That fine may not be as much as you think.
For many of us last Thursday was kind of a blur. With the July 4th long-weekend coming up, some news just fell through the cracks. This was one of those headlines.
Last Thursday, BP announced that they came to an agreement with the US government, state governments that border the Gulf Coast, and over 400 local governments on the figure of $18.7 billion for settlement payments regarding the Deepwater Horizon rig explosion that happened in 2010. Many environmentalists have referred to the Deepwater Horizon disaster as one of the worst environmental disasters in US history.
The settlement comes just before a federal judge’s ruling in how much BP would have to pay for violating the EPA’s Clean Water Act. In their settlement, BP stated that a civil penalty of $5.5 billion would be paid over 15 years in conjunction with various other fines from the surrounding coastal areas. Experts estimate these fines bring BP’s total cost of the Deepwater Horizon oil spill to about $53.8 billion.
While that is a sizable amount of money, it’s also important to remember that since Deepwater Horizon disaster BP has made $69.6 billion in profits, so in comparison the fines aren’t that damning. Though what many are worried about – for good reason too – is that BP could write off $13.2 out of the 18.7 billion to taxes. That means BP could deduct a large chunk of the fine, under a legal loophole, to taxes if the Department of Justice doesn’t file the fines under “a penalty cost.”
With the Deepwater Horizon Disaster claiming 11 lives and wrecking environmental havoc along the Gulf Coast region for years to come, let’s hope that everything is on the up-and-up.
(Photo Credit: Wikipedia)