BP Reaches $18.7 Billion Deepwater Horizon Settlement
More than five years after the explosion and subsequent spill from the Deepwater Horizon oil rig, a record-breaking settlement has been reached between the Department of Justice, along with five states, and the oil company BP for $18.7 billion.
Friday, July 3, 2015 - A federal lawsuit pursued by the U.S. Department of Justice and five states against the massive oil company BP for it‘s role in the 2010 Deepwater Horizon oil spill in the Gulf of Mexico came to a close July 2 with the announcement of an $18.7 billion settlement with the defendants. The oil spill, the country‘s worst offshore oil catastrophe of all time, also elicited the largest fine under the Clean Water Act with a penalty of $5.5 billion. That amount is included in the $18.7 billion total, which will be paid out over a period of more than a decade.
The United States government was joined by Alabama, Florida, Louisiana, Mississippi and Texas in the multidistrict litigation brought against BP. The Deepwater Horizon oil spill began after an April 20, 2010 explosion on the oil rig led to the death of 11 people and allowed for a massive flow of oil to shoot from the Gulf floor where the rig had been drilling. The claims range from allegations naming environmental damage, shoreline damage and business failure as a result of the massive oil spill that took place for nearly three months between April and July in 2010.
The settlement is split into four parts that will help pay all government agencies that brought claims against BP. The federal government will received the $5.5 billion civil penalty pursuant with the Clean Water Act. The federal government in tandem with the five states that filed suit against Bp will receive $7.7 billion to be used to help repair and restore restore natural resources affected by the oil spill. $4.6 billion will go direct to the states that filed claims against BP, and this money will be paid out over a term of 18 years. Lastly, more than 400 local government agencies will divvy up $1 billion to settle their claims against the oil company.
Before the settlement, BP invested more than $1 billion to aid in the Gulf Coast‘s recovery after the Deepwater Horizon spill. This figure was not included in the most recent settlement. Also not included was $232 million that BP agreed to set aside to cover further the rehabilitation of further natural resource damages left following the disbursement of the original settlement funds.
The settlement money will assist a wide spectrum of victims affected by the spill. The funds will assist businesses that either saw significant downturn or closure as a result of the spill. Natural habitats will be restored, along with those in the tourism industry whose reliance on a clean environment was compromised by the spill. There are still plenty of people as well suffering from medical complications as a result of the spill that will be assisted by the settlement. After waiting through more than fives years of litigation, the announcement of the settlement means that funds from BP will begin to stream into these affected communities shortly.
Even with the massive settlement announced, there are still criminal and shareholder lawsuits filed against BP that have yet to be resolved. The settlement however does close all state and federal claims pending against BP.
