BP Agrees to Pay $20bn for Gulf Oil Spill

Gulf Oil Spill

WASHINGTON, DC – The federal government on Monday announced the details of a record $20-billion civil settlement with the British oil company BP over the 2010 explosion of the Deepwater Horizon oil rig in the Gulf of Mexico.  

Atty. Gen. Loretta Lynch called it “the largest settlement with a single entity in American history.”   U.S. District Judge Carl Barbier in New Orleans had previously found that 134 million gallons of oil spilled into the gulf in the nearly three months that the well was not contained.

Eleven oil workers died in the explosion.   “Once approved by the court, this agreement will launch one of the largest environmental restoration efforts the world has ever seen,” Lynch said at a news conference.

Separately, in 2013 BP pleaded guilty to criminal misconduct before and after the disaster and was sentenced to pay an additional $4 billion in criminal fines and restitution, including $2.4 billion for natural resources restoration, the Justice Department said.  

The civil settlement will be available for public comment for 60 days before being presented to a federal judge for final approval.  

This money will be paid directly to state and local governments in Alabama, Florida, Louisiana, Mississippi and Texas to reimburse them for economic losses under an agreement separate from the federal deal with BP.  

After the disaster, the federal government closed more than a third of the gulf to commercial fishing, causing $2.5 billion in losses, according to some estimates. Lost tourist revenues were estimated at up to $23 billion.   $4.7 billion: Habitat restoration and conservation   The federal government and state agencies will spend the money to restore wetlands and coastal habitats, with the lion’s share, $4.3 billion, going to restoration in Louisiana. Alabama will get $96 million, Florida $38 million, Mississippi $140 million and Texas $100 million.  

The largest amount, $404 million, will be spent to aid water fowl species whose habitat was destroyed or whose members were killed directly by the spilled oil. An additional $380 million will be spent on fish and invertebrates and $163 million on trying to restore the sea turtle population. After the spill, sick sea turtles began stranding themselves on the shoreline in large numbers.   $1.5 billion: Monitoring, adaptive management and administrative oversight   This money will be spent on monitoring the gulf environment, planning and resolving any unknown environmental impacts from the spill that may be discovered in the future.   $1.1 billion: Contribution to the Oil Spill Liability Trust Fund.

This additional Clean Water Act violation money will go to the Oil Spill Liability Trust Fund to help pay for responses to future oil spills.   $419 million: Recreational opportunities   This will be spent to restore parks and other recreational facilities.   $400 million: Water quality   Of this, $110 million will be spent on nutrient reduction and $300 million on storm-water treatments, hydrologic restoration, restoration of sedimentation and other such projects.