blew out on April 20, 2010, in a disaster that killed 11 men.
"Bile tells you what a fish's last meal was," said Steve Murawski, a marine biologist with the University of South Florida and former chief science adviser for the National Marine Fisheries Service. "There was as late as August of last year an oil source out there that some of those animals were consuming."
Bile in red snapper, yellow-edge grouper and a few other species contained on average 125 parts per million of naphthalene, a compound in crude oil, Murawski said. Scientists expect to find almost none of the substance in fish captured in the open ocean.
- Last year, a federally funded team of scientists conducted what experts say is the most extensive study yet of sick fish in shallow and deep Gulf waters. Over seven cruises in July and August, the scientists caught about 4 000 fish, from Florida's Dry Tortugas to Louisiana.
Parasites
About 3% of the fish had gashes, ulcers and parasites symptomatic of environmental contamination, according to Murawski, the lead researcher.
The number of sick fish rose as scientists moved west away from the relatively clean waters of Florida, and also as they pushed into deeper waters off Alabama, Mississippi and especially Louisiana, near where the Deepwater Horizon rig sank.
About 10% of mud-dwelling tile fish caught in the DeSoto Canyon, to the northeast of the well, showed signs of sickness.
"The closer to the oil rig, the higher the frequency was" of sick fish, Murawski said.
Past studies off the Atlantic Seaboard found about 1% of fish suffering from diseases, Murawski said. But he said that figure cannot really be used for comparisons with the Gulf, whose warmer waters serve as an incubator for bacteria and parasites that can cause lesions and other illnesses.
- Laboratory work over the past winter on the USF samples indicates the immune systems of the fish were impaired by an unknown environmental stress or contamination. Other researchers say they have come to similar conclusions.
"Some of the things I've seen over the past year or so I've never seen before," said Will Patterson, a marine biologist at the University of South Alabama and at the Dauphin Island Sea Lab. "Things like fin rot, large open sores on fish, those were some of the more disturbing types of things we saw. Different changes in pigment, red snapper with large black streaks on them."
Cause
Teasing out what might have been caused by the spill and what is normal will be tricky, and that's the challenge scientists now face. Deformities, diseases and sudden shifts in fish numbers are regular occurrences in nature. For example, scientists are not sure what to make of reports from fishermen of eyeless or otherwise deformed shrimp and crabs.
"I've heard everything but shrimp with two heads," said Jerald Horst, a marine biologist retired from LSU AgCenter who writes books about the Gulf. "I listen respectfully. Reports can be useful but are not proof in themselves of cause and effect."
Even if oil were pinpointed as the cause, it could be difficult to definitively tie the problem to the BP spill. The Gulf is strewn with wells, pipelines, natural oil leaks from the seafloor, and pollution from passing ships. And muddy, contaminant-laden water flows constantly into the Gulf from the Mississippi River.
Still, the more scientists look - thanks to millions of dollars in research money, much of it coming from a fund set up by BP for independent research - the more they're finding that may be off-kilter.
- SAPA
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http://www.bloomberg.com/news/2012-02-24/bp-wins-most-pentagon-fuel-awards-in-year-after-gulf-of-mexico-explosion.html
BP Wins Most Pentagon Fuel Awards in Year After Gulf Explosion
The scorn heaped upon BP (BP) Plc
following the biggest offshore oil spill in U.S. history in 2010
wasn’t echoed at the U.S. Defense Department (USBODEFN). It stepped up
purchases from the London-based company, making it the
Pentagon’s biggest fuel supplier.
BP’s contracts with the military surged 33 percent to $1.35
billion in the fiscal year that ended Sept. 30 from $1.02
billion in fiscal 2010, according to data compiled by Bloomberg
Government. BP received 49 percent more in defense contracts
than the No. 2 fuel supplier, San Antonio-based Valero Energy
Corp. (VLO)
To critics, BP’s favored spot at the Pentagon cash window
adds insult to the injury caused by the April 2010 explosion of
the Deepwater Horizon oil rig in the Gulf of Mexico. The
incident killed 11 workers, sullied hundreds of miles of
coastline and crippled the region’s fishing and tourism
industries.
