Wednesday, October 4, 2023
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BP Underestimated Gulf Spill, Federal Judge Finds

NEW ORLEANS (CN) - A federal judge ruled Thursday that BP will be held responsible for spilling nearly 4 million barrels of oil into the Gulf of Mexico during the 2010 Deepwater Horizon disaster, a decision that could lead to a penalty of $13.7 billion.

U.S. District Judge Carl Barbier's ruling came just days before the third phase of a civil trial over the oil spill is set to begin. It effectively lowers the bar on the penalties the energy giant will face as a result of the mishap.

Prior to Thursday, higher estimates for how much oil spilled put the maximum fine BP could have faced at $18 billion. Still, the new maximum possible fine would be the highest fine yet paid in the U.S. over environmental pollution.

Quantifying the volume of oil that ended up in the Gulf is essential for assessing fines, even if, as U Judge Barbier pointed out in his 44-pgae ruling, "There is no way to know with precision how much oil discharged into the Gulf of Mexico."

The judge found a total of 4 million barrels of oil gushed from the well during the incident, 3.19 million of which ended up in the Gulf of Mexico.

In a separate ruling over the oil spill in September, Barbier found that BP had acted with "gross negligence" in events leading up to the April 20, 2010 blowout that killed 11 workers and unleashed one of the worst offshore oil spills in history.

That ruling was significant because it means BP could face up to the maximum possible damages of up to $4,300 in Clean Water Act fines per barrel of oil spilled (as opposed to the minimum possible fine of $1,100 per barrel).

Barbier additionally ruled Thursday that punitive damages will not be sought from BP.

During the second oil spill trial that this ruling relates to, attorneys representing the United States and the Gulf Coast States each presented evidence BP had publicly low balled its estimates for how much oil was flowing from its broken well, even while knowing the figures must have been much higher than presented.

Barbier ruled that while there is no "dispute that BP lied about the amount of oil that flowed" from the well, it has not been proven that BP's lies kept the well from being capped or delayed progress with stopping the oil flow. For that reason, the judge settled on a finding BP did not act with gross negligence in the way it sought to control the broken well once oil was coming out.

Scientists working for the federal government during the oil spill later testified that BP's low ball estimates of flow rate weren't taken seriously anyway, the judge ruled.

Dr. Marcia McNutt, Director of the federal flow rate technical group, testified at trial that "no one in the government had any confidence in BP's 5,000 barrels per day estimate," anyway, Barbier said.

Also, "The Court finds that BP's oil spill response plan, including the limited source control aspects, complied with federal regulations and industry practice existing at the time," Barbier said.

Immediately after the oil spill began, the United States Coast Guard was put in charge of well control operations, with BP acting as a lesser entity but in conjunction with the Coast Guard.

As such, Barbier found that "When it came to source control, BP could not act unilaterally" because the federal government had ultimate say.

The judge found BP's source control actions were not unreasonable and that BP's plan of action - though meager - actually complied with federal standards of the time.

Both BP and the United States and Gulf States, acting together, agreed that 810,000 barrels of oil were collected during the oil spill. Barbier also agreed.

The U.S. proposed that 5 million barrels gushed during the spill (or 4.19 million barrels into to Gulf of Mexico after the 810,000 that were collected is deducted); BP estimated 3.26 barrels were released (or 2.45 million barrels).

"There is no way to know with precision how much oil discharged into the Gulf of Mexico," since the well itself had no gage to measure oil as it was lost, Barbier concluded in his ruling.

"After weighing all of the evidence and considering all of the arguments, the Court finds that 4.0 million barrels of oil released from the reservoir. After deducting the Collected Oil from this amount per the parties' stipulation, the Court finds for purposes of calculating the maximum possible civil penalty under the CWA that 3.19 million barrels of oil discharged into the Gulf of Mexico," Barbier ruled.

In a statement Thursday, BP acknowledged that Barbier will weigh various factors to determine the rightful penalty and said it believes a penalty "on the lower end of the statutory range" is appropriate.

Trial opens in Barbier's court next week in which Barbier will determine the actual amount of the fines BP faces. This will be the third phase in a three part trial.

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