BP to Pay $2.3 Billion to Alabama in Deepwater Horizon Spill Settlement

Oil lickign from pipeAlabama will receive $2.3 billion as part of BP’s settlement for environmental and economic damages stemming from its 2010 Deepwater Horizon Oil spill, officials announced on Thursday, July 2.

According to AL.com, Gov. Robert Bentley said the state will receive its $1 billion in economic damage payments over a span of 18 years, while the environmental damages will amount to $1.3 billion over the same period.

During his announcement at the State Capitol, the governor called the spill the worst environmental disaster in American history, with its effects on the Alabama gulf coast being particularly detrimental.

“With the agreement announced today, we are taking a significant step forward in our state and will become a stronger, safer and more resilient state as a result of this terrible disaster,” Bentley said.

Offshore drilling has gradually become one of the largest sectors of the oil production industry as a whole. Today, offshore drilling rigs have sourced oil in waters more than 7,500 feet deep and up to 200 miles from the nearest shore.

The Deepwater Horizon rig was drilling in 5,100 feet of water approximately 100 miles off the coast of Alabama when it ignited and exploded on the morning of April 20, 2010. The explosion resulted in an oil leak that lasted for 87 days; the total amount of oil spilled into the Gulf of Mexico has been estimated at around 4.9 million barrels. The Deepwater Horizon spill remains the largest accidental oil spill in history.

Alabama Attorney General Luther Strange said BP’s settlement is fair compensation to the state for the environmental and economic damage that resulted from the spill.

“It’s really an incredible accomplishment to get all these parties together dealing with this amount of money and all the other factors that were in play,” Strange said.

BP will pay a total of $18.7 billion dollars in fines and damages to the parties affected by the Deepwater Horizon spill — making this the largest corporate settlement in history.

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