The U.S. Government and five Gulf states, Alabama, Florida, Louisiana, Mississippi and Texas, hit by the massive oil spill from the Deepwater Horizon blowout in 2010, have reached a settlement to resolve civil claims against BP. The global settlement is worth more than $20 billion.
The explosion and fire which occurred on April 20, 2010, destroyed the Transocean-owned Deepwater Horizon drilling rig, killing 11 men aboard and spewing more than 3 million barrels of oil into the Gulf of Mexico over a period of nearly three months.
The spill damaged and temporarily closed fisheries essential to the Gulf economy, oiled hundreds of miles of beaches, coastal wetlands and marshes and killed thousands of birds and other marine wildlife, among other economic and natural resource injuries.
This global settlement announced Thursday resolves the governments’ civil claims under the Clean Water Act and natural resources damage claims under the Oil Pollution Act, as well as economic damage claims of the five Gulf states and local governments.
Taken together this global resolution of civil claims is worth $20.8 billion, and is the largest settlement with a single entity in the department’s history, Department of Justice said in a statement on Thursday.
If made final, the settlement will provide the U.S. and Gulf states with the resources and certainty needed for effective restoration planning and improvements.
According to the Department of Justice, under the terms of a consent decree lodged in federal court in New Orleans on Thursday, BP must pay the following:
$5.5 billion federal Clean Water Act penalty, plus interest, 80 percent of which will go to restoration efforts in the Gulf region pursuant to a Deepwater-specific statute, the RESTORE Act. This is the largest civil penalty in the history of environmental law, DOJ said.
$8.1 billion in natural resource damages, this includes $1 billion BP already committed to pay for early restoration, for joint use by the federal and state trustees in restoring injured resources. BP will also pay up to an additional $700 million, some of which is in the form of accrued interest, specifically to address any later-discovered natural resource conditions that were unknown at the time of the agreement and to assist in adaptive management needs.
This is the largest civil penalty in the history of environmental law.
The natural resource damages money will fund Gulf restoration projects that will be selected by the federal and state trustees to meet five different restoration goals and 13 restoration project categories.
These include restoration focusing on supporting habitats such as coastal wetlands, but also provide for specific resource types, such as marine mammals, fish and water column invertebrates, sturgeon, submerged aquatic vegetation, oysters, sea turtles, birds and lost recreational use, among others.
$600 million for other claims, including claims for reimbursement of federal and state natural resource damage assessment costs and other unreimbursed federal expenses and to resolve a False Claims Act investigation due to this incident.
Today’s settlement is a significant step in restoring the natural resources that were impacted by the Deepwater Horizon oil spill and a breakthrough for building back the resilience of this region
The payments will be made over time and are backed by parent company guarantees from BP Corporation North America Inc. and BP P.L.C.
Additionally, BP has entered into separate agreements to pay $4.9 billion to the five Gulf states and up to a total of $1 billion to several hundred local governmental bodies to settle claims for economic damages they have suffered as a result of the spill.
“Five years after one of the worst environmental disasters in our nation’s history, which claimed 11 lives and caused untold damage, we have reached a historic milestone with today’s settlement,” said Secretary of Commerce Penny Pritzker. “With this settlement, federal, state and local governments and the Gulf coast communities will have the resources to make significant progress toward restoring ecosystems, economies, and businesses of the region. We are committed to ensuring the Gulf Coast comes back stronger and more vibrant than before the disaster. If made final, the settlement will provide the U.S. and Gulf states with the resources and certainty needed for effective restoration planning and improvements.”
“This agreement brings renewed hope for a fully restored Gulf of Mexico to millions of Americans who value the Gulf for its contributions to our economy, our environment and plentiful recreational opportunities,” said Interior Secretary Sally Jewell. “Today’s settlement is a significant step in restoring the natural resources that were impacted by the Deepwater Horizon oil spill and a breakthrough for building back the resilience of this region. The Trustees will continue to work with people along the coast to ensure they have every opportunity to be engaged in these meaningful recovery and restoration efforts that will generate jobs, improve water quality, support our tribal responsibilities and result in an improved wildlife habitat for migratory birds and hundreds of vulnerable species.”