How the Record $20 Billion BP Oil Spill Settlement Will Be Spent
By Timothy M. Phelps
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.
Attorney General 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. "BP is receiving the punishment it deserves, while also providing critical compensation for the injuries it caused to the environment and the economy of the Gulf region. The steep penalty should inspire BP and its peers to take every measure necessary to ensure that nothing like this can ever happen again."
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.
Here's a closer look at where the $20 billion will go.
$ 5.9 billion (maximum): State and local government economic claims
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 by some estimates $2.5 billion in losses. Lost tourist revenues were estimated at up to $23 billion.
$4.7 billion: To restore and conserve habitat
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.
Coast Guard Admiral Paul Zukunft, who oversaw the federal response to the oil spill, said Monday that although no oil from the disaster has been spotted since March and the tourism and fishing industries are back on their feet, it will take substantial time and money to repair coastal wetlands.
$4.4 billion: Civil penalty to the states under the Clean Water Act
BP will pay this for violating the Clean Water Act. The money will be divided equally by the five affected states to spend on environmental restoration, economic recovery projects, and tourism and seafood promotion. If BP had not settled, it might have been found liable for up to $7.5 billion in additional Clean Water Act violations, although Lynch said that would have required protracted litigation and delayed new recovery efforts.
$1.8 billion: Wildlife restoration
This money is meant to replenish and restore wildlife, including sturgeon and other fish, sea turtles, marine mammals such as dolphins, birds and oysters.
The largest amount, $404 million, will be spent to aid water fowl whose habitat was destroyed or who were killed directly by the spilled oil. Another $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 to monitor the Gulf environment, on planning and on resolving any currently 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: To provide and enhance recreational opportunities
This will be spent to restore parks and other recreational facilities.
$400 million: Restoring water quality
Of this, $110 million will be spent on nutrient reduction and $300 million on stormwater treatments, hydrologic restoration, restoration of sedimentation and other such projects.
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