More than five years after a well blowout spilled millions of barrels of oil into the Gulf of Mexico, energy giant BP reached a historic settlement with the Obama administration Monday and will pay the largest environmental penalties in U.S. history.
The agreement, announced by Attorney General Loretta Lynch and other administration officials, requires BP to pay more than $20 billion to repair environmental damage in the Gulf and to pump desperately needed capital into local economies that still haven’t fully recovered from the 2010 spill.
The settlement is the result of nearly five years of litigation and negotiation between BP and the federal government, and officials say the $20 billion figure is commensurate with the damage BP has inflicted on the region.
“The agreement will launch one of the largest environmental restoration efforts the world has ever seen. … This resolution is both strong and fitting. BP is receiving the punishment it deserves,” Ms. Lynch said during a press conference at the Justice Department. “The steep penalty should inspire BP and its peers to take every step necessary to ensure nothing like this can ever happen again.”
The spill originated on April 20, 2010, with an explosion at the Deepwater Horizon well about 50 miles off the Gulf Coast. Eleven people died in the explosion.
Over the next few weeks, more than 3 million barrels of oil from the well flowed into the Gulf, and the company struggled to stop the leak amid nonstop media coverage and intense pressure from the federal government, including strong statements from President Obama, who famously said he was looking for someone’s “ass to kick” as a result of the incident.
Former Interior Secretary Ken Salazar also said at the time that he would keep his boot “on the throat” of BP until the company had fully addressed the spill and its consequences. In the years since, officials have maintained that they would hold BP accountable.
Specifically, the settlement calls on BP to pay $5.5 billion in civil claims for violations of the federal Clean Water Act, $7.1 billion for natural resources damages, $4.9 billion for economic damages to Gulf states and other penalties.
In a statement, BP acknowledged that it has “financial obligations” stemming from the spill but seemed to downplay Monday’s announcement, stressing that the penalties are not new.
“Today we are another step closer to finalizing the settlement we announced on July 2, fulfilling our commitment to help restore the Gulf economy and environment. The filing of the consent decree does not reflect a new settlement or any new money,” company spokesman Geoff Morrell said. “It covers the same payments — and same amounts — disclosed by BP when we announced this agreement in July. The government has announced a number that includes amounts previously spent or disclosed by BP. As BP said in July, this settlement resolves the largest litigation liabilities remaining from the tragic accident, providing BP certainty with respect to its financial obligations and allowing us to focus on safely delivering the energy the world needs.”
The $20 billion will be paid out over 15 years and is accompanied by a 15-year recovery plan to restore the Gulf to its former state.
State officials say the money is vital to reversing the damage done in 2010.
“The disaster of Deepwater Horizon was a tragedy that touched people’s lives all along the Gulf Coast, from those who love its natural beauty and wildlife to those who make their living from the water,” Texas Attorney General Ken Paxton said. “This agreement will help restore our natural resources and strengthen the communities that rely on them. Texas as a whole will benefit from this settlement.”
• Ben Wolfgang can be reached at bwolfgang@washingtontimes.com.
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