NEW YORK (CNNMoney.com) — Just how much will BP pay in fines to the U.S. government? In a worst case scenario, they could top $18 billion.
BP (BP) has already announced a $20 billion fund to compensate disaster victims. But it will also owe a huge amount in fines for violating the Clean Water Act: Up to $4,300 per barrel of oil released if it’s found the company was negligent in causing the disaster, according to a Justice Department spokesman.
No one has a precise number for how much oil has spewed into the Gulf. The Coast Guard originally said it was just 1,000 barrels a day. That figure has since been revised up to between 35,000 and 60,000 barrels a day.
Taking the high end of that estimate – over 4.3 million barrels of oil released since the spill began – the fines could total over $18 billion, and that’s accounting for the 800,000 or so barrels BP had said it has captured.
Given BP’s massive size (it made nearly $17 billion last year alone) and the fury it’s generated among the voting public, the company is an easy target.
“BP should be held fully accountable under the law, and that’s the law,” said a spokesman for Rep. Ed Markey, D-Mass., when asked if $18 billion was really a reasonable fine.
A BP spokesman confirmed the company could be liable for up to $4,300 per barrel of oil released, but declined to speculate on the amount of the total fine.
Given the amount of money at stake and the wide range of estimates for oil spilled, reaching consensus on a number will be no easy task.
Last week Markey called for BP to measure the amount of oil flowing from the well if and when the temporary cap currently stemming the flow has to be removed.
Up until last week the company did not have a proper funneling system or enough ships to collect all the oil from the well.
Now the well cap that is sealing the well can be connected to collection vessels on the surface to safely measure the well’s flow rate. So long as the system is deemed to be working, no changes are expected to be made. But if the cap fails, or if too much oil is escaping through cracks in the sea floor, Markey wants the cap to be opened and all the oil collected and measured.
“I am concerned that without such a monitored collection effort we may never be able to provide a definitive answer to the question of how much oil has actually been released,” said Markey, a vocal critic of BP’s response to the spill, in a statement.
Whatever number is ultimately arrived at, others say it’s unlikely BP will pay anything close to $18 billion.
Dick Watt, a Houston-based oil and gas attorney, said $18 billion might be possible in theory but not practice, given the extent politics will play into the decision. Ultimately, it will be a judge or jury that decides how much BP must pay, not the U.S. government.
“The fines will be very large,” said Watt, “but nowhere near that range.”