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BP will pay a record-breaking $18.7 billion settlement for the Deepwater Horizon oil spill

AP/Gerald Herbert
Five years later, it's a proverbial black cloud for the owner of the Deepwater Horizon rig.
Published This article is more than 2 years old.

BP has tentatively resolved the largest of its pending claims for damages from the 2010 Deepwater Horizon oil spill, reaching a deal to pay $18.7 billion to the US federal government and individual states affected by the spill. That would be the largest environmental settlement in history—fitting for what is considered the largest environmental disaster to ever occur in the United States.

Under the agreement, which will have to be finalized in court, will have BP to pay $5.5 billion to the federal government for violations of the Clean Water Act; $4.9 billion, combined, to the states of Florida, Louisiana, Alabama, Mississippi, and Texas for harm to the states’ economies; at least $7.1 billion, combined, to the states and the federal government for destruction of natural resources; and approximately $1 billion in related payouts to more than 400 local governments.

This is a civil settlement—BP is paying a separate $4.5 billion for criminal charges related to the 2010 spill, and reportedly spent $15 billion on cleanup and restoration efforts in the affected areas, plus $9 billion to private individuals and businesses.

The oil spill occurred on April 20, 2010 when a BP-owned oil rig, the Deepwater Horizon, exploded above a drilling well in the Gulf of Mexico. The explosion killed 11 people and unleashed an uncontrollable gush of oil from the sea floor, from which an estimated 210 million gallons of oil flowed over 87 days. The economies and ecosystems along the Gulf coast have never been the same.

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