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BP to pay Gulf states $18.7 billion in Deepwater Horizon disaster settlement (+video)

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Stephen Lehmann/U.S. Coast Guard/Reuters/File

(Read caption) The crew of a Basler BT-67 fixed wing aircraft release oil dispersant over an oil discharge from the mobile offshore drilling unit, Deepwater Horizon, off the shore of Louisiana, May 5, 2010. BP Plc announced July 2, 2015 it has reached a comprehensive $18.7 billion settlement with the US government and five states, a landmark deal that effectively ends years of litigation over environmental damage and human casualties caused by the 2010 Gulf of Mexico spill.

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BP has agreed to pay $18.7 billion to settle all government claims that have arisen from the massive 2010 Deepwater Horizon spill which released 120 million gallons of oil into the Gulf of Mexico.

In the wake of the spill, which ranks as one of the worst environmental disasters in US history, BP faced litigation from four states as well as more than 400 local government entities.

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The $18.7 billion – paid out over 18 years – will be divvied up among Florida, Alabama, Mississippi, Louisiana, and local governments to settle environmental and economic damage claims as well as support restoration efforts along the Gulf Coast.

The settlement comes as a federal judge was preparing to rule on how much in penalties the British oil giant owed for violating the federal Clean Water Act. Arguing against the fines, BP had said it already had to pay out more than $40 billion because of the spill.

Last year a federal court ruled that the company was guilty of “gross negligence” in the disaster and therefore 67 percent responsible for the spill and explosion which killed 11 people. The final phase of the litigation ended earlier this year when a federal court gave BP $4,300-per-barrel penalty for the spill, the maximum allowable under the law, amounting to $13.7 billion total.

The Clean Water Act penalties were based on BP’s appeal of these decisions.

Costs incurred by BP so far include an estimated $14 billion for response and cleanup and $4.5 billion in penalties announced after a settlement of a criminal case with the government.

In 2012, BP reached a settlement with individuals and businesses over economic and property damage claims arising from the spill. It is still unclear exactly how much the company will have to pay due to this settlement.

According to environmental scientists it could take decades before the health of the Gulf Coast is restored. A National Wildlife Federation's (NWF) report released last year gave a list of 47 projects and recommendations to help the process along and pointed to BP fines and penalties to fund them.

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“Five years later, wildlife in the Gulf are still feeling the impacts of the oil spill,” said NWF president and CEO Collin O’Mara in a news release. “The science is clear that this is not over – and sea turtles, dolphins, fish, and birds are still suffering from the fallout. Holding BP fully accountable and using all fines and penalties to restore the Gulf of Mexico must be a national priority.”

Researchers are still discovering subtle effects on the Gulf Coast’s environment and animals a half-decade after the spill. A study published in April in the journal PLOS One linked the spill to an increasing number of bottle-nosed dolphin deaths in the area affected by the disaster.

“Studies have increasingly pointed to the presence of petroleum hydrocarbons as being the most significant cause of the illnesses and deaths plaguing the Gulf’s dolphin population,” said Teri Rowles, head of NOAA’s Marine Mammal Health and Stranding Response Program in a statement.