The Deepwater Horizon explosion was the worst environmental disaster in history. Photo: Wiki Commons
When BP’s Deepwater Horizon rig exploded, it killed eleven people and began vomiting death into the ocean 40 miles off the coast of Louisiana. It would continue to do so for nearly six months. Now, five years later, in the largest corporate settlement in American history, BP has been ordered to pay $18.7 billion in penalties to five states and the U.S. Government.
In what might have been the worst environmental disaster of all time (how quickly we forget, right?), somewhere between 5 million and 9 million barrels of oil escaped into the fragile ecosystem in the Gulf of Mexico. The slick was immense–at nearly 300 miles wide and 200 miles long, the cleanup is still not over. The coastline was decimated. Nearly all of the area’s oyster bed were ruined, and the fishing industry fell into an enormous slump. Tourism took a hit as well, and countless animals died. “There’s going to be a lot of oil out there that’s going to show up on beaches for 10 years, 20 years,” said R. Eugene Turner of Louisiana State University’s Department of Oceanography and Coastal Sciences a few months after the spewing well had been capped.
A few months after the explosion, BP set aside $43.8 billion for cleanup and penalties. The company says the total cost to them is now just over $50 billion dollars. With a b.
The settlement calls for BP to pay nearly $13 billion in Clean Water Act fines and natural resource damages, as well as $5 billion to different states affected. The payments will be staggered over the next 18 years. Although the agreement still has to get court approval, there are claims from Alabama, Florida, Louisiana, Texas, and Mississippi, as well as 400 other government entities.
Although BP is a large company, the $50 billion dollar hit is a big one. So far, they’ve sold nearly a fifth of the earnings base they had before the disaster. It’s not clear yet how they will come up with the rest of the money, but the settlement may open the doors for potential buyouts.
