Why BP Wrote the Gulf Oil Spill Out of Its Own "Sustainability" Report

BP's sustainability report -- its first since the Deepwater Horizon disaster in the Gulf of Mexico -- is two parts PR masterpiece, one part lawyery genius, topped with a splash of delusion. BP fills its report with images and details of the disaster as well as a gripping message about responsibility and "earning back trust" from straight-talkin' CEO Bob Dudley.

The report is so "honest," in fact, that you might easily miss the fact that BP doesn't want to say just how much oil it spilled into the Gulf (h/t the Lookout).

That leads to some interesting cognitive dissonance. Early on in the report, BP offers a historical breakdown of fatalities, worker injuries, spills and volume of oil leaked for the past four years (2006-2010). Go to BP's online graphics tool and you can look at data as far back as 1999.

Spill? What spill?
If you were to approach this data in a state of total innocence, you'd quickly conclude that 2010 -- when the Gulf spill took place -- actually looked like a pretty good year. Heck, BP leaked twice as much oil -- some 3.4 million liters -- in 2008 than it did last year.

For those with the patience for fine-print footnotes, BP provides the following explanation:

Although there are several third-party estimates of the flow rate of total volume of oil spilled from the Deepwater Horizon incident, we believe that no accurate determination can be made or reported until further information is collected and the analysis, such as the condition of the blowout preventer is completed.

As you'd expect, of course, BP has a perfectly understandable incentive to sidestep the question of the Gulf spill size. The company faces billions in fines for the oil that spewed from its damaged Macondo well into the Gulf of Mexico. Penalties under the Clean Water Act, which were strengthened after the Exxon Valdez spill, begin at $1,100 for each barrel of oil that spills into federal waters.

The U.S. Geological Survey determined in August that 4.1 million barrels of oil (out of a total of 4.9 million barrels released from the well) actually made it into the Gulf. That means BP faces a minimum of $4.5 billion in fines if the official estimate stands. It gets worse for BP from there. BP could face $21.1 billion in fines if the court finds the UK oil company was grossly negligent, although this scenario is unlikely.

BP offers up its own estimate of 3.2 million barrels of oil spilled -- but only in its annual report, not its sustainability document. The company estimates possible Clean Water penalties will be around $3.5 billion.

Back to the future
Flashback to the early days of the disaster when BP argued that measuring the size of the Gulf oil spill was an unnecessary distraction to the task of stopping the gushing well. The federal government acquiesced and put out a low-ball estimate of 5,000 barrels of oil a day based on satellite imagery. It would be five weeks before a federal team, called the Flow Rate Technical Group, would provide more accurate data. And even those numbers were low compared with what they would eventually determine.

Now BP is arguing that the flow rate was weaker and then increased over time as impediments to the oil were cut away. Meaning if BP's claims are true, the size of the spill could be smaller than government estimates. Less oil in federal waters, fewer fines for BP.

Photo from Deepwater Horizon Response
Related:

• Should BP Managers Face Manslaughter Charges?
• Gulf Oil Spill: Why Size Mattered From the Very Beginning, Especially for BP