Brazil: Environmental Hypocrisy or Political Idiocy?

chevron oil spill frade
A vessel works to clean up oil from last months Frade Oil Spill offshore Brazil

2,400 Barrels Spilled

In November 2011, a deepwater well in the Chevron-operated Frade field offshore Brazil leaked 2,400 barrels of of oil from the seabed.  The leak was halted within 4 days and the oil did not reach the shoreline.  The cause of the Frade spill and the subsequent spill response is still under investigation, however none of the initial factors appear to indicate gross negligence, and from all accounts, the spill response was highly effective and appropriate to avoid significant environmental damage.

Brazilian officials however, are currently demanding billions in environmental damages and fines.   The following is a break down:

  • USD $27 million – Initial Brazilian Institute of Environment and Renewable Natural Resources (IBAMA) fine.  Fine for alleged infraction of environmental regulations due to the discharge of oil.
  • USD $81 million – Rio State environmental lawsuit.  The suit calls for three things: an order for the company to conduct a broad, two-year effort to monitor, including by satellite, boats and helicopter, its oil production activities in Brazil; an order for the company to finance an environmental audit based on international standards of all its activities in Brazil; and an order for the company to pay $81 million for damages caused by the oil spill.
  • USD $5.4 million – Subsequent fine from IBAMA regarding alleged deficiencies in the emergency response plan
  • USD $10.8 billion – Federal DA’s lawsuit in Campos regarding environmental damage claims

It’s never a good day whenever oil is spilled into the sea, but this was by no means an environmentally catastrophic disaster.  Can offshore operators expect to see similar fines imposed on Petrobras-operated fields?

Or is this a political tactic to try and get funding for their 2016 Olympics, or perhaps to clean up and repair past environmental disasters such as…

26 Mar 1975, 70,000 Barrels Spilled

On 26 Mar 1975, while entering the Sao Sebastiao terminal at Santos, Brazil, M/T Tarik Ibn Ziyad ran aground spilling an estimated 70,000 barrels of oil into Guanabara Bay.  It was the worst oil spill in Brazilian history. CAUSE: Human Error

Guanabara bay sugar loaf mountain rio de janeiro

January 18, 2000, 8,176 barrels Spilled

8,176 barrels of fuel oil spilled from a Petrobras-operated subsea pipeline into a swamp adjacent to Brazil’s Guanabara Bay.  $28 million dollar fine imposed and over $200m has been invested in the past decade toward environmental and social projects in Guanabara Bay. CAUSE: Negligence and human error

Guanabara Bay mangrove oil spill
Dead mangrove area in Guanabara Bay 10 years after the oil spill. Photo: Maria Elena Romero/Al Jazeera

July 16, 2000, 34,000 Barrels Spilled

A ruptured expansion joint at Petrobras’ Araucaria refinery caused a 34,000 barrel spill into inland rivers and wetlands within the Brazilian state of Parano.  Pipe flowed for 2 hours before the workers were able to halt the flow of oil.   At least a $56 million fine was imposed. CAUSE: Negligence and human error

Iguacu River Oil Spill
Iguacu River Oil Spill

By using Brazil’s current oil spill-to-penalty ratio of $4.5 million per barrel spilled…

What if Petrobras’ BW Pioneer, an FPSO currently operating in the Gulf of Mexico, has an accident?