Damage Claims and Cleanup Estimates for the BP Oil Spill of 2010

TASA ID: 897

Cost recovery for necessary assessment and cleanup costs from an oil spill which started hundreds of miles away on an offshore drilling platform is going to be a large issue for numerous Gulf Coast property owners.  Legal action of any sort is a time-consuming affair.  There are several types of damage caused by the BP Oil Spill of 2010.  The first category relates to those employees injured or killed during the initial explosion of the Deep Water Horizon drilling platform on April 20, 2010.  The aftermath of the explosion has created environmental devastation throughout several coastal states.  The efforts that BP has attempted since the explosion and subsequent spill suggest a level of emergency planning that was not anticipated.  In addition, it appears that BP never evaluated the risks and possible consequences of catastrophic failures and the probability of those failures.  Had BP contemplated those risks seriously, proper risk assessments would have been performed and BP would have been prepared with a variety of rapid emergency response spill responders, cleanup maneuvers and oil collection equipment.                    

The types of damages to the natural environment are catastrophic from the BP Oil Spill of 2010 and must be characterized.  The claims relate to several types of damage.  There are damages related to the explosion and associated injuries and wrongful deaths.  There are damages associated with people whose livelihood and businesses have been destroyed, damaged and interrupted by the oil spill.  These types of claims relate to the damage associated with not being able to use the Gulf of Mexico's offshore and near shore resources for tourism, fishing, and oil drilling.  All the workers who support these industries may also encounter diminished economic prospects directly to the BP Oil Spill. These businesses and employees are possible claimants and can be helped by properly trained legal experts.  These types of damages and claims, while important and unfortunate, are well beyond the scope of this article. 

Another type of damage relates to real property where the sales prices or rental income may diminish due to the residues of the oil spill.  The cost is the assessment and cleanup of the free product or as dissolved hydrocarbons in the ocean and coastal waterways.  Likewise, on the coast, the shallow sediments of beachfront properties may contain tar balls and residuals of dissolved hydrocarbons in the saturated sediments.  The hydrocarbons may exist in vapor form in the pore spaces.  The odors and visual staining may be in evidence for many years.  These effects contribute to the diminishment of the enjoyment and value of the property, and because of what is referred to as the "stigma value," the price of the property will be diminished even by the residual presence of the oil.  Other environmental effects include lower counts of healthy wildlife which diminishes the value of the real property. 

These claims will be difficult to prove without proper scientific documentation by a properly trained environmental expert.  The assessment needed for these types of damage claims would require an evaluation of photos before April 20, 2010, collection of many photos showing the impacted sediments and waterways, interviews of knowledgeable persons, and use of historic aerial photographs to also document conditions from the air.  In more industrial areas of the Gulf Coast, verification that the hydrocarbons detected and observed are related to the BP Oil Spill may require a laboratory technique known as gas chromatography to differentiate other hydrocarbons from other sources.

Although most of the media is concerned about the obvious floating free product associated with the BP Oil Spill, it is the dissolved contamination that will remain for a long period of time and continue to volatilize generating the crude oil odors, long after the free product has been mostly cleaned up from the surface of the air-sea interface. An interesting experiment known as DeepSpill was performed in 2000 off the coast of Norway and sponsored by 23 oil companies, as well as the U.S. Mineral Management Service (MMS).  In four different two-hour tests, 60 cubic meters (15,850 gallons) of nitrogen gas, marine diesel oil, crude oil and natural gas were released at 844 meters (2,769 feet).  For the diesel test, of the 60 cubic meters that were released into the ocean, only between 1 and 17 cubic meters, the lower and upper estimate ranges, were observed on the surface.  The difference was ascribed to evaporation and natural dispersion.  This also suggests that a significant amount of hydrocarbons become dissolved in the ocean water.  This is likely the case with the BP Oil Spill, and the ocean will have high levels of dissolved hydrocarbons in the water for many years, which will still impact beaches and property values, as well as the food chain and fishing industry for decades.

To document site damage and to substantiate environmental claims, discrete surface water or groundwater samples can be collected and analyzed for total petroleum hydrocarbons as crude oil using a modified EPA Method 8015 method, or similar analysis.  In addition, beach or estuary sediment can be collected for verification sampling purposes.  Although the crude oil from the BP Oil Spill has low volatility, as the hydrocarbons degrade and volatilize, some vapors or gas-phase hydrocarbons will be trapped in soil pore spaces in the sandy beach sediments and the clay-rich estuary sediments.  This soil vapor can be analyzed as well.  In some cases, vapor intrusion into buildings and living spaces can be a major health issue and exposure pathway for humans.  All analysis must be done using state-certified laboratories using standard EPA or state-approved analytical laboratory methods.

Laboratory analysis for petroleum hydrocarbons commonly has reporting levels in the parts per billion and with some analyses, parts per trillion levels.  Consequently, small amounts of hydrocarbon contamination can be found and documented in the field.  In the environmental field, small amounts of contamination can be related to adverse health effects if exposure pathways can be shown and documented.    Sensitivity to chemicals, including those found in crude oil, varies significantly in the population.  Some individuals are significantly more susceptible to the health effects of volatile organic compounds associated with crude oil. 

 Photo courtesy US EPA.

The restoration of a pristine estuary or beach can occur; however, the evidence for the BP Oil Spill, even with excellent cleanup efforts, will still be visible and known.  The observations of subtle evidence and knowledge of the spill causes devaluations of real property. 

Environmental scientists can assess the costs of cleanup and associated monitoring.  The costs of damage are defined once the environmental damage has been documented using laboratory analysis and reports by geologists and engineers.  The out-of-pocket costs for assessment, cleanup and monitoring can be substantial, well over a few thousand dollars.  These costs are necessary to bring the property close to the pre-spill pristine condition.  Given uncertainties and the limitations of using a small number of laboratory analyses on the property, the engineering costs can be evaluated as to the low, medium and high costs of cleanup and monitoring, with an average or most likely case being generated for settlement purposes.   The estimated environmental assessment and remediation costs can be prepared by a properly trained environmental professional.  Costs related to loss in value associated with loss of enjoyment, value of the property, and "stigma costs," should be performed by legal or other appraisal experts.

 Photo courtesy US EPA.

1) Environmental Assessment of sediments and water bodies

2) Evaluation of Exposure Pathways

3) Sampling of sediments, water or vapor

4) Wildlife inventory

5) Other specialized assessments

6) Cost Estimate of Remediation and Restoration

In summary, a land owner will need a multidisciplinary team to address environmental restoration costs associated with the BP Oil Spill or other spills.  A full team of experts including the attorney, real estate appraiser and the environmental scientist should work together in the planning and strategy of data collection and cleanup implementation to provide the best value in cost recovery.  The environmental experts will be able to address site assessment and remediation measures to restore the property and estimate costs of cleanup. 

This article discusses issues of general interest and does not give any specific legal, medical, or business advice pertaining to any specific circumstances.  Before acting upon any of its information, you should obtain appropriate advice from a lawyer or other qualified professional.

This article may not be duplicated, altered, distributed, saved, incorporated into another document or website, or otherwise modified without the permission of the author, who will be contacted by TASA.

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