BP challenges ‘excessive’ spill claims

BP announced Tuesday that it would defend itself in court against “excessive” claims for civilian penalties and federal gross negligence charges regarding its role in the 2010 Gulf of Mexico oil spill.

The British oil giant said it could not reach a settlement with the Justice Department for the up to $21 billion in civil charges it faces for the Deepwater Horizon disaster. Judge Carl Barbier of the U.S. District Court for the Eastern District of Louisiana will handle the case, which begins Monday.

Rupert Bondy, general counsel with BP, said in a statement that the firm had been open to a settlement. He said the company is resorting to the trial because the Justice Department’s assertions were “not based on reality or the merits of the case.”

BP already agreed to a record $4 billion criminal settlement with the Justice Department in November. It also paid a separate $525 million penalty to the Securities and Exchange Commission (SEC) in that deal.

{mosads}The big-ticket item — especially for states affected by the spill — is the civil proceeding. Those fines would be paid out as Clean Water Act violations, roughly 80 percent of which would go directly to Gulf Coast states.

The Justice Department said it is ready for the case. 

“The United States is fully prepared for trial. We intend to prove that BP was grossly negligent and engaged in willful misconduct in causing the oil spill,” Wyn Hornbuckle, a Justice Department spokesman, told The Hill on Tuesday.

At the heart of the case is the federal government’s claim that BP’s failure to plug the Macondo well allowed 4.9 million barrels of oil to escape into the Gulf.

BP said Tuesday that the federal government’s estimate is incorrect, saying instead that the upper limit should be 3.1 million barrels of oil.

“These issues are extremely complicated as a technical matter, and there is still further analysis to do. But it is clear, based on our analysis so far, that the government’s public estimate is simply wrong and overstated,” Bondy said.

The Macondo well exploded in April 2010, killing 11 workers aboard the Deepwater Horizon rig. A faulty backup device failed to stop the oil leak.

A regulatory overhaul of the Interior Department’s offshore drilling program followed. The White House also backtracked on permitting oil-and-gas drilling off the Atlantic Coast and imposed a six-month freeze on deepwater drilling in the Gulf, a decision that was heavily criticized by the oil-and-gas industry and the GOP.

Lawmakers on Capitol Hill have slammed BP for its immediate response to the spill. Democrats, especially House Natural Resources Committee ranking member Edward Markey (D-Mass.), said BP lowballed the size of the spill in the immediate aftermath.

The SEC fines BP agreed to in November settled charges that the company had misled Congress by understating the rate of oil spewing into the Gulf.

When announcing the November criminal settlement, Attorney General Eric Holder said the Justice Department would set out to prove BP was “grossly negligent” in its response to the spill.

But BP has said it deserves less than the maximum per-barrel fine allowed under the Clean Water Act. It said the court should consider the $23 billion it already has spent on cleanup, restoration and payments on claims by businesses, individuals and governments.

The oil firm on Tuesday said that such penalties typically have hovered nearer a fine’s lower limit than its ceiling.

“No company has done more, faster, to meet its commitment to economic and environmental restoration efforts in the wake of an industrial accident,” Bondy said.

— This story was last updated at 12:17 p.m.