Five years after the Deepwater Horizon disaster fouled the Gulf Coast, the city of Mobile has struck a tentative $7.1 million settlement with BP to resolve claims that the spill cost the city tax revenue.
Mayor Sandy Stimpson announced the agreement, which joins hundreds of similar settlements reached between BP and Gulf Coast municipalities in recent weeks as the oil giant worked to close out remaining claims tied to the 2010 spill. After attorney’s fees and other expenses are deducted, the city expects to net roughly $4.7 million from the deal.
“The oil spill had a devastating effect on the entire Gulf Coast, and this settlement is an important step in the ongoing recovery process for our citizens,” Stimpson said in announcing the agreement, adding that officials view it as a fair resolution that avoids the cost and uncertainty of further litigation.
City officials said the settlement funds are expected to be disbursed within roughly a month of the announcement. Mobile has not detailed exactly how it plans to allocate the money, though other Gulf Coast municipalities that reached similar settlements have used the funds for infrastructure repairs, environmental restoration projects and general budget needs tied to spill-related economic disruption.
The 2010 spill, triggered by an explosion on BP’s Deepwater Horizon drilling rig, sent millions of barrels of oil into the Gulf of Mexico over several months, disrupting fishing, tourism and shipping activity throughout the region. Coastal Alabama, including the Mobile Bay area, saw tourism and seafood industries take a significant hit as oil reached area beaches and waterways.
In the years since, municipalities across the Gulf Coast have pursued legal claims against BP to recover lost tax revenue tied to reduced economic activity during and after the spill. Mobile’s settlement reflects the city’s assessment of losses tied specifically to reduced sales and lodging tax collections during the crisis and its aftermath.
The agreement adds to a broader wave of Gulf Coast settlements that collectively total billions of dollars as BP worked through remaining claims from state, county and municipal governments. For Mobile, the deal closes out one more chapter of the long recovery process that began when oil first began washing ashore in the spring of 2010.