Civil fine could be $4,300 for every barrel leaked into the Gulf

[charlesg]

http://www.reuters.com/article/idUSTRE64O75Q20100526

Civil fine in Gulf spill could be $4,300 barrel
Joshua Schneyer | NEW YORK

(Reuters) - Just how many barrels of oil are gushing into the Gulf of Mexico from the Deepwater Horizon spill is a billion dollar question with implications that go beyond the environment. It could also help determine how much BP and others end up paying for the disaster. A clause buried deep in the U.S. Clean Water Act may expose BP and others to civil fines that aren't limited to any finite cap -- unlike a $75 million limit on compensation for economic damages. The Act allows the government to seek civil penalties in court for every drop of oil that spills into U.S. navigable waters, including the area of BP's leaking well.

As a result, the U.S. government could seek to fine BP or others up to $4,300 for every barrel leaked into the U.S. Gulf, according to legal experts and official documents. So far, analysts and experts calculating potential oil spill liabilities have mostly concentrated on the cost of the clean-up and compensation for economic damages to affected parties. Some have also discussed criminal liabilities. But the potential for civil fines has received scant attention -- and they could add up very quickly, depending on how aggressive the U.S. government is in pursuing them. The threat of hefty fines underscores the importance of quantifying how much oil is pouring into the Gulf. As BP seeks to staunch the leak that has now been gushing for at least 33 days, it has estimated a spill rate of 5,000 barrels per day. But some experts say the volume -- and hence the fines -- could be more than 10 times higher.

The little-known, seldom applied clause in the Clean Water Act was added in 1990 after the Exxon Valdez disaster in Alaska, and was intended to beef up the arsenal of penalties the government can apply to oil spillers to deter future disasters. "These civil penalties could be staggeringly high, possibly running into the billions," said Professor David Uhlmann, director of the Environmental Law program at University of Michigan. Total liability -- including civil fines as well as the cost of clean-up, economic damages and potential criminal liability -- "will run into the billions and may be in the tens of billions," Uhlmann said.

Under the Clean Water Act, the Environmental Protection Agency can seek in federal court to fine any party whose negligence results in an oil spill in U.S. federal waters. Other companies involved at the Horizon platform and the oilfield could share liability with BP, experts said. They include rig-owner Transocean Ltd, cementing contractor Halliburton Co., blowout preventer manufacturer Cameron, and Anadarko and Mitsui, which also hold stakes in the oilfield. The basic fine, according to the act, is $1,100 per barrel spilled. But the penalty can rise to $4,300 a barrel if a federal court rules the spill resulted from gross negligence. The fines were originally set at $1,000 to $3,000 but that was raised in 2004 to keep up with inflation, according to Tracy Hester, head of the Environmental Law and Policy program at the University of Houston...

[amborin]

1. all the more reason for dispersants....

[Jkid]

2. The Grand Total?

5,000 barrels of oil x33 days x $4,300= $709,500,000

Still I think it's chump change, convince me otherwise.

[flvegan]

3. Court? Court? We'll all be dead before BP is actually forced to write a check.

From old age, mind you.