BP (NYSE:BP) has repaid the federal government approximately $520 million related to the cost of this summer’s Gulf of Mexico oil spill, according to a report released by the Government Accountability Office, but the office warns there are still-growing costs that are quickly reaching the limits of what the U.S. government can legally pay for.
The GAO said that the U.S. government has put away approximately $1.6 billion in the Oil Spill Liability Trust Fund, which is financed by an 8-cent tax on each barrel of oil, to be used to cover the costs of this oil spill and potential future incidents. While the government has put aside money to cover clean up, the current statute says the maximum amount of money that can be withdrawn per incident is $1 billion.
The $1 billion mark was easily exceeded by BP for April oil spill months ago, and BP has put aside $20 billion in a trust to cover the future costs of the spill.
According to the GAO, the government’s own expenditures on the Gulf oil spill are expected to exceed that $1 billion cap in the relatively near future. And while BP has pledged to repay the government for all costs related to the spill, the GAO said that the per-incident cap could make it legally impossible to settle any Oil Pollution Act claims over that cap.
The GAO recommends in its report that Congress revise the Oil Pollution Act to take in to account net expenditures in an oil spill – those costs incurred by the federal government that are not reimbursed by the responsible party, or in this case BP.