Money for restoring Louisiana environment, economy should come from BP fines in oil spill, report says


Congress should use a large chunk of what could be billions of dollars in Clean Water Act fines charged to BP to pay for the restoration of the environment and economy of Louisiana and other Gulf Coast states affected by the Gulf oil spill, Navy Secretary Ray Mabus said Monday.

The recommendations could provide a giant boost to Louisiana’s efforts to rebuild thousands of acres of coastal wetlands and barrier islands, help prop up the state’s fishing and oil and gas industries, and underwrite the treatment of long-term medical and mental health effects stemming from the spill.

BP and other parties found responsible for the spill might be required to pay between $5 billion and $19 billion in civil penalties, based on whether the companies are found to be negligent in connection with the spill.

Mabus did not say what percentage of the fines Congress should contribute to the new restoration fund.

Congress also should equally divide a smaller share of the fines directly among the five Gulf states to help them jump-start restoration efforts, Mabus said.

He also asks Congress to create a new Gulf Coast Recovery Council to oversee the long-term restoration efforts, as part of the report ordered by President Barack Obama to direct how to move from response to recovery in the aftermath of the 4.9 million barrels of oil spilled into the Gulf. The report will be released Tuesday during an 11:30 a.m. news conference at the Port of New Orleans.

“The long-term effects of the oil spill may reverberate in the region for years to come and may continue to impact the lives of all Americans long into the future,” said an executive summary of the report released Monday.

America needs a healthy Gulf

“The Gulf is a national treasure. The Gulf is a pillar of our economy, and central to our national ecosystem. America needs the Gulf. America needs the Gulf to be clean. America needs the Gulf to be healthy,” Mabus said.

“The notion is that these penalties under the law today would simply go into the Oil Spill Liability Trust fund and sit there, waiting for the next spill,” he said. “A significant amount of these monies should go back to the Gulf, since the Gulf was the place where the spill happened, the Gulf took the risk, and the Gulf took the damage.”

Mabus said it’s clear that while significant, the fine money will not be enough to pay all the costs of restoration stemming from both the spill and other long-term environmental problems, like coastal erosion in Louisiana. He also offered no guarantees on what share of the money Louisiana would receive.

“The need is greater than whatever monies are going to be available, but you could have some substantial money to make a huge start on some things that the Gulf has needed to do for a long, long time,” he said.

The fund could strategically partner with projects financed under a separate Natural Resource Damage Assessment process under the federal Oil Spill Act, Mabus said. For instance, the damage assessment may require restoration of part of a barrier island oiled during the spill, while the new fund could pay for restoration of the rest of the island.

U.S. Sen. David Vitter, R-La., praised the administration plan for using the fine money on restoration, but said Congress should deliver 80 percent of the money to restoration efforts, and that Louisiana should be guaranteed the largest share of the money because it suffered the most economic and environmental damage.

“What I’ll be pushing for with the rest of Louisiana’s congressional delegation is that the funds be used and allocated based on sound, objective criteria about environmental and economic impacts, all of which would give Louisiana the lion’s share,” he said.

Response-to-recovery task force

Obama also will issue an executive order creating an interim Gulf Coast Ecosystem Restoration Task Force, to be chaired by EPA Administrator and New Orleans native Lisa Jackson, that will oversee “a seamless transition from response to recovery,” Mabus said.

“This is yet another manifestation of the president’s strong commitment to this region,” Jackson said. “With the recognition that the response phase is winding down, there’s a need to make good on his promise that restoration of this region will continue to be a priority for this administration,” Jackson said.

The task force would expire if and when Congress creates the recovery council, Jackson said. It will include representatives from federal and state government agencies and from tribal organizations, and coordinate restoration efforts when the oil spill response headed by National Incident Commander Thad Allen expires.

Remaining spill response efforts would be handled by Federal On-Scene Coordinator Coast Guard Adm. Paul Zukunft.

Several of the task force’s members also will be serving on committees overseeing the separate Natural Resource Damage Assessment process, and will be coordinated with the new task force.

The task force would develop policy and budget recommendations for recovery efforts and help avoid overlaps and duplications of efforts.

It would be advised by science and stakeholder committees.

The damage assessment will determine the value of natural resources lost or harmed by the spill and identify projects that would mitigate those damages, which also would be paid for by BP and other responsible parties.

Details were not available Monday on how the money would be divided among the states or how individual projects would be approved. Federal officials were not forthcoming on Monday on whether Congress would be asked to provide other sources of money for the coastal restoration fund when the oil spill fine money runs out.

Cutting through red tape

Mabus said the Interior Department also will cut through red tape that has blocked the transfer of as much as $600 million promised for restoration projects in Louisiana and other Gulf Coast states under the federal Coastal Impact Assistance Program, financed with revenue from Outer Continental Shelf oil and gas payments to the federal government.

But the report does not support a Louisiana recommendation that Congress speed up the sharing of revenue from new Outer Continental Shelf leases under the Gulf of Mexico Energy Security Act, which now is scheduled to provide about $200 million a year to the state beginning in 2017.

In addition to environmental restoration projects, the work to be underwritten by the new fund also would include support for public health efforts, possibly including long-term testing for the effects of exposure to oil and oil dispersants by workers and residents.

It also is likely to include support for economic recovery projects, including tracking seafood safety, support for seafood businesses and for marketing efforts aimed at renewing the “branding” of the Gulf’s seafood as safe to eat.

Mabus said he also is attempting to entice the private sector, including other large oil companies that operate on the Gulf Coast, to create a non-profit organization to underwrite projects that will not be covered by the Recovery Council or task force.

“I’ve gotten some enthusiastic responses, some strong interest, and some more neutral responses,” he said. “The important thing would be for the individual private companies that have a big interest in the Gulf, either headquartered on the Gulf or do big amounts of business on the Gulf, for them to have a role in the long-term restoration of the Gulf.”

He compared the private sector proposal to the creation of the Foundation for the Mid South in 1990, which stemmed from a 1988 meeting between Mabus, Bill Clinton and Buddy Roemer, when they were the governors of Mississippi, Arkansas and Louisiana, respectively.

That foundation provides grants for education, health, economic development and other community needs in the three states.

The Mabus report represents the results of dozens of meetings in Louisiana, Mississippi, Alabama, Florida and Texas with fishers, health officials, environment workers, nonprofit groups, scientists, business officials, local and tribal leaders, elected officials and coastal residents.

It also relies on the findings of an earlier federal agency working group created by Obama to review coastal restoration efforts in Louisiana and Mississippi.

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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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