Justice Department, 5 states in US$20b settlement with BP
Print Edition
The Justice Department and five US states announced a US$20 billion final settlement of claims arising from the 2010 Deepwater Horizon oil spill in the Gulf of Mexico.
The deal, once approved by a judge, would resolve all civil claims against BP and end five years of legal fighting over a 134-million gallon (500 million liter) spill that affected 2,000 kilometers of shoreline.
It also would bind the company to a massive cleanup project in the Gulf Coast area aimed at restoring wildlife, habitat and water quality.
“BP is receiving the punishment it deserves, while also providing critical compensation for the injuries that it caused to the environment and the economy of the Gulf region,” Attorney General Loretta Lynch said at a Justice Department news conference on Monday. “The steep penalty should inspire BP and its peers to take every measure necessary to ensure that nothing like this can ever happen again,” she said.
The settlement, filed in federal court in New Orleans, finalizes an agreement first announced in July. The next steps are a 60-day public comment period and court approval.
In a statement, BP spokesman Geoff Morrell said the settlement total announced on Monday includes amounts previously spent or disclosed by the company, and “resolves the largest litigation liabilities remaining from the tragic accident.”
Among other requirements, BP would have to pay US$5.5 billion in Clean Water Act penalties and nearly US$5 billion to five Gulf states: Alabama, Florida, Louisiana, Mississippi and Texas. The company would also be required to pay US$8.1 billion in natural resource damages, with funds going toward Gulf restoration projects such as support for coastal wetland and fish and birds.
An additional US$600 million would cover other costs, such as reimbursement for federal and state damage assessment costs. And up to US$1 billion would go to local governments to settle claims for economic damage from the spill. BP in 2012 settled with people and businesses harmed by the spill, a deal that’s so far resulted in US$5.84 billion in payouts.
A coalition of conservation organizations, including the National Audubon Society and the Environmental Defense Fund, praised the settlement in a joint statement. The groups said that while the full damage of the oil spill may not yet be known, the process “will help bring the Gulf back to the state it was before the spill, and the release of this plan is a positive step toward that end.”
But Miyoko Sakashita, oceans director at the Center for Biological Diversity, said the oil spill had damaged the Gulf region in a way that money could never fix. She said the real solution would be in curbing offshore oil and gas drilling. “All of this drilling is really just deepening our climate crisis,” she said.
The spill followed the April 2010 explosion on an offshore rig that killed 11 workers.
A report by Deepwater Horizon Natural Resource Trustees, comprised of representatives from multiple federal agencies and the Gulf states, called the oil spill damages “unprecedented.”
The report found that deep ocean water currents carried oil from the spill hundreds of miles from the blown-out well. Oil from the spill was deposited onto at least 1,000 million square kilometers of the sea floor and washed up onto more than 2,000km of shoreline from Texas to Florida.
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