With recent ruling, federal judge cuts at least $240 million from state’s BP fine

The windfall in coastal-restoration money Louisiana hopes to gain from the Deepwater Horizon disaster took at least a $240 million hit last week when a federal judge ruled that BP spilled 3.19 million barrels into the Gulf of Mexico, not the 4.19 million claimed by the federal government.

The Clean Water Act, which BP admits violating, calls for a maximum fine of $4,300 per barrel if  “gross negligence” by the responsible party contributed to the pollution. U.S. District Judge Carl Barbier determined in a September ruling that BP was, in fact, grossly negligent in causing the accident, setting off headlines that BP could be facing $18 billion in fines based on the government’s claim of 4.19 million barrels spilled. His ruling last week for the smaller volume reduced the maximum fine to $13.7 billion.

The RESTORE Act, which Congress passed in 2013, dedicates 80 percent of that total to the five Gulf states for environmental and economic restoration. The act divides the money into five “pots” dedicated to specific types of programs. The Gulf Coast Ecosystem Restoration Council will control funding from four of those pots.

Only the first pot sends money directly to states. It directs 35 percent of the total fines to be split  evenly between the states.

If Barbier rules for a maximum fine, Louisiana’s share of that under the 4.19 million barrel finding would have been a little over $1 billion. Under the 3.19 million barrel finding, it will be $767 million.

But even that is not a sure thing. Barbier could decide on a lower fine than $4,300 maximum.

In his ruling on volume last week, Barbier exonerated BP for charges that it was less than robust in its response to the accident, stating “BP was not grossly negligent, reckless, willful or wanton,” in those efforts.

David Uhlmann, Michigan law professor and former head of the U.S. Justice Department’s environmental crimes division, told Bloomberg News* the ruling would save BP billions.

He said the ruling is “a major victory for BP and reduces by billions their potential liability. A fine in excess of $10 billion remains possible but is now less likely.”

The British oil giant has been waging a campaign recently to have the judge consider its overall expenses related to the spill, which it claims have exceeded $28 billion so far.

Environmental groups say those expenses should not be considered by Barbier because the trial is about only violations of the Clean Water Act.

“You don’t get credit for what you have to do – which is cleaning up the pollution you dumped on the Gulf,” said David Muth, National Wildlife Federation director of the Mississippi River Delta Restoration coalition. “It doesn’t matter whether it cost them $200 or $200 billion, it’s what they have to do. For them to claim some kind of moral credit for cleaning up even a spec of what they dumped is absurd.

“This trial and this fine is only for breaking the law.”

*Corrections: An earlier version of this story rounded this figure to 3.2 million; it’s been changed for precision and consistency. Also, the earlier story incorrectly said a quote from law professor David Uhlman was given to the Wall Street Journal, and it misspelled his last name.

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  • A $240M loss is important but the +$10B fine won’t be bad, considering Big Oil (prices) ain’t so big lately, the po’ Pierre’s! (: Also, Redemption is a big thing on Louisiana’s coast, what with the Catholic Church owning most of the oil & gas royalty-property and all… Meanwhile let’s remember Slewfoot’s little bird! (: http://www.youtube.com/watch?v=qOgJupUcpkQ

  • nickelndime

    BP spent money after the damage. That’s damage control. I agree with David Muth. That is what they are supposed to do. Barbier shouldn’t be giving BP any slack now. None! Throw the bum out. 01/27/2015 3:07 PM