Quantcast

BP to Pay 'Largest Settlement With a Single Entity in American History'

Energy

As the U.S. Department of Justice announced on Monday a final settlement with BP over the devastating 2010 Deepwater Horizon oil spill, groups are warning that the oil giant may still nab a substantial tax break under the deal.

The U.S. Coast Guard battles flames following the explosion on BP's offshore oil rig Deepwater Horizon. Photo credit: U.S. Coast Guard / Wikimedia Commons

Attorney General Loretta Lynch said the $20.8 billion settlement agreement marks the "the largest settlement with a single entity in American history." The resolution includes $5.5 billion to settle civil claims under the Clean Water Act; $7.1 billion in natural resources damages claims under the Oil Pollution Act, in addition to the $1 billion previously committed for early restoration and $4.9 billion in economic damages claims to the five Gulf states and up to $1 billion for local governments.

However, reporting by the Times-Picayune highlighted the little-noticed detail that, while the U.S. Department of Justice has explicitly forbidden BP from deducting its Clean Water Act penalties, no restrictions have been placed on the billions labeled natural resource damages payments, restoration and reimbursement to government, which it can treat as a business expense.

U.S. Public Interest Research Group (PIRG) says this amounts to $15.3 billion that can be written off as the "cost of doing business"—$5.35 billion of which can be claimed as a tax windfall.

"BP was found to be grossly negligent in the Deepwater Horizon case and yet the vast majority of what they are paying to make up for their gross negligence is legally considered just business as usual under the tax code unless the U.S. Department of Justice explicitly prohibits a write-off," said Michelle Surka, program associate with U.S. PIRG. "This not only sends the wrong message, but it also hurts taxpayers by forcing us to shoulder the burden of BP’s tax windfall in the form of higher taxes, cuts to public programs and more national debt."

Environmental watchdog group Friends of the Earth also noted that the Deepwater Horizon disaster has already allowed BP sizable tax benefits, including the $10 billion windfall it was able to secure by deducting the cost of its cleanup expenses.

"BP should not be allowed to treat the costs of their disaster as the cost of doing business," said Friends of the Earth climate and energy campaigner Lukas Ross. "We are concerned that this settlement doesn’t protect taxpayers. The justice department must ensure that no further tax benefits can accrue to the company responsible for perhaps the biggest environmental disaster in U.S. history."

YOU MIGHT ALSO LIKE

Citigroup Becomes Third Major Bank to Cut Financing to Coal Industry

Bernie Sanders Vows to Stop ‘Disastrous’ TPP Deal

Ralph Nader: Monsanto vs. Freedom of Information Act

Watch Hillary Clinton on Saturday Night Live Talk Keystone XL and Donald Trump

EcoWatch Daily Newsletter

BLM drill seeders work to restore native grasses after wildfire on the Bowden Hills Wilderness Study Area in southeast Oregon, Dec. 14, 2018. Marcus Johnson / BLM / CC BY 2.0

By Tara Lohan

In 2017 the Thomas fire raged through 281,893 acres in Ventura and Santa Barbara counties, California, leaving in its wake a blackened expanse of land, burned vegetation, and more than 1,000 destroyed buildings.

Read More Show Less
Brogues Cozens-Mcneelance / EyeEm / Getty Images

By Alina Petre, MS, RD

Fruit juice is generally perceived as healthy and far superior to sugary soda.

Read More Show Less
Sponsored
Pexels

By Danielle Nierenberg and Katherine Walla

As the holiday season ramps up for many across the world, Food Tank is highlighting 15 children's books that will introduce young eaters, growers and innovators to the world of food and agriculture. Authors and organizations are working to show children the importance — and fun — of eating healthy, nutritious and delicious food, growing their own produce, and giving food to others in need.

Read More Show Less
Pixabay

By Alina Petre, MS, RD (CA)

Purple cabbage, also referred to as red cabbage, belongs to the Brassica genus of plants. This group includes nutrient-dense vegetables, such as broccoli, Brussels sprouts, and kale.

Read More Show Less
Pexels

By Lauren Wolahan

For the first time ever, the UN is building out a roadmap for curbing carbon pollution from agriculture. To take part in that process, a coalition of U.S. farmers traveled to the UN climate conference in Madrid, Spain this month to make the case for the role that large-scale farming operations, long criticized for their outsized emissions, can play in addressing climate change.

Read More Show Less