BP's Fine For 2005 Plant Explosion Could Be $3.2 Billion

Attorneys for victims of BP's deadly plant explosion in Texas contend the fine could be as much as $3.2 billion, dwarfing the $50 million being proposed in a plea agreement.

HOUSTON (AP) β€” Attorneys for victims of BP PLC's deadly 2005 plant explosion in Texas contend the oil giant's fine could be as much as $3.2 billion (euro2.19 billion), dwarfing the $50 million (euro34.16 million) being proposed in a plea agreement.
Attorneys said the fine should be higher than $400 million (euro273.3 million) at least.
The proposed fines were in court documents filed by victims' attorneys last week at the request of a federal judge who is deciding whether to accept a plea deal from London-based BP.
The agreement proposes that BP plead guilty to a violation of federal environmental laws and pay a $50 million (euro34.16 million) fine for its criminal conduct in the blast, which killed 15 people and injured more than 170 others at the Texas City refinery. The company would also be on probation for three years.
Plant manager Keith Casey formally entered the guilty plea on behalf of the company earlier this month.
But blast victims' attorneys asked U.S. District Judge Lee Rosenthal to reject the deal, arguing the fine was too low and the deal did not provide for an independent monitor who would report on whether BP was meeting its safety obligations. They also criticized prosecutors for not consulting victims while the deal was being put together.
Prosecutors and BP defended the deal, saying it is the harshest option available in assessing criminal punishment for the blast.
While Rosenthal seemed to disagree with most legal points made by attorneys for blast victims in the early February hearing, she did let them file legal briefs in which they could argue how the fine should be calculated.
Victims' attorneys said federal law calls for a defendant to be fined not more than the greater of twice the gross gain or twice the gross loss resulting from a crime.
BP has said it has paid more than $1.6 billion (euro1.09 billion) to settle at least 2,000 of the 4,000 lawsuits filed after the accident.
BP spokesman Neil Chapman declined to comment Monday. A spokeswoman for the U.S. Attorney's Office did not immediately return a call seeking comment. Both were expected to file their responses in court within a week.
During the February hearing, BP's attorneys and prosecutors were skeptical about whether actual losses could be calculated and if the civil settlements could be used to help determine the fine.
The plea deal was part of an October agreement by BP to pay $373 million (euro254.85 million) to settle various criminal and civil charges.
The explosion at the Texas City plant about 40 miles (64 kilometers) southeast of Houston occurred after a piece of equipment called a blowdown drum overfilled with highly flammable liquid hydrocarbons.
The excess liquid and vapor hydrocarbons then were vented from the drum and ignited as the isomerization unit β€” a device that boosts the octane in gasoline β€” started up. Alarms and gauges that were supposed to warn of the overfilled equipment did not work properly.
The U.S. Chemical Safety and Hazard Investigation Board, one of several agencies that investigated the accident, found BP fostered bad management at the plant and that cost-cutting moves by BP were factors in the explosion.
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