The United States is preparing its Clean Water Act (CWA) case against BP and others that owned the Macondo Project. The case is set to begin January 20, 2015, and will be the most significant, one-off case in the Deepwater Horizon oil spill litigation. The case will determine the value of CWA penalties that BP and its partners will have to pay as a result of the oil spill. In general terms, the calculation is based on the barrels of oil spilled and the per-barrel fine attributed to those barrels. In the Phase II trial, United States experts estimated that nearly 4.2 million gallons, or approximately 176 million gallons, spilled into the water before BP sealed the well 86 days after April 20, 2010. Predictably, BP countered with a much lower estimate of 2.45 million barrels, or nearly 103 million gallons.
The government wants BP Plc to pay $16 billion to $18 billion in water-pollution fines for the worst offshore oil spill in U.S. history while seeking more than $1 billion from the co-owner of the blown-out well that caused the 2010 Gulf of Mexico disaster. The federal government said BP deserves the maximum fine, which BP said would be the biggest Clean Water Act penalty ever and called it a “gross outlier” compared to other cases. U.S. District Judge Carl Barbier in New Orleans ruled in September that London-based BP acted with gross negligence in drilling the well, a finding that quadruples the per-barrel penalty. As of Oct. 28, the company had set aside $3.51 billion for the penalties, saying that’s a reliable estimate of its liability if it wins an appeal of the judge’s ruling. Barbier will conduct a non-jury trial next month to set pollution fines for BP and its well partner, Anadarko Petroleum Corp., after weighing multiple factors including the spill’s size and the level of responsibility each company bears for the disaster. “APC’s culpability is minimal compared to that of BPXP,” the government said in today’s filing, referring to Anadarko and BP’s exploration unit.
Anadarko paid BP $4 billion to resolve its portion of spill cleanup, response and damages costs, which it was obligated to share as co-owner of the well, under the Oil Pollution Act. The U.S. said that settlement with BP should be disregarded because it represents a “resolution of cross-claims arising from the incident between business partners” and would leave APC paying no government pollution penalty.
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