Federal judge rejects BP bid to lower $13.7 billion oil spill fine
A federal judge in New Orleans has rejected BP’s effort to cap its fines from the 2010 Gulf of Mexico oil spill at $9.57 billion, nearly one-third lower than the penalty federal prosecutors are seeking. The court has not yet ruled how much the British oil giant will pay for the disaster.
U.S. District Judge Carl Barbier ruled Thursday (Feb. 19) that BP could pay a maximum civil penalty of up to $4,300 for each barrel of oil spilled. The fines apply under the Clean Water Act, the federal law governing water pollution.
The ruling means BP continues to face up to $13.7 billion in civil fines for the oil spill.
BP had asked Barbier to cap the fine at $3,000 per barrel, the maximum set in 1990. But federal prosecutors said Environmental Protection Agency and Coast Guard rules required adjustments for inflation.
Barbier said Thursday the EPA rules are “applicable and correct” and affirmed the agency had the authority to adjust the penalty.
Barbier is expected to make a final ruling on how much BP will pay for the spill in coming months.
BP Vice President Geoff Morrell said the company disagrees with the decision and is “considering all of our legal options.”
“We continue to believe that neither the EPA nor the Coast Guard have the power to independently inflate the maximum penalty Congress intended,” Morrell said. “At the very least, fair notice was never provided as to which of those two agencies possessed the authority to inflate the penalty amount.”
Setting the civil fine is the final stage of the civil trial over the April 20, 2010 blowout at BP’s Macondo oil well, which killed 11 men. Oil gushed into the Gulf of Mexico for 87 days until the well was capped.
The civil trial started in early 2013 and was split into three phases, one to assign blame for the disaster, a second to determine how much oil spilled, and a final phase to set penalties for BP and Anadarko Petroleum Corp., its partner in the failed well.
Barbier ruled in September that BP bore most of the blame for the disaster. He found the BP’s actions amounted to “gross negligence or willful misconduct,” exposing the company to the maximum Clean Water Act fine.
In January, Barbier ruled 3.19 million barrels of oil were released into the Gulf during the disaster. The figure was below the 4.19 million the government thought spilled and above BP’s 2.45 million barrel estimate.
The two-week trial over the civil penalties ended Feb. 2.
BP argued it should pay a lower penalty because of the $40 billion in oil spill costs it already faces, including more than $14 billion spent to clean up the spill. Anadarko said it did not deserve a penalty because it did not cause the spill.
Federal prosecutors said imposing the maximum penalty for both companies is a necessary step in preventing future offshore oil disasters.
In the Thursday ruling, Barbier said the maximum penalty Anadarko faces under the Clean Water Act is $1,100 per barrel of oil spilled.
U.S. District Judge Carl Barbier ruled Thursday (Feb. 19) that BP could pay a maximum civil penalty of up to $4,300 for each barrel of oil spilled. The fines apply under the Clean Water Act, the federal law governing water pollution.
The ruling means BP continues to face up to $13.7 billion in civil fines for the oil spill.
BP had asked Barbier to cap the fine at $3,000 per barrel, the maximum set in 1990. But federal prosecutors said Environmental Protection Agency and Coast Guard rules required adjustments for inflation.
Barbier said Thursday the EPA rules are “applicable and correct” and affirmed the agency had the authority to adjust the penalty.
Barbier is expected to make a final ruling on how much BP will pay for the spill in coming months.
BP Vice President Geoff Morrell said the company disagrees with the decision and is “considering all of our legal options.”
“We continue to believe that neither the EPA nor the Coast Guard have the power to independently inflate the maximum penalty Congress intended,” Morrell said. “At the very least, fair notice was never provided as to which of those two agencies possessed the authority to inflate the penalty amount.”
Setting the civil fine is the final stage of the civil trial over the April 20, 2010 blowout at BP’s Macondo oil well, which killed 11 men. Oil gushed into the Gulf of Mexico for 87 days until the well was capped.
The civil trial started in early 2013 and was split into three phases, one to assign blame for the disaster, a second to determine how much oil spilled, and a final phase to set penalties for BP and Anadarko Petroleum Corp., its partner in the failed well.
Barbier ruled in September that BP bore most of the blame for the disaster. He found the BP’s actions amounted to “gross negligence or willful misconduct,” exposing the company to the maximum Clean Water Act fine.
In January, Barbier ruled 3.19 million barrels of oil were released into the Gulf during the disaster. The figure was below the 4.19 million the government thought spilled and above BP’s 2.45 million barrel estimate.
The two-week trial over the civil penalties ended Feb. 2.
BP argued it should pay a lower penalty because of the $40 billion in oil spill costs it already faces, including more than $14 billion spent to clean up the spill. Anadarko said it did not deserve a penalty because it did not cause the spill.
Federal prosecutors said imposing the maximum penalty for both companies is a necessary step in preventing future offshore oil disasters.
In the Thursday ruling, Barbier said the maximum penalty Anadarko faces under the Clean Water Act is $1,100 per barrel of oil spilled.
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