Any fine above $2 billion against BP for the Deepwater Horizon disaster would be “extraordinary and severe,” would be double the highest-ever U.S. water-pollution fine and could potentially cripple the British oil company’s American business, BP says in new court documents.
As FuelFix.com reports, BP’s court filing late Friday marked the final legal argument it can make before a federal judge is clear to render environmental fines as high as $13.7 billion for the 2010 Gulf of Mexico oil spill.
BP says a fine of more than $2 billion would be 58 times greater than any civil Clean Water Act fine before Deepwater Horizon, and it argued it shouldn’t have to pay a high penalty because it has already shelled out $27.5 billion to clean up the spill and compensate claimants along the Gulf. It also wants credit for its $1.25 billion criminal penalty.
BP for months has argued that oil spill liabilities and the current slump in crude prices have battered its U.S. oil-production company, BP Exploration & Production, to the point it can’t handle big penalties. At the end of last year, the unit was worth just $5 billion, it says.
“The practical impact of this staggering amount of past spending is that BPXP has less capacity to shoulder a CWA penalty today,” the filing reads. “Reducing the penalty against a violator that has less capacity to pay because of its proactive and beneficial spending on spill response is an entirely appropriate and just outcome contemplated by the (Clean Water Act) statute.”
In its reply, the U.S. government says the spill warrants at least $12 billion in fines and that U.S. District Judge Carl Barbier would be well within his rights to consider the bigger BP parent company’s assets in calculating the fines.
“The issue is whether the parent was closely involved with the polluting activities and siphoned profits from that subsidiary,” government prosecutors say. “The BP Group promised to pay all claims resulting from Macondo, but now seems to be saying the opposite.”
