Five years later, Gulf oil spill is a legal quagmire

On Monday, it will be five years since BP's Deepwater Horizon oil rig exploded, killing 11 men and unleashing more than 100 million gallons of oil into the Gulf of Mexico. BP has set aside $42 billion to pay fines, compensate victims, and clean up the sea and the coastline. That is a staggering sum. And the final bill could be even higher.

In February, a federal judge rejected BP's plea that its fines under the Clean Water Act should be limited to $9.57 billion, ruling that $13.7 billion would be more appropriate. In addition, trustees from federal agencies, the affected states (Alabama, Louisiana, Mississippi, Florida and Texas) and Indian tribes are overseeing a "Natural Resource Damage Assessment" (NRDA) to determine how much damage has been done and what BP must pay to clean it up.

It would suit the government if those estimates turned out to be high. Politically, BP is an easy target. It is an oil firm. It is foreign. And it genuinely messed up.

Plus, the government gets to spend some of the moolah. Small wonder the early official estimates of damage differ from BP's.

A recent report from the oil giant finds that the available data do not indicate "a significant long-term impact to the population of any Gulf species." Shrimp harvests are up. Seabirds are breeding much as before. As early as August 2010, less than 2 percent of water samples showed more oil-related chemicals than the Environmental Protection Agency deems safe for marine life. "The few areas where there were potentially harmful exposures were limited in space and time, mostly in the area very close to the wellhead during the spring and summer of 2010," says BP.

Trustees compiling the NRDA retort that BP "misinterprets and misapplies data." Ben Sherman of the National Oceanic and Atmospheric Administration (NOAA), which advises the Coast Guard on scientific issues, says it is too soon to assess the damage. The effects of oil remnants on the Gulf bottom, the shoreline and deepwater corals are disputed, as is the extent to which the accident drove away tourists.

The firm has so far spent about $12 billion to settle some 300,000 private claims. Some of these were fraudulent. BP says it has paid out more than $500 million to people with bogus or exaggerated claims, such as a phone shop that burned down before the spill. It is unlikely to recover much of that.

Some practical lessons have been learned. The environmental effects of spraying 1.84 million gallons of dispersants are becoming clearer and leading to new regulation. They prevented the formation of an oil slick after the explosion (by breaking down the oil into droplets on the water's surface). However, a new study suggests that one dispersant harms epithelial cells, found in human lungs and fish gills. Responders who helped in the explosion's aftermath may have suffered burning lungs and coughing bouts as a result. Other scientists discovered compounds from dispersants in the eggs of white pelicans at nesting sites in Minnesota and Illinois.

The disaster spurred technological progress. After it, NOAA and the University of New Hampshire developed a geospatial reference system. Accessible to all online, the Environmental Response Management Application mapped the site of the rig in the Gulf, ocean currents, ship positions and the movement of oil. This made dealing with the disaster easier. Doug Helton of NOAA calls it "a huge success" — the site had more than 3 million hits on the day it went live in June 2010. Now it can also depict areas in the Arctic, the Caribbean and the Great Lakes — just in case.

On April 13, the Obama administration unveiled tough new safety requirements for blowout preventers. These are the valves that seal drill pipes to prevent explosions — a precaution that conspicuously failed on the Deepwater Horizon. The federal government raised standards for well-casings five years ago and on the cementing of wells two years after that.

Bethany Kraft of the Ocean Conservancy, a green group, worries that drilling technology develops more quickly than people's ability to respond. But Helton argues that America is "much better prepared" for another spill. More than 100,000 people helped out after Deepwater Horizon, and their memories are still fresh.

The huge penalties inflicted on BP could deter future negligence. But they could also deter investment in America. They feed the perception that its legal system poses as serious a political risk to multinationals as anything they might encounter in emerging markets — Deepwater Horizon cost BP far more than sanctions on Russia over the invasion of Ukraine, for example.