Gulf of Mexico oil spill: BP back in court

BP rejected known fixes to seal the 2010 Gulf of Mexico oil spill to mask the rate of oil escaping, the U.S. government argues in a trial to resume Monday. But the British multinational oil and gas giant argues in the civil trial it made every reasonable effort to cap the well and says all its unsuccessful measures were approved by the government, and other oil companies agreed with BP's strategy for dealing with what ultimately became a world record off-shore spill. The U.S. Justice Department and BP are also expected to argue over how much oil leaked into the gulf during the three months it took to cap the well. The four-week, non-jury trial -- which could add $18 billion in financial penalties to BP's bill for the disaster, on top of $42.4 billion the company set aside for cleanup, claims and fines -- starts the second of three phases in U.S. District Court in New Orleans nearly five months after the first phase ended. The first phase, which ran from February to April, covered the causes of the April 20, 2010, explosion and sinking of the Deepwater Horizon oil rig, which killed 11 men and triggered a seafloor oil gusher that flowed for 87 days until it was capped July 15. The phase sought to determine and allocate the amount of blame for the disaster among BP and its partners, rig operator Transocean Ltd. of Geneva, Switzerland, and contractor Halliburton Co. of Houston. On Monday the U.S. Justice Department, joined now by Transocean and Halliburton, along with the states of Louisiana and Alabama -- known collectively as the "allied plaintiffs" -- will argue BP deliberately covered up gusher's true flow rate and rejected solutions that would have sealed the well more quickly because it wanted to protect the coverup, a joint filing submitted ahead of the trial indicates. "But for BP's fraud, the well could have been capped weeks earlier," the filing alleges, contending BP was grossly negligent after the spill as well as before it. Transocean and Halliburton, seeking to limit their own responsibility in the spill that polluted vast swaths of ocean and beach and devastated wildlife and industry in five gulf states, argue BP could have sealed the well May 15, two months earlier than it was actually capped, but chose not to, the Financial Times reported. They argue their financial liabilities should therefore stop May 15. The allied plaintiffs argue BP deliberately underestimated the amount of oil gushing from the well and then delayed the well's sealing hoping to cover up its misrepresentation. BP made public statements during the spill indicating the well was gushing about 5,000 barrels a day. The Justice Department and the other plaintiffs argue BP knew the flow rate was three times higher than initial claims -- pointing to deleted messages showing BP knew the correct flow rate. They also allege BP knew its "top kill" plan to restrict the oil flow before sealing it would likely fail, even though BP claimed otherwise. They argue the fact that the "top kill" plan failed was evidence more than 15,000 barrels a day were gushing from the blown-out well. BP rejects the allied parties' arguments, saying in pretrial motions the claims rely on "sound bites and misrepresentations "and ignore "material facts." BP says the federal government reviewed and approved its plans to cap the well at every stage and says ExxonMobil Corp., Chevron Corp., Royal Dutch Shell PLC and ConocoPhillips Co. agreed with its capping strategies. It also says its preparations were in line with the industry's best practices at the time. The federal government estimates 4.2 million barrels -- 176.4 million gallons -- of crude spewed into the gulf. BP says 2.45 million barrels -- 102.9 million gallons -- spilled, arguing the government's figures come from "unproven methods that require significant assumptions and extrapolations in lieu of ... available data and other evidence." Both sides agree 810,000 barrels were captured in the spill response. The decision by U.S. District Judge Carl Barbier is to set the stage for the final tally of BP's legal bills. Under the U.S. Clean Water Act, BP's fines could rise to $4,300 for each barrel of oil that escaped, up from $1,100 a barrel, if the company is found guilty of gross negligence. It also opens BP to punitive damages. Barbier is expected to rule on the first two phases together, the Times said. The penalties under the Clean Water Act are expected to be determined in the trial's third phase next year.