By Andrea J. Chambers and Jerry D. Brown, Attorneys, Foley & Lardner LLP
The offshore oil drilling industry will be forever changed by the explosion of the Transocean Deepwater Horizon drilling rig and subsequent oil spill in the Gulf of Mexico on April 20, 2010. This article briefly discusses the facts and circumstances surrounding the Deepwater Horizon explosion and Gulf oil spill and analyzes the legal issues raised and the legislative responses now being considered by Congress. It points to the urgent need for the energy industry to actively engage in the transformation of the regulatory and legal landscape resulting from this disaster so that an effective new regulatory and legal framework will allow the industry to thrive.
"The Gulf oil spill has rapidly generated a proliferation of lawsuits, raising numerous legal issues with lasting wide-ranging consequences, not only for the litigating parties but for the energy industry as well," write Andrea J. Chambers and Jerry D. Brown. "The number of claims is expected to grow considerably. Moreover, in addition to potential liability for personal injury and property damage claims, numerous other federal laws are implicated in the Deepwater Horizon explosion and the resulting oil spill, raising numerous and serious potential liabilities for BP, Transocean and Halliburton. Moreover, issues have been raised about the government's oversight of offshore drilling-specifically, possible failures to properly regulate BP, Transocean and Halliburton."
"Further, the Obama administration's response to the oil spill has been subjected to legal challenge," explain the authors. "Specifically, a six-month moratorium against new offshore drilling in the Gulf of Mexico issued by the U.S. Department of the Interior (DOI) was challenged in a complaint for an injunction on the grounds that the DOI failed to establish a proper and sufficient record to support the moratorium."
"Several congressional hearings into the explosion have already taken place, with at least one BP employee invoking his Fifth Amendment rights against testifying. Changes to existing regulations have already been proposed, with more changes likely to follow." Furthermore, the authors note, "The U.S. Justice Department has initiated both civil and criminal investigations into the explosion and oil spill."
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Andrea Chambers is a partner with Foley & Lardner LLP and a member of the Energy Industry Team. She provides regulatory counsel to entities involved in the restructuring of electric and natural gas industries. Ms. Chambers earned her J.D. from American University and her B.A. from Georgetown University.
Jerry Brown is an associate at Foley & Lardner LLP. He is a member of the firm's Energy Industry Team. He earned his law degree from the University of Minnesota School of Law where he was managing editor for the Journal of Law & Inequality. Mr. Brown earned his bachelor's degree from the University of Chicago.
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