Deepwater Horizon Oil Spill: Settlement Will Fund Restoration - Largest Settlement in History of Federal Law Enforcement

On April 20, 2010, the BP Deepwater Horizon mobile drilling unit exploded, caught fire and sank in the Gulf of Mexico, resulting in the death of 11 workers and injury of 17 others. The damaged oil well discharged oil and natural gas for 87 days after the explosion, resulting in the release of approximately 3.19 million barrels (134 million gallons) of oil into the Gulf—the largest offshore oil spill in U.S. history. Six years later, on April 4, 2016, a federal court in New Orleans entered a consent decree resolving civil claims against BP. This historic settlement resolves the U.S. government’s civil penalty claims under the Clean Water Act, the governments’ claims for natural resources damage claims under the Oil Pollution Act of 1990, and also implements a related settlement of economic damage claims of the Gulf States and local governments. Taken together, this resolution of civil claims is worth more than $20 billion and is the largest settlement with a single entity in the history of federal law enforcement.

Under the consent decree BP will pay a CWA civil penalty of $5.5 billion (plus interest), $8.1 billion in natural resource damages (this includes $1 billion BP already committed to pay for early restoration) under OPA, up to an additional $700 million (some of which is in the form of accrued interest) for adaptive management or to address injuries to natural resources that are currently unknown but could come to light in the future, and $600 million for other claims. Under the economic damages settlement noted above, BP will pay $4.9 billion to the Gulf States (Alabama, Florida, Louisiana, Mississippi and Texas) to resolve their economic damage claims. In other, related agreements, BP will pay up to another $1 billion to resolve similar claims the company faces from various local governments in the Gulf region. This settlement includes both the largest civil penalty ever paid by any defendant under any environmental statute, and the largest recovery of damages for injuries to natural resources.