Courtesy of U.S. Coast Guard, Deepwater Horizon response.

BP returned to profit with a bang last year, posting net earnings of $23.9 billion on Tuesday, as the British energy giant prepared for a criminal trial over the US Gulf of Mexico oil spill disaster. … [H]igher oil prices offset a drop in production, according to a group statement.

The London-listed energy major also signalled its recovery by hiking its shareholder dividend for the first time since the devastating April 2010 spillage that ravaged the company’s fortunes.

BP’s profits in the final three months of 2011 alone reached $7.69 billion. Combined, the five biggest oil companies made a record-high $137 billion in profits in 2011.

BP also reported $14 billion in cash on hand, and its CEO made clear he’s ready to pursue an Exxon Mobil-style legal strategy. “As I have said before, we are prepared to settle if we can do so on fair and reasonable terms, but equally, if this is not possible, we are preparing vigorously for trial,” said Bob Dudley.

NWF Staff Photo

BP has pledged to spend $500 million on marketing over the next two years and has spent millions on lobbying Congress.

Meanwhile, Congress still hasn’t passed the RESTORE Act, bipartisan legislation to dedicate BP’s fines and penalties to Gulf restoration.

Congress must act to make sure BP’s fines and penalties are dedicated to Gulf restoration, rebuilding critical wildlife habitat. Help protect the Gulf’s brown pelicans by urging Congress to pass the RESTORE Act now.

The cap is a pretty simple concept: it limits the amount of money a driller has to pay in the event of an accident.   Right now the cap is set at $75 million, so a company like BP is only liable for $75 million in economic damages from their massive disaster.  They still have to pay cleanup costs and penalties for the oil they spilled, but aren’t legally bound to compensate folks like, say, the restaurant owner whose seafood supply was suddenly cut off, or the hotel staff who were laid off because tourists stayed home.

Oil spill make it so you can't buy fish for your restaurant? Too bad. (photo: Steve Linder)

Under heavy pressure from President Obama, BP set up a fund to cover some of these damages, but many Gulf residents have been turned away or forced to endure long waits.  And according to a report from the federal Oil Spill Commission, “If a company with less financial means had caused the spill, the company would likely have declared bankruptcy long before paying anything close to the damages caused.”

The obvious solution to this problem is to raise or eliminate the liability cap.  It’s a matter of accountability—if you knew you could wreck your rental car and only pay a $75 penalty, I bet you would go a little heavy on the gas pedal.

But BP is trying to make it about an altogether different issue: in a National Journal article yesterday (subscription required) Dudley was quoted as saying “The tough question is: How many companies do you want operating in the Gulf’s deep water? The higher the liability cap gets, the fewer companies that will operate in the Gulf.”

Well yeah, Bob…that’s true, but it’s not like deepwater drilling is exactly a mom-and-pop industry. We’re talking about some of the most expensive equipment in history—according to Michael Kearns of the National Ocean Industries Association, a deepwater rig can cost $600,000 a day to operate.  The little guys simply can’t afford to play the game in the first place.

BP's Dudley: "Don't chase off the little guys!" (photo: BP America)

Stop me if you’ve heard this one before, but Congress is taking its sweet time bringing liability legislation up for a vote.  So long, in fact, that new deepwater permits are being issued without a new law in place.  When the bill eventually takes shape, it’s likely to create a two-part system with one cap for deepwater rigs and another, cheaper cap for shallow water rigs.  The idea there is that smaller companies already operate in shallow water and folks don’t want to chase them out of the Gulf.  Also, as we witnessed so painfully last summer, it’s a LOT harder to stop a spill five thousand feet below the ocean surface than it is in shallow water.  We need a bill that forces drillers to make safety, not speed, the priority.

Big Oil is fond of saying they have a good safety record (a slightly absurd claim, according to the numbers) but if that’s true, what do they have to fear about accountability?  The fact is these companies know they were incredibly lucky to avoid a major spill for so long, and they grew accustomed to easy profits while taxpayers carried all the risk.

Oh, and that new deepwater well that’s being drilled?  BP owns half of it.