BP has agreed to pay an estimated $7.8 billion to settle lawsuits brought against the company by businesses and individuals in the wake of the 2010 Deepwater Horizon disaster. The disaster, which caused around 205 million gallons of oil to spew into the Gulf of Mexico, had widespread economic and health impacts on local communities. The estimated compensation, which is not capped, includes provisions for $2.3 billion to bolster the region’s seafood industry and $105 million to improve available health care in the impacted communities. The Washington Post reports that under the agreement, BP also agrees to provide medical consultations for the next 21 years for those with spill-related health complaints.
Clean-up workers and Gulf Coast residents alike reported adverse health effects from exposure to oil and the dispersant used in the effort to clean up the spill. The Plaintiffs Steering Committee explained that “Residents in the coastal and wetlands areas of Louisiana, Mississippi, Alabama and the Florida Panhandle will be compensated for a broad range of specific medical conditions such as respiratory, skin, stomach, headaches and a host of other ailments.” Similarly, clean-up workers may also receive compensation.
BP was widely expected to reach a settlement in the case, as experts cited fears that a court case would likely have led to devastating disclosures regarding cost-cutting measures within the company which led to the disaster. Such a court case is not yet, entirely, off the books. While this recent settlement brings to a close litigation brought by private individuals and businesses, it does not cover fines the oil-giant faces from State and Federal Authorities under the Clean Water Act and Oil Pollution Act. If BP is found to be negligent in the disaster, they could face fines of $1,100 per barrel of oil spilled. If a court determines that BP was grossly negligent, that number could increase to $4,300 per barrel. BP has disputed updated government estimates regarding the quantity of oil which leaked from the blown-out well, estimating flow at between 210,000 gallons and 1.6 million gallons a day, while Federal officials estimate the rate at around 2.4 million gallons a day.
The funds for this most recent settlement will come from a $20 billion escrow account set up by BP following the environmental disaster. The Gulf Coast Claims Facility, administered by Kenneth Feinberg, had previously overseen tens of thousands of claims presented by individuals seeking compensation for lost earnings and ill health resulting from the disaster.
While this settlement is a significant stride in supporting the communities affect by the Deepwater Horizon blow out, the full public health and environmental impacts of the disaster are unlikely to be realized for several years. Among a multitude of environmental issues raised by the spill are concerns over the oil’s impact on already fragile wetlands, the effect of dispersants on marine life, and reports of a sudden increase in deaths of dolphins and endangered brown pelicans in the area.
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