$20B Settlement Reached Over BP Oil Spill

NEW ORLEANS (CN) - The Justice Department and five Gulf states Monday announced a $20 billion final settlement has been reached over the 2010 BP oil spill.

Pending a federal judge's approval, the deal announced today would resolve all civil penalties over the oil spill, which resulted in 4.2 million barrels of oil being spilled into the Gulf of Mexico. The settlement would also require BP to undertake massive projects along the Gulf Coast focused on wildlife, habitat and water quality restoration.

The settlement filed Monday in federal court finalizes an agreement first announced in July and is subject to a 60-day comment period and court approval.

In announcing what she called the "historic resolution" of the litigation, Attorney General Loretta Lynch said, "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."

In a statement, a spokesman for BP said the settlement total announced Monday "resolves the largest litigation liabilities remaining from the tragic accident" and includes amounts adjusted by the Justice Department to reflect sums previously spent or disclosed by the company.

Under the terms of the settlement, BP will pay $5.5 billion in Clean Water Act penalties and almost $5 billion to the five states along the Gulf affected by the oil spill -- Louisiana, Texas, Mississippi, Alabama and Florida.

The settlement also requires BP to pay $8.1 billion in natural resource damages, with funds going toward Gulf restoration projects that include restoration of coastal wetlands and wildlife.

An additional $600 million will cover other costs related to state and federal reimbursement claims, and up to $1 billion will be given to local governments to settle claims for economic damage from the spill.

The spill was the result of the April 20, 2010, explosion and sinking of the Deepwater Horizon oil rig 50 miles offshore from Louisiana. The blast killed 11 workers, injured numerous others and unleashed one of the worst oil spills in history.

Oil from the spill settled along at least 400 square miles of sea floor and washed up in tar mats, logs and guck sticking to reeds and sand, sullying 1,300 miles of fragile marshes, wetlands and beaches along the Gulf Coast. The oil was toxic, resulting in countless deaths to birds, fish, dolphins and other wildlife, interrupting fertilization, resulting in increased dolphin miscarriage and mortality events, interrupting bird nesting patters, and resulting in decreased numbers and mutations in fish and plankton.

Gina McCarthy, Administrator to the Environmental Protection Agency, said that besides the environmental devastation and human death toll, "the spill drove Gulf communities into a period of painful uncertainty, forcing questions that no American family should ever have to ask: Is my food safe to eat? Is it dangerous for my kid to play near the shore? Is the air still clean to breathe? And will my businesses ever recover?"

Louisiana Attorney General Buddy Caldwell released a statement Monday praising the settlement. "I am especially pleased that we have a firm commitment from BP that all of Louisiana's costs, including litigation expenses and attorneys' fees will be paid by BP," Caldwell said, adding that "this entire case was handled on behalf of Louisiana at absolutely no cost to taxpayers."

The settlement agreement "contains a number of terms to assure payment," according to the fact sheet released Monday by the Department of Justice.

Among those assurances of payment is a provision stipulating that although the consent decree is with BP Exploration & Production Inc. who owned the Macondo Well, BP's American and British parent companies - BP Corporation North America Inc. and BP plc - have also guaranteed that all payments will be made.

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