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A hard hat from an oil worker lies in oil from the Deepwater Horizon oil spill on East Grand Terre Island, Louisiana June 8, 2010. REUTERS/Lee Celano

BP looking to cut Clean Water Act fines by $10 billion

U.S. District Judge Carl Barbier recently reaffirmed his ruling that BP was grossly negligent in the events leading up to and during the Deepwater Horizon disaster. Now BP is seeking to have a new, lower cap placed on the fines it could face come January.

Under the Clean Water Act, BP could face fines of up to $4,300 per barrel of oil spilled during the 87-day fiasco. However, according to David Hammer for the Shreveport Times, BP wants Judge Barbier to cap the per-barrel fine at $3,000 before the Deepwater Horizon litigation moves forward in 2015. The government estimates that 4.1 billion barrels were spilled from the Macando well into the Gulf of Mexico. Cutting the maximum fine for each barrel would result in over $5 billion in savings for the oil giant, chopping the total from $17.6 billion to $12.3 billion.

Judge Barbier’s ruling of gross negligence upped the potential fines from $1,100 per barrel to $4,300, putting BP in a bind. The company had only budgeted $3.5 billion in fines under the Clean Water Act.

BP has levied the request on the grounds that the Coast Guard and Environmental Protection Agency both violated the Clean Water Act by adjusting the fines for inflation. The fines were originally set in 1990 following the Exxon Valdez spill.

BP is also arguing that the government has exorbitantly overestimated the total amount of oil spilled into the Gulf. Instead, BP places that number at approximately 2.45 million barrels, only about 60 percent of the federal estimate. Should the number of barrels for which BP is fined be reduced, in addition to a lower maximum fine, it would save the company another $4.95 billion, capping fines at $7.35 billion.


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