BP faces state fines on top of federal tab

It hasn’t escaped the attention of those closely monitoring the aftermath of last year’s oil spill that BP is expected to pony up as much as $22 billion in fines under the federal Clean Water Act. In fact, Louisiana’s congressional delegation has made quite a bit of noise in its drive to have dedicated 80% of the cash to ecosystem restoration—an effort that members of President Barack Obama’s Oil Spill Commission, among others, peg as a 50-50 shot. The money from the fines would otherwise go into the federal treasury. As for alternatives, the Clean Water Act also offers a mitigation process in which state officials could negotiate the same or similar terms. For its part, BP has already made a $1 billion down payment on the federal fines so that Gulf Coast states could get started with restoration projects. Although it has received considerably less attention, there will be a penalty process launched on the state level as well. According to Peggy Hatch, secretary for the Louisiana Department of Environmental Quality, calculations for the fines are made on a per-gallon basis for all of the crude that was released into the Gulf of Mexico. When all of the counting is done, BP could likely face state fines of $300 million or more. The total fines amount is somewhat uncertain at this point because state officials are still developing the bottom-line figure. “They haven’t been levied yet,” Hatch said of the state fines during a recent meeting of the House Natural Resources Committee. —Jeremy Alford