The Providence Journal (R.I.), April 9:
Roughly six years after it was physically stanched, the BP oil spill came to a quiet official conclusion last week. On Monday, a federal judge in New Orleans gave final approval to a settlement estimated at $20.8 billion. Of that amount, $5.5 billion consists of penalties under the Clean Water Act. Much of the rest will be spent on compensation and repairs for environmental damage. Some will go toward reimbursing government costs.
In 2010, millions of gallons of oil spilled into the Gulf of Mexico following a drilling-rig explosion that killed 11 workers. Under the settlement with BP, five Gulf states and numerous local governments will receive payments over the next dozen years. The funds will enable them to ramp up vital restoration work in coastal areas.
The Justice Department has described the agreement, initially announced last July, as the largest environmental settlement in U.S. history.
For a long-suffering region of the country, the settlement’s clearing of the way for environmental repairs is certainly a great step forward. Many Americans well recall scenes of soiled beaches, damaged fisheries and injured wildlife. Hotels, restaurants and related businesses suffered as tourists stayed away for months. Under a separate but uncapped 2012 agreement, BP continues to settle claims from business owners and residents who say they were harmed.
Yet only a handful of BP employees were criminally charged in the spill; they were either acquitted or received light punishment. The company itself paid $4 billion in criminal penalties tied to the rig workers’ deaths. But for the most part, individuals were not held accountable.
While the amount of the final settlement appears satisfactory, and sufficient to cover substantial restoration efforts, taxpayers nevertheless have grounds for dismay. BP will be allowed to write off nearly $15.3 billion of the settlement costs. In other words, the oil giant will enjoy a tax deduction for what the U.S. District judge in the case, Carl Barbier, has declared to be “gross negligence.”
The Justice Department can deny such breaks in the course of structuring agreements with corporate wrongdoers, and has sometimes done so. Too many taxpayers already feel that the system rewards well-heeled players at the expense of ordinary people. Knowing that they will soon be, in effect, subsidizing a penalty for the reckless acts of BP is not likely to sit well.
Others maintain that the Justice Department could have held out for an even bigger settlement.
Still, it is good to get this matter settled, and get this large amount of money out to compensate for economic losses and provide environmental restoration. Surely, this settlement – on top of the devastating damage to BP’s reputation – should serve as a powerful warning to those drilling in the ocean. They must take all precautions to prevent such a disaster from recurring.
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