Regulation News

Judge Finalizes $20.8 Billion Penalty for Deepwater Horizon Oil Disaster

Nearly six years after the start of the BP Deepwater Horizon oil disaster, the U.S. Department of Justice announced the official conclusion of the litigation. On 4 April 2016, U.S. District Judge Carl Barbier signed the consent decree that details how the $20.8 billion settlement agreement will be spent over the next 15 years to address the environmental issues and economic damages resulting from the BP oil disaster, the largest environmental disaster in U.S. history.

The settlement includes $5.5 billion in civil Clean Water Act penalties and billions more to cover environmental damage and other claims by the five Gulf states and local governments. The money is to be paid out over a 16-year period. Judge Barbier's earlier ruling had said that BP had been “grossly negligent” in the offshore rig explosion that killed 11 workers and caused a 134-million-gallon spill.

U.S. Attorney General Loretta Lynch, said “Today’s action holds BP accountable with the largest environmental penalty of all time while launching one of the most extensive environmental restoration efforts ever undertaken. I want to thank everyone who made this outcome possible, including my predecessor, Attorney General Eric Holder, and the federal agencies and states that developed the comprehensive restoration plan. The Department of Justice will continue to stand with the people of the Gulf as they seek to rebuild and protect the marine life, coastal systems, and beautiful beaches that have made the region a treasured natural resource.”

Bethany Carl Kraft, Director of Ocean Conservancy’s Gulf Restoration Program said that her organization, “applauds the U.S. Department of Justice for their diligence and commitment to reaching resolution with BP. With a final consent decree in place, it is now up to the state and federal agencies tasked with restoration to make good on their commitments to restore the Gulf from Texas to Florida, and from the coast to the offshore. The oil disaster wreaked havoc on the economy, communities and environment of the Gulf region; these settlement dollars came at a very dear price. It is our responsibility to invest them wisely on transformative restoration projects that will chart a new future for the Gulf of Mexico.”

Despite protests from Congress and a broad coalition of environmental groups, the final settlement will allow BP to deduct a majority of the costs as an ordinary business expense. Friends of the Earth released a statement denouncing the tax provisions. The official final judgement can be viewed and downloaded here.

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