NEW ORLEANS (CN) – The Department of Justice said it will hold BP accountable for the disaster that dumped millions of barrels of oil into the Gulf of Mexico, on top of the $7.8 billion BP agreed to pay fishermen and others.
“While we are pleased that BP may be stepping up to address harms to individual plaintiffs, this by no means fully addresses its responsibility for the harms it has caused – as nothing in the PSC [plaintiff steering committee]/BP settlement compensates the public for the significant damages to its natural resources and environment and BP has yet to pay a penalty for its violations of law,” the Justice Department said in a statement.
Late Friday, BP and plaintiff steering committee attorneys announced a $7.8 billion settlement had been reached to compensate 116,000 Gulf Coast fishermen, hotel owners, restaurant workers and seafood processors who lost income because of the Deepwater Horizon disaster.
The proposed settlement involves two agreements: one to resolve claims for economic loss, and another to resolve plaintiffs’ medical claims for up to 21 years.
But the settlement does not account for environmental restoration, federal punitive fines, if any, for pollution, or claims against BP from the five Gulf Coast states affected by the oil spill .
The government estimates that 4.1 million barrels, or 172 million gallons, of oil spilled into the Gulf after the April 20, 2010 explosion of the Deepwater Horizon drilling rig that killed 11 and unleashed the worst environmental disaster in U.S. history.
More than 966 miles of shoreline was contaminated with oil, fragile marshlands were inundated with oil and white sand beaches were sullied.
The impact of the oil and toxic dispersants used on it, on marine life and to the health of the Gulf, has been more difficult to chart.
BP acknowledged it used 1.8 million barrels of dispersant to break the oil into drops and help it sink it from the surface.
Susan Shaw, an independent marine toxicologist and director of the Marine Environmental Research Institute in Blue Hill, Maine, told Courthouse News previouslythat from a toxicology standpoint, dispersed oil is more toxic than oil by itself. Shaw said that dispersants work by breaking the outer membrane of cells of organs and oil alike. The effect on marine life is that the oil can enter the body more readily.
In June 2010, C. Arlen Braud II, a Madisonville, La. attorney, filed a federal class action on behalf of oystermen against BP and Nalco, the dispersant manufacturer. The oystermen claimed BP’s use of more than 1 million gallons of dispersant in the Gulf caused the poison to become “a permanent part of the seabed and food chain in the biostructure in the Gulf of Mexico.”
The oystermen claimedthat BP used such an enormous quantity of the chemical “to lessen the public reaction to the oil spill by forcing the oil to the bottom of the Gulf and thereby obviating the need for shoreline cleanup.”
Bloomberg News reported today that L. Blake Jones, a New Orleans attorney representing commercial fishermen seeking compensation for oil-polluted oyster beds, said the BP settlement may not provide enough money to cover future damages to the fishing industry.
‘”We won’t know the true extent of the damage for 5 to 10 years,'” Jones told Bloomberg. “‘Oystermen could be facing losses of as much as $40 billion, depending on the pace of recovery.”‘
The Department of Justice said in its statement that “the United States is prepared to hold the responsible parties accountable for the damages suffered in the Gulf region.”
The statement continued: “The United States will continue to work closely with all five Gulf states to ensure that any resolution of the federal law enforcement and damage claims, including natural resource damages, arising out of this unprecedented environmental disaster is just, fair and restores the Gulf for the benefit of the people of the Gulf states. Although we remain open to a fair and just settlement, we are fully prepared to try the case.”
Several factors remain unknown.
The $20 billion fund from which plaintiff attorneys and BP plan to strike the $7.8 billion settlement was intended to be used in part for environmental restoration. If the fund is tapped, it remains unclear what additional money, if any, will be allotted for restoration.
Congressional delegates from Louisiana and other Gulf Coast states are pushing to pass the Restore Act, which would ensure that BP fines will go to restore Gulf Coast states. The bill would dedicate at least 80 percent of Clean Water Act penalties for the BP spill to Gulf Coast states.
If the Restore Act fails in Congress, the money recovered will go into the federal Oil Spill Liability Trust Fund. While that money will stem from damages to the Gulf of Mexico, the federal government will not be obligatedto spend any of it to restore the Gulf Coast.
Under the Clean Water Act, the Department of Justice may seek a minimum fine of $1,100 per barrel of oil spilled.
“These are civil penalties – they’re not intended to make the people whole. It’s intended to punish,” Department of Justice Senior Attorney Steven O’Rourke told U.S. District Judge Carl Barbier during a January trial status conference.
At $1,100 per barrel, using government estimates of 4.1 million barrels of oil spilled, BP’s minimum fine comes to about $4.5 billion.
If the case ends goes to trial, Judge Barbier will assess the fines, which under the Clean Water Act could come to as much as $4,300 per barrel, or $17.6 billion.
To assess the maximum fine, Barbier must find the oil spill was caused by gross negligence.
What fines Barbier, a Clinton appointee, will assess is uncertain, but BP has been fines severely in the past.
In 2007, BP Exploration pleaded guilty to negligent discharge of oil, a misdemeanor, and paid $20 million for spilling more than 212,000 gallons of oil from a broken pipeline in Prudhoe Bay, Alaska.
That fine amounted to just under $4,000 per barrel.
After BP’s 2005 Texas City refinery explosion that killed 15 and wounded 170, BP was charged with criminal violations of federal environmental laws. The Occupational Safety and Health Administration slapped BP with a then-record fine for hundreds of safety violations, and subsequently imposed an even larger fine after claiming that BP had failed to implement safety improvements following the disaster.
On Oct. 30, 2009, OSHA fined BP $87 million for failing to correct safety hazards revealed by the 2005 explosion. OSHA also cited more than 700 safety violations. The fine was the largest in OSHA history.
The Justice Department has declined to say whether criminal charges will be brought against BP for the oil spill from the Deepwater Horizon.
In his March 2 order that postponed the trial indefinitely, Barbier wrote: “The court will schedule a status conference with liaison counsel to discuss issues raised by the settlement and to set a new trial date.”