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Final pollution fine for BP Deepwater Horizon disaster still unclear

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Oil still unrecovered in the Gulf of Mexico due to the 2010 Deepwater Horizon disaster could cost BP P.L.C. up to $13.7 billion for violating federal environmental law.

The final penalty phase of a nearly two-year civil trial in New Orleans wound down in February following closing arguments by lawyers representing BP, drilling partner Anadarko Petroleum Corp. and the U.S. Environmental Protection Agency.

While U.S. District Judge Carl J. Barbier has yet to decide what BP will pay in civil penalties for violating the Clean Water Act, he did reject a March attempt by BP's lawyers to limit the amount.

In his order, Judge Barbier agreed with the EPA's stance that BP could face a maximum civil penalty of $4,300 per barrel spilled. Since the judge determined 3.2 million barrels of oil remained unrecovered in the Gulf of Mexico, the fine could reach $13.7 billion.

A date has not been set for the penalty determination, a court spokeswoman said.

“The amount of the penalty turns in part on whether BP was grossly negligent or ordinarily negligent,” said Joseph Lavitt, a law professor at the University of California Berkeley. But beyond the BP penalty, the trial has posed larger questions, Mr. Lavitt said.

“Five years post-BP, it's time to reflect of the inadequacies of the present system of private insurance and publicly determined liability to deal with major disasters caused by human error,” he said. “The question now is whether the legal system and insurance industry are able to address the types of risk now engendered by modern technology without stifling progress.”