Justice Department Announces Final Settlement With BP Over 2010 Oil Spill

Oct 6, 2015
Originally published on October 6, 2015 9:01 am

The Justice Department and five states have finalized a settlement of more than $20 billion arising from the 2010 Deepwater Horizon oil spill in the Gulf of Mexico.

The deal announced Monday resolves all civil claims against BP and ends five years of legal fighting over the nearly 134 million-gallon spill.

"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," Attorney General Loretta Lynch said at a Justice Department news conference. "The steep penalty should inspire BP and its peers to take every measure necessary to ensure that nothing like this can ever happen again."

It is the largest environmental settlement — and the largest civil settlement with any single entity — in the nation’s history.

Lynch called the filing of the final settlement “a major step forward in our effort to deliver justice to the Gulf region in the wake of the Deepwater Horizon tragedy — the largest environmental disaster our nation has ever endured.”

Gina McCarthy, the Environmental Protection Agency administrator, estimated that the final settlement represented $1,725 a barrel of oil spilled in the disaster. The maximum amount that a judge could have assessed in the case was $4,300 a barrel.

The settlement is the resolution of a 2010 lawsuit filed by the Justice Department against BP. It includes civil claims under the Clean Water Act, for which BP has agreed to pay a $5.5 billion penalty, the largest civil penalty in the history of environmental law. Also, it includes natural resources damages claims under the Oil Pollution Act, for which BP has agreed to pay $7.1 billion, on top of the $1 billion it previously committed to pay for early restoration work.

The settlement finalizes an agreement first announced in July.

Among other requirements, BP will be forced to pay $5.5 billion in Clean Water Act penalties and nearly $5 billion to five Gulf states: Alabama, Florida, Louisiana, Mississippi and Texas. Louisiana, the hardest hit of the states, will receive $5 billion of the $8.8 billion allocated for restoration.

The spill followed the April 2010 explosion on an offshore rig that killed 11 workers. BP earlier settled with people and businesses harmed by the spill, a deal that's so far resulted in $5.84 billion in payouts.