Although the deal is finalized, various sources have differed in how the payout will be calculated. The New York Times is reporting that $5 billion of the $8.8 total allotment for environmental restoration will go to Louisiana, the state hardest hit by the disaster, payable over an 18-year period. $5.5 billion will go to Clean Water Act penalties, payable over a 15 year period, the largest environmental fine in history. $4.9 billion will also go towards economic damages to the states affected by the spill. The Wall Street Journal reports that a total of $8.1 billion will go towards environmental damages to the U.S. and the Gulf states. BP had already agreed to a separate criminal penalty of $4 billion in 2013.
Pending approval by a New Orleans federal judge, the Justice Department and the governments of the affected Gulf Coast states and localities have agreed to a final settlement with BP over the 2010 Deepwater Horizon oil spill that leaked 134 million gallons and affected over 1,300 miles of shoreline in the area. The spill affected over 400 square miles of ocean water in total, causing widespread death to fish and wildlife, and placed “Gulf communities into a period of painful uncertainty, forcing questions that no American family should ever have to ask”, said Environmental Protection Agency Gina McCarthy, who added example questions like, “Is my food safe to eat? Is it dangerous for my kids to play near the shore? Is the air still clean to breathe? And will my businesses ever recover?” U.S. Attorney General Loretta Lynch said that “The steep penalty should inspire BP and its peers to take every measure necessary to ensure that nothing like this can ever happen again.” The spill which occurred April 20th, 2010 when the Deepwater Horizon oil rig caught fire, killing 11 people and sent oil spewing into the Gulf for 89 days. The rig sank two days later roughly 45 miles off of the Louisiana coast.
Although the deal is finalized, various sources have differed in how the payout will be calculated. The New York Times is reporting that $5 billion of the $8.8 total allotment for environmental restoration will go to Louisiana, the state hardest hit by the disaster, payable over an 18-year period. $5.5 billion will go to Clean Water Act penalties, payable over a 15 year period, the largest environmental fine in history. $4.9 billion will also go towards economic damages to the states affected by the spill. The Wall Street Journal reports that a total of $8.1 billion will go towards environmental damages to the U.S. and the Gulf states. BP had already agreed to a separate criminal penalty of $4 billion in 2013. As a consolation, however, the company will be able to write-off $15.3 billion of the settlement as a tax deduction. The Associated Press reports that the amount is in addition to a 2012 settlement that has so far paid out $5.84 billion, however, portions of that agreement are still tied up in appeals court. BP has set aside $54.6 billion altogether for payment of the various federal, state, and civil claims revolving around the spill.
The Justice Department had originally announced that the final settlement amount would be $18.7 billion in July; however the agency explained the discrepancy by saying that the earlier amount did not include money that BP had already paid, as well as saying that some of the settlement parameters were still being calculated. BP spokesman Geoff Morrell also said that the disparity “does not reflect a new settlement or any new money. It covers the same money — and the same amounts — disclosed by BP when we announced this agreement in July.” Louisiana Attorney General Buddy Caldwell was pleased to have resolved the matter without moving to trial, saying “I am extremely proud to have led Louisiana’s litigation efforts. With this recovery, we can move forward to begin rebuilding our coast and repairing the damage caused by this spill rather than dealing with the uncertainty and delays of trial and appeals.” The megafirm Kirkland & Ellis has represented the company throughout the negotiations, and has also been hired to represent Volkswagen in its ballooning emissions scandal.
In a joint statement, several environmental groups, including the Environmental Defense Fund, the National Wildlife Federation, and the National Audubon Society responded to the announcement by saying, “Once the consent decree is approved, it will provide a steady funding stream to the Gulf, funds that are vital to the restoration and long-term ecological health of the region.” Friends of the Earth’s Lucas Ross, however, was less enthusiastic about the agreement, saying “BP should not be allowed to treat the costs of their disaster as the cost of doing business. We are concerned that this settlement doesn’t protect taxpayers.” To some degree, McCarthy concurred, saying “Justice is not about dumping a pile of money and walking away.” Some environmentalists like Miyoko Sakashita, oceans director of the Center for Biological Diversity, wants to stop offshore drilling altogether, saying “All of this drilling is really just deepening our climate crisis.” Although a proponent of using the funding from the settlement wisely to restore growth, National Oceanic and Atmospheric Administration (NOAA) undersecretary Kathryn Sullivan also concludes that, “The scientific assessment concluded that there was grave injury to a wide range of natural resources and loss of the benefits they provide.”
Sources:
Claims Journal – U.S. PIRG
Nola.com (Times-Picayune) – Mark Schleifstein
U.S. News and World Report – Eric Tucker/Associated Press
Wall Street Journal – Devlin Barrett
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