The U.S. Justice Department and five Gulf states have reached a $20.8 billion settlement of civil claims against BP resulting from the 2010 Deepwater Horizon oil spill.
The settlement, the largest with a single entity in the department’s history, resolves the governments’ civil claims under the Clean Water Act and natural resources damage claims under the Oil Pollution Act, as well as economic damage claims of the states of Alabama, Florida, Louisiana, Mississippi and Texas, and local governments.
In a statement announcing the settlement, Attorney General Loretta Lynch called it a “strong and fitting response to the worst environmental disaster in American history” adding that “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 $20.8 billion figure reflects a preliminary agreement reached in July, and includes some payments that BP has already made.
The settlement announcement was followed by the release of a draft damage assessment and restoration plan and a draft environment impact statement from the Deepwater Horizon Trustees Council. The council is made up of Federal agencies (the Departments of Agriculture, Commerce, and the Interior, as well as the Environmental Protection Agency), and the five Gulf states.
The plan assesses natural resource damages resulting from the oil spill and provides a detailed framework for how the trustees will use settlement funds from BP to restore the Gulf environment.
Notice of both the consent decree and the draft damage assessment and restoration plan are published in the Federal Register and both will be available for public comment for 60 days.
Of the total settlement, $5.5 billion is for Clean Water Act penalties, $8.1 billion for damage to natural resources along with an additional $700 million to address damages not yet discovered at the time of the settlement, and $600 million for other claims.
Additionally, BP has entered into separate agreements to pay $4.9 billion to the five Gulf states and up to a total of $1 billion to several hundred local governmental bodies to settle claims for economic damages they have suffered as a result of the spill.
The payments will be made over time and are backed by parent company guarantees from BP Corporation North America Inc. and BP P.L.C.
Monday’s settlements are in addition to earlier criminal and civil settlements concerning the disaster with MOEX Offshore 2007 LLC (February 2012), BP Exploration and Production Inc. (January 2013), and Transocean Deepwater Inc. (February 2013).