A federal judge in New Orleans granted final approval this week to an estimated $20 billion settlement over the 2010 BP oil spill in the Gulf of Mexico.
The settlement, first announced in July, 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 will pay out over roughly 16 years. The U.S. Justice Department estimated the settlement will cost the oil giant as much as $20.8 billion, the largest environmental settlement in U.S. history as well as the largest-ever civil settlement with a single entity.
U.S District Judge Carl Barbier, who approved the settlement, had set the stage with an earlier ruling BP had been “grossly negligent” in the offshore rig explosion that killed 11 workers and caused a 134 million gallon spill.
In 2012, BP reached a similar settlement agreement with private attorneys for businesses and residents who claim the spill cost them money. That deal, which didn’t have a cap, led to a protracted court battle over subsequent payouts to businesses. A court-supervised claims administrator is still processing many of these claims.
BP estimated its costs related to the spill, including its initial cleanup work and the various settlements and criminal and civil penalties, will exceed $53 billion.
“We are pleased that the Court has entered the Consent Decree, finalizing the historic settlement announced last July,” BP spokesman Geoff Morrell said.