Gulf states and BP reach settlement over oil spill

Source:KEVIN McGILL & REBECCA SANTANA, Associated Press

Gulf states and BP reach settlement over oil spill

NEW ORLEANS (AP) — BP and five Gulf states announced a record $18.7 billion record settlement Thursday that resolves years of legal fighting over the environmental and economic damage done by the energy giant's oil spill in 2010.

The settlement, if accepted by a federal judge, would end a years-long battle between BP and the U.S. government over Clean Water Act penalties after a judge ruled the company was grossly negligent in the nearly 134 million gallon spill.

It would resolve the states' natural resources damage claims and settle economic claims involving state and local governments in Florida, Alabama, Mississippi, Louisiana and Texas, according to an outline filed in federal court.

"If approved by the court, this settlement would be the largest settlement with a single entity in American history; 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," U.S. Attorney General Loretta Lynch said in a statement.

The settlement will likely mark the end of major litigation against BP, following the biggest offshore oil spill in U.S. history. When the Deepwater Horizon oil rig exploded in April 2010, it killed 11 people on board and spread miles of black oil across the Gulf Coast before the underwater well was capped a few months later.

Governors and attorneys general from four of the five states to receive money from the settlement announced it during simultaneous news conferences Thursday morning just as the court filings were made public.

The court filings consisted of a confidentiality order that gave broad outlines of the deal, including the money involved, but it did not go into specifics and barred any of the parties from doing so.

Louisiana Attorney General Buddy Caldwell said the agreement ends litigation that could have dragged on for years, delaying the state's ability to repair and rebuild its coast and wetlands.

"Today's settlement is a game-changer for Louisiana, its communities and its families," Caldwell said. But he cautioned that it's a deal in principle only, with the finer details remaining to be worked out in a final consent decree he expected to be complete in about two months.

Louisiana received the largest share of the settlement money — about $6.8 billion — and Caldwell said the payments will be received over the next 16 years.

Alabama Attorney General Luther Strange called the settlement a "home run," and he and Gov. Robert Bentley said they believed a looming jury trial was a significant factor in reaching the settlement.

BP PLC chairman Carl-Henric Svanberg said the settlement reflected the company's commitment to restoring the Gulf of Mexico economically and environmentally, and provided the company with closure going forward.

"It resolves the company's largest remaining legal exposures, provides clarity on costs and creates certainty of payment for all parties involved," Svanberg said.

The company had been facing an additional roughly $13.7 billion in possible Clean Water Act penalties alone, with possibly billions more resulting from other legal cases.

The company had argued against a high Clean Water Act penalty, saying its spill-related costs already were expected to exceed $42 billion. It's also unclear how much BP will end up paying under a 2012 settlement with individuals and businesses claiming spill-related losses.

Costs incurred by BP so far include an estimated $14 billion for response and cleanup and $4.5 billion in penalties announced after a settlement of a criminal case with the government.

Environmental groups remained concerned the settlement didn't go far enough. Raleigh Hoke, campaign director for the Gulf Restoration Network, said the organization worried how much money would actually go to coastal restoration. That's a key concern for many in Louisiana, which has been hurt by decades of coastal erosion that has made it even more at risk to hurricanes and rising ocean levels.

In Mississippi, officials said some of the money would cover projects including restoration of marshes and artificial reef habitats. In Louisiana, officials planned to use money for coastal restoration, as well as wetlands and wildlife habitat repair.

Jacqueline Savitz, U.S. vice president for Oceana, a group dedicated to protecting the world's oceans, said the $18.7 billion still paled in comparison to what BP should pay.

"If the court approves this proposal, BP will be getting off easy and 'we the people' will not be fully compensated for the natural resource damages that we suffered, and the law requires that the public is made whole for those damages," Savitz said.

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