Total Value of Settlement Would Top $18.7 Billion, the Largest Settlement with a Single Entity in American History
Today, BP disclosed that it has reached agreements in principle with the United States, state, and local governments for a settlement of civil claims arising from the April 20, 2010, Deepwater Horizon oil spill in the Gulf of Mexico. The Attorney General made the following statement:
“Since the Deepwater Horizon oil spill – the largest environmental disaster in our nation’s history – the Justice Department has been fully committed to holding BP accountable, to achieving justice for the American people and to restoring the environment and the economy of the Gulf region at the expense of those responsible and not the American taxpayer. In December 2010, my predecessor, Attorney General Eric Holder, announced a civil lawsuit against BP and its co-defendants. Since that time, the Deepwater trial team has fought aggressively in federal court for an outcome that would achieve this mission, proving along the way that BP’s gross negligence resulted in the Deepwater disaster.
“Today, I am pleased to say that after productive discussions with BP over the previous several weeks, we have reached an agreement in principle that would justly and comprehensively address outstanding federal and state claims, including Clean Water Act civil penalties and natural resource damages. BP is also resolving significant economic claims with the impacted state and local governments. 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. 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.
“I am so very grateful to the Deepwater civil trial team, made up of men and women from the department’s Environment and Natural Resources Division and Civil Division, as well as the incredible response, investigative and supporting efforts of the Departments of Homeland Security, Interior, Commerce and Agriculture and the Environmental Protection Agency, whose efforts have made this important step possible. I also appreciate the extraordinary effort of the many state leaders and environmental professionals who collaborated to advance this agreement in principle.”
From July 2, 2015 BP Press Release - BP has reached agreements in principle to settle all federal and state claims arising from the event.
BP today announced that its US Upstream subsidiary, BP Exploration and Production Inc (BPXP) has executed the agreements with the US federal government and five Gulf Coast states.
The agreement with the states of Alabama, Florida, Louisiana, Mississippi and Texas also includes settlement of claims made by more than 400 local government entities.
The principal payments are as follows:
The principal payments arising from the agreements will be made over extended periods of time as set out in the attached schedule of payments.
NRD and CWA payments are scheduled to start 12 months after the agreements becomes final. Total payments for NRD, CWA and State claims will be made at a rate of around $1.1 billion a year for the majority of the payment period.
The agreements in principle are subject to execution of definitive agreements. These will comprise a Consent Decree with the United States and Gulf states with respect to the civil penalty and natural resource damages, a settlement agreement with five Gulf states with respect to State and local claims for economic and property losses, and release agreements with local government entities.
The Consent Decree will be subject to public comment and final court approval. The Consent Decree and settlement agreement with the Gulf states are conditional upon each other and neither will become effective unless (1) there is final court approval for the Consent Decree and (2) local government entities execute releases to BP’s satisfaction.
The agreements do not cover the remaining costs of the 2012 class action settlements with the Plaintiffs’ Steering Committee for economic and property damage and medical claims. They also do not cover claims by individuals and businesses that opted out of the 2012 settlements and/or whose claims were excluded from them. BP will continue to defend those claims vigorously. Today’s agreements in principle also do not resolve private securities litigation pending in MDL 2185.
|Year after consent decree||Civil Penalty payments||Natural Resource Damages (NRD) payments||NRD additional final payment||State Claims payments|
|Totals||$5.50 billion||$7.10 billion||$0.23 billion||$4.90 billion|
State by State Reports
From July 2, 2015 Florida Senate, Sen. Don Gaetz press release -- Under the terms of the Oil Spill Economic Recovery Act, which I sponsored and which became law in 2011, three fourths of this money or $1.5 billion will become an endowment to diversify the economy of coastal Northwest Florida. These funds are above and separate from Restore Act monies appropriated by Congress to local governments and are apart from individual and business claims against BP.
Attorney General Bondi has achieved an historic and very favorable outcome for Florida. Because of her efforts, our state receives the largest share of economic damages. Because of the legislation I was fortunate enough to pass, Northwest Florida will receive three fourths of Florida's share. I didn't want any proceeds we could receive to be drained away in Washington or Tallahassee.
