U.S. Congress eases way for BP oil spill settlement

By David Ingram

WASHINGTON | Fri Jun 29, 2012 11:38pm BST

WASHINGTON (Reuters) - The U.S. Congress on Friday removed an obstacle to settling legal claims emerging from the 2010 BP Gulf of Mexico oil spill, when it approved a spending plan for the billions of dollars it expects the government to collect.

The plan, which President Barack Obama is expected to sign, directs 80 percent of Clean Water Act penalties related to the spill to a new trust fund for restoration efforts in five states along the Gulf coast.

An explosion at the Deepwater Horizon drilling rig in April 2010 killed 11 workers and led to the biggest oil spill in U.S. history, with some analysts putting the cost at $60 billion (38.2 billion pounds) or more.

Officials involved in the spending plan said its approval would foster any settlement between the U.S. Justice Department and defendants BP Plc and Transocean Ltd, not for any legal reason but because of how Congress manages budget matters.

Any fines from the spill would be new money for the U.S. government, but under complicated budget rules, Congress could not spend it without offsetting budget changes elsewhere.

The plan passed as part of a massive transportation bill by a vote of 373-52 in the House of Representatives and 74-19 in the Senate.

Approving the plan required lawmakers to find $1.6 billion in offsetting changes over 10 years.

By comparison, civil fines alone from the oil spill have been estimated at up to $21 billion, depending on exactly how much oil spilled. Finding offsetting budget changes for that much money would be much more difficult.

Enactment of the plan "removes an impediment" to the Justice Department either settling oil-spill claims or making an announcement of what it would seek in trial against the companies, said Whitney Stanco, senior policy analyst at Guggenheim's Washington Research Group.

A Justice Department spokeswoman had no comment on Friday on negotiations of a possible settlement.

(Additional reporting by Kim Dixon, Thomas Ferraro and Roberta Rampton in Washington; Editing by Howard Goller and David Gregorio)

Source: http://uk.reuters.com/article/2012/06/29/uk-bp-settlement-idUKBRE85S1JZ20120629?feedType=RSS&feedName=topNews

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