BP Oil spill- The case goes on
BP’s Settlement Is Only the Beginning of the End of the Gulf Oil Spill | TIME.com
All the oil has been cleaned up or has evaporated from the waters of the Gulf of Mexico—well, nearly all of it—while the spill itself seems to have receded into memory, something that transfixed us for months but which is now little more than grist for an episode of the Newsroom. (Note: the amnesia may not apply to Gulf residents.) The legal mess over the worst oil spill in U.S. history, however, is still far from being cleaned up.
Still, a big step was taken on Nov. 15 towards resolving the legal problems over the spill when BP announced that it would pay $4.5 billion in fines and other payments to the government and plead guilty to 14 criminal charges connected to the 2010 accident which resulted nearly 5 million barrels of crude being spilled into the Gulf—as well as the deaths of 11 crewmen aboard the doomed Deepwater Horizon rig. The total amounts to the largest single criminal fine in corporate history.
Chief among them are the potential fines from BP’s violation of the Clean Water Act, which charges oil companies for every barrel of crude spilled. How much BP could end up paying will depend on how negligent the company is found to have been during the spill. If BP is found to be simply negligent, the company would be charged $1,100 for every barrel spilled. If it is found grossly negligent, however, those fines rise to $4,300 per spilled barrel. That’s the difference between $5.4 billion and $21 billion, and it’s one the company has already said it will fight over.
BP could also face a massive, multi-billion dollar penalty over a provision of the Oil Pollution Act, which would allow the Justice Department to charge the company ore than $30 billion to fix damages from the spill. A settlement of some sort seems more likely, but there’s a twist—Gulf Coast states insist that BP should pay the full fine, and that the bulk of those funds should go to the Gulf states. (Legislation already exists that would send 80% of the fines implemented under the Clean Water Act to the Gulf states.) A settlement, however, might allow the federal government to control where that money ends up.
And make no mistake—this is all about money. BP may have paid the highest criminal fine in corporate history, but considering the company made $5.4 billion last quarter alone, it shouldn’t have any trouble paying its bills. Indeed, the company’s stock price rose in the wake of the announcement—for investors, the settlement moved BP one step closer to being a normal oil company again. And with Brent crude over $100 a barrel right now, being a normal oil company means being a very profitable oil company. That’s not justice—that’s just economics.
BP’s Settlement Is Only the Beginning of the End of the Gulf Oil Spill | TIME.com
All the oil has been cleaned up or has evaporated from the waters of the Gulf of Mexico—well, nearly all of it—while the spill itself seems to have receded into memory, something that transfixed us for months but which is now little more than grist for an episode of the Newsroom. (Note: the amnesia may not apply to Gulf residents.) The legal mess over the worst oil spill in U.S. history, however, is still far from being cleaned up.
Still, a big step was taken on Nov. 15 towards resolving the legal problems over the spill when BP announced that it would pay $4.5 billion in fines and other payments to the government and plead guilty to 14 criminal charges connected to the 2010 accident which resulted nearly 5 million barrels of crude being spilled into the Gulf—as well as the deaths of 11 crewmen aboard the doomed Deepwater Horizon rig. The total amounts to the largest single criminal fine in corporate history.
Chief among them are the potential fines from BP’s violation of the Clean Water Act, which charges oil companies for every barrel of crude spilled. How much BP could end up paying will depend on how negligent the company is found to have been during the spill. If BP is found to be simply negligent, the company would be charged $1,100 for every barrel spilled. If it is found grossly negligent, however, those fines rise to $4,300 per spilled barrel. That’s the difference between $5.4 billion and $21 billion, and it’s one the company has already said it will fight over.
BP could also face a massive, multi-billion dollar penalty over a provision of the Oil Pollution Act, which would allow the Justice Department to charge the company ore than $30 billion to fix damages from the spill. A settlement of some sort seems more likely, but there’s a twist—Gulf Coast states insist that BP should pay the full fine, and that the bulk of those funds should go to the Gulf states. (Legislation already exists that would send 80% of the fines implemented under the Clean Water Act to the Gulf states.) A settlement, however, might allow the federal government to control where that money ends up.
And make no mistake—this is all about money. BP may have paid the highest criminal fine in corporate history, but considering the company made $5.4 billion last quarter alone, it shouldn’t have any trouble paying its bills. Indeed, the company’s stock price rose in the wake of the announcement—for investors, the settlement moved BP one step closer to being a normal oil company again. And with Brent crude over $100 a barrel right now, being a normal oil company means being a very profitable oil company. That’s not justice—that’s just economics.
