British Petroleum announces multi-billion dollar settlement

The largest environmental settlement in history was announced Thursday by British Petroleum and the U-S government. $18.7 billion will be split among Gulf States, the federal government and local governments.

If approved, it would end the legal battle with the U-S government over Clean Water Act penalties.

Back in April of 2010, hundreds of millions of gallons of oil spilled into the Gulf of Mexico after an explosion of B-P’s Deepwater Horizon oil rig, which killed 11 workers. Tar balls began washing up on the panhandle beaches, drying up tourism and causing a huge impact on the economy.

Florida Attorney General, Pam Biondi supports this agreement, “Instead of battling with a litigation black hole, we have now forged ahead with an agreement to spur hope and spur recovery for our entire gulf region.”

Here’s how the settlement breaks down. $18.7 billion agreement includes $8.1 billion for natural resource damages, $232 million for damages to natural resources, $5.5 billion for Clean Water Act civil penalties and $4.9 billion for state economic losses.

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

BP has 18 years to pay the settlement and most of it is tax-deductible. It could take a federal judge three months to approve the deal.

All told, this disaster has now cost BP at least $45 billion in damages and clean up expenses.