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Did BP Get Off Cheaply? Antonia Juhasz on $18.7B Gulf Oil Spill Settlement

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BP has reached an $18.7 billion settlement to resolve all government claims resulting from the 2010 Deepwater Horizon explosion, the worst offshore oil spill in world history. If confirmed by a federal judge, it would be the largest environmental settlement in U.S. history and the largest ever by a single entity. The agreement covers damages sought by the federal government, the states of Alabama, Florida, Louisiana, Mississippi and Texas, as well as more than 400 civic entities along the Gulf Coast. The payment includes a $5.5 billion civil penalty under the Clean Water Act and a $7.1 billion fine for environmental damage to the Gulf. But some groups have questioned if BP is paying enough. For more we’re joined by reporter Antonia Juhasz in San Francisco. Her Rolling Stone story is headlined “BP 'Got Off Cheaply' With $18.7 Billion Settlement.”

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This is a rush transcript. Copy may not be in its final form.

NERMEEN SHAIKH: We end today’s show looking the historic settlement BP has reached that will resolve all government claims resulting from the 2010 Deepwater Horizon explosion, the worst offshore oil spill in U.S. history. The agreement totals $18.7 billion and covers damages sought by the federal government, the states of Alabama, Florida, Louisiana, Mississippi and Texas, as well as more than 400 civic entities along the Gulf Coast. The payment includes a $5.5 billion civil penalty under the Clean Water Act and a $7.1 billion fine for environmental damage to the Gulf.

AMY GOODMAN: If confirmed by a federal judge after a public comment period, it will be the largest environmental settlement in U.S. history and the largest ever by a single entity. But some groups have questioned if BP is paying enough.

For more, we go to reporter Antonia Juhasz in San Francisco. Her Rolling Stone story is headlined “BP 'Got Off Cheaply' with $18.7 Billion Settlement.” Her report in the May issue of Harper’s magazine is “Thirty Million Gallons Under the Sea: Following the Trail of BP’s Oil in the Gulf of Mexico.” She’s also author of Black Tide: The Devastating Impact of the Gulf Oil Spill.

You have been reporting on this for years, Antonia. Did BP get off cheaply? What were the costs, and what are they ultimately liable for?

ANTONIA JUHASZ: Yeah, good morning, Amy and Nermeen.

Yeah, unfortunately, BP did. So, you know, as you said in the introduction, this is certainly a historic settlement. It is a very large figure, $18.7 billion. But BP also caused the largest oil spill in world history, the largest offshore drilling oil spill in world history. And with that—and it was found to be a crime. BP had to settle 12 criminal charges. And BP was found grossly negligent in causing this disaster. So, with that, with those crimes and that grossly negligent behavior comes a historic fine, if you apply our laws. And our laws are supposed to account for the enormous amount of oil spilled into the Gulf of Mexico. That’s the Clean Water Act. The Oil Pollution Act says that BP is required to put everything back the way it was, basically, economically and ecologically, so pay for the damage that was done and pay for restoration. And that’s the Oil Pollution Act. In addition, we want to make sure that other companies will not engage in that same sort of criminal and grossly negligent behavior. And so, on each of those legal counts, I think this settlement fails. It fails to account for the Clean Water Act. It fails to account for full restoration. And I think it certainly fails as a very, very important tool for dissuading this type of behavior in the future, which is very problematic given the move of the oil industry into even more dangerous and risky oil drilling behavior.

NERMEEN SHAIKH: Well, Antonia, could you explain how the BP settlement breaks down? How much goes to damage, and how much to restoration? And what would have been a better settlement, in your view?

ANTONIA JUHASZ: Yeah, I mean, the federal government was originally seeking $18 billion—18 billion—just in Clean Water Act fines alone. And that’s a straight application of the law. So, the federal government had argued, and most independent scientists agreed, that 4.1 million barrels of oil were released into the Gulf of Mexico. And the judge had found in September that BP was grossly negligent, which brings a fine of $4,300 per barrel, which would have equaled an $18 billion fine. The judge then ruled that it felt—that he felt that only 3.1 million barrels of oil were spilled, which would have reduced the Clean Water Act fine to about $14 billion. But this settlement only provides $5.5 billion in Clean Water Act fines, so that’s more like about $1,800 per barrel of oil spilled, so BP got off on that provision.

Then, in addition to the Clean Water Act, this also covers all natural resource costs and restoration. And the National Wildlife Federation did an analysis a few years back that that number should have been about $31 billion alone. But in this settlement, BP gets $7.1 billion for natural resource restoration, plus $1 billion it had already paid, so that’s $8 billion.

And then there is, in addition, the economic costs suffered by states and, as you said, some 400 localities. And that’s $4.9 billion for the states, $1 billion for the localities. That’s how we get at $18.7.

And there is no—and this is really critical—reopener. So, you know, there’s a lot of science that’s still going on. I was on the show not too long ago talking about my submarine trip to the bottom of the Gulf of Mexico at the site of the BP oil spill, and the scientists who I accompanied estimating that 30 million gallons of oil is still in the Gulf of Mexico. That’s the—

AMY GOODMAN: Antonia?

ANTONIA JUHASZ: Yeah, yeah.

AMY GOODMAN: I wanted you to respond to The New York Times Editorial Board responding to the settlement with “BP Deal Will Lead to a Cleaner Gulf” headline. They wrote, “Even before this settlement, BP’s costs have not been trivial. … When all is said and done, the company estimates it will have paid nearly $54 billion, shedding major assets to pay the tab. If that isn’t a deterrent to careless behavior by the oil companies, it’s hard to know what is.” Can you respond to that, finally?

ANTONIA JUHASZ: Yeah. Again, it’s a lot of money. It’s the largest oil spill—offshore drilling oil spill in world history. So, BP has been estimating all along the costs associated with this disaster. They had already estimated $43 billion, so put aside a $43 billion cost. This puts it to about $53 billion. But that’s even less than analysts were predicting the cost would be for the spill. So, back in 2011, Moody’s estimated $60 billion. And this is coming in.

AMY GOODMAN: We have—

ANTONIA JUHASZ: Yeah.

AMY GOODMAN: We have to leave it there.

ANTONIA JUHASZ: OK.

AMY GOODMAN: And I want to thank you very much for joining us, Antonia Juhasz—we will link to your pieces—also the author of Black Tide.

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