How Would You Spend BP’s Oil Spill Penalty? 4 Ways BP’s Payout Could Get Us Off Oil
BP could be liable for as much as $13 billion (maybe more) for the Gulf oil spill.
June 27, 2010 by Jim DiPeso
BP has agreed to fork over $20 billion to pay claims stemming from the Deepwater Horror. Except for fake conservatives like Rush Limbaugh, who bloviated in defense of Joe Barton’s funhouse mirror characterization of the compensation fund as a “shakedown,” any person with even a passing acquaintance with morality would agree that BP should pony up for the damage it has caused.
The $20 billion, however, likely will not be the closing bill for BP, even if the special kitty covers all claims for restitution. There is the matter of civil fines for the oil spill, which haven’t received nearly as much attention.
The fines could be big. Very big. And therein lies an opportunity for attacking the core of the problem, of which the worst oil spill in U.S. history is a symptom.
First, however, how much could BP be fined under the Clean Water Act for an illegal oil discharge? Depends on how much oil has been spilled and the degree of negligence involved. Spill estimates have been a moving target, and more will spill in the weeks to come, but the latest estimated range is 1.6 million to 3 million barrels.
Under the law, fines could range from $1,100 to $4,300 per barrel spilled. A fine of $1,100 per barrel, charged against 1.6 million barrels spilled, would yield a civil fine of $1.76 billion. That’s the approximate low end. At the approximate high end, a fine of $4,300 could be levied if there is a finding of gross negligence. Times the high estimate of 3 million barrels, and now we’re talking a fine approaching $13 billion.
A tidy sum. What would be a good use for the money? Oil dependence is the monkey on the nation’s back that has resulted in BP and other oil companies going to the ends of the earth and under the deep blue sea, at substantial environmental risk, to find expensive, hard-to-reach oil to feed our addiction. How about using the fine proceeds to create a special fund which, as part of a broader energy plan, could be used to start throttling back oil dependence?
There are any number of possible uses. Such as:
- A revolving loan fund to finance beefing up and smartening up the power grid, so it can better handle electric cars.
- R&D for electric car batteries offering the range that drivers demand.
- R&D for alternative fuels made from inedible feedstocks, such as algae.
- Building capacity for carrying out large-scale demonstrations of capital-intensive, high-risk energy technologies, such as carbon capture and sequestration.
Establishing a special Get the Oil Monkey Off Our Backs Fund, financed by a gigantic fine levied on BP, is not a complete answer to reducing oil dependence and the many geopolitical, economic, and environmental liabilities associated with such. It would not make up for the damage that Gulf Coast communities will be dealing with for years to come. It would be a start, however, to addressing the root cause of the spill and putting the U.S. onto a more sustainable, less risky energy path.
Article reprinted with permission. Copyright Jim DiPeso. Jim DiPeso is the policy director for Republicans for Environmental Protection. Contact Jim DiPeso at: jdipeso@rep.org
