The settlement announced Thursday in the 2010 BP oil spill marks a major turning point for the federal-state effort to repair the Gulf of Mexico after the worst environmental disaster in U.S. history. The $18.7 billion that BP has agreed to pay is substantial enough to help the gulf, punitive enough to send a message to the industry and affordable enough to keep a major player active in the vital energy sector. Florida fares well at first glance, but it will be up to regulators and the courts to ensure that this framework agreement actually fulfills its promise.
The settlement would resolve nearly all outstanding claims resulting from the explosion of the Deepwater Horizon drilling rig, which sank off the coast of Louisiana on April 20, 2010, killing 11 workers and causing millions of barrels of oil to spew into the Gulf of Mexico. BP would pay $18.7 billion in damages and fines, including $7.1 billion for environmental restoration, $5.9 billion for economic claims from the five gulf states and a record $5.5 billion in penalties under the Clean Water Act (80 percent of which will be directed to gulf restoration projects), plus other costs.
State and federal officials could have held out for more, and U.S. Sen. Bill Nelson said he would have liked to have seen larger damages. The federal court in New Orleans overseeing the case was expected to rule on damages any day, and BP lost its bid this week to have the U.S. Supreme Court consider its appeal on damages. But this deal is a reasonable effort to end years of litigation, provide certainty for all sides and bring serious money to the table for economic losses and restoration. And it's on top of $1 billion the company fronted early on for restoration projects (several of which are under way in Florida). BP also committed another $1 billion to resolve local government claims; Tampa announced Thursday it would receive $27 million. And BP will set aside an additional $600 million to cover any future environmental damage and any outstanding response costs.
