Environmental Law

BP Could Face Civil Fine as High as $4,300 for Each Leaked Barrel of Oil

The $75 million cap on civil liability for economic damages doesn’t limit the amount of fines that BP could pay for the Gulf oil spill.

According to Reuters, “a clause buried deep in the U.S. Clean Water Act” authorizes the government to seek civil penalties of up to $4,300 for every barrel of oil leaked into the ocean. The $4,300-a-barrel fine applies in cases of gross negligence; the basic fine is $1,100 a barrel.

BP has estimated the spill rate at 5,000 barrels a day. But preliminary estimates released today by the government put the rate at 12,000 to 19,000 barrels a day—an amount that means the spill is already larger than the Exxon Valdez disaster, according to stories in the Houston Chronicle and Washington Post.

BP opted against safeguards that could have spotted or stopped a gas leak that likely led to the explosion, according to investigative stories published today by the New York Times and the Wall Street Journal.

David Uhlmann, director of the Environmental Law program at the University of Michigan, told Reuters the civil penalties could be “staggeringly high, possibly running into the billions.”

According to the New York Times, BP had a choice of two casings for the oil rig that later exploded, and the one installed in the days before the accident was riskier than the other and expected to be cheaper in the long-term. The newspaper bases its story on a document provided by a congressional investigator.

The casing used by BP provided only a single barrier to the wellhead, rather than a double barrier, in case cement around the casing pipe failed to seal properly, allowing a gas leak. Investigators have said a gas leak was the likely cause of the explosion.

Andrew Gowers, a spokesman for BP, told the Times that there was no industry standard for casings, and the one chosen was not unusual.

The Wall Street Journal’s story focuses on “the fateful decisions that preceded the blast.” The WSJ says BP skipped a quality test of the cement and cut short a test that was designed to detect and remove gas. Then, in a push to finish the job that was behind schedule, workers removed “a critical safeguard,” the heavy drilling fluid known as mud that keeps gas from rising to the surface. Gowers also defended BP’s procedures in an interview with the Wall Street Journal.

Both newspapers report on a disagreement over procedures that broke out on the rig the morning of the blast. The “skirmish” was between Transocean officials and a BP official, the Wall Street Journal says.

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