Maybe the April 2010 explosion that destroyed the Deepwater Horizon oil rig, killed 11 workers, leaked more than 100 million gallons of oil into the Gulf of Mexico and cost thousands of people their livelihoods will also prove costly enough to deter BP and other oil companies from cutting corners in the future.
BP’s expenses thus far include $14 billion for cleanup and almost $10 billion to compensate businesses and individuals for lost profits and jobs. It is expected to pay individuals and businesses about $8 billion more.
Those costs don’t include the $4.5 billion the company will pay in connection with its agreement with the Justice Department, announced Wednesday, to plead guilty to obstruction of Congress and felony manslaughter charges associated with the deaths of the 11 workers killed in the oil rig explosion on April 21, 2010.
About one-third of the $4.5 billion constitutes fines payable over several years; they are the largest single penalty; it’s appropriate given that the BP oil spill was the largest ever. Most of the rest of the money will go to the National Fish and Wildlife Foundation; $525 million will go to the Securities and Exchange Commission and $350 million will go to the National Academy of Sciences.
A generation ago, the fines levied in the Exxon Valdez oil spill amounted to $150 million, and Exxon was excused from paying most of that sum because of its cleanup efforts. In that 1989 incident, the Exxon Valdez ran around and spilled almost 11 million gallons of oil into Prince William Sound off the southern coast of Alaska, taking an enormous toll on fisheries and wildlife.
Although Americans without ties to the Gulf Coast might have thought the BP disaster had long since been dealt with, there is more to come. Civil liability lawsuits are certain to add to BP’s costs, and the British energy giant faces payouts to the various states affected and fines for violating a number of federal laws, including the Clean Water Act.
That BP remains profitable despite the costs associated with this disaster is attributable in large part to years of high oil prices. While it’s wrong to begrudge the company, or any other energy firm, its profits, it’s entirely reasonable to expect — demand — responsible handling of a commodity that’s both a vital resource and a dangerous pollutant.
And it’s fair to levy large fines and expect the companies to make individuals, businesses and the environment whole when company failures result in catastrophes.