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.

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