The Oil Spill in the Gulf: What Sanctions will BP Face?

After reading the Wall Street Journal’s very detailed article BP Decisions Set Stage for Disaster, I’ll be very curious to see what specific criminal charges and civil penalties BP will ultimately face from the U.S. Government.

BP is currently spending over $33 million per day for cleanup. BP has set aside $700m to compensate the victims of the explosion. I suspect BP will face the maximum $75 million in oil pollution civil damages under federal statutory law (Oil Pollution Act of 1990). The natural resource damages estimates are unfathomably high given the biodiversity and habitat loss and at this point incalculable given that the well is still gushing oil. And economic damages for fisherman and other industries grow by the day.

But what is the potential scope of criminal penalties, and are criminal penalties likely?

My prediction is: Big and Yes.

Criminal charges, in addition to BP (owner of the oil well), could also implicate Transocean (owner of the rig) and Halliburton (the cementing sub-contractor). There is no monetary cap on criminal damages. And BP has a history of violation and criminal charges (Texas oil refinery explosion in 2005, Alaska pipeline leaks, pricing conspiracy, federal Occupational and Safety, and Health Act violations, etc.)

Hat tip for the WSJ Article: Oregon law professor John Bonine.

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