Industry News

Should BP Get Tax Credits for Gulf Spill Fines?

On 4 December 2015, a letter from Friends of the Earth and 16 other groups was sent to Attorney General Loretta Lynch. It calls on the Justice Department to ensure that the costs of BP’s latest Deepwater Horizon settlement are not passed along to taxpayers.

 

In October, an out-of-court settlement worth an estimated $20.8 billion was proposed between BP, the Justice Department and the five states of the Gulf Coast, triggering a 60-day comment period ending 4 December 2015. Of the total settlement costs, an estimated $15.3 billion is expected to be tax deductible, meaning that BP could claim a tax windfall worth $5.35 billion. The letter asks the Justice Department to pursue a final agreement specifically ensuring that none of BP’s settlement costs be tax deductible.

Friends of the Earth Climate and Energy Campaigner Lukas Ross issued the following statement, “Taxpayers should not be forced to subsidize the worst oil spill in U.S. history. The Justice Department still has the authority to make sure that BP and BP alone bears the full cost of its ‘gross negligence.”

Among other things, letter states, “Although the task of ending polluter subsidies in our tax code ultimately falls to Congress, the Department of Justice has wide latitude to pursue a settlement that specifically forbids the deduction of these payments. We encourage you to use it.”

To read the full letter, click here.

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