Record Environmental Settlement Reached in 2010 BP Gulf Oil Spill

While a judge must approve the historic $18.7 billion settlement reached July 2, the United States and the five Gulf States of Alabama, Florida, Louisiana, Mississippi, and Texas have agreed to the settlement, along with BP.

2 minute read

July 6, 2015, 5:00 AM PDT

By Irvin Dawid

"The federal government and Gulf Coast states announced a record-setting $18.7 billion settlement with BP on Thursday that resolves years of litigation over the 2010 Gulf of Mexico oil spill and delivers the largest environmental settlement ever," writes Rick Jervis of USA TODAY. "BP was leasing the Deepwater Horizon rig in April 2010 when it exploded and sank off the coast of Louisiana, killing 11 crewmen and releasing some 200 million gallons of crude into the Gulf."

The BP spill is considered to be the worst environmental disaster in U.S. history. Before April 20, 2010, the March 24, 1989 oil spill from the grounded Exxon Valdez in Alaska was thought to be the most devastating. The ship spilled 11 to 38 million US gallons, according to Wikipedia.

The New York Times breaks down the settlement sums:

  • $5.5 billion paid to the federal government "a civil penalty of $5.5 billion under the Clean Water Act over a 15-year time frame."
  • $7.1 billion paid to the gulf "under the Natural Resource Damage Assessment which is meant to compensate for direct environmental harm caused by the spill."
  • $5 billion of the settlement "would arise from economic damage claims made by the states. But those claims are only a part of what the states would be getting."
  • $1 billion for local government claims 

The settlement is in addition to $4 billion in criminal fines BP had agreed to in 2012, approved by a federal judge in January 2013.

The timing of the settlement was crucial as the civil penalty could have been far greater had BP waited, explains Tony Dokoupil of msnbc.

The announcement came unexpectedly, just three days after the Supreme Court declined to hear BP’s appeal in an earlier case. That decision set BP up for as much as a $13.7 billion fine under the Clean Water Act alone.

"The settlement still must be approved by United States District Court Judge Carl J. Barbier in New Orleans, who oversaw a tremendously complex two-year civil trial concerning the spill, according to The Times.

Thursday, July 2, 2015 in USA Today

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