BP Reaches $18 Billion Settlement Over Gulf Oil Spill

 

Five years: That’s what it took to finally reach a conclusion on the damages claim by a number of U.S. states that border the Gulf of Mexico. Five years ago, the Deepwater Horizon oilrig exploded, leaving 11 workers dead and 16 injured, as well as causing unprecedented — and still unfolding — damage to the Gulf’s marine environment.

On July 2nd, British Petroleum (BP) reached a settlement to pay the U.S. federal government, along with the states of Louisiana, Alabama, Texas, Florida and Mississippi, a total of $18.732 billion dollars in damages caused by the spill. This brings the company’s penalty payments for the disaster up a grand total of almost $54 billion.

This is the most recent in a long line of settlements and payouts that the company has faced following the 2010 explosion, wherein the rig subsequently sank and spilled as much as 4.9 million barrels of crude oil into the water, making it the worst offshore drilling disaster in U.S. history.

The settlement allows the affected states to continue their work in restoring their coastlines, and will also help the fishing and tourism industries get back on their feet. The settlement also includes a substantial payment to the Clean Water Act. All payments are to be made within the coming 18 years, although the company agreed to speed up payments if another company purchases BP, a very likely scenario, as the settlements have severely weakened the company, making it ripe for a take-over by competitors.

However, not everyone is happy with the settlement. U.S. Representative Garret Graves (R-Louisiana) called the settlement, particularly the payment period, “overly generous” towards BP and urged a shorter window.

Oxfam America also feels that BP got off too easy. The agency has been working for decades to alleviate poverty in Mexico, and this work was severely set back in some regions due to the oil spill. Numerous environmental organizations have also called for harsher penalty. The National Wildlife Federation has calculated that the fine should have been closer to $31 billion to account for the restoration work needed in the Gulf.

The U.S. government originally sought to secure $18 billion for the Clean Water Act alone, based on the provision in the act. And with the court finding that BP had been guilty of gross negligence by ignoring signs that the well was not sound, and was likely to contain gas pockets, many observers are wondering why the settlement wasn’t larger. Interestingly, even BP seemed to think so, as their CFO, Brian Gilvary, stated in a press release that the economic burden of the settlement “will be manageable.

However, the fight doesn’t end here for local governments and environmental organizations: More than 3,000 cases are still pending. So it’s safe to say that BP hasn’t had its last day in court just yet.

The post BP Reaches $18 Billion Settlement Over Gulf Oil Spill appeared first on Scuba Diver Life.

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