British Energy Company Grants Historic $20.8 Billion Indemnity For Environmental and Civil Damages Claims Arising From 2010 Deepwater Horizon Spill In Gulf of Mexico, U.S. Justice Department Says

The United States Justice Department and five gulf states announced Monday that a $20.8 billion settlement will be granted to indemnify environmental damages claims against British energy giant BP arising from the harrowing 2010 Deepwater Horizon oil spill in the Gulf of Mexico.

The initial settlement announced in July only amounted to $18.7 billion before being raised to $20.8 billion, writes the New York Times Monday. The amount is the largest recorded environmental settlement and "the largest civil settlement with any single entity" in U.S. history.

Attorney General Loretta Lynch said at a Justice Department news conference, "This historic resolution is a strong and fitting response to the worst environmental disaster in American history.

"BP is receiving the punishment it deserves, while also providing critical compensation for the injuries it caused to the environment and the economy of the Gulf region."

"The steep penalty should inspire BP and its peers to take every measure necessary to ensure that nothing like this can ever happen again," Lynch said.

Once approved, the settlement will resolve all civil claims filed against BP and "launch one of the largest environmental restoration efforts the world has ever seen," The Globe and Mail reports. The deal will thus bind BP to a large-scale cleanup project in the affected Gulf Coast, which will include the rehabilitation of water quality, wildlife, and the environment.

The $20.8 billion settlement resolves a lawsuit filed by the Justice Department against BP in 2010. More specifically, BP would have to pay $5.5 billion for civil claims under the Clean Water Act. The company is also obliged to give $8.1 billion for natural resources damages claims under the Oil Pollution Act, which is in addition to the $1 billion BP previously granted to fund earlier restoration activities in the area.

$4.9 billion will be given to the five states affected by the massive oil spill namely Florida, Alabama, Mississippi, Lousiana and Texas. A $700 million buffer will be reserved for future environmental problems that may arise as a result of the spill, writes Politico Florida Monday.

According to Ocean Portal, oil began to leak into the Gulf of Mexico in April 20, 2010 following the explosion of the Deepwater Horizon rig, which also caused the death of 11 workers. Roughly 200 million gallons of oil spewed into the gulf before the well was covered in July. The resulting oil slick spanned at least 15,300 square miles and affected at least 1,300 miles of shoreline. It is considered as "the largest accidental marine oil spill in the history of the petroleum industry."

With this settlement, the government and the Gulf coast communities are positive they will make significant progress toward restoring ecosystems, economies, and business in the region. Secretary of Commerce Penny Pritzker stated, "We are committed to ensuring the Gulf Coast comes back stronger and more vibrant than before the disaster. If made final, the settlement will provide the US and Gulf states with the resources and certainty needed for effective restoration planning and improvements"