Federal Law May Cap BP Oil Spill Damages at $75 million

BP  faces liability for one of the worst environmental disasters due to the April 20 accident at at oil rig which is releasing an estimated 200,000 gallons a day into the waters across the Gulf of Mexico. BP is spending $6 million a day to contain the oil spill, as the federal Oil Pollution Act requires BP to reimburse the cleanup costs of government agencies such as the Coast Guard and Homeland Security. BP’s costs will mount considerably due to  wrongful-death and personal injury cases and damage to wildlife, coastal businesses, and tourism.

Fadel Gheit, a market analyst with Oppenheimer & Co., estimated that BP could pay anywhere between $5 billion and $15 billion for the cleanup, damage claims and lawsuits. Federal law sets a $75 million cap on how much an oil company has to pay for damages such as lost wages and economic suffering. However, this cap may not apply if BP is found to have violated federal safeguards or was otherwise grossly negligent. A class-action lawsuit over the accident  has been filed in federal court in New Orleans against  BP, Transocean, Haliburton, and Cameron International Corp.,  a maker of rig equipment.

Sources: http://news.yahoo.com/s/ap/20100503/ap_on_bi_ge/us_gulf_oil_spill_bp

http://www.foxnews.com/politics/2010/05/03/obama-administration-press-bp-settle-oil-spill-cleanup-costs/

http://abcnews.go.com/Business/wireStory?id=10544522

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This entry was posted on Tuesday, May 4th, 2010 at 11:34 am and is filed under Environment. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.