Oil spill settlement deal rapped as chump change for BP

The record-setting $4.5 billion fine that BP has agreed to pay to settle criminal charges stemming from the 2010 Deepwater Horizon disaster is little more than a “rounding error” for the British oil giant that will do little to deter misdeeds offshore, environmentalists accused Thursday.

“Nothing in this proposed settlement gives any oil company incentive to be more careful in future operations,” said Greenpeace senior investigator Mark Floegel. “This proposed settlement would not hold the guilty accountable for their actions.”

When BP’s Macondo well blew out on April 20, 2010, it triggered an explosion aboard Transocean’s Deepwater Horizon drilling rig that claimed 11 workers’ lives and unleashed the United States’ worst oil spill. Federal offshore drilling regulators imposed a five-month ban on most deep-water oil exploration, even as crude gushed into the Gulf and also temporarily halted seafood harvesting in some coastal areas.

Initial reaction from environmentalists on Thursday was swift and angry.

Michael Brune, the executive director of the Sierra Club cast the fine as a slap on the wrist.

“The people of the Gulf of Mexico have yet to be served a meaningful justice,” Brune said. “The $4 billion criminal settlement announced today lets BP off with a slap on the wrist after causing the largest oil disaster in American history.”

Others adopted a softer approach and said the fine marked an important first step in restoring the region, holding BP accountable and discouraging oil companies from cutting corners offshore.

Larry Schweiger, president and CEO of the National Wildlife Federation called the fine a “down payment on the massive restoration needed for the Gulf’s ecosystems and the people and communities that depend on them.”

Speaking at a Politico event on energy policy, Natural Resources Defense Council head Frances Beinecke called the fine “step one.”

“The oil spill wreaked tremendous devastation on the Gulf Coast. One drill gone bad basically shut down the oil industry, the fishing industry and the tourism industry across four states,” said Beinecke, who was a member of the presidential commission that investigated the disaster. “This is an important step in holding BP accountable.”

In a statement later, Beinecke said she hoped the fine would “send a signal to Big Oil that unrelenting irresponsibility will no longer be tolerated.” Beinecke added that the criminal settlement agreement needs to be followed by a “sizable civil penalty to begin to address the damage that has been done to Gulf communities.”

The criminal settlement does not affect what BP could be forced to pay out in civil penalties, including up to $21 billion for violations of the Clean Water Act, and to compensate Gulf Coast fishermen, boat operators and others who claim economic damage from the disaster.

Oceana’s deputy vice president, Jacqueline Savitz, stressed that “BP still owes Americans tens of billions more, possibly as much as $90 billion according to our analysis, including $20 billion under the Clean Water Act, an estimated $30 billion for natural resource damages and additional compensation for economic damages to the fishing and tourism industries.”

“These fines should reflect the scale of the impact, which was unprecedented and far-reaching,” Savitz added.

With civil penalties still looming, Sen. Tom Carper, D-Del.,noted that the criminal settlement “closes only one chapter in the story.”

“We will unfortunately be grappling with the human and environmental costs levied by this disaster for many years,” Carper said, adding that “for many, no amount of money can adequately repair the damage caused by this spill.”

Congressional Democrats were widely praising the Justice Department’s handling of the deal.

Sen. Bill Nelson, D-Fla., said “the Justice Department brought the hammer down on BP.”

With criminal issues mostly resolved, Nelson said, he hoped focus would move to ensuring “Gulf Coast residents (get) every cent they deserve.”

As part of the agreement, BP pleads guilty to a charge of lying to the U.S. Congress about the size of the spill. Separately, the government has charged a former BP executive, David Rainey, with obstruction of Congress and making false statements to law enforcement officials.

Rep. Ed Markey, D-Mass., who led a congressional push for more information during the spill, said the fines and penalties BP faces “are appropriate for such a disaster.”

“People died, BP lied to Congress, and millions of barrels of oil poured into the Gulf,” Markey said. “This steep cost to BP will provide the Gulf Coast some of the funds needed to restore the region and will hopefully deliver some comfort and closure to the families and businesses affected by the spill.”

At a news conference, Markey applauded the obstruction charges against BP and Rainey, in light of what he called “lowballing” by the company.

“The FBI and Justice Department uncovered internal documents that apparently made it clear that Mr. Rainey and his colleagues knew the likely flow rate was significantly higher than what Congress had been told,” Markey said. “Eleven Americans died, then BP lied, then they tried to cover it up. They deserve this record-breaking penalty.”

Markey said the flow rate estimates were important not just for fully disclosing the gravity of the situation to the public and Congress — but also to dictate the size of the response.

Rep. Henry Waxman, D-Calif., the top Democrat on the House Energy and Commerce Committee, said Thursday’s settlement provides “a measure of accountability.”

“The Department of Justice has acted aggressively against BP,” Waxman said. “It is holding the company and individuals criminally responsible.”

Waxman joined other Democratic lawmakers in characterizing the settlement agreement as providing some closure for victims — though more, they said, still needs to be done.

Rep. Steny Hoyer, D-Md., said in a statement that the deal “represents an important step in the direction of justice and toward closure for the families of the 11 Deepwater Horizon rig workers who lost their lives as well as the millions of Gulf Coast residents who suffered from the oil spill and its aftermath.”