In 2010, oil giant BP was responsible for a disaster that killed 11 people and caused one of the worst oil spills in history – all because of the company’s greed and negligence. That’s one clear message presented in Deepwater Horizon, the new film that chronicles the timeline of the disaster and honors the heroism of the oil rig workers caught up in it.
But one thing the movie doesn’t explore is the aftermath of the spill, when BP heaped insult on injury by putting US taxpayers on the hook for billions of dollars in cleanup and settlement costs. You read that right: tax loopholes actually incentivize more disasters like Deepwater Horizon by subsidizing cleanup and compensation costs.
If you’re human, the mostly true-to-life story told in the Deepwater Horizon film will make your blood boil. Big Oil’s greed is personified by BP company man Donald Vidrine, who is played artfully by John Malkovich. Vidrine’s character, who relentlessly pushes for drilling to proceed without following safety protocols, offers a window into BP’s mindset: profit above all else, the consequences and workers’ lives be damned.
The movie doesn’t nail every detail, but it gets the big things right. BP indeed deserves the most blame for what happened. In the real world, BP was found guilty not just of negligence, but of gross negligence in causing the disaster. Yet despite this official finding, BP has managed to put the burden of billions of dollars in cleanup and settlement costs onto the shoulders of U.S. taxpayers.
Let that sink in: after being found grossly negligent in causing one of the world’s worst oil spills – an accident that killed 11 people and wreaked havoc on coastal communities – BP made you and me foot a huge chunk of the bill. And our government let them do it.
In 2015, BP agreed to a final settlement of $20.8 billion to be paid to federal and state governments, covering civil penalties and economic and environmental damages. But work by U.S. PIRG uncovered that BP would be able to write off the majority of the settlement as a tax deduction, which would rob regular U.S. taxpayers of $5.35 billion that BP would otherwise have paid in taxes. This was after BP already wrote off its initial $32.2 billion in cleanup and compensation costs in 2010, costing U.S. taxpayers another $10 billion.
It’s outrageous that taxpayers are on the hook for more than $15 billion of BP’s cleanup and settlement costs. Yet our government continues to allow this subsidy – one among many – to benefit multi-billion dollar oil companies. Some recent attempts have been made to curb these subsidies to Big Oil, but none have passed Congress, who have staunchly defended Big Oil’s 100+-year-old subsidies even while agreeing to phase out tax credits for wind and solar by 2020.
This pisses me off, and I bet it pisses you off, too. Help us ratchet up the pressure in two ways: Tell Congress that the time has come to stop funding fossils, and tell the President to stop offshore drilling to reduce the risk of another Big Oil–caused disaster like Deepwater Horizon.
I see that you total ignorance of business accounting continues. Corporations pay taxes on profit. Expenses reduce profit. So, all expenses reduce profit. It is inaccurate to say that expenses are a “tax deduction”; they are simply expenses.
Expenses are one thing , fines for gross neglegence should not be included in the balance sheet as a running expense. No other small or medium sized business is allowed to do that. Joes plumbing sefvice can’t put speeding fines or parking fines downas an expense.
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