Environmental

BP's 'willfull misconduct' key to full compensation for oil spill damages

BP CEO Tony Hayward has said that his company will pay for all “legitimate” damages caused by the Deepwater Horizon oil spill, but those expenses are impossible to calculate as the site continues to spew more than 200,000 gallons of crude into the Gulf of Mexico every day. As the costs escalate, both the White House and Congress are taking measures to ensure that BP adequately compensates for the economic damage that is bound to occur in the volatile communities along the Gulf Coast and possibly beyond.

In BP’s favor is a mere $75-million cap on liability for oil-spill damages that the oil industry successfully lobbied for years ago. However, since the Deepwater Horizon disaster, the White House and Congress have been working to raise the cap to $10 billion.

Still, the oil slick could ripple throughout the fishing and tourism industries, dealing a huge blow to the economies of the Gulf States – a scenario that some analysts say could create damages of $100 billion or more. It all depends on how long it takes for BP to plug the leaking wellhead.

The White House could also accuse BP of misconduct and seek compensation under the Oil Pollution Act of 1990. Since the extent of the leak became apparent soon after the rig sank, administration officials have spoken of exceptions to the $75 million cap.

“Understand this … they are fully liable for cleanup and recovery costs per the Oil Pollution Act of 1990,” White House spokesman Robert Gibbs said earlier this week.

“The cap is not in place if somebody is found to be either grossly negligent, conduct willful — involved in willful misconduct, or in violation of federal regulations. As you know, there’s an investigation ongoing as to the cause behind the spill,” Gibbs added.

White House Communications Director Dan Pfeiffer also said as much on the White House blog this week and added “The bottom line is that the administration will aggressively pursue compensation from BP for any damages from this spill.”

According to BP, it is spending more than $6 million per day in oil containment and cleanup efforts. The company also announced $25 million in grants for Alabama, Florida, Louisiana and Mississippi.

Federal and state governments are also spending millions in emergency efforts, and the Pentagon just approved requests from the affected Gulf states for deployment of 17,500 National Guard troops.

Sen. Mary Landrieu (D-La), a staunch ally of the oil industry and advocate of offshore drilling, called on BP Wednesday to assist the devastated fishing industry in the Gulf States. According to Landrieu, commercial fishermen in the Gulf earned revenues of $659 million in 2008 and Louisiana’s $2.4 billion seafood industry employs more than 27,000 people.