Pam Bondi deserves the credit for resolving the state's claims in record time instead of having Florida mired in decades of litigation. The Exxon Valdez oil spill in Alaska has been dragging through the courts for more than 25 years.
The Oil Spill Economic Recovery Act establishes Triumph Gulf Coast, Inc. as a long term non-governmental endowment to manage and use the funds to diversify and strengthen our regional economy. Trustees have already been appointed and include Gulf Power CEO Stan Connally, Stephen Riggs IV, Dr. Pam Dana, Bob Bonezzi and Allan Bense.
Deepwater Horizon was the worst economic disaster to hit Northwest Florida in modern times. This agreement could be the best economic opportunity for Northwest Florida in our time.
From July 2, 2015 MONTGOMERY Gov. Bentley press release —Governor Robert Bentley on Thursday announced the State of Alabama has reached an agreement in principle to settle its lawsuit with BP for damages caused by the 2010 Deepwater Horizon oil spill. This landmark agreement, announced at a news conference in Montgomery by Governor Bentley and Attorney General Luther Strange, is designed to compensate the State for both environmental and economic damages as a result of the disaster.
The total value of the Agreement in Principle is approximately $18.5 Billion for all of the affected Gulf states economic losses, the natural resource damages and BP’s Clean Water Act penalties. Alabama’s share of this global agreement is over $2.0 Billion. On the economic side, $1 billion will be paid to the State over the next 18 years for economic damages suffered. On the environment side, Alabama will receive approximately $1.3 billion over the next 15 years that will be used to facilitate coastal restoration projects in Alabama.
From July 2, 2015 BILOXI Gov. Phil Bryant press release --—Gov. Phil Bryant and Attorney General Jim Hood announced today in Biloxi that Mississippi has reached an agreement in principle with BP to settle claims related to the 2010 Deepwater Horizon disaster. The settlement will bring approximately $1.5 billion in additional relief to Mississippi over the next 17 years. Combined with $659 million in early funding, Mississippi is receiving a total of nearly $2.2 billion in compensation.
Under the $1.5 billion agreement in principle with BP, Mississippi will receive approximately $183 million in Natural Resource Damage Assessment payments and approximately $582 million in Clean Water Act penalties under the RESTORE Act. Mississippi will also receive $750 million in economic damages.
Attorney General Jim Hood stated, “Our office recovered about seven times more than the initial projections for economic damages. We worked well with other states and all of the cities and counties on our Coast to build an outstanding economic damages model.”
Breakdown of New Agreement in Principle
The $1.5 billion agreement in principle includes:
• Approximately $183 million in Natural Resource Damage Assessment payments, to be paid over 15 years, which will be used primarily for environmental restoration;
• approximately $582 million in Clean Water Act penalties under the RESTORE Act. These funds will be paid over 15 years and used primarily for environmental projects, research and economic development;
• $750 million in economic damages paid over 17 years as a result of Mississippi’s own lawsuit against BP. Mississippi is scheduled to receive a payment of $150 million in 2016 and equal yearly payments of $40 million from 2019-2033. The funds will be available for appropriation by the Mississippi Legislature.
Breakdown of $659 Million in Early Funding
• $112.557 million in Natural Resource Damage Assessment Early Restoration payments;
• $106 million in early RESTORE Act payments;
• $356 million in National Fish and Wildlife Foundation payments;
• $85.168 in initial response payments.
TOTAL RESTORATION FUNDS TO THE STATE OF MISSISSIPPI: $2.174 billion.
The agreement in principle with BP also provides up to $1 billion to settle claims in the five Gulf States between BP and local governments and other public entities. Settlement amounts for individual governments and public entities, including those in Mississippi, have not yet been determined. Discussions are ongoing, and an announcement is expected on or about July 12.
From July 2, 2015 BATON ROUGE Gov. Bobby Jindal press release – Today, Governor Jindal, Attorney General Caldwell, and state officials announced that an Agreement in Principle has been reached with BP Exploration & Production Inc. (“BP”) on all of the state and federal claims arising from the 2010 Deepwater Horizon oil spill. The Agreement in Principle totals approximately $18.732 billion, of which Louisiana anticipates receiving more than $6.8 billion for claims related to Natural Resource Damages under the Oil Pollution Act of 1990, the State’ share of Clean Water Act penalties (under the RESTORE Act), and the State’s various economic claims. Upon finalization, the Agreement announced today will bring Louisiana’s total recovery from the Deepwater Horizon disaster to approximately $10 billion.