“When BP still owes billions of dollars in possible fines and penalties for their spill in the Gulf of Mexico, our military shouldn’t renew lucrative contracts” for the company, said Massachusetts Representative Edward Markey, the top Democrat on the House Natural Resources Committee. It’s time “for our government to stand up to BP,” Markey said in an e- mail.
A trial to determine compensation for businesses and residents victimized by the spill is scheduled to begin Feb. 27 in New Orleans federal court. The company also faces hundreds of other lawsuits, at least 40 filed by survivors or relatives of the 126-member crew that was aboard the rig.
Most of the contract money awarded to BP by the Defense Department was subject to full and open competition, according to federal procurement data. The company offered the lowest price, said Michelle McCaskill, a spokeswoman for the Defense Logistics Agency, which buys fuel for the Pentagon.
Government agencies are allowed to suspend or disqualify companies from receiving contracts if they have committed or are suspected of committing wrongdoing.
“BP is neither suspended nor debarred and is therefore eligible to offer on and receive U.S. government contracts,” McCaskill said in an e-mail.
The Pentagon awarded $14.7 billion in fuel contracts in fiscal 2011. Eleven suppliers accounted for half of the total, led by BP, the world’s sixth-biggest oil company by market value.
Also among the top 10 Pentagon fuel suppliers are No. 6 Chevron Corp. (CVX), the fourth-largest oil company by market value and No. 4 Royal Dutch Shell Plc (RDSA), which ranks third by the same measure. Exxon Mobil Corp. (XOM), the world’s biggest publicly traded oil company, was the Pentagon’s 12th-largest supplier last year.
“There is a sense that large federal contractors, like BP, are too big to suspend or debar,” Amey said in an e-mail.
“The government’s over-reliance on such companies can make it nearly impossible to hold them accountable, absent a monetary penalty and promises to keep clean,” he said. “Temporarily cutting off millions or billions in taxpayer funds seems like a better way to get a company’s attention and truly alter corporate culture.”
The military’s global reach makes geography an important determinant of the Pentagon’s fuel suppliers. Valero, Chevron and World Fuel Services Corp. (INT), a Miami-based marketer of marine and aviation fuel, are the only U.S.-based companies among the top 10. World Fuel ranked No. 5 last year with $858 million in fuel contracts, a notch ahead of San Ramon, California-based Chevron, with $620 million.
It’s often less costly and easier for the government to buy oil from local suppliers, said Pavel Molchanov, a Houston-based analyst with Raymond James & Associates Inc.
“When I talk about those geographies where U.S. companies have very limited access, I’m thinking of places like Afghanistan, Pakistan, the Horn of Africa,” Molchanov said in an interview. Even in countries like Germany and Japan, where the Defense Department “has a very large presence,” it may be cheaper to use a local supplier, he said.
The Gulf catastrophe may yet cost BP some of its business with the Pentagon, from which the company received $7.06 billion in fuel contracts in the last five years.
BP has been cited with violations of the federal Clean Water Act, which allows the government to seek fines of $1,100 a barrel of oil spilled automatically, a figure that can rise to as much as $4,300 a barrel if a judge finds the company was grossly negligent in allowing the pollution to occur.
The maximum penalty would be $4.51 billion, using the $1,100-a-barrel fine and the government’s estimate of barrels spilled. A finding of gross negligence would boost that figure to $17.6 billion.
Violations of the Clean Water and Clean Air Acts typically result in the barring of specific facilities where the problems occurred, rather than punishing the company as a whole. The EPA has indefinitely disqualified two BP facilities from doing government work due to other violations.
The agency in 2009 barred the company’s refinery in Texas City, Texas, after an explosion that killed 15 workers and injured 170 others, according to EPA data. In 2008, the EPA disqualified BP’s Prudhoe Bay Unit on the North Slope in Alaska after a leak spilled between 200,000 and 270,000 gallons of crude oil into a nearby lake and tundra area.
