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BP faces $18 billion in fines for Gulf oil spill

A New Orleans federal court judge found BP grossly negligent and chiefly responsible for the April 2010 Deepwater Horizon oil spill at its Macondo well in the Gulf of Mexico — the worst offshore oil spill in U.S. history.

“The court finds that BP’s conduct was ‘reckless’ under general maritime law and a substantial cause of the blowout, explosion and oil spill,” U.S. District Court Judge Carl Barbier wrote in his opinion Thursday.

He said BP, which was $60 million over budget and 54 days behind schedule at the Macondo well, ignored questionable test results as it prepared to temporarily abandon the well and “committed a series of negligent acts or omissions that resulted in the discharge of oil, which together amount to gross negligence and willful misconduct under the [Clean Water Act].”

Barbier found BP 67 percent liable for the accident, Transoceanic Ltd., the rig’s owner, 30 percent at fault, and Halliburton Co., which was hired to do the cementing and mudlogging to prepare the well for abandonment, 3 percent responsible. The judge said the second two companies were negligent in events leading up to the spill.

An April 20, 2010 a blowout, explosions and fire occurred aboard the Deepwater Horizon offshore drilling rig as BP was temporarily abandoning the Macondo well it had drilled on the Outer Continental Shelf off Louisiana.

Eleven men died and 17 were injured in the accident. The explosions and fire should have triggered the rig’s blowout preventer, but the triggering device either failed to activate the preventer or it otherwise failed to close, sealing the well. Subsequent attempts to operate the preventer with remotely operated vehicles also failed to stop the blowout.

Deepwater Horizon burned continuously until mid-morning on April 22, when it capsized and sank into the Gulf of Mexico, breaking a pipe — the marine riser — and discharging millions of gallons of oil into the Gulf of Mexico during the next 87 days. The well was finally capped and the discharge halted on July 15, 2010, but not before there was widespread damage to beaches, the coastline, bottom habitat, marine life and waters of the Gulf.

This case, deciding who was at fault in the spill, is the first phase of a three-phase civil process in court. The second phase, which also has been concluded but has produced no ruling yet, decides how much oil spilled into the Gulf. The third phase will decide how much BP will have to pay “the United States, the states of Louisiana and Alabama, and numerous private individuals, businesses, or other entities who have filed claims.”

Barbier said BP should pay “enhanced civil penalties” under the Clean Water Act … as the discharge of oil was the result of [its] gross negligence and [its] willful misconduct.”

The criminal case against BP has concluded. In 2012, BP pleaded guilty to manslaughter in the 11 deaths and obstructing Congress’ investigation into the spill.

Bloomberg reported that BP could face fines of as much as $18 billion, but has set aside $3.5 billion to cover those penalties. It said the company’s July 29 earnings statement said it had taken a $43 billion charge to cover all of the costs related to the spill.

BP already has paid $9.2 billion in negotiated settlements with non-government plaintiffs — thousands of commercial fishermen, charter captains, restaurants, hotels, marinas, boat dealers and others adversely affected by the spill. It also paid a record $4 billion in penalties last January in the criminal case.

BP said it will appeal the ruling that its conduct rises to the level of gross negligence and willful misconduct.

Click here for Barbier’s opinion.

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