How Much Should BP Pay?

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Two years ago, an explosion on BP’s Deepwater Horizon drilling platform killed 11 workers and marked the beginning of a prolonged environmental disaster now acknowledged as the worst in American history. Before the Macondo well was finally capped, more than two hundred million gallons of crude oil had gushed into the Gulf of Mexico, killing untold thousands of birds, sea turtles, dolphins, and other marine mammals. The spill also devastated the fishing and tourism economies of the Gulf’s coastal communities.

Nothing we say or do now can erase that tragedy. But our actions today can still make a profound difference for the future of both the Gulf region and the rest of our nation. First, we must do everything we can to “make it right.” That requires holding BP and other responsible parties fully accountable for the restoration of the Gulf waters and coastal ecosystems, as well as for the complete recovery of the region’s coastal communities. Second, we must heed the painfully obvious lesson of the Deepwater Horizon disaster: If we cannot curb our national addiction to oil, we’ll see more oil spills again and again, for decades to come.

Although damage claims from individuals and businesses against BP were settled for approximately $7.8 billion, we are still waiting for a comprehensive settlement for economic damages to the Gulf’s communities and for the devastation of its natural resources. That settlement will need to be large enough both to support long-term recovery of the Gulf and to serve as a deterrent that can help prevent future disasters.

Both the President’s Oil Spill Commission and the Gulf Coast Ecosystem Restoration Task Force made concrete recommendations on how to restore the region and protect it from current and future oil and gas development. The settlement will need to fund following through on those recommendations. At a minimum, that will require $10 billion.

In addition, BP must pay maximum Clean Water Act civil penalties for “gross negligence” and maximum criminal penalties assessed under the Clean Water Act and other statutes of no less than $45 billion. A significant portion of these fines should be placed into a separate fund that pays for projects to enhance the long-term resiliency of the Gulf Coast’s ecosystems and communities. The precedent for such a fund was set by the consent agreements negotiated by the U.S., the State of Alaska, and Exxon in the aftermath of the 1989 Exxon Valdez spill.

It is also essential that the people of the Gulf have a greater voice in future decisions that put their region and communities at risk. Therefore, a settlement should include funds to create and staff a Regional Citizen’s Advisory Council of the Gulf that can provide oversight for ongoing and future offshore drilling operations. Again, this is no less than was done in response to the Exxon Valdez spill. The staffing and ongoing funding for such a council will require at least $500 million.

BP obviously would love to put the Deepwater Horizon disaster behind it, but the communities of the Gulf do not have that luxury. Even two years later, no one can say what the full extent of the damages caused by the disaster are or what new damages might still be uncovered. The once-robust herring fishery in Prince William Sound did not collapse until three years after the initial oil spill. Two decades later, the herring have yet to recover. A settlement should be sufficiently open-ended to allow for such unforeseen damages and be effective for the long haul.

If, instead, BP and other responsible parties manage to shirk responsibility, they will be joining the long list of polluters who are content to let American taxpayers foot the bill for the damage they do to our water, air, health, and climate. Because BP’s reckless actions severely hurt families, wildlife, and coastal communities, it and the entire oil industry need to learn a lasting lesson from this tragedy. It must not simply be written off as a “cost of doing business.”

Others need to learn a lesson as well. Congress and President Obama should both acknowledge that there is no connection between domestic drilling and gas prices, and that opening new areas off our coasts and in the Arctic Refuge for oil exploration will do nothing to reduce gas prices or solve our energy challenges. We must not condone the destruction of important and fragile ecosystems and the devastation of coastal economies simply to further enrich the world’s wealthiest corporations.

Big Oil will continue to push for more drilling — whether in the Gulf or the Arctic — for as long as it can keep profiting, which will be for as long as we remain shackled to the gas pump. The only way to avoid more disasters will be to free ourselves from that fossil-fuel servitude. That means investing in American innovation and 21st-century transportation solutions like smarter, more fuel-efficient cars and trucks, electric vehicles, and mass transit. Only then will we achieve true energy security and a clean-energy economy beyond oil.

Article by Michael Brune, appearing courtesy ecopolitology.

About Author

Walter’s contributions to CleanTechies over the past 4 years have been instrumental in growing the publications social media channels via his ongoing editorial and data driven strategies. He is the founder and managing director of Sunflower Tax, a renewable energy tax and finance consultancy based in San Diego, California. Active in the San Diego clean technology community, participating in events sponsored by CleanTech San Diego, EcoTopics, and Cleantech Open San Diego, Walter has also been a presenter at numerous California Center for Sustainability (CCSE) programs. He currently serves as an adjunct professor at the University of San Diego School of Law where he teaches a course on energy taxation and policy.

  • Max Kennedy

    It’s quite simple, Pay 100% of the cleanup, pay 100% of the health costs for people affected, pay 100% of lost revenues for fishermen, tourist operators etc., pay 100% of lost property values and 100% of relocation costs for those needing to move due to health or lost income, then pay the penalties and preventative costs detailed above. Finally, pay for and have delivered to each and every ocean drill site a means of containing such a blowout as occurred within 24 hours of the blowout occuring. This latter requirement to be applied to ALL companies drilling for oil.