Alabama Expects Billions From BP Over Oil Spill


BIRMINGHAM, Alabama (Reuters) – Alabama expects to receive billions of dollars in penalties from BP Plc as a result of the oil spill in the Gulf of Mexico, Governor Bob Riley said on Monday.

BP and the White House will probably soon reach an agreement on how much money will be available to four Gulf states that have been affected by the spill, Riley said in a statement.

“While we don’t know the total or how it will be divided … we have every reason to believe Alabama will suddenly have significant resources at its disposal, likely in the billions of dollars,” the statement said.

There was no immediate comment from BP.

The state is setting up a Coastal Recovery Commission charged with setting priorities for its expected payment from the energy giant, Riley said.

Louisiana’s coastline bore the brunt of damage from the spill, which began on April 20 when a BP deepwater rig exploded and sank, unleashing millions of gallons of oil into the Gulf of Mexico.

Alabama, Mississippi and Florida also sustained damage. The spill continued until July 15, when the well was capped.

BP this month turned down Alabama’s claim for $148 million in lost government revenue because it said there was ongoing litigation over the issue.

The state’s attorney general, Troy King, accused the company of “playing games” with Alabama and other states on the Gulf Coast.

There is a growing dispute over how states, individuals and businesses in Louisiana, Mississippi, Alabama and Florida should be compensated for losses suffered as a result of the spill.

BP has set up a $20 billion compensation fund administered by lawyer Kenneth Feinberg to handle claims. In addition, numerous lawsuits have been filed against the company.

Alabama’s losses stem from diminished sales, lodging and fuel tax revenues as tourists avoided the state’s coast this summer because of the spill.

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Stuart H. Smith is an attorney based in New Orleans fighting major oil companies and other polluters.
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