Is BP Backing Out of Agreement to 'Pay Whatever is Necessary' in Gulf?
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BP Seeking to Limit Damages to $75 Million in Gulf?
Oh boy. Everybody's favorite Gulf of Mexico-soiling oil giant has just dropped something of a bombshell. Well, it would certainly turn out to be a massive bombshell if it's true: BP's attorney has just suggested that the company may seek to invoke the clause in the 1990 Oil Pollution Act that limits polluting companies' liability in a disaster to $75 million. That's right -- BP may seek to limit its damages for the entire BP spill (remember, folks, this was the worst environmental disaster in American history) to a comparatively measly $75 million. And it would be perfectly legal.
In a seemingly never-ending parade of radio, television, print and web ads, in addition to numerous official statements, BP officials have repeatedly insisted that the company intends to make the Gulf Coast and its residents "whole" again. In the latest such PR blitz, BP employee and New Orleans native Iris Cross reiterates that the company will do everything it has to do in order to "make this right."They may have been under that impression because BP formally agreed to set up a $2 billion fund to pay out damages to impacted Gulf business and residents with the president of the United States. Maybe Tony Hayward just had his fingers crossed in his blazer pocket during the meeting, or was waiting to exclaim 'Psych!' at an opportune moment, but got distracted and forgot. Who knows?
But yesterday in federal court, an attorney for the oil giant sent shockwaves throughout the Gulf region by suggesting that BP may seek shelter under the $75 million liability cap polluters can invoke under the Oil Pollution Act of 1990.
U.S. District Judge Carl J. Barbier, who's presiding over the more than 300 consolidated lawsuits against the company, was taken aback when BP attorney Don Haycraft floated the idea of the liability cap. Barbier replied simply that "BP said it would pay whatever [is] necessary." Steven Herman, a plaintiffs attorney in the case, also registered surprise. "We're shocked over here to hear the defendants now bring up this $75 million cap," he said. "We were under the impression it was waived."
Regardless, it's a little painful to look more closely at the language BP has been using throughout their PR blitzes to try to assure the American public now: The agreement to pay "whatever is necessary" or that they'll "make it right" are blatant exercises in intentional vagueness. Now, there's absolutely no way that BP is walking away from the Gulf spill while limiting its damages to $75 million. It's already shelled out way more than that. But things might get interesting if the company decides to seek shelter from further damage under the liability cap. And there's some ominous evidence that may be the case:
[BP attorney] Haycraft did not dispute BP's oft-repeated stance -- but he also noted that the company has already forked over "lots and lots" of money, suggesting that the Oil Pollution Act could help stanch the company's cash outlays in reparation to spill victims who've lost income as a result of the disaster.That last bit is sort of chilling. There are still hundreds of thousands of people suffering in the Gulf who have yet to receive restitution -- the mere prospect of BP weaseling out of its obligation to the lives it has devastated is maddening to say the least.
"I have said for sure, BP will pay all legitimate claims," Haycraft said -- prompting to Herman snap back, "All legitimate claims up to $75 million?" Haycraft's response: "I am not prepared to answer that question in this context."