BP Oil Spill Fines

BP has won an agreement from the Justice Department that there will be no penalties on the barrels of crude oil the company was able to recapture during the 2010 Gulf of Mexico spill, effectively cutting the company’s potential Clean Water Act fines by as much as $900 million, or even up to $3.5 billion.

BP has contended that the amount spilled was “at least 20 percent” less than that. Moreover, it has argued that whatever the size of the spill, it kept 810,000 barrels out of the water by capturing the oil with its containers and vessels. That would mean that civil penalties would apply only to 3.1 million barrels of oil. Even using the government’s higher estimate, the agreement to exclude the 810,000 barrels would reduce BP’s Clean Water Act fines by 16.5 percent.

Under the Clean Water Act, the federal government can impose fines of as much as $1,100 a barrel or, if BP is found to be grossly negligent, as much as $4,300 a barrel. BP is going to trial in a New Orleans federal court Monday to defend itself against charges of gross negligence. The size of the spill will be the subject of the second phase of the trial, beginning in September. (Wash Post, 2/20/2013)