Judge slashes BP’s oil spill liability by 810,000 barrels

BP 435x292 Judge slashes BP’s oil spill liability by 810,000 barrelsA federal judge agreed Tuesday to let BP off the hook for 810,000 barrels of the 4.9 million barrels (206 million gallons) of oil released by its blown-out Macondo well in the Gulf of Mexico, accepting the argument that the company collected that much oil from the source before it contaminated the water.

Judge Carl Barbier’s order represents a substantial victory for BP because it reduces the maximum penalty the company would pay for violating the Clean Water Act by $3.4 billion.

A federal trial is set to begin Monday in New Orleans to determine how much blame should be placed on BP and its partners for their roles in the doomed Deepwater Horizon drilling venture. Civil fines for contaminating the Gulf with oil, a violation of the Clean Water Act, will be assessed on a per-barrel basis. Fines could fall between $1,100 to $4,300 per barrel depending on whether the court finds BP acted with gross negligence in causing the Deepwater Horizon disaster and other factors.

The Deepwater Horizon rig exploded on April 20, 2010 and sank to the Gulf floor two days later. The blast killed 11 workers and caused the Macondo well to gush oil for more than 80 days.

Judge Barbier’s decision means that the maximum civil fine BP faces for the spill has been reduced from $21 billion to about $17.6 billion. In his court order, he said that “The collected oil … never came into contact with any ambient sea water, and was not released to the environment in any way.”

BP has not been able to settle the civil claims with the federal government ahead of Monday’s trial. The company has accused the U.S. government of making excessive demands and says it is prepared defend itself vigorously in court. BP also says the government’s official estimate of the oil spill’s volume is 20 percent too high, but the credibility of that estimate remains in doubt.

In January, a federal judge approved a plea agreement between BP and the U.S. to settle several criminal charges, including 11 felony counts of manslaughter; one misdemeanor count under the Clean Water Act; one misdemeanor count under the Migratory Bird Treaty Act; and one felony count of obstruction for lying to Congress about the quantity of oil gushing from the Macondo well.


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