Justice Dept.: Shielding Transocean docs could threaten Gulf spill report

HOUSTON – A U.S. attorney on Monday urged a federal appeals court to reject Transocean’s challenge to subpoenas for documents linked to the 2010 Gulf of Mexico oil spill, arguing they are pivotal for a regulatory report on the disaster due in June.

Overturning five subpoenas that the U.S. Chemical Safety Board issued to the Swiss rig operator roughly four years ago could leave the agency vulnerable to legal challenges to “basically scrap” its upcoming investigative report, Adam Goldman, an attorney for the Justice Department, said in a Houston court early Monday.

The report, he said, would serve a unique – and in the federal government’s eyes, important – purpose: Among the results of 16 other probes into the 2010 oil spill, it would be the only report that strictly looks at ways to prevent similar accidents in the future.

The CSB said earlier this month that on June 5 it will issue a report at a public meeting in Houston on technical, organizational and cultural factors behind the accident, as well as recommendations on ways regulators and industry players can improve offshore safety.

Transocean had operated the Deepwater Horizon rig under contract with BP, owner of the Macondo well that blew out in an April 2010 disaster that killed 11 workers and spilled millions of barrels of oil into the ocean.

Assertion of authority

A federal judge in Houston last year ordered Transocean to comply with the agency’s requests for records related to the spill after the company had disputed the CSB’s authority to investigate the offshore oil spillThroughout the legal battles, Transocean has pointed to language in the federal law that created the board in 1998, which says it “shall not be authorized to investigate marine oil spills.”

But the law allows it to conduct research on potential causes of accidental releases, and agency officials have said they were exploring the reasons behind the 2010 disaster.

Transocean is fighting the subpoenas vigorously because “compliance would implicitly acknowledge the board’s authority to investigate this spill and validate the relevancy of its findings regarding the root causes of the spill,” said Blaine Lecesne, a Loyola University law professor. “Those findings could then be used against Transocean in future liability determinations during the oil spill litigation. Transocean wants to be able to challenge those findings and not be estopped from doing so because they complied with the investigation.”

Circuit Judge Edith Jones on Monday noted that Transocean has not requested that judges undo the CSB report, but asked why the matter was not moot once the agency published its findings.

“They’re going to publish a report, so that’s going to let all the cats out of the bag,” Jones said.

Those records, an attorney for Transocean said Monday, could be used in future CSB materials or Congressional briefings.

“They shouldn’t have it for future testimony; that’s significant to Transocean,” said Sean Jordan, an attorney at Sutherland, Asbill & Brennan. “This is an unprecedented assertion of authority” by the CSB, he said.

Safety reports

Jordan argued that Congress designed the 16-year-old CSB to investigate onshore accidents at petroleum refineries and the like. Vessels like the Deepwater Horizon rig typically are the purview of the National Transportation Safety Board, an agency that led one of several separate probes into the accident.

In an April 18 statement, the CSB said its new publications will go beyond previous reports by showing new findings on why the rig’s blowout preventer failed, as well as an analysis of the industry’s approach to risk management, corporate governance and other organizational factors that could be improved to prevent future accidents.

The agency said it plans to follow up later this year with reports on regulators’ role in the offshore industry and organizational and cultural issues that emerged as causes for the spill.

“We look forward to presenting this vital information to the public, industry, Congress, and all others interested in fostering safety in the offshore drilling and production industry,” the agency said.