The $18.732 billion agreement funds include the following components:
• $8.1 billion for natural resource damages (includes $1 billion in early restoration projects);
• $232 million to address any unknown natural resource damages;
• $5.5 billion for Clean Water Act civil penalties (subject to the RESTORE Act);
• $4.9 billion for state economic losses; and
The more than $6.8 billion included for Louisiana is comprised of the following components:
• $5 billion for natural resource damages (includes $368 million in previously allocated early restoration);
• A minimum of approximately $787 million for Clean Water Act civil penalties distributed through the RESTORE Act (Louisiana’s portion of the RESTORE Council distributed funds has yet to be determined); and
• $1 billion for state economic damages.
“We’ve made tremendous progress in recent years in addressing the crisis we face in coastal Louisiana; a crisis that was exacerbated by the BP oil spill,” said Chip Kline, chairman of the Coastal Protection and Restoration Authority Board. “Through hard work and determination, we have now managed to transform this disaster into an opportunity. The oil spill intensified our resolve to restore and protect coastal Louisiana. Today’s announcement provides us with an opportunity to not only address the damages associated with the oil spill, but also to continue to build upon the progress we’ve made over the last 7 years. With our Coastal Master Plan guiding our efforts, and working in close coordination with our coastal parishes, our congressional delegation, and our communities, we will remain focused on our mission of achieving a sustainable and productive Coastal Louisiana where all Louisianans can continue to live, work, and thrive.”
From July 2, 2015 AUSTIN Gov. Greg Abbott press release -- Texas today announced an agreement in principle between BP Exploration and Production Inc. and the states of Alabama, Florida, Louisiana, Mississippi, Texas, and the U.S. federal government. As part of the agreement, BP will pay $20.2 billion in damages and penalties, with Texas receiving more than $750 million. Upon agreeing to the terms, Governor Abbott issued the following statement:
“After five years, I’m proud to announce that Texas, along with the other Gulf States, has reached an agreement in principle with BP to resolve all the states’ claims. This settlement will allow Texas to reinvest in the Gulf community and reinvigorate the economic and environmental health of the region.”
Texas will see a large amount of money that will be part of Texas’ Gulf Restoration plan
The Clean Water Act penalties and the Natural Resource Damages penalties will be a 15 year payout plan starting in 2017.
July 2, 2015, NEW ORLEANS, LA Joint press release by National and local organizations working on Gulf of Mexico and Mississippi River Delta restoration – Environmental Defense Fund, National Wildlife Federation, National Audubon Society, Ocean Conservancy, The Nature Conservancy, Coalition to Restore Coastal Louisiana and Lake Pontchartrain Basin Foundation – released the following statement in response to today’s announcement of an agreement in principle between the Gulf states, federal government and BP for its role in the largest U.S. offshore oil disaster in history. Although the settlement will not be finalized for several weeks, the agreement will dedicate billions of dollars to restore damage caused by the 2010 Deepwater Horizon oil spill.
“In sharp contrast to the decades-long litigation following the Exxon Valdez spill, federal and state leaders have wasted no time in closing this case. Their swift work means meaningful restoration efforts are imminent. Their leadership, at this moment, is invaluable.
“While we await key details, one thing is clear: As soon as the settlement is final, it will be time to put that money to work.
“We need our leaders to make sure that every dime of this settlement is used as it is intended: to address oil spill impacts and repair long-standing ecosystem damage. We cannot afford to wait any longer. The Gulf ecosystem is the backbone of the local economy and our primary defense from storms during hurricane season.
“This settlement, which promises to be the largest environmental settlement in American history, is an unprecedented opportunity to accelerate and expand the response to the devastating harm caused by the spill, and to build lasting resilience into the essential ecosystems of the Gulf.
“We are especially encouraged that the settlement will put special emphasis on restoring health to the Mississippi River Delta and its coastal wetlands. We also urge leaders in NOAA and other agencies to leverage resources from this settlement to restore marine resources.”
A recent infographic depicts ongoing impacts of the Gulf oil disaster five years later. And over the past year alone, new scientific research has surfaced: