Ecocentric

BP’s Settlement Is Only the Beginning of the End of the Gulf Oil Spill

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John Moore / Getty Images

A sheen of oil floats in a marsh on April 19, 2011 at Middle Ground in southern Louisiana.

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.

(MORE: Nearly Two Years On, Did the BP Oil Spill Have to Happen to BP?)

Included in the settlement will be $4 billion related to those criminal charges—which include lying to the public about the size of the spill—and $525 million to security regulators. BP will also plead guilty to 11 felony counts of misconduct or neglect related to the deaths of those 11 crewmen. And there will be real criminal charges against real individuals. The Justice Department also announced that it will file manslaughter charges against the two top BP company men aboard the Deepwater Horizon, as well as charges of obstruction of Congress against David Rainey, BP’s former VP of exploration, for making false statements about the rate that oil was leaking out of the blown well.

Robert Dudley, BP’s chief executive—who took over for the much-maligned Tony Heyward—tried to spin the settlement as a step forward for the company, which has seen its share price dragged down by legal uncertainty over the spill:

All of us at BP deeply regret the tragic loss of life caused by the Deepwater Horizon accident as well as the impact of the spill on the Gulf coast region. From the outset, we stepped up by responding to the spill, paying legitimate claims and funding restoration efforts in the Gulf. We apologize for our role in the accident, and as today’s resolution with the U.S. government further reflects, we have accepted responsibility for our actions.

It’s true that Thursday’s settlement resolves criminal and securities claims against BP, but the company isn’t done fighting yet, and may still face billions more in federal civil claims and environmental damages.

(MORE: How Spill Settlement Money from BP May Save the Gulf Coast)

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.

PHOTOS: Scenes of the BP Spill Zone, One Year Later

15 comments
GrannieCool
GrannieCool

NO.  They drilled into a pocket of unstable sand that their OWN geologists told them not to drill into because i would collapse, but they did itanyway. It will continue to collapse & leak oil until ALL the oil in that area has leaked out into the Gulf.

BillCBeekeeper
BillCBeekeeper

It is sheer stupidity for any of us to say or think this oil disaster has been cleaned up or that the oil has evaporated. How naive is it for us to also believe that this is even close to being over. The majority of the oil is still lurking in the deep ocean in the massive plumes that now will likely forever be present, suspended in a toxic cloud of dispersants. The failure of our society to move out of fossil fuels into renewable energy only gives more chances for another severe incident, AND IT WILL HAPPEN AGAIN!!

Ignorance is bliss and the USA excels at burying our heads in our dark holes...sad to know that future generations will be forced to deal with this generations failures!!!

Publius_
Publius_

Large corporations shouldn't be allowed to plead guilty to felonies whose cumulative penalties consist of a fifth of a year's profits.  Like people, corporations should suffer political disenfranchisement when they're convicted of felonies.  Although corporations can't vote, convicted corporations could be barred, for a significant time period, from all lobbying activities.  Such "real" penalties would help prevent token pleas, and, perhaps, more felony charges involving corporations might be tried instead of plead.  

GaryMcCray
GaryMcCray

Why is it that when really big corporations purposely lie and mislead and people die as a result of those lies the only thing that happens to them is they get a fine.

Real people caused real deaths, everywhere else in our society those individuals are responsible for their criminal actions and they are incarcerated for it whereas those same individuals under the umbrella of a Corporation seem to have no responsibility at all for their individual actions or for the conspiracy in which they operated.

This is just another example of our government giving more rights to corporations than it does to it's own citizens.

And that is NOT the way it is supposed to be in the United States of America.

vernecypher
vernecypher

if corporations are people (as determined by the supreme court), and admit to a dozen felonies, shouldn,t this corporation be incarderated for an appropriate amount of time, instead of just paying fines (which consumers end up paying for anyway)?  

NOLALiz
NOLALiz

It is not the beginning of the end of the BP criminal disaster. This is just a shell game for humans. The real victims don't have bank accounts. There is no way to fix the marsh grass that was destroyed, the wildlife that died, the single celled creatures that were melted, birds that died, nor the fish, turtles and dolphins that had an agonizing and dismal death. 

This is all show, all PR, all a game. As if BP's long history of arrogance towards safety can be fixed with something called "money." Money has no currency in the true damages. 

GrannieCool
GrannieCool

@Publius_  Actually the fine wasn't even a DAY's profit.  It was a slap on the hand.  JUST SAY NO TO ALL FOSSIL FUELS !

Hadrewsky
Hadrewsky

@Publius_ 

That is a pretty stupid suggestion... pleading guilty to a charge allows a company to take responsibility for its actions and saves court costs... all they are doing is avoiding a courtroom fight by accepting that they are guilty... trying them would serve of no use and might allow for them to walk scot free is they were lucky.

Charges being plead as guilty are a good thing and saves money... it is a dense suggestion to want to government to be forced to spend money it doesnt need to,

wprout31756
wprout31756

@vernecypher 

Your opinion is very shallow, you know that ?All I have to say is this : "What came FIRST, the Chicken or the Egg ? ".Our dependence on OIL, had created companies like BP, and because of that dependence, we the people have given them so much power over our ENVIRONMENT ! Don't believe me ? It's documented that there are those who will pay Officials under the table to overlook questionable acts that a company is committing !

Hadrewsky
Hadrewsky

@vernecypher Another really silly idea.... sigh

Incarcerating an entire corporation would cost hundreds of millions and prevent the company from paying money to fix its actions... not only is this idea stuipidly expensive it is also completely unworkable.

They need to pay to fix their actions because if they were to fail they would hurt the consumers more than their continued existence... Destroying a company by idiot incarceration would hurt the public and prevent fixing the problem with a company's money... If you destroy BP to get back at them this will hurt you.

francogcpt
francogcpt

@vernecypher corporations are also immortal, they are like superman, if they break they get a huge bailout paid for by our tax dollars.

francogcpt
francogcpt

@NOLALiz not only am I sad to agree with you, but I am also very angry that the law is a joke.  A lot of companies just follow the law, if they could get away with more they would.

wprout31756
wprout31756

@Hadrewsky

Your opinion is very shallow, you know that ?All I have to say is this : "What came FIRST, the Chicken or the Egg ? ".Our dependence on OIL, had created companies like BP, and because of that dependence, we the people have given them so much power over our ENVIRONMENT ! Don't believe me ? It's documented that there are those who will pay Officials under the table to overlook questionable acts that a company is committing !