Support provided by:

Learn More

Documentaries

Articles

Podcasts

Topics

Business and Economy

Climate and Environment

Criminal Justice

Health

Immigration

Journalism Under Threat

Social Issues

U.S. Politics

War and Conflict

World

View All Topics

Documentaries

BP Facing Up to $17 Billion in Penalties in Civil Trial

BP Facing Up to $17 Billion in Penalties in Civil Trial
BP Facing Up to $17 Billion in Penalties in Civil Trial

By

Azmat Khan

February 25, 2013

Watch The Spill, a joint investigation by FRONTLINE and ProPublica into the trail of problems — deadly accidents, disastrous spills, safety violations — which long troubled the oil giant. Could the disaster in the Gulf of Mexico have been prevented?

A high-stakes civil trial against BP begins today to assign blame and assess damages related to the April 2010 Deepwater Horizon spill that could cost the oil giant between $4 and $17 billion in penalties.

The first part of the trial will focus on the cause of the disaster in order to determine whether BP was negligent, meaning it failed to use reasonable care, or was “grossly negligent,” which involves a substantial deviation from the duty of reasonable care. Last year, BP admitted negligence in a separate $4.5 billion criminal settlement.

The second part of the trial, which could begin in September, will address how much oil spilled, a factor that helps determine the federal fine. If BP is found negligent, it would pay $1,100 per barrel of oil spilled, and if found grossly negligent, it would pay $4,300 per barrel.

The government says that 4.9 million barrels of oil spilled in the disaster, while BP claims that the amount is 20 percent of that.

“It is extremely difficult to determine precisely how much oil was spilled into the Gulf of Mexico,” explained David Uhlmann, the former chief of the environmental crimes section at the Department of Justice. “Both sides are working from flow estimates.  There is no metering device on the well that can be used to determine how much oil is discharged when a blowout occurs.”

Last week BP scored a small victory when the Justice Department agreed that the 810,000 barrels oil BP captured with its vessels and containers should not be included in the fine, which could save the company several billion dollars.

Five states — Mississippi, Florida, Texas, Louisiana and Alabama — could benefit from the suit, but only the latter two states are involved in the trial. And though the plaintiffs are united in their view that BP was grossly negligent, there is disagreement over how much BP should pay in civil penalties, like the Clean Water Act fines, or natural resource damages, through the National Resource Damage Assessment process (NRDA). Natural resource damages can only be used for environmental restoration projects and are tax-deductible for BP, while economic damages can be spent more flexibly and are not tax-deductible.

On Sunday, The New York Times reported that a $16 billion settlement offer had been made to BP that would limit Clean Water Act fines to $6 billion, impose $9 billion in natural resource damages and restoration, and set aside $1 billion for any unanticipated environmental damages.

Uhlman said a settlement is still possible in the early weeks of the trial. “But if the case is not settled,” he added, “the trial will last several months, and a final resolution of the case is not likely to come for several years.”

Business and Economy

Email:

FrontlineEditors@wgbh.org
Journalistic Standards

Related Documentaries

The Spill

The Spill

54m

Latest Documentaries

Related Stories

Related Stories

Get our Newsletter

Thank you! Your subscription request has been received.

Stay Connected

Explore

FRONTLINE Journalism Fund

Jon and Jo Ann Hagler on behalf of the Jon L. Hagler Foundation

Koo and Patricia Yuen

FRONTLINE is a registered trademark of WGBH Educational Foundation. Web Site Copyright ©1995-2025 WGBH Educational Foundation. PBS is a 501(c)(3) not-for-profit organization.

Funding for FRONTLINE is provided through the support of PBS viewers and by the Corporation for Public Broadcasting. Additional funding is provided by the Abrams Foundation; Park Foundation; the John D. and Catherine T. MacArthur Foundation; and the FRONTLINE Journalism Fund with major support from Jon and Jo Ann Hagler on behalf of the Jon L. Hagler Foundation, and additional support from Koo and Patricia Yuen. FRONTLINE is a registered trademark of WGBH Educational Foundation. Web Site Copyright ©1995-2025 WGBH Educational Foundation. PBS is a 501(c)(3) not-for-profit organization.

PBS logo
Corporation for Public Broadcasting logo
Abrams Foundation logo
PARK Foundation logo
MacArthur Foundation logo
Heising-Simons Foundation logo