When announced last year, the $20 billion fine leveed against BP in response to the Gulf of Mexico oil spill was considered to be the largest corporate settlement of its kind. Now a U.S. federal judge in New Orleans has given the settlement final approval, resolving close to six years of litigation. This approval means the company will have to start paying out its multi-billion dollar fine to the states affected and to cover the costs of the environmental damage inflicted by the spill.
Around $5.5 billion will go towards Clean Water Act penalties, while much of the rest will be paid out to the federal government, to the five Gulf States – Alabama, Florida, Louisiana, Mississippi, and Texas – and to the hundreds of municipalities most heavily affected by the spill. The money will be shelled out over a 16-year period, and is expected to go towards environmental clean-up and restoration costs, as well as other claims by the states for economic development programs.
The Deepwater Horizon oil spill site 30 days after the blowout. Green Fire Productions/Flickr CC BY 2.0
It was on April 20 in 2010 that the Deepwater Horizon oil well blowout occurred, killing the 11 workers on the rig at the time. The aftermath saw almost 4 million barrels of crude oil gush out into the Gulf of Mexico over a period of 87 days, coating more than 2,000 kilometers (1,200 miles) of coast line in oil.
Considered the largest environmental disaster in U.S. history, the spill occurred in one of the most productive areas of ocean, home to an estimated 8,300 species. The chemicals found within the oil, and then the dispersants sprayed on top, have been implicated in a whole host of effects, from a rise in miscarriage rates in dolphins to an increase in shrimp found lacking eyes and eye sockets.
The environment, including scores of birds that rely on the Gulf, was heavily impacted by the spill, which continued for 87 days straight. Louisiana GOHSEP/Flickr CC BY 2.0
But it wasn’t just the environmental impact that hit the region hard. The collapse of the local fisheries meant that many fishermen were simply put out of business and unable to work, while the bad press and destruction of beaches saw tourism crash. The spill destroyed a massive part of the local economy that relied on a clean and healthy ecosystem in order to function. The disaster is estimated to have cost the fishing industry $2.5 billion and the tourism industry $23 billion.
This final figure of $20 billion is actually slightly more than what BP initially agreed to pay back in July. Exact figures as to what the oil giant has now shelled out for the disaster vary, but sit somewhere in the $50 billion ballpark before taxes.
Main image: EPI2oh/Flickr CC BY 2.0