Valero has paid more than $283 million in fines and settlements since 2000 for enforcement related to the environment and labor, according to the same database. That includes a 2007 case in which the company voluntarily agreed to pay $4.25 million in penalties and $232 million for pollution controls to bring refineries purchased in 2005 into compliance with the Clean Air Act, according to an EPA press release.
Military and government awards are a small part of Valero’s total revenue, said Bill Day, a company spokesman. He otherwise declined to comment on the company’s contracts.
“If any company that had an environmental scandal was ruled out as a fuel supplier for the military, the military would very quickly run out of fuel,” said Raymond James’s Molchanov. “That would pretty much rule out every oil company on the planet -- foreign or domestic,” he said.
To contact the reporter on this story: Danielle Ivory in Washington at divory@bloomberg.net
To contact the editor responsible for this story: Stephanie Stoughton at sstoughton@bloomberg.net
Fire boats battle a fire at the
oil rig Deepwater Horizon on April 21, 2010 in the Gulf of Mexico off
the coast of Louisiana. Photo: U.S. Coast Guard via Getty Images
Feb. 24 (Bloomberg) -- BP Plc
became the Pentagon’s biggest fuel supplier in the fiscal year following
the biggest offshore oil spill in U.S. history. BP's contracts with the
U.S. Defense Department surged 33 percent to $1.35 billion in the
fiscal year that ended Sept. 30.
Megan Hughes reports on Bloomberg Television's "InBusiness with
Margaret Brennan." (Source: Bloomberg)
Staff Sergeant Rusty Jones
prepares to fuel an A-10C Thunderbolt II on March 25, 2010. The Pentagon
awarded $14.7 billion in fuel contracts in fiscal 2011. Eleven
suppliers accounted for half of the total, led by BP, the world’s
sixth-biggest oil company by market value. Source: U.S. Air Force
“When BP still owes billions of dollars in possible fines and penalties for their spill in the Gulf of Mexico, our military shouldn’t renew lucrative contracts” for the company, said Massachusetts Representative Edward Markey, the top Democrat on the House Natural Resources Committee. It’s time “for our government to stand up to BP,” Markey said in an e- mail.
A trial to determine compensation for businesses and residents victimized by the spill is scheduled to begin Feb. 27 in New Orleans federal court. The company also faces hundreds of other lawsuits, at least 40 filed by survivors or relatives of the 126-member crew that was aboard the rig.
‘Not Right’
“BP still hasn’t fulfilled its commitment to fund the restoration of the Gulf of Mexico, but they pocketed $26 billion of profits last year, thanks in part to these government contracts, and that’s not right,” Jeremy Symons, senior vice president at the National Wildlife Federation in Reston, Virginia, said in an interview.Most of the contract money awarded to BP by the Defense Department was subject to full and open competition, according to federal procurement data. The company offered the lowest price, said Michelle McCaskill, a spokeswoman for the Defense Logistics Agency, which buys fuel for the Pentagon.
Government agencies are allowed to suspend or disqualify companies from receiving contracts if they have committed or are suspected of committing wrongdoing.
“BP is neither suspended nor debarred and is therefore eligible to offer on and receive U.S. government contracts,” McCaskill said in an e-mail.
Biggest Consumer
The company’s facilities in the Gulf of Mexico don’t play any role in its government work, said Scott Dean, a BP spokesman in Warrenville, Illinois. He declined to comment further on the company’s contracting.The Pentagon awarded $14.7 billion in fuel contracts in fiscal 2011. Eleven suppliers accounted for half of the total, led by BP, the world’s sixth-biggest oil company by market value.
Also among the top 10 Pentagon fuel suppliers are No. 6 Chevron Corp. (CVX), the fourth-largest oil company by market value and No. 4 Royal Dutch Shell Plc (RDSA), which ranks third by the same measure. Exxon Mobil Corp. (XOM), the world’s biggest publicly traded oil company, was the Pentagon’s 12th-largest supplier last year.
