With well killed, BP works to determine its own estimate of how much oil spilled in GulfBy Harry R. Weber, AP
Friday, September 24, 2010
BP works on own estimate for amount of oil spilled
NEW ORLEANS — BP PLC is working behind the scenes to formulate its own estimate for how much crude spewed from its well in the Gulf of Mexico, as it prepares for a potential legal fight with the U.S. government over fines.
The company knows the amount of the fine will depend on how much oil spilled, and has carefully avoided accepting the government’s estimate that 206 million gallons of crude were released by the well that blew out after the April 20 explosion on an offshore drilling rig.
A spokesman told The Associated Press that “now that the relief well has succeeded we are reviewing data and will develop our own estimate.” No timetable was given for reaching a conclusion.
Penalties can be levied against BP, which owned the well and was leasing the rig that exploded, under a variety of environmental protection laws, including fines of up to $1,100 under the Clean Water Act for each barrel of oil spilled. If BP were found to have committed gross negligence or willful misconduct, the fine could be up to $4,300 per barrel.
BP has already shelled out $9.5 billion for cleanup costs and agreed to set aside another $20 billion for a victims’ compensation fund. It also faces hundreds of lawsuits, including one filed Sept. 15 by three Mexican states bordering the Gulf of Mexico — Veracruz, Quintana Roo and Tamaulipas. BP said in a regulatory filing Friday the suit alleges that the oil spill harmed the Mexican states’ tourism, fishing and commercial shipping industries, damaged natural resources and the environment, and caused the states to incur expenses in preparing a response to the oil spill.
BP said it still can’t estimate its future potential liabilities, but it noted they have had and will have a negative impact on the company’s business. A federal judge in New Orleans overseeing many of the lawsuits said Friday he was appointing a Duke University law professor as a special master because of the complexity of the litigation.
The murky issue over the fines is whether BP would be given credit for the amount of oil that never touched the water.
The government, sensing a legal fight, is not clarifying exactly how much of the oil actually entered the Gulf before being captured by various collection methods.
“If and when we were to seek penalties, there would be a number we would use, but because we still have an open investigation we can’t go into what measurements we will and will not use,” Justice spokeswoman Hannah August said.
David Uhlmann, a University of Michigan law school professor and former chief of the Justice Department’s environmental crimes section, said there is no definitive case law on the question of whether the oil discharge has to be in the water to count toward the penalty. But Uhlmann said he believes oil that never entered the water should not count and, even if the government is unsure of how much didn’t touch the water, it may not make such a big issue of that because of the billions of dollars in criminal penalties BP also may face.
“We are already in the stratosphere,” Uhlmann said.
Oil that entered the water and was collected by ships on the surface would count, but the penalty could be adjusted to take into account the cleanup effort, according to Eric Schaeffer, who led the Environmental Protection Agency’s civil enforcement office from 1997 to 2002.
If the ultimate fine were based on the total amount of oil spilled from the well and BP were found to have committed gross negligence, it could be slapped with a penalty of up to $21 billion. The figure is important to the Gulf because Sen. Mary Landrieu, D-La., is pushing legislation that would require that at least 80 percent of the civil and criminal penalties charged to BP under the Clean Water Act be returned to the Gulf Coast for long-term economic and environmental recovery.
Steve Yerrid, special counsel on the oil spill for Florida Gov. Charlie Crist, said officials in Florida are seeking a meeting with President Barack Obama to discuss oil spill relief for coastal states and other issues, including the state’s position on how BP and other companies involved in causing the spill should be treated.
Yerrid said that if BP were hit with the maximum penalty based on the higher number of gallons, that could serve as an incentive to future wrongdoers to work faster to cap the spill.
“If the polluter knows that the meter is running, isn’t that a great motivation to stop that flow?” Yerrid said.
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