Special report: Civil fine in Gulf spill could be $4,300 barrel

A clause buried deep in the U.S. Clean Water Act may expose BP and others to civil fines that aren't limited to any finite cap -- unlike a $75 million limit on compensation for economic damages. The Act allows the government to seek civil penalties in court for every drop of oil that spills into U.S. navigable waters, including the area of BP's leaking well.

As a result, the U.S. government could seek to fine BP or others up to $4,300 for every barrel leaked into the U.S. Gulf, according to legal experts and official documents.

So far, analysts and experts calculating potential oil spill liabilities have mostly concentrated on the cost of the clean-up and compensation for economic damages to affected parties. Some have also discussed criminal liabilities.

But the potential for civil fines has received scant attention -- and they could add up very quickly, depending on how aggressive the U.S. government is in pursuing them.

The threat of hefty fines underscores the importance of quantifying how much oil is pouring into the Gulf. As BP seeks to staunch the leak that has now been gushing for at least 33 days, it has estimated a spill rate of 5,000 barrels per day. But some experts say the volume -- and hence the fines -- could be more than 10 times higher.

The little-known, seldom applied clause in the Clean Water Act was added in 1990 after the Exxon Valdez disaster in Alaska, and was intended to beef up the arsenal of penalties the government can apply to oil spillers to deter future disasters.

"These civil penalties could be staggeringly high, possibly running into the billions," said Professor David Uhlmann, director of the Environmental Law program at University of Michigan.

Total liability -- including civil fines as well as the cost of clean-up, economic damages and potential criminal liability -- "will run into the billions and may be in the tens of billions," Uhlmann said.

Under the Clean Water Act, the Environmental Protection Agency can seek in federal court to fine any party whose negligence results in an oil spill in U.S. federal waters.

Other companies involved at the Horizon platform and the oilfield could share liability with BP, experts said. They include rig-owner Transocean Ltd, cementing contractor Halliburton Co., blowout preventer manufacturer Cameron, and Anadarko and Mitsui, which also hold stakes in the oilfield.