BP is preparing for a legal decision in January regarding the company’s penalty under the Clean Water Act for oil spilled as a result of the Macondo well blowout and tragic Deepwater Horizon accident that occurred in the Gulf of Mexico 2010. BP is seeking to cap the amount of the civil penalty at $12.3 billion.

Major questions with regard to the Clean Water Act determination include the total number of barrels spilled, the amount BP will be penalized per barrel and which regulatory body has the authority to set the per-barrel penalty amount.

A trial last fall featured competing estimates of the total volume released ranging from 5 million barrels at the high end to 3.26 million barrels at the low end, which is the figure BP defends.

As such, the maximum penalty could be as high as $21.5 billion, which is roughly 15% of the company’s market capitalization. The 3.26 mmbbl figure would result in a penalty of about $14 billion, which is still much higher than the $3.5 billion BP reportedly has “set aside” to settle the impending damages.

BP urged a judge on Friday to cap the per-barrel penalty at $3,000.

“It cannot be the law that 20 or more federal agencies all simultaneously possess the power to inflate the civil penalty amounts,” BP wrote. “That would be a recipe for legal chaos.” – As reported by Fuel Fix