Deepwater Horizon Settlement Information
April marked the fifth anniversary of the devastating Deepwater Horizon explosion that claimed eleven lives and caused extensive environmental and economic damages across the Gulf coast. This month, there was a huge step “to make it right.”
On July 2, agreements in principle were reached between BP Exploration and Production (BPXP) and the US Government and five Gulf coast states to settle all federal and state claims arising from the 2010 Deepwater Horizon event for a total of $18.782 BILLION.
Louisiana should stand to recover over $10 billion in fines, penalties, and damages – the largest environmental settlement in US history. This settlement, eliminates years, perhaps even decades, of litigation and appeals, allowing Louisiana to begin diligently implementing the State Master Plan and mitigating for natural resource damages.
Breaking the numbers down, Louisiana should receive $787 million through the Clean Water Act fines through the RESTORE Act. Coastal parishes will also divide $92 million as part of the RESTORE formula. This direct funding allocation to the parishes is separate from the millions in economic damages the parishes and other governmental entities reached agreements on.
The State and Parishes will also greatly benefit from the $5 billion, or 60% of the total funds allocated, in natural resource damages that will go directly to Louisiana. These projects will occur in the form of coastal or wildlife restoration projects intended to mitigate for the damages to the thousands of fish, birds, turtles, and other natural resources injured as a result of the spill. Through an early allocation of these funds, Louisiana has already been apportioned $300 million from this source alone. The State will also receive interest, as well as reimbursement for the considerable funds already expended for impact studies and clean-up.
Spread over the range of 15-18 years, the July 2 agreement also allows the State to leverage $1.2 billion in criminal fines from Deepwater Horizon, directed to barrier islands and diversions, as well as the State’s share of impending offshore royalty revenues known as GOMESA or the Landrieu bill which allocated the funds, Gulf of Mexico Energy Security Act.
Louisiana has committed nearly all of the RESTORE and natural resource related funding to coastal restoration and mitigation of damages, even going so far as to dedicate many of these funding streams by law or constitutional amendment. Kudos to those who had the foresight to dedicate this money in advance, as well as a heartfelt thank you to those who negotiated this deal for Louisiana.
While there are many more i’s to dot and t’s to cross on the agreement, we have been provided a great opportunity; however, many challenges and tough decisions remain. Now more than ever, through transparency and public participation throughout the process, Louisiana and our coastal parishes must show ourselves and the nation we have always been prepared to “make it right.” Now, let’s get to work!
Click the below for a downloadable PDF with the numbers and more details about the settlement. Also if you have any questions leave them in the comment section below!
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