BP 'grossly negligent' in 2010 U.S. spill, fines could be $18 billion

Thu Sep 4, 2014 6:35pm EDT
 
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By Anna Driver and Mica Rosenberg

HOUSTON/NEW YORK (Reuters) - A U.S. judge has decided that BP Plc (BP.L: Quote) was “grossly negligent” and “reckless” in the Gulf of Mexico oil spill four years ago, a ruling that could add nearly $18 billion in fines to more than $42 billion in charges the company took for the worst offshore environmental disaster in U.S. history.

BP said it would appeal Thursday’s ruling by U.S. District Judge Carl Barbier in New Orleans, Louisiana, who held a trial without a jury last year to determine who was responsible for the April 20, 2010 rig explosion and spill that killed 11 workers and spewed oil for nearly three months onto the shorelines of several states.

Barbier ruled that BP was mostly at fault and that two other companies in the case, Transocean Ltd (RIG.N: Quote) and Halliburton (HAL.N: Quote), were not as much to blame. The disaster struck when a surge of methane gas known to rig hands as a "kick" sparked an explosion aboard the Deepwater Horizon rig as it was drilling the mile-deep Macondo 252 well off Louisiana.

Barbier has yet to assign damages from the spill under the federal Clean Water Act or rule on how many barrels spilled, but

David Uhlmann, a University of Michigan law professor and former chief of the Justice Department's environmental crimes section, said the ruling “dramatically increases” BP’s liability for civil penalties under the act.

Previous calculations by Reuters have shown fines could run to $17.6 billion in the costliest scenario under a 'gross negligence' finding. The amount is far more than the $4.5 billion maximum fine that could have been levied under a simple 'negligence' ruling.

BP has set aside only $3.5 billion for fines under the Clean Water Act, part of a much broader series of provisions for cleanup, compensation and damages that exceed $42 billion.

"The Court concludes that the discharge of oil 'was the result of gross negligence or wilful misconduct' by BP," Barbier said in his written ruling. “BP’s conduct was reckless.”   Continued...

 
Fire boat response crews battle the blazing remnants of the offshore oil rig Deepwater Horizon, off Louisiana, in this April 21, 2010 file handout image. REUTERS/U.S. Coast Guard/Files/Handout