Four months after an agreement in principle was announced, the details of a $20.8 billion settlement between BP and five Gulf Coast states were released for public comment for the first time this week.
At the same time, state officials released the details of Alabama’s own settlement with the oil giant, which will bring between $1 billion to $2 billion to the state through various funding streams over the next 25 years.
“After five years of litigation, I am pleased to announce that Alabama’s $1 billion settlement with BP for economic damages is now officially approved by all parties,” said Attorney General Luther Strange. “In addition, the United States has lodged a consent decree that will allow the public to comment on the global settlement of natural resource damages and federal penalties, which if approved, will bring another billion dollars to Alabama’s coastal counties.”
The state’s individual settlement weighs in at $1 billion, as had been previously reported from the initial announcement July 2. Under this settlement, $950 million will be paid straight into Alabama’s general fund in yearly increments of roughly $50 million starting in 2016 and continuing through 2033.
The remaining $50 million will be paid by BP directly into the Alabama Gulf State Park Project next year — an agreement announced by Gov. Robert Bentley last month that will redirect some of the state’s settlement to coastal areas directly affected by the oil spill.
However, under the proposed consent decree filed by the federal government, more than $295 million of Natural Resource Damages Assessment (NRDA) monies would be spent in Alabama’s coastal counties if given final approval by the court. Those funds are part of an $8.1 billion settlement under the Oil Pollution Act that includes $1 billion BP already committed to pay for early restoration.
The state will also have the ability to seek additional funding from nearly $1.6 billion being set aside for Gulf-wide, open ocean restoration projects. However, those open ocean projects, or a lack thereof, have been a point of concern for some environmental groups since the details were released today.
Bethany Kraft, director of Ocean Conservancy’s Gulf Restoration Program, expressed some of those concerns in an initial press release, but noted the organization’s overall reaction has been “positive.”
“We are concerned that a number of the early restoration projects to address lost recreational use are classified as open ocean projects,” Kraft wrote. “Given the extent of known impacts in the Gulf waters, it is imperative that every restoration dollar available is allocated to projects that actually restore impacted resources. Additionally, the proposed governance structure of the Trustee Council creates eight decision-making bodies instead of one Trustee Council. This approach also appears to decrease funding available for open ocean projects, given that all of the federal trustees’ administrative costs across the eight restoration planning areas will be coming from the open ocean allocation.”
Kraft was referring to the way the NRDA Trustee Council is comprised — of representatives of the five Gulf states and four federal agencies that each have a vote to determine the allocation of those resources.
An additional phase of NRDA projects in Alabama is waiting final approval from the trustees and the U.S. Treasury that are collectively valued at approximately $11 million.
As for the civil penalties, the final agreement has BP set to pay $5.5 billion, which will be distributed under the terms of the 2012 congressional RESTORE Act. Based on that legislative formula, Alabama will receive approximately $708 million of that settlement, which the locally-controlled Alabama Gulf Coast Recovery Council will ultimately distribute to numerous projects aimed at environmental restoration, economic recovery and tourism and seafood promotion.
“Although we believe that the natural resources of our state are priceless, we are pleased with the outcome of this settlement,” said N. Gunter Guy, Jr., commissioner of Alabama’s Department of Conservation and Natural Resources (ADCNR). “Rather than expending additional time and resources preparing for trial and various appeals which could take many years, we are able to avoid the uncertainties of litigation and begin using this money now to continue restoring our Gulf coast ecosystems and economies. We are proud to be a part of this historic, Gulf-wide settlement — the largest environmental settlement in both Alabama and the United States as a whole.
After considering these comments, the government will determine whether to seek court approval of the consent decree that was filed in a federal court in New Orleans this week.
Notice of both the consent decree and the Draft Programmatic Damage Assessment and Restoration Plan (PDARP) — which guides the allocation of NRDA funding — are published in the federal register. Both will be available for public comment through Dec. 4.
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