September 20, 2020

BP faces $13.7 billion fine for gross negligence

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Halliburton-BP-Deepwater-Horizon-Oil-SpillBy Amanda Bronstad, From The National Law Journal

BP PLC could face up to $13.7 billion in civil penalties under the U.S. Clean Water Act for its role in the Deepwater Horizon oil spill, according to a federal judge’s ruling on Thursday.

U.S. District Judge Carl Barbier of the Eastern District of Louisiana sided with the U.S. Department of Justice that BP’s maximum allowable fine under the Clean Water Act should be $4,300 per barrel—an amount for gross negligence adjusted by the Environmental Protection Agency for inflation.

Barbier did not determine the actual fine amount, but his ruling follows the final phase of trial that wrapped up on Feb. 2 over the 2010 spill to determine how much BP and subcontractor Anadarko Petroleum Corp. should end up paying in Clean Water Act penalties.

BP had argued that its maximum penalties should be an unadjusted $3,000 per barrel.

BP spokesman Geoff Morrell wrote in an email that he disagreed with the decision, stating that “neither the EPA nor the Coast Guard has the power to independently inflate the maximum penalty Congress intended.” He continued, “At the very least, fair notice was never provided as to which of those two agencies possessed the authority to inflate the penalty amount.”

The DOJ declined to comment.

On Sept. 4, following the first phase of the DOJ’s trial, Barbier found that BP Exploration & Production was 67 percent at fault for the disaster and was grossly negligent, boosting its potential penalties under the Clean Water Act.

The DOJ, on Nov. 14, sought an order clarifying whether BP must face a statutory maximum penalty under the Clean Water Act of $3,000 per barrel—or one of two separate amounts of $4,000 by the U.S. Coast Guard and $4,300 by the EPA, both adjusted for inflation.

BP, in its own filing, said both inflated amounts were invalid since only the attorney general has the authority to make such changes.

But Barbier disagreed. “As the United States points out, accepting BPXP’s position would invalidate nearly every agency’s attempt to inflate civil penalties that can be sought in federal court,” he wrote.

Barbier also found that Anadarko should face a maximum penalty of $1,100 per barrel.

After the second phase of trial, Barbier on Jan. 15 ruled that the spill left about 3.19 million gallons of oil in the Gulf of Mexico—far less than previously estimated. That ruling reduced BP’s potential fine from the Justice Department’s estimated $18 billion, which was based on 4.19 million gallons of oil.

IMAGE: A ship floats amongst a sea of spilled oil in the Gulf of Mexico after the BP

Photo: Kris Krüg via Wikimedia Commons

For more: http://www.nationallawjournal.com/id=1202718398996/BP-Faces-137-Billion-Fine-for-Gross-Negligence#ixzz3SKXDREQ0

 

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