BP agrees to pay $18.7 billion to settle all federal and state claims.

This morning BP announced that it has agreed to pay $18.7 billion over 18 years to settle all federal and state claims arising from the Deepwater Horizon oil spill.

The agreement involves the states of Alabama, Louisiana, Florida, Mississippi and Texas as well as claims made by 400 local government entities. As part of the deal, BP agreed to pay a civil penalty of $5.5 billion under the U.S. Clean Water Act, payable over 15 years. It also agreed to pay $7.1 billion to the U.S. and five Gulf states over 15 years, and $4.9 billion to be paid over 18 years to settle economic and other claims made by the five Gulf states.