Judge Grants Final Approval of $20bn Settlement Over BP Oil Spill

A New Orleans federal judge has just handed down the biggest environmental settlement in US history, ordering BP to pay out an estimated US$20 billion following the 2010 Gulf of Mexico disaster. As well as being the world’s largest ecological payment, it also clocks in as the biggest civil settlement issued to a single entity.

On April 20 2010, an explosion on the Deepwater Horizon oil rig triggered one of the most catastrophic environmental disasters the US has ever seen. Over a period of 87 days the sea-floor oil gusher churned 4.9 million barrels of oil into the ocean. It’s notorious as one of the worst offshore spills in history, and has had serious financial consequences for BP.

It all adds up…

In July the company was slapped with over $5.5 billion in civil Clean Water Act penalties, as well as billions more in environmental damages. Five Gulf states and a host of local governments also sought compensation from the oil and gas goliath. All up, US Justice Department estimates that the total settlement will top US$20 billion, with money to be distributed over a 16-year period.

U.S District Judge Carl Barbier handed down the final ruling, accusing BP of being "grossly negligent" in the events leading up to the explosion. 11 people died, while surrounding marine ecosystems were swathed in an oily film.

BP forced to pay up

Not only does BP have to find the cash for its US$20 billion settlement, but it’s also had to lump colossal clean-up bills and growing criminal/civil penalties. All up, the total cost of the disaster is estimated at over US$53 billion. While it’s an unfathomable sum, BP spokesman Geoff Morrell has maintained that the company is happy to have reached the historic settlement.

Others are also relieved the dealings have come to a close, with former chief of the Justice Department's environmental crimes section David Uhlmann describing the ruling as the end to a " long sad chapter in American environmental history." He adds, "The question that remains is whether we have learned enough from this tragedy to prevent similar environmental disasters in the future.”

The oil and gas industry has been highly criticised for its negative environmental impact, and mercury emissions are a major issue. For more information on why the formation of mercuric sulphide and soluble ionic mercury is a serious environmental problem, ‘Unconsidered Mercury Emissions from the Oil and Gas Industry’ is a must read article.