BP faces as much as $17.6 billion in civil fines for Gulf oil spill
Now that BP is finally on the verge of capping its well, the source of the largest oil spill in United States history, the oil company’s focus must now shift toward the cleanup of the Gulf and the expensive civil liability fines that it faces stemming from the disaster. Based on a federal panel of experts’ estimate earlier this week, BP could face up to $17.6 billion in civil penalties from the 4.1 million barrels of oils leaked from it well into the Gulf.
Environmental lawyers familiar with such toxic tort cases opine that BP is likely to negotiate a lower penalty. Nonetheless, the fines could still hurt the company’s ability to pay for the cleanup costs. Under the Clean Water Act, oil owners are liable for fines of $1,100 per barrel spilled even if it did nothing wrong. The penalty jumps to $4,300 per barrel if BP was grossly negligent, which would include making conscious decisions that increased the likelihood of an incident while engaged in a risky business, such as deepwater drilling. BP Chairman expressed doubt about the fines being that high, stating that BP and the government have a mutual interest in a lower number because, according to BP Chairman, the government does not want to push BP into insolvency.
The civil fines, discussed above, which fall under United States environmental laws are distinct from costs that BP currently faces to clean up the spill. Additionally, they are separate from costs that BP faces for compensating the personal injury victims of the disaster.
Click on the Business Week link to read more about the liability fines facing BP.
