BP ready for trial

The Deepwater Horizon civil trial for BP is just five days away and the legal counsel for the oil and gas giant is saying the corporation is ready for court and was “not grossly negligent.”

Unless a settlement between the federal government and BP can be reached, a lengthy trial in New Orleans would determine whether BP is penalized anywhere from $5 billion to more than $20 billion in Clean Water Act fines.

Rupert Bondy, BP general counsel, said in an announcement Tuesday that BP is prepared for trial without any “reasonable” settlement offer on the table.

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

“We have confidence in our case and in the legal team representing the company and defending our interests,” he added.

The 2010 Deepwater Horizon explosion killed 11 men, and resulted in a three-month discharge of 4.9 million barrels of oil into the Gulf of Mexico off the coast of Louisiana. The federal government blames the oil leak largely on BP’s cost-cutting and time-saving decisions.

BP is contending the 4.9 million barrels estimate is overinflated by at least 20 percent. The additional argument is that BP is asserting it recaptured 810,000 barrels and that the upper limit of the amount of barrels factored into civil penalties should not exceed 3.1 million barrels, according to Bondy.

The BP general counsel contended that BP has its share of blame, but that several parties were responsible and that BP was not “grossly negligent,” which is the standard for authorizing maximum penalties.

“Gross negligence is a very high bar that BP believes cannot be met in this case,” Bondy stated. “This was a tragic accident, resulting from multiple causes and involving multiple parties. We firmly believe we were not grossly negligent.”

Sen. Mary Landrieu, D-La., who is out of the country this week, disagreed in an email response.

“I have consistently said I believe that BP was grossly negligent leading up the Deepwater Horizon disaster and must be held fully accountable under every applicable statute,” Landrieu wrote. “I continue to urge all parties to reach a resolution that achieves justice for the Gulf.”

Rep. Cedric Richmond, D-New Orleans, said in an email response that he is confident in the judicial process.

“For the past three years Louisiana has been working to restore and recover from the devastation of the impact this tragedy caused Gulf Coast residents and the environment,” Richmond wrote. “The families and businesses impacted by this disaster want, need and deserve closure.”

Mark Davis, director of the Tulane Institute on Water Resources Law and Policy, said it appears BP is asserting as much leverage as it can, but that a settlement is still possible.

“They’re at least trying to make it look like they want to go to trial, which is the best way to get a favorable settlement,” said Davis, adding that BP is looking forward to trial like a person looks forward to a “tooth extraction.”

A settlement could happen tomorrow, Davis said, or it could even occur as the case is being handed over to a jury many months from now.

BP does not want to look grossly negligent, Davis said, “and I’m sure the federal government doesn’t want to reveal how underprepared it was.”

Transocean, a Swiss-based drilling company that owned the Deepwater Horizon rig, had its $1.4 billion criminal and civil penalties settlement finalized this week for its share in the oil leak.

Halliburton, another partner in the Deepwater Horizon drilling project, has not reached any settlement deals.

Last month, the settlement was completed for BP’s more than $4 billion in criminal penalties, but the larger fines are expected in the civil case.

Landrieu was the lead sponsor of the RESTORE Act legislation signed into law last summer that directs 80 percent of the Clean Water Act fines to the five Gulf of Mexico states affected by the disaster, an amount that could reach $20 billion once the BP penalties are concluded.

Sen. David Vitter, R-La., has been among those arguing Louisiana potentially could end up with a larger share of funds if more of the penalty dollars go through the federal Natural Resource Damage Assessment process, called NRDA, and not only the RESTORE Act equation.

Vitter wrote a letter last week to U.S. Attorney General Eric Holder asking the U.S. Justice Department not to rush into a settlement with BP before some of the NRDA penalty issues are worked out so BP cannot use its Clean Water Act penalties to also represent its Natural Resource Damage Assessment fines.

Vitter wrote that he was concerned BP may take advantage of the overlap in the two laws “to continue intentionally slow-walking restoration efforts.”

While Vitter may be right, Davis said, “But if you don’t settle soon, it goes to trial.”

“It’d be a donnybrook,” Davis added.