By Mark Schleifstein, NOLA.com | The Times-Picayune
Email the author | Follow on Twitter
on July 02, 2015 at 8:15 AM, updated July 02, 2015 at 1:55 PM
BP has agreed to pay $18.7 billion to Louisiana, four other states, and the federal government to settle lawsuits filed in the aftermath of the Deepwater Horizon disaster, which killed 11 and unleashed one of the largest oil spills ever in 2010.
Louisiana Attorney General Buddy Caldwell announced Thursday (July 2) that the state will receive more than $6.8 billion from the settlement, including $5 billion for natural resource damages and $1 billion for state economic damage.
The state also will receive as much as $787 million in Clean Water Act penalties. BP will also pay for attorney fees and other costs associated with the state’s lawsuit, Caldwell said.
The payments, in a deal to be finalized over the next weeks and months, will come in addition to $2 billion already received by the state under previous settlements with BP and other companies involved in the disaster.
In all, the state will receive more than $10 billion, Caldwell said, which he said is more than any state has received from a settlement in the past.
“Today’s settlement is a game changer for Louisiana and its families,” he said.
“Nothing can bring back the lives those 11 lives lost tragically April 20, 2010,” Caldwell said. “But with new technology and innovation, perhaps we can prevent any further loss of life and protect our planet while we’re at it.”
He said the specifics of the agreement are still being worked out.
U.S. Rep. Garret Graves, the former chairman of the state Coastal Protectiion and Restoration Authority who acted as the state’s trustee during most of the negotiations with BP, said the effective result of the settlement will be to provide the state with at least $500 million a year for its coastal restoration master plan over the next 15 years.
Graves also said that while he could not say specifically how the proposed settlement differed from other offers considered by the five Gulf states since the spill, this one represented the best environmental and scientific understanding of the effects of the spill on Louisiana. The spill resulted in the release of 3.19 million barrels of oil into the Gulf of Mexico over 87 days in 2010.
Deal includes other Gulf states
The settlement was announced in simultaneous press conferences by Caldwell and the attorneys general of Alabama, Florida and Mississippi. Under the terms of the agreement, BP will make payments over 16 years.
The settlement must still be approved by U.S. District Judge Carl Barbier, who is overseeing the majority of lawsuits stemming from the disaster. A public comment period will be part of that process.
The U.S. Supreme Court on Monday cleared the way for the settlement by refusing to hear a challenge by BP and Anadarko of Barbier’s ruling that BP faces up to a maximum of $13.7 billion in fines. Barbier calculated that figure after determining the amount of oil spilled and ruling that the company acted with gross negligence or willful misconduct. The settlement announced Thursday includes the Clean Water Act fines Barbier would have set.
“Five years ago we committed to restore the Gulf economy and environment and we have worked ever since to deliver on that promise,” said BP Chairman Carl-Henric Svanberg, in a news release. “We have made significant progress, and with this agreement we provide a path to closure for BP and the Gulf. It resolves the company’s largest remaining legal exposures, provides clarity on costs and creates certainty of payment for all parties involved.
“In deciding to follow this path, the Board has balanced the risks, timing and consequences associated with many years of litigation against its wish for the company to be able to set a clear course for the future,” Svanberg said.
“The Board therefore believes that this agreement is in the best long-term interest of BP and its shareholders. The Board set out its position on the dividend at the first quarter and this remains unchanged by the agreement.”