A federal judge decided this week that British Petroleum will pay a maximum of $13.7 billion for its 2010 Gulf of Mexico oil spill, saying that the oil spill was not as extensive as United States officials claimed. The sum is several billions lower than all parties involved were expecting – except for BP, of course.
In September 2014, a federal judge has called major oil company BP (British Petroleum) “reckless”, and Transocean and Halliburton “negligent” following the major oil spill of 2010. The US District Judge Carl Barbier has ruled that BP’s “gross negligence” was responsible for the 11 lives which were lost and the 4.9 million barrels (210 million US gal; 780,000 cubic meters). The spill area hosts 8,332 species, and several peer reviewed studies and governmental reports have shown that the environmental damage (both in short and the long run) is inestimable.
The legal terms here revolve around negligence: under a “gross negligence” ruling Barbier issued in September, BP could be fined a statutory limit of up to $4,300 for each barrel spilled. However, a simple “negligence” ruling, which BP sought, caps the maximum fine at $1,100 per barrel – about 4 times lower.
The fine might seem huge – and it is, in a way. The maximum sum is $13.7 billion… which goes without saying, is a lot of money. But when you put it into perspective, things change significantly. BP’s annual profit was almost $24 billion in 2013, and shows no reason of dropping from the $20 billion ballpark in the future. So for the 4.9 million barrels of oil which killed countless animals and caused an unprecedented environmental disaster, the company will have to pay about half of its annual profits. Doesn’t seem so much now, does it ?
Even after the Clean Water Act fines are set, BP may face other bills from a lengthy Natural Resources Damage Assessment — which could require BP to carry out or fund environmental restoration work in the Gulf — as well as other claims.
So far, 810,000 barrels were collected during the clean-up, and even the imperfect cleaning efforts have cost BP more than the fine. As a matter of fact, without the fines, the Deepwater Horizon oil spill has cost BP some $42 billion already – not counting the negative publicity.