The United States and the five Gulf states reached a $20.8 billion settlement this week to resolve civil claims against BP arising from the April 2010 Deepwater Horizon accident.
The global settlement is the largest settlement with a single entity in U.S. Department of Justice history and 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 Gulf states and local governments.
“Building on prior actions against BP and its subsidiaries by the Department of Justice, this historic resolution is a strong and fitting response to the worst environmental disaster in American history,” said Attorney General Loretta Lynch in an official announcement.
On April 10, 2010, less than 50 miles off the coast of Louisiana, the BP Macondo well suffered a catastrophic blowout. The ensuing explosion and fire destroyed the Deepwater Horizon drilling rig, killing 11 men aboard and sending more than three million barrels of oil into the Gulf of Mexico over a period of nearly three months.
U.S. Secretary of Commerce Penny Pritzker called this week’s settlement a historic milestone. “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,” she said.
As part of the $20.8 billion settlement, BP will pay a $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, according to the Department of Justice.
BP will also pay $8.1 billion in natural resource damages, which 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 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.
Another $600 million will be paid 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.
Additionally, BP has entered into separate agreements to pay $4.9 billion to Alabama, Florida, Louisiana, Mississippi and Texas 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.
The settlements announced this week are in addition to several earlier criminal and civil settlements of federal government claims concerning the Deepwater Horizon disaster.
For more information, read the the full announcement from the U.S. Department of Justice.