BP Ordered To Pay $18.7 Billion For Deepwater Horizon Oil Spill, But Given The Damage, Is That Really Enough?
Five years ago, the BP-owned Deepwater Horizon oil rig exploded and sank, causing the largest accidental marine oil spill in history and wreaking unprecedented havoc on marine life, the surrounding environment, and the local economy. The Deepwater Horizon incident has now led to what is shaping up to be the biggest environmental settlement in U.S. history. On Thursday, the U.S. government and the Gulf states have come to a tentative agreement: BP will pay $18.7 billion for the oil spill. It's a large sum, but given the environmental and economical damages caused by the spill, that settlement might not even come close to being enough.
According to the tentative settlement plan, BP Exploration and Production, an American subsidiary of the British company, will pay $7.1 billion or more to the federal government and to the Gulf states of Texas, Louisiana, Mississippi, Alabama, and Florida to compensate for damage to natural resources; $5.5 billion to the government for violating the Clean Water Act; $4.9 billion to the states for hurting their local economies, and up to $1 billion to more than 400 local governments.
Though BP has estimated the total settlement to be about $18.7 billion, the U.S. Justice Department noted that the total amount could exceed $20 billion. The settlement still needs to be approved by a federal judge, but if it goes through, it will be historical. Attorney General Loretta E. Lynch said in a statement:
If approved by the court, this settlement would be the largest settlement with a single entity in American history. It would help repair the damage done to the Gulf economy, fisheries, wetlands and wildlife; and it would bring lasting benefits to the Gulf region for generations to come.
On April 20, 2010, the Deepwater Horizon oil rig exploded and sank two days later, causing an oil leak that spilled more than 200 million gallons of oil into the ocean over 87 days. The consequences of the spill were devastating to more than 8,000 species of wildlife and to various sectors of the U.S. economy. Here are the worst consequences of the Deepwater Horizon oil spill.
Among the species whose natural habitat was contaminated by the oil spill were birds, fish, mollusks, sea turtles, and marine mammals, many of which developed diseases as a result of being exposed to the toxic oil or were stranded because of the contaminated waters. According to a University of New Hampshire study, more than 39 species were threatened by the spill, on top of the 14 endangered species already protected under federal law. In addition to animals, a substantial amount of plant life, from coral to seaweed to the nearby wetlands, was also affected.
Even five years later, the effects can still be felt. According to a CNN report from April, dolphins are still dying at an accelerated rate along the Gulf Coast and the population of seaside sparrows is still struggling today. However, the report also notes that it's too soon to make any accurate assessments on the long-term effects of the oil spill.
Beyond the environmental damage, the Deepwater Horizon spill was also detrimental to the economy. In the months after the spill, the National Oceanic and Atmospheric Administration (NOAA) closed more than 85,000 square miles of waters for fishing, costing the local fishing industry an estimated $2.5 billion. According to an International Business Times report from April, fisherman on the Gulf Coast are still struggling to make ends meet five years after the spill.
Additionally, the U.S. Travel Association initially estimated that the oil spill could cost the Gulf Coast $23 billion on tourism over a three-year period, with Florida being the most affected. The effects of the oil spill have also been far-reaching. If you consider all the damage, suddenly $18.7 billion seems like a paltry figure.
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