“BP to pay $4.5 billion spill fine”
Two-and-a-half years since the drilling-rig explosion that killed 11 workers and unleashed the greatest offshore oil spill in the nation’s history, oil-industry giant BP lead guilty to the charges brought against it and agreed to what many believe is the biggest criminal fine in U.S. history.
The fine was levied, according to Assistant Attorney General Lanny Breuer, because of crimes that “resulted from BP’s culture of privileging profit over prudence.”
That is certainly a lot of money, but let’s put it context. Last year, BP made a record profit of $25.8 billion. That leaves a lot left over for the company and its shareholders.
BP has five years to pay it off, something that is seldom, if ever, done in a criminal case. Thus, it follows that if BP continues to make the profits it has made in the past, this settlement will cost the company only $900 million a year — less than 5 percent of its yearly profits.
While this board is glad the U.S. courts have continued to go after BP, we ask: Is this a reasonable settlement for actions that led to 11 deaths and a company official lying to Congress about the extent of the spill?
It will be if the federal judge overseeing the settlement agrees that it is.
Beyond the monetary resolution, the agreement means there will not be years of litigation like that which followed the Exxon-Valdez oil spill. Neither BP nor the government or the parties it represented wanted that scenario. That alone may be justification for reaching this agreement.
Meanwhile, keep in mind that this is only one part, and maybe a small part, of what will be the final settlement. BP will still face fines under the Clean Water Act that could amount to as much as $20 billion — or more. And there is still the $7.8 billion settlement between BP and some 100,000 businesses and individuals that is waiting for approval from a federal judge in New Orleans.
Additionally, the government has not determined how it will pursue charges against the other companies that were involved — Deepwater Horizon, the company that owned the rig, and Halliburton, the company whose cement work BP claims contributed to the disaster.
BP may be happy this phase of the litigation has been settled, but the company also knows the matter is far from over.