BP, facing fines, challenges estimate on size of gulf spill

WASHINGTON - BP is mounting a challenge to the U.S. government estimate of how much oil flowed from the company's runaway well in the Gulf of Mexico, an argument intended to reduce by billions of dollars the federal pollution fines it faces for the biggest offshore oil spill in history.

BP's lawyers are arguing that the government overstated the spill by 20 percent to 50 percent, staffers working for the presidential oil-spill commission said Friday.

In a 10-page document obtained by the Associated Press, BP says the government's spill estimate of 206 million gallons is "overstated by a significant amount" and the company said any consensus around that number is premature and inaccurate.

The company submitted the document to the commission, the Justice Department, and the National Oceanic and Atmospheric Administration.

"They rely on incomplete or inaccurate information, rest in large part on assumptions that have not been validated, and are subject to far greater uncertainties than have been acknowledged," BP wrote, saying it would present its own firm estimate.

In a statement Friday, the company said the government's estimates failed to account for equipment that could obstruct the flow of oil and gas, such as the blowout preventer, making the numbers "highly unreliable."

BP's request could save it as much as $10.5 billion or as little as $1.1 billion, depending also on factors such as whether the government concludes BP acted negligently.

For context, the U.S. Environmental Protection Agency's entire federal budget for 2010 was $10.3 billion.

President Obama has said he wants Congress to set aside some of the money BP pays in fines for the gulf's coastal restoration. Louisiana lawmakers are pushing legislation that would require at least 80 percent of the civil and criminal penalties charged to BP, and possibly other companies, to be returned to the Gulf Coast.

Under the Clean Water Act, the oil giant, which owned and operated the well, faces fines of up to $1,100 for each barrel, or 42 gallons, of oil spilled. If BP were found to have committed gross negligence or willful misconduct, the fine could be up to $4,300 per barrel.

Based on the government's estimate of 206 million gallons spilled, BP could face civil fines alone of between $5.4 billion and $21.1 billion.