However, in the case of the April 2010 oil spill, the stakes are much higher; the well explosions and resulting spill harmed five state coastlines, prompted a six-month ban on oil and gas drilling in the Gulf of Mexico, and disrupted the livelihoods of fishermen and other coastal businesses.
BP has already made efforts to lower what could be a huge fine. The penalty that the Department of Justice could award BP under the U.S. Clean Water Act ranges from $1,100 to $4,300, if the company is found to have been grossly negligent. Using the maximum fine payable under the act, to calculate the worse possible scenario, BP could have faced penalties of as much as $21 billion. But Justice Department agreed earlier this week to lower the number of barrels of oil involved in the case after determining that the oil and gas producer had captured 810,000 barrels of crude before they spilled into the ocean.
The company has maintained that it will settle for “reasonable terms,” reported Reuters, but BP’s lawyer Rupert Bondy has made it clear that the company is facing “demands that are excessive and not based on reality,” in the upcoming trial.
BP has already committed $8.5 billion to plaintiffs in one settlement, paid $9 billion in other claims, and settled 14 criminal charges with a guilty plea and a fine of $4 billion. This has put a huge strain on the company: accounting provisions have totaled $42 billion, a figure that represents close to 30 percent of its stock market value. BP has sold assets worth $38 billion to cover its financial obligations, and these moves have cut $5 billion per year from its cash flow, which is a basic money-making measurement…