“[Following the April 2010 drilling rig explosion in the Gulf of Mexico] cleanup, government fines, lawsuits, legal fees and damage claims will likely exceed the $40 billion that BP has publicly estimated, according to an Associated Press analysis. But they’ll be far below the highest estimates made over the summer by legal experts and prominent Wall Street banks, such as Goldman Sachs, which said costs could near $200 billion.”
For spills under the [Canadian] National Energy Board’s jurisdiction in Arctic waters, liability is capped at $40 million. For Atlantic offshore oil areas regulated by federal-provincial offshore petroleum boards, the liability limit is $30-million. . . . an offshore oil company may invoke a “due diligence” defence to shelter itself from liability above the cap.
If BP’s ultimate liability for the Gulf of Mexico spill is $40 billion, that is a thousand times more than it or other oil companies would face in Canada’s arctic or Atlantic. Can BP afford the financial hit and survive? Yes, it can. The company has little debt and its global enterprises should generate $26 billion next year in cash flow from operations.
Are there logical reasons for taxpayers to provide insurance to the oil industry protecting them from spill consequences? Should they do that for the highly profitable multinationals but not, for example, provide insurance to middle class owner/operator drivers trucking fuel to gas stations?
Will the Canadian Taxpayers Federation, the Fraser Institute and other phony guardians of the public purse issue press releases decrying the public’s financial exposure? Don’t hold your breath waiting.