Judge Declares BP is Grossly Negligent but are Fines Enough?

A September 4, 2014 federal ruling states that BP was “grossly negligent” in the 2010 Deepwater Horizon oil disaster in the Gulf of Mexico. The judge cited BP for recklessness and criticized the company for what he termed “profit-driven decisions.” This ruling is a crucial part of holding BP accountable.

On September 2, 2014 Halliburton agreed to pay a 1.1 billion settlement for its role in the disaster, but BP’s fines could amount to more than 16 times that amount.

As explained in a statement by national and local organizations in New Orleans working on Mississippi River Delta restoration, “Today’s ruling a vital step toward holding BP accountable, restoring the Gulf.”

BP has set aside 3.5 billion for civil penalties under the US Clean Water Act. However, the ruling by US District Judge Carl Barbier could cost the company more than five times that amount. BP may have to pay as much as $18 billion in pollution fines for the Gulf spill. In total the fines could amount to $4,300 for each barrel of crude spilled.

A total of 80 percent of the proceeds will go to environmental restoration projects and the remaining 20 percent will go into a trust fund to cover cleanup costs for future spills. However, no amount of money can repair all the ecological damage, nor will it bring back all of the creatures killed or the 11 workers that perished in the disaster.

In addition to fines, stock prices are another way that these legal proceedings are hurting BP. The company’s shares closed down 5.9 percent in London following the federal judge’s ruling. The cost have been significant even for an oil giant like BP. Due to the Gulf oil disaster, the company has been forced to sell off assets effectively making it a smaller company.

In the wake of the ruling, Environmental Defense Fund, National Wildlife Federation, National Audubon Society and the Lake Pontchartrain Basin Foundation released the following statement:

“More than 4 years after the BP oil disaster, today’s ruling brings hope and justice for the people, wildlife and ecosystems of Louisiana and the Gulf Coast. For 87 days, the Deepwater Horizon well spewed more than 4.1 million barrels of oil into the Gulf of Mexico – because of BP’s egregious conduct. A court of law has confirmed that risky and reckless behavior has consequences. The areas most damaged by the spill cannot wait any longer for restoration to begin. Today’s ruling is a vital step toward holding BP and other parties responsible for the largest oil spill in our nation’s history.”

It is hoped that by making the costs of such mishaps so burdensome, it will decrease the likelihood of their recurrence. Has BP learned its lesson?

Rather than accept the ruling, BP has indicated that it will fight the decision. A trial on the Clean Water Act fine is expected to take place in January 2015. Sadly, this tragic debacle is far from over and spill-related litigation may drag on for decades.

New projects including some in the Gulf of Mexico suggest otherwise. As reported by the Wall Street Journal, the company was among the most active bidders in a lease sale in the Gulf last month. Further, the company has reached an all time high in Gulf oil extraction with 10 rigs increasing production by 32 percent over last year.

No matter how much BP pays, it will not be able to stop the egregious impacts on wildlife, nor can it stop the oil that continues to wash ashore from Louisiana to Florida. Given the fact that the impacts of the largest petroleum spill in marine history will last for generations, 18 billion seems like a steal.