In Largest U.S. Settlement, BP Pays Governments $20.8 Billion for Oil Spill
A federal judge on Monday approved a $20.8 billion settlement negotiated between BP and a group of plaintiffs including the federal government, Texas and four other Gulf Coast states and hundreds of local governments stemming from the energy giant's 2010 Deepwater Horizon explosion and oil spill.
Judge Carl Barbier of the District Court for the Eastern District of Louisiana signed off on the deal, resolving all state claims against the company for its role in the disaster, which killed 11 people and spewed millions of barrels of oil into the Gulf of Mexico. It is considered the largest settlement with a single entity in American history and includes the biggest civil penalty in the history of environmental law.
“The approval of this agreement will open a final, hopeful chapter in the six-year story of the Deepwater Horizon tragedy,” U.S. Attorney General Loretta Lynch said in a statement. “Today’s action holds BP accountable with the largest environmental penalty of all time while launching one of the most extensive environmental restoration efforts ever undertaken."
When negotiations were finalized in October, Texas Attorney General Ken Paxton said it would send some $800 million to Texas in money and restoration projects.
Under the agreement:
BP must pay $5.5 billion in federal Clean Water Act fines over 15 years – $4.4 billion of which would fund Gulf-wide projects under the federal RESTORE Act. At least $430 million of that money will flow to Texas.
BP must pay about $8.1 billion (including about $1 billion already paid out for “early restoration projects") over 15 years for natural resources damages under the federal Oil Pollution Act. About $238 million from that pot will directly benefit restoration in Texas.
BP must pay $4.9 billion over 19 years for economic damage to the states, including about $150 million for Texas.
BP must pay up to $1 billion to resolve claims by hundreds of local governments across the Gulf.
The settlement was last in a series of agreements that had already yielded some $275 million for Texas restoration projects, which includes the largest conservation land purchase in Texas history – some 17,000 acres of undisturbed coastal prairie in Calhoun County.
Disclosure: BP is a corporate sponsor of The Texas Tribune.