BP to pay Alabama $2.3 billion for oil spill

BP to pay Alabama $2.3 billion for oil spill

MONTGOMERY, AL (WSFA) - Alabama Governor Robert Bentley along with Alabama Attorney Luther Strange and other officials announced Thursday that the state has reached an agreement in principle to settle its lawsuit with BP for damages caused by the 2010 Deepwater Horizon oil spill.

According to the governor's office, this landmark agreement is designed to compensate the state for both environmental and economic damages as a result of the disaster. The total value of the agreement  is approximately $18.5 billion for all the affected states over the next 18 years for the damages suffered. Alabama's share of this agreement amounts to over 2 billion dollars.

Officials say on the economic side, $1 billion will be paid to the state over the next 18 years while $1.3 billion is distributed to the environmental side for then next 15 years. This money will be used to facilitate coastal restoration projects in Alabama. Attorney General Luther Strange says, $1 billion will be placed into the General Fund over the next two decades to restore Alabama's gulf counties. It is unclear when the first payment will be made by BP.

"The BP/ Deepwater Horizon oil spill was the worst environmental disaster in United States history, and the impact to the Alabama Gulf Coast was detrimental" Governor Robert Bentley said. "We have reached an agreement in principle with BP to compensate the State for all of the environmental and economic damages suffered as a result of the oil spill. 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."

When asked about the budget shortfall Governor Bentley says, "Our state's General Fund Budget needs attention. This money will help but it is not the solution to our problems." Governor Bentley says the state will continue to address the challenges of the General Fund Budget for 2016.

The BP Deepwater Horizon oil spill happened on April 20, 2010, about 100 miles off of Alabama's coast. Eleven people lost their lives, and for nearly three months an estimated 3.19 million barrels of oil flowed into the Gulf of Mexico. Alabama experienced significant economic and environmental damages as a result.

"From the first day that Governor Bentley and I took office, we've worked together to secure justice for Alabama in the wake of the tragic BP oil spill," Attorney General Luther Strange said. "That teamwork has led us to today's record settlement and a positive legacy for the future."

"It is important to commend BP, our Federal partners and the other Gulf Coast states for their efforts to get this agreement accomplished," Department of Conservation and Natural Resources Commissioner Gunter Guy said. "We look forward to working with Alabama's coastal communities to identify, develop and implement appropriate projects to restore our resources and the services they provide."

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