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BP Faces up to $18 Billion in Fines for Gross Negligence Over Deepwater Horizon
BP was yesterday found guilty of being “grossly negligent” and “reckless” in the 2010 Deepwater Horizon oil rig blowout. The blowout killed 11 workers and caused the massive Gulf of Mexico oil spill that was the worst offshore environmental disaster in U.S. history. In the latest phase of the ongoing trial investigating BP’s liability for the incident, Louisiana District Judge Carl Barbier’s ruling means the U.K. oil company could be liable for up to $18 billion in additional fines under the Clean Water Act, on top of the $43 billion in charges the company already anticipated.
In the ruling Judge Barbier found BP 67 percent responsible for the disaster, with rig operator Transocean 30 percent responsible, and Texas-based Halliburton, which performed the cement work for the well, 3 percent responsible. Barbier’s ruling stated: “The Court concludes that the discharge of oil ‘was the result of gross negligence or wilful misconduct‘ by BP. BP’s conduct was reckless.” BP says it will challenge the ruling on the grounds that the standard for proving gross negligence was not met. “The law is clear that proving gross negligence is a very high bar that was not met in this case. BP believes that an impartial view of the record does not support the erroneous conclusion reached by the district court,” the company said in a statement.
The final tally of the fines will not be known until Barbier determines the exact amount of oil spilled and the fine per barrel is set. BP claims 3.26 million barrels leaked in the disaster, whereas the U.S government says the figure was 4.9 million barrels, although 810,000 barrels recovered after the incident won’t be included in the fines. Under the Clean Water Act a gross negligence or wilful misconduct ruling means the fine per barrel could be as high as $4,300. A simple negligence finding means the fine is up to $1,100 per barrel. BP is reported to have only set aside $3.5 billion for Clean Water Act fines, so it is unsurprising that they have decided to appeal. It is estimated the fines under a gross negligence ruling could reach almost $18 billion.
The next phase of the trial begins in January, 2015. Barbier will then determine how much oil was spilled and has also indicated that further civil damages cases could be brought by third parties. The criminal case against the company and a class action lawsuit were settled in 2012. In response to the decision on Thursday, U.S. Attorney General Eric Holder stated, “We are confident this decision will serve as a strong deterrent to anyone tempted to sacrifice safety and the environment in the pursuit of profit.” BP’s share price dropped 5 percent in the wake of the ruling.
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