ConocoPhillips Oil Spill in China’s North Bohai Bay

This summer, an area half the size of London in Bohai Bay, near China’s northeast Shandong Province, was devastated by two oil leaks involving a total of 3,200 barrels. The spill and subsequent cover-up raise important questions of the companies’ lack of transparency and regard for public safety. The first oil leak occurred on June 4th, 2011 in the Penglai 10-3 oil field, China’s largest oil field, owned jointly by the China National Offshore Oil Corp (Cnooc) and the China subsidiary of the US oil company ConocoPhillips. ConocoPhillips claims to have reported the leak immediately to the State Ocean Administration (SOA), who held a press conference on July 5th, an entire month after the initial leaks, at which point they formally released information to the public.

The public was first made aware of the spill through a microblog post on June 21st, which served as the tip-off for journalists and activists who further investigated the issue. The Chinese paper Southern Weekend released the first in-depth article the following week. ConocoPhillips, who owns 49% of the oil field and serves as the operator, is facing allegations for cover-ups and delays in reporting, while the SOA has been accused of waiting a month after the reported leaks to hold a press conference and inform the public. After a leak on July 12th, however, SOA urged both companies to publicly disclose information and suspend drilling until the leaks have been dealt with.

840 square kilometers of seawater have been directly affected, turning from Grade I to Grade IV, the worst measurement water quality in China. A total of 3,400 square kilometers were indirectly affected by the spill. New leaks were recently discovered, and two of the sixteen leaks are still intermittently active.

The spill is a grave threat to marine life and the livelihood of fishermen, as seafood is expected to be contaminated for at least a year. The Chinese maritime authority recently announced their intention to sue ConocoPhillips, on behalf of China’s government, if the company does not meet a deadline to complete clean-up and eliminate the risk of future risks by August 31st. Forty-nine Chinese law firms have already requested to provide legal assistance for the case. The losses in the fishing industry caused by the spill are estimated at around $23.5 million (150-170 million yuan).

China’s worst oil spill to date was from a pipeline rupture in July of 2010 in the northern city of Dalian. However, regulations regarding marine environmental protection and compensation in the event of a future oil spill following this incident were not improved. Companies responsible for oil spills in the past have been punished with meager fines, and have not been required to compensate affected residents. While the current law only demands a 200,000 yuan fine, the People’s Daily, the national newspaper, recently called for the companies involved to set up a compensation fund cover the entire cost of clean-up, repair and just compensation. As ConocoPhillips is a foreign company, however, the government may be trying to strike a balance between adequate punishment and continuing to attract foreign investment.

Some of Pacific Environment’s partner groups are working to uncover more information about the leak and its harms to the environment. Green Anhui and Nanjing-based Green Stone were among eleven environmental organizations to send a jointly-written letter to ConocoPhillips and Cnooc demanding an official apology for failing to meet standards of corporate social responsibility by concealing the oil leaks, thus further damaging the environment by delaying clean-up efforts.