Gulf states reach $18.7B settlement with BP
Deal resolves legal disputes over economic, environmental effects of 2010 oil spill
NEW ORLEANS— BP and five Gulf states announced a record $18.7-billion settlement Thursday that resolves years of legal fighting over the damage done by the energy giant’s oil spill in 2010.
The settlement, if accepted by a federal judge, would end a years-long battle between BP and the U.S. government over Clean Water Act penalties after a judge ruled the company was grossly negligent in the 500-million-litre spill.
It would resolve the states’ naturalresources damage claims and settle economic claims involving state and local governments in Florida, Alabama, Mississippi, Louisiana and Texas, according to an outline filed in federal court.
“If approved by the court, this settlement would be the largest settlement with a single entity in American history; it would help repair the damage done to the Gulf economy, fisheries, wetlands and wildlife; and it would bring lasting benefits to the Gulf region for generations to come,” U.S. Attorney General Loretta Lynch said in a statement.
The settlement will likely mark the end of major litigation against BP, following the biggest offshore oil spill in U.S. history.
When the Deepwater Horizon oil rig exploded in April 2010, it killed 11 people on board and spread oil for miles across the Gulf Coast before the underwater well was capped a few months later.
The court filings consisted of a confidentiality order that gave broad outlines of the deal, including the money involved, but it did not go into specifics and barred any of the parties from doing so.
Louisiana Attorney General Buddy Caldwell said the agreement ends litigation that could have dragged on for years, delaying the state’s ability to repair and rebuild its coast and wetlands.
“Today’s settlement is a gamechanger for Louisiana, its communities and its families,” Caldwell said. But he cautioned that it’s a deal in principle only, with the finer details remaining to be worked out in a final consent decree he expects to be complete in about two months.
Louisiana received the largest share of the settlement money — about $6.8 billion — and Caldwell said the payments will be received over the next 16 years.
Alabama Attorney General Luther Strange called the settlement a “home run,” and he and Gov. Robert Bentley said they believed a looming jury trial was a significant factor in reaching the settlement. BP PLC chairman Carl-Henric Svanberg said the settlement reflected the company’s commitment to restoring the Gulf of Mexico economically and environmentally, and provided the company with closure.
“It resolves the company’s largest remaining legal exposures, provides clarity on costs and creates certainty of payment for all parties involved,” Svanberg said.
The company had been facing an additional roughly $13.7 billion in possible Clean Water Act penalties alone, with possibly billions more resulting from other legal cases.
The company had argued against a high Clean Water Act penalty, saying its spill-related costs already were expected to exceed $42 billion.
It’s also unclear how much BP will end up paying under a 2012 settlement with individuals and businesses claiming losses related to the company’s oil spill.