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After a long legal fight, BP agrees to largest environmental settlement in U.S. history

In the nation’s worst oil disaster, 134 million gallons of crude gushed into the Gulf of Mexico, coating beaches and barrier islands, killing thousands of animals and decimating fisheries. Now nearly five years later, oil giant British Petroleum is facing a record settlement of $18.7 billion. Judy Woodruff discusses the deal with Rep. Garret Graves, R-La.

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  • JUDY WOODRUFF:

    It was the nation’s worst oil disaster and came to be known as the BP spill. After a long and bitter fight that played out in the courts, a record settlement was finally announced today.

    The oil gushed from BP’s Macondo well for 87 days. Now, almost five years since the well was sealed, the company aims to settle with the federal government and five states, Alabama, Florida, Louisiana, Mississippi, and Texas.

  • Alabama Governor Robert Bentley:

  • GOV. ROBERT BENTLEY (R), Alabama:

    With the agreement reached today and the compensation BP will pay for their responsibility, we are taking a significant step forward in our state and in especially the Gulf Coast areas to move forward with the worst environmental disaster in U.S. history.

  • JUDY WOODRUFF:

    In all, 134 million gallons of crude fouled the Gulf’s waters, and coated beaches and barrier islands, killing thousands of animals, and decimating local fisheries.

    The projected deal totals $18.7 billion; $5.5 billion would go toward restoration efforts, as part of a federal Clean Water Act penalty. Another $7 billion would cover natural resource damages. And nearly $6 billion goes to economic and other claims by the five states and 400 local government entities.

    In a statement today, U.S. Attorney General Loretta Lynch called it the largest environmental settlement in U.S. history. For BP, the settlement will effectively add about $10 billion to the $44 billion it already set aside for cleanup costs and penalties.

  • The oil giant had revenues of $15 billion last year, and will spread the settlement costs over the next 15 to 18 years. In a statement today, BP’s CEO, Bob Dudley said:

    “This agreement will resolve the largest liabilities remaining from the tragic accident and enable BP to focus on safely delivering the energy the world needs.”

    The agreement is still subject to final approval by a federal judge.

    The settlement was hailed by a number of public officials, but several environmental groups called the final agreement disappointing.

    Joining us is a key figure who was involved in hammering out the deal. U.S. Representative Garret Graves served as Louisiana’s lead trustee representing the state in the BP oil spill negotiations from 2010 to 2014. He’s served as an adviser since. He is a Republican and he joins us from Baton Rouge.

    Congressman Graves, welcome.

    Is this a fair settlement?

  • REP. GARRET GRAVES (R), Louisiana:

    It is.

    And, Judy, I think it’s very important. You can’t just look at this in a vacuum. You have to look at the other options and alternatives that were available to settle this. We have been sitting here for five years now with one of the biggest environmental crises in our nation’s history and we haven’t had any type of settlement or really settlement investment in the Gulf of Mexico.

    So, the two options are, you accept this deal or you potentially get stuck in a judicial process where we could still be talking about this for 10 or 20 years.

  • JUDY WOODRUFF:

    How was the number $18.7 billion arrived at?

  • REP. GARRET GRAVES:

    Well, look, I can’t speak for the other states.

    I’ll tell you, in the case of Louisiana, the decision on numbers was based entirely upon science, measuring the ecological damages, the natural resource impacts to our coastal resources, to the Gulf of Mexico. We’re the top fishery state in the continental United States. And the ecological productivity is very important to our state’s economy and our culture here.

  • JUDY WOODRUFF:

    How will Louisiana use its share?

  • REP. GARRET GRAVES:

    The state has committed to use all $5 billion of natural resource damages to advance our overall coastal master plan, investing in and restoring the coastal wetlands, investing it in projects that will improve the production of fisheries in the Gulf of Mexico, to manage the fisheries, making several investments in bird projects as well.

    This is the largest wintering habitat for migratory waterfowl. So we will be making major investments in ecological restoration here. And that’s where virtually all of the natural resource dollars are being committed. Of the $8.1 billion in natural resources restoration, well over $5 billion of that will be spent in the state of Louisiana.

  • JUDY WOODRUFF:

    Are you comfortable with how the other money is going to be spent? For example, the federal government gets, I think it’s $5 billion in penalties that are related to the Clean Water Act.

  • REP. GARRET GRAVES:

    Under federal law that was passed in the summer of 2012, 80 percent of those dollars will be allocated to what’s known as a restore council. It’s a state-federal council that will be making decisions on the allocations of those funds.

    Candidly, I don’t think it’s the most efficient mechanism to allocate the funds, but it is something that will ensure public participation and some transparency in the decisions.

  • JUDY WOODRUFF:

    I’m sure you know, Congressman Graves, that a number of environmental groups say this is not nearly enough. They are saying the damage is extensive, it will go on for years, even decades, and that BP should have been asked to pay much more.

  • REP. GARRET GRAVES:

    Look, if we were in a vacuum, if you made me king for the day, there certainly are some changes I would make to this agreement.

    It’s important to keep in mind that, number one, you can’t go out there and go put tens of billions on most companies. This would have crippled or bankrupted most companies around the world. Number two, we have seen a decline in gas prices, a decline in profits for the company. Those things need to be taken into consideration as well.

    I think this was the best deal that was going to be cut cooperatively. And I will tell you that there were several previous attempts at negotiations that were rejected by the state of Louisiana because of insufficient funds. Again, I could make some improvements to this in a vacuum, but compared to the other alternative, this is a good deal and this settlement needs to be approved.

  • JUDY WOODRUFF:

    Do you expect that the court will approve this?

  • REP. GARRET GRAVES:

    I think that they will. Right now, it is simply an agreement in principle.

    The Department of Justice was obviously very heavily involved in negotiations. It’s going to have to be translated to a consent decree and submitted to the courts ultimately, which will take months, but I do expect the court to approve this settlement proposal.

    (CROSSTALK)

  • JUDY WOODRUFF:

    Excuse me.

    And, as I understand it, there are still some private pieces of litigation that are out there, individuals and businesses who have sued BP and those cases are still outstanding.

  • REP. GARRET GRAVES:

    Without a doubt. That’s a really important point to make.

    There are billions of dollars in private claims that are still outstanding. There was a large settlement that was reached with a majority of the plaintiffs in this case, but many of them opted to not go with that settlement offer that was out there. And so those cases will continue proceeding through the judicial process.

    The settlement that was announced today pertains only to federal, state and local government claims against BP.

  • JUDY WOODRUFF:

    All right. U.S. Representative Garret Graves of Louisiana, we thank you for joining us.

  • REP. GARRET GRAVES:

    Thank you very much.

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