British Petroleum will pay $20.8 billion in a settlement related to the 2010 Deepwater Horizon disaster that resulted in a massive oil spill on the Gulf Coast.
Attorney General Loretta Lynch announced the settlement, which resulted in BP paying a $5.5 billion penalty for civil claims under the Clean Water Act, $7.1 billion in claims under the Oil Pollution Act, $1 billion for early restoration work, $4.9 billion to five Gulf states and $1 billion to local governments.
“Once approved by the court, this agreement will launch one of the largest environmental-restoration efforts the world has ever seen,” Lynch said.
The explosion on the Deepwater Horizon offshore drilling rig killed 11 workers and set off a massive oil leak that damaged 1,300 miles of coastline in Louisiana, Alabama, Florida, Mississippi and Texas.
The spill began April 20, 2010, and wasn’t stopped until July 2010. The well was being fully sealed in September 2010. It is estimated that about 4.9 million barrels of oil blew out of the well and into the Gulf of Mexico.
The effect of the spill on wildlife has been pronounced. Studies show dolphins in the Gulf of Mexico are dying, possibly from oil exposure, and other chemicals from the well are hurting tuna, grouper and mahi mahi populations. Other animals, such as waterfowl, were also harmed by the massive spill.
Oil from the spill likely settled on the bottom of the ocean floor, which could have long-lasting effects on the ecosystem.
Commerce Secretary Penny Pritzker said the money from the settlement will go toward environmental restoration, large-scale projects and investments in economic development in the five Gulf states.
“The settlement reaffirms our administration’s clear, ongoing and unwavering commitment to securing justice for the Gulf communities,” she said at a press conference Monday.
Agriculture Secretary Tom Vilsack said many private landowners are still struggling in the wake of the spill.
Forty-five percent of the land affected by the spill is privately owned, and the Department of Agriculture is working with farmers to make their land viable. Vilsack said the settlement would go a long way toward making that happen.
“It is a national treasure for the entire country,” Vilsack said of the Gulf Coast. “This is an important settlement and we have important work to do.”
Earlier this year, it was announced that BP was facing closer to $18 billion in fines. Lynch said that the higher total reflected some revisions and refining of what BP could do.
The $20.8 billion total is above what could have been found in court had the spill been litigated, Lynch said.
“It would have significantly not accounted for the delays in getting recovery to the Gulf,” she said. “This is still the largest environmental penalty under the Clean Water Act and Oil Pollution Act ever.”
While the Gulf of Mexico’s shoreline is improving, there is still much restoration work that needs to be done in the wetlands, said Environmental Protection Agency Administrator Gina McCarthy.
“The reason you have the $8.1 billion in restoration funds is there is a lot of work to be done,” she said. “There’s also an additional $700 million built into this agreement, should there be unforeseen damages we did not anticipate that require work.”
Some in Congress, including Sen. Edward Markey, D-Mass, cheered the settlement.
Markey said the large amount is justified and added that BP now stands for “Biggest Penalty.”
“Unfortunately, we have still not done everything that we can or should do to prevent a similar disaster in the future,” he said. “While the Obama administration has taken the steps that it can within its existing authorities, Congress has still failed to enact a single new significant law to improve the safety of offshore drilling.”
