BP civil trial to begin today; Company could pay more than $17 billion in penalties

NEW ORLEANS – A much anticipated trial against British Petroleum over alleged Clean Water Act violations and environmental damages stemming from the 2010 oil spill in the Gulf of Mexico is set to begin today barring a last minute settlement from the oil giant.

Although BP has already settled thousands of injury claims and suits against the company, it opted to go to trial with the hope of avoiding a finding of gross negligence that could end with a potential penalty of $17 billion in environmental fines.

BP group general counsel Rupert Bondy said the corporation has attempted to settle the case, but was unsuccessful due to what it determined were unreasonable demands from the Department of Justice.

“We have always been open to settlements on reasonable terms, failing which we have always been prepared to defend our case at trial. Faced with demands that are excessive and not based on reality or the merits of the case, we are going to trial,” Bondy said.

Today’s arguments will open the first phase of the trial and will focus on the causes of the Deepwater Horizon oil platform explosion that began the 2010 Gulf oil spill that eventually leaked an estimated 4.9 million barrels of oil in the largest oil spill ever recorded.

To be successful in phase one of the trial BP will have to show the bulk of the blame for the rig’s failure, which began the spill, was due to a faulty cement job by rig operator Transocean and subcontractor Halliburton.

Bondy said part of BP’s defense, which will be argued in phase two of the trial in September, will be based on the government’s estimate of the amount of oil leaked, which he claims is faulty.

“These issues are extremely complicated as a technical matter, and there is still further analysis to do,” Bondy said. “But it is clear, based on our analysis so far, that the government’s public estimate is simply wrong and overstated by at least 20 per cent.”

The proceedings of the trial will take place without a jury and will be overseen by U.S. District Judge Carl Barbier who will ultimately assess any penalty.

In November, BP settled 14 criminal charges, including manslaughter, in a criminal suit with the Department of Justice for $4.5 billion, which was the largest criminal fine ever levied on a corporation by the federal government. In addition, BP drilling managers Donald Vidrine and Robert Kaluza are also undergoing a separate criminal trial that began late last year with the two pleading not guilty to manslaughter charges.

BP said in a statement that it has already spent $23 billion on response, cleanup and claim payments.