OIL SPILLS, LIMITED LIABILITY AND BP: A CRITICAL LOOK AT WHY LIMITED LIABILITY IS ESSENTIAL TO MODERN SOCIETY

I. Introduction On the evening of April 20, 2010, roughly 5,000 feet below the ocean's surface, British Petroleum's Macondo Well suffered a major blowout. 1 This set off a disastrous chain reaction the full effects of which will not be known for years. 2 The fail-safe devices which should have prevented the blowout failed and the resulting explosion destroyed the Deepwater Horizon Drilling Rig killing eleven of its crew. 3 The explosion caused a spill that released an estimated 4.9 million barrels of crude oil into the Gulf of Mexico at an initial rate of 62,000 barrels a day. 4 Prior to the Macondo explosion, the worst spill in U.S. waters was the Exxon Valdez, 5 which dumped 10.8 million gallons of crude oil in to the Prince William Sound. 6 A barrel of petroleum contains 42 gallons, so the entire Exxon spill was less than 260,000 barrels. 7 The Macondo Spill released, on average, roughly one Exxon Valdez every four days and took BP three months to completely stop the leak. 8 Although commercial use of oil began in the early to mid-1800s, its use did not become wide spread until the invention of gasoline and its use in combustion engines. 9 Modern society is inextricably linked with petroleum; many of the products we use daily are at least partially made from petroleum and oil accounts for a large portion of our energy supply. 10 The problem is, oil is unevenly distributed beneath the earth's surface ...