Image courtesy of BP.

BP reached a $20.8 billion civil settlement with the U.S. Department of Justice and five Gulf states on Monday to resolve civil claims tied to the April 2010 Deepwater Horizon accident.

The global settlement resolves the governments’ civil claims under the Clean Water Act and natural resources damage claims under the Oil Pollution Act, as well as economic damage claims brought by five Gulf states and local governments, the DOJ said.

The five states included in the settlement are Alabama, Florida, Louisiana, Mississippi and Texas.

The resolution is worth $20.8 billion and is the largest settlement with a single entity in the department’s history.

BP must pay a $5.5 billion federal Clean Water Act penalty, plus interest, with 80 percent of those funds going towards restoration efforts in the Gulf region.

This fine is the largest civil penalty in the history of environmental law, the DOJ said.

The company will pay $8.1 billion in natural resource damages, including $1 billion BP has already committed to pay for early restoration.

Those funds are marked for joint use by the federal and state trustees to restore injured resources.

BP will also pay up to an additional $700 million, with some of those funds being accrued interest, to specifically address any later-discovered natural resource conditions that were unknown at the time of the agreement and to assist in adaptive management needs.

The natural resource damages money will fund Gulf restoration projects that will be selected by federal and state trustees to meet five different restoration goals and 13 restoration project categories.

These projects include restoration focusing on supporting habitats such as coastal wetlands, but also provide for specific resource types, such as marine mammals, fish and marine life and lost recreational use.

BP will also pay $600 million for other claims, including claims for the reimbursement of federal and state natural resource damage assessment.

“This settlement puts billions of dollars to work to help restore the Gulf, and holds BP publicly accountable for changes to its practices, to prevent this kind of disaster from happening again,” EPA administrator Gina McCarthy said.

The settlement is in addition to earlier criminal and civil settlements of federal government claims related to the Deepwater Horizon disaster.

BP Exploration and Production Inc. pleaded guilty to illegal conduct leading to and following the  Deepwater Horizon accident in January 2013, and was sentenced to pay $4 billion in criminal fines, penalties and restitution, including $2.4 billion for natural resource restoration.

Last November, U.S. District Court Judge Carl Barbier upheld a ruling that BP had committed “gross negligence” leading up to the Macando well blowout that caused the largest oil spill in U.S. history and killed 11 people.

BP is currently seeking restitution for some claims paid out to businesses as part of the Deepwater Horizon claims program after a federal court found the settlement claims administrator was incorrectly matching the revenues 0f businesses filing claims to their expenses.


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