For the first time in the long history of rebuilding Louisiana’s shrinking coast, the state is poised to receive a substantial stream of steady funding for those efforts — a direct result of one of the worst environmental disasters in the nation’s history.
A proposed settlement between the state and BP puts Louisiana in line to receive $5 billion in money to restore areas damaged by the oil spill in 2010 as well as $787 million from Clean Water Act penalties.
Details about the settlement over the Deepwater Horizon incident still need to be worked out, but a consent decree is expected in about two months, said Attorney General Buddy Caldwell.
But even with some details unclear, state officials and most environmentalists agreed that the money will be a boost for coastal restoration efforts.
“Today’s settlement is a game changer for Louisiana’s communities and its families,” Caldwell said, noting it is the result of five years of negotiation and work on the part of many state agencies.
Of the proposed $6.8 billion settlement for Louisiana, about $5 billion is designated to help restore damage to natural resources, $1 billion for economic harm and $787 million for Clean Water Act penalties. The money will be paid over the next 15 to 18 years, depending on which pot of money is involved.
The proposed settlement does not cover individual business claims or parish claims against BP.
One of those parishes, Plaquemines, issued a statement Thursday saying the negotiation process still continues and that parish officials couldn’t settle for the amount offered so far to compensate it for thousands of acres of oiled wetlands.
State coastal staff members are working on restoration and protection projects outlined in a 2012 master plan, an ambitious 50-year, $50 billion roadmap paid for through a host of federal and state funding sources.
Other pots of BP money already have been directed to coastal restoration work. Louisiana is slated to receive $1.3 billion over five years for barrier island and river diversion projects from a fund created from BP and Transocean plea agreements to resolve criminal cases. That money is being managed by the National Fish and Wildlife Foundation.
“Will these (settlement) dollars fully fund the master plan? No. But it’s a significant step in the right direction,” said Chip Kline, director of the Governor’s Office of Coastal Activities. “We don’t need all the dollars right now.”
Currently, limitations on planning and construction capacity mean the maximum the state could spend in a year on coastal work tops out at $1 billion.
“This is a marathon,” Kline said.
Just how much the state expects to get per year over the next 15 years remains to be worked out through the consent decree.
“We do believe this is enough money. We wouldn’t be here if we didn’t,” said Kyle Graham, executive director of the state Coastal Protection and Restoration Authority.
He said the money from this proposed settlement probably won’t start flowing for about two years, but money from the earlier BP settlements is helping get projects engineered so they’ll be ready to go when the money comes through.
The consistent funding will allow the state to pursue more complicated projects that have the potential to make large-scale impacts on coastal areas and to do longer-range planning. Some of the planning and engineering work for those projects, like diversions of sediment and water from the Mississippi River, is already moving forward.
The state plans to unveil just how the new Deepwater Horizon money will be spent during the Aug. 19 meeting of the Coastal Protection and Restoration Authority.
Most of the reaction from the coastal environmental community was supportive of guaranteed funding and the ability to move forward with restoration.
“For Louisiana, one of the problems with having this wonderful state master plan is not knowing how much you can spend each year,” said David Muth, director of the Gulf Restoration Program for the National Wildlife Federation in Louisiana. Even without knowing the full details of the settlement yet, the announcement Thursday means there will at least be guaranteed money coming in for the next 15 years.
“This gives us some real certainty,” Muth said.
Simone Maloz, executive director of Restore or Retreat, agreed.
“I’m glad we know what we’re dealing with,” she said.
A coalition of seven coastal environmental groups working in Louisiana also applauded the announcement, comparing the five years it took to work this deal out with the decades-long process after the Exxon Valdez spill in Alaska.
“We need our leaders to make sure that every dime of this settlement is used as it is intended: to address oil spill impacts and repair long-standing ecosystem damage,” the group’s statement said. “We’re