BP faces up to $13.7 billion in fines for Gulf oil spill

BP could face a maximum fine of $13.7 billion under the Clean Water Act for its Gulf of Mexico oil spill in 2010, several billion less than expected.

Federal judge Carl Barbier ruled on Thursday that the size of the spill from the Deepwater Horizon drilling rig, the worst offshore spill in U.S. history, was smaller than the government had claimed.

He said that it amounted to 3.19 million barrels, or just under 134 million gallons — less than the government’s estimate of 4.2 million barrels and more than BP’s claim of 2.4 million barrels.

If the court had agreed with the government’s estimate, BP could have faced nearly $18 billion in penalties under the Clean Water Act.

Those penalties are to be determined in a trial set to open next Tuesday in New Orleans. In pre-trial briefs, the government has argued that the oil giant should pay as much as $4,300 per barrel spilled. Barbier has not yet decided how much per barrel BP must pay. BP has argued that the penalties should be lower than what the government is asking for, but has not offered a specific figure.

Barbier's ruling comes more than a year after a trial in which the judge found that BP acted with "gross negligence" in the 2010 explosion of the offshore rig.

"Both sides presented evidence to support their cumulative flow estimates, and each mounted effective attacks on the other's calculations," Barbier wrote. "There is no way to know with precision how much oil discharged into the Gulf of Mexico. There was no meter counting off each barrel of oil as it exited the well. The experts used a variety of methods to estimate the cumulative discharge. None of these were perfect."

Lawyers for BP argue that the company already faces costs totaling $42 billion, including a $14 billion response and cleanup effort. They say a low-end penalty would accomplish the Clean Water Act purposes of deterring environmentally dangerous behavior and encouraging effective cleanup responses.

In a 47-page ruling recapping BP's efforts to control the spill and the conflicting evidence of how much was lost, Barbier said about 168 million gallons of oil was released from the well's reservoir, but the figure was reduced to about 134 million gallons after recovery efforts.

Even after the Clean Water Act fines are set, BP may face other bills from a lengthy Natural Resources Damage Assessment — which could require the company to carry out or fund environmental restoration work in the Gulf — as well as other claims.

The Deepwater Horizon rig exploded April 20, 2010, killing 11 workers and sending oil spewing into the Gulf for 87 days.

Wire services