A mass of civil claims arising from the 2010 Deepwater Horizon oil spill would be settled for some $18.7 billion, under “agreements in principle” announced Thursday morning by the Justice Department and the oil giant BP.
The settlement with BP would resolve claims filed by federal, state, and local governments following the catastrophic April 20, 2010 spill in the Gulf of Mexico. The proposed settlement would cover Clean Water Act civil penalties and natural resource damages, among others.
“If approved by the court, this settlement would be the largest settlement with a single entity in American history,” Attorney General Loretta Lynch said in a statement. “It would help repair the damage done to the Gulf economy, fisheries, wetlands and wildlife; and it would bring lasting benefits to the Gulf region for generations to come.”
Lynch added that “we will work diligently during the next several months” to incorporate the agreement in principle into a consent decree, which would then undergo public comment before court approval.
The settlement covers claims filed by Alabama, Florida, Louisiana, Mississippi and Texas, as well as local governments.
According to BP, the settlement would include a civil penalty of $5.5 billion under the Clean Water Act payable over 15 years and $7.1 billion to the United States and the five Gulf states over 15 years for natural resource damages. A total of $4.9 billion would be paid over 18 years to settle economic and other claims made by the five Gulf Coast states, and up to $1 billion will be paid to resolve claims by more than 400 local government entities.
“In deciding to follow this path, the Board has balanced the risks, timing and consequences associated with many years of litigation against its wish for the company to be able to set a clear course for the future,” BP’s chairman Carl-Henric Svanberg said in a statement.
Other litigation remains unresolved.
The agreements-in-principle announced Thursday do not cover the remaining costs from a 2012 2012 class action settlemen, or claims by individuals and businesses that opted out of the 2012 settlements.
The oil company previously agreed to pay a $4.5 billion penalty and plead guilty to misconduct and felony criminal manslaughter for the Deepwater Horizon disaster that killed 11 workers and led to the biggest environmental disaster in U.S. history.