Final Approval for BP Oil Spill Settlement

On April 20, 2010, the Deepwater Horizon drilling rig explosion occurred about 40 miles southeast of the Louisiana coast. It is considered to be the largest accidental marine oil spill in the world and the largest environmental disaster in U. S. history. The explosion killed 11 workers and injured 16 others. It caused the Deepwater Horizon to burn and sink, resulting in a massive offshore oil spill in the Gulf of Mexico. Millions of barrels of oil were discharged onto the shorelines of gulf coast states for almost three months. It coated miles of wetlands with thick oil, killing birds, fish and marine mammals and caused tar balls to wash up on Gulf beaches. The drilling rig was owned by BP and in the intervening years law suits and litigation have been ongoing.

We reported that in July of 2015, BP agreed to pay an $18.5 billion settlement to all federal, state and local claims against the oil company arising from the Gulf of Mexico Oil Spill. However, the deal still had to be approved by United States District Court Judge Carl Barbier in New Orleans, who had presided over the two year civil trial concerning the spill.

Last October, 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.” The Attorney General also announced that the settlement would be about $20.8 billion, a higher figure than the $18.7 billion first proposed.

On April 4, 2016, U.S. District Judge Carl Barbier, granted final approval to the $20 billion settlement, over the worst oil spill in U.S. history. It is the largest civil settlement ever with a single entity and the largest environmental settlement in the history of the United States.

Under the agreement, the funds will go to the affected governmental entities under these categories: Economic Claims $4.9 billion, Natural Resource Damages $8.1 billion, Restore Act $5 billion and Local Claims $1 billion. The money will be going to the Gulf of Mexico states: Florida, Louisiana, Alabama, Mississippi and Texas.

The oil spill caused significant impacts to Florida’s natural resources and economy. Of Florida’s 790 miles of coastline, 177 miles received some degree of oiling. As part of the agreement Florida would receive at least a total of $3.252 billion. The bulk of the funds ($2 billion) will go for economic damages, at least $680 million for natural resource damages and $572 million from the Restore Act. The payments will come in over the course of several years per an agreed schedule.

The A.P. reported that David Uhlmann, a University of Michigan law professor and former chief of the Justice Department’s environmental crimes section, said Barbier’s ruling “ends a long sad chapter in American environmental history. The question that remains is whether we have learned enough from this tragedy to prevent similar environmental disasters in the future.”

Photo courtesy of NOAA

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