MARCH 12, 2012
WASHINGTON, D.C.
A federal appeals court on Thursday affirmed the authority
of government investigators to probe Transocean’s involvement in the 2010
Deepwater Horizon disaster.
By a vote of 9-6, the New Orleans-based Fifth Circuit Court
of Appeals rejected Transocean’s petition for a rehearing of its challenge to
government subpoenas tied to the explosion of its drilling rig nearly five
years ago.
Drilling contractors have warned that decades of case law
and precedents governing the offshore drilling sector hang in the balance.
In 2013, a federal district court ordered Transocean to
comply with those subpoenas from the Chemical Safety and Hazard Investigation
Board in April 2013.
Although Transocean has since produced the documents, the
drilling contractor continued fighting the ruling in federal court. Last
September, a three-judge panel of the Fifth Circuit Court of Appeals upheld the
district court’s ruling that the board could investigate.
Transocean asked the full court to rehear its arguments, but
Thursday’s ruling quashed that, potentially ending a long-running dispute over
the power the independent Chemical Safety Board has to investigate offshore
accidents.
It is unclear whether Transocean will take its legal
challenge further with an appeal to the Supreme Court. A Transocean spokeswoman
declined to comment.
The company owned the Deepwater Horizon drilling rig that
was working on BP’s failed Macondo well in the Gulf of Mexico when it blew out
in April 2010. The resulting explosion killed 11 workers on the rig and
unleashed the nation’s worst offshore oil spill.
The Chemical Safety Board has been probing the blast,
asserting that its focus is on the root causes of the explosion of the Deepwater
Horizon rig and not the oil spill that followed. The distinction is key because
the federal law that created the CSB asserts that the agency is not “authorized
to investigate marine oil spills.”
Transocean argued that Congress expressly limited the CSB’s
authority to investigate accidental releases from stationary sources — and that
the Deepwater Horizon should not qualify because it was a floating, seagoing
vessel, even if happened to be stationary above the Macondo well at the time of
the accident.
The International Association of Drilling Contractors
supported Transocean’s view, arguing in a friend-of-the-court brief that if CSB
were allowed to investigate an incident involving an offshore rig — despite the
statutory limitation to inquiries involving “stationary sources” — it could
upset decades of precedent governing the offshore oil sector.
Ruling in favor of the CSB “threatens the carefully
constructed legal framework developed by this court over the past 55 years to
deal with the myriad rigs that operate in the Gulf of Mexico,” the IADC argued.
At risk, the IADC said, are drilling contracts and insurance programs that have
been designed to comply with existing case law.
Although a riser pipe connected the Deepwater Horizon to the
Macondo well deep below, the IADC noted it otherwise was unconstrained by
anchor chains or mooring lines when it was working at the site. Instead, the
Deepwater Horizon’s dynamic positioning thrusters continually adjusted to the
ocean’s movement to keep the rig suspended above the well.
But the United States countered that “the Macondo drilling
installation, as a whole, was a stationary source,” and the Deepwater Horizon
drilling unit “was but one portion of the larger integrated drilling
installation.”
The stabilizing thrusters that kept the Deepwater Horizon in
constant motion in a confined area over the Macondo well were used “so that it
can perform a stationary activity,’ the Justice Department said, noting that in
this case, the rig remained in place for about two months.
With the underlying subpoenaed documents in hand, the
Chemical Safety Board is nearing the end of its probe of the accident.
The agency released the first half of its report into the
disaster last June; two more volumes are under internal review and could be
published later this year.