Too Big
The military’s hunger for oil may make it too difficult to eliminate major providers, said Scott Amey, general counsel of the Project on Government Oversight, a watchdog group in Washington. Excluding countries, the Defense Department is the world’s biggest consumer of energy.“There is a sense that large federal contractors, like BP, are too big to suspend or debar,” Amey said in an e-mail.
“The government’s over-reliance on such companies can make it nearly impossible to hold them accountable, absent a monetary penalty and promises to keep clean,” he said. “Temporarily cutting off millions or billions in taxpayer funds seems like a better way to get a company’s attention and truly alter corporate culture.”
The military’s global reach makes geography an important determinant of the Pentagon’s fuel suppliers. Valero, Chevron and World Fuel Services Corp. (INT), a Miami-based marketer of marine and aviation fuel, are the only U.S.-based companies among the top 10. World Fuel ranked No. 5 last year with $858 million in fuel contracts, a notch ahead of San Ramon, California-based Chevron, with $620 million.
Local Purchases
“Almost all of the fuel used by the military services overseas is purchased overseas,” the Defense Logistics Agency’s McCaskill said. “As a result, many of the contract dollars are awarded to foreign-based companies.”It’s often less costly and easier for the government to buy oil from local suppliers, said Pavel Molchanov, a Houston-based analyst with Raymond James & Associates Inc.
“When I talk about those geographies where U.S. companies have very limited access, I’m thinking of places like Afghanistan, Pakistan, the Horn of Africa,” Molchanov said in an interview. Even in countries like Germany and Japan, where the Defense Department “has a very large presence,” it may be cheaper to use a local supplier, he said.
The Gulf catastrophe may yet cost BP some of its business with the Pentagon, from which the company received $7.06 billion in fuel contracts in the last five years.
EPA Decision
The Environmental Protection Agency “has not yet determined whether to take further debarment action against BP as a result of the Deepwater Horizon oil spill,” Stacey Dey- Foy, director of EPA’s Suspension and Debarment Division, said in an e-mailed statement. Dey-Foy declined to say when the EPA would make a decision or whether debarment was part of continuing negotiations with the company.BP has been cited with violations of the federal Clean Water Act, which allows the government to seek fines of $1,100 a barrel of oil spilled automatically, a figure that can rise to as much as $4,300 a barrel if a judge finds the company was grossly negligent in allowing the pollution to occur.
The maximum penalty would be $4.51 billion, using the $1,100-a-barrel fine and the government’s estimate of barrels spilled. A finding of gross negligence would boost that figure to $17.6 billion.
Violations of the Clean Water and Clean Air Acts typically result in the barring of specific facilities where the problems occurred, rather than punishing the company as a whole. The EPA has indefinitely disqualified two BP facilities from doing government work due to other violations.
The agency in 2009 barred the company’s refinery in Texas City, Texas, after an explosion that killed 15 workers and injured 170 others, according to EPA data. In 2008, the EPA disqualified BP’s Prudhoe Bay Unit on the North Slope in Alaska after a leak spilled between 200,000 and 270,000 gallons of crude oil into a nearby lake and tundra area.
Valero Too
BP since 2000 has been hit with more than $2.6 billion in fines and settlements for enforcement related to the environment, labor, contract fraud and antitrust, according to the Project on Government Oversight’s database of federal contractor misconduct. The database includes both government and civil actions.Valero has paid more than $283 million in fines and settlements since 2000 for enforcement related to the environment and labor, according to the same database. That includes a 2007 case in which the company voluntarily agreed to pay $4.25 million in penalties and $232 million for pollution controls to bring refineries purchased in 2005 into compliance with the Clean Air Act, according to an EPA press release.
Military and government awards are a small part of Valero’s total revenue, said Bill Day, a company spokesman. He otherwise declined to comment on the company’s contracts.
“If any company that had an environmental scandal was ruled out as a fuel supplier for the military, the military would very quickly run out of fuel,” said Raymond James’s Molchanov. “That would pretty much rule out every oil company on the planet -- foreign or domestic,” he said.
To contact the reporter on this story: Danielle Ivory in Washington at divory@bloomberg.net
To contact the editor responsible for this story: Stephanie Stoughton at sstoughton@bloomberg.net
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