Settlement for the Gulf
The proposed multibillion-dollar settlement between BP and individuals and businesses hurt by the 2010 oil spill in the Gulf of Mexico is a welcome development. If a federal judge grants final approval, it could spare both plaintiffs and the company a lengthy legal battle with uncertain outcomes.
It is also further evidence that BP is willing to pay serious money to atone for its errors. Now it needs to show a similar willingness to meet its obligations in pending suits aimed at assessing civil and possibly criminal penalties for environmental damages.
Under an agreement with the Obama administration, BP put $20 billion in an escrow fund to compensate shrimpers, motel owners and hundreds of thousands of others whose livelihoods were damaged by the spill. Kenneth Feinberg, who administered the fund for the last 18 months, has awarded $6.1 billion to 225,000 claimants. Under the settlement, the court would take over for Feinberg. BP estimates that it will pay an additional $7.8 billion to more than 100,000 additional claimants.
Claimants will still be able to opt out and sue BP separately in court. But, as before, the hope is to get people to settle, not litigate.
Next are federal claims for environmental damages. BP is liable for naturalresource damages and penalties under the Clean Water Act. The penalties could cost the company $1,100 for each of the 4.9 million barrels of oil it spilled and $4,300 a barrel, or more than $20 billion altogether, if the Justice Department can prove gross negligence.
The department must seek the best possible deal from BP, brandishing the possibility of a long, nasty trial and a possible conviction for gross negligence. BP appears eager to put this disaster behind it, so now is the time for the Justice Department to push—and push hard.
Congress must also ensure that this money is used to carry out a broad program of restoration in the Gulf’s fragile ecosystem: the wetlands and barrier islands that had been dramatically weakened long before the spill by miles of oil and gas pipelines, misguided levee-building along the Mississippi River, and Hurricane Katrina. Unless Congress specifically directs the penalties to restoration, the money will flow largely to the federal Treasury and disappear in the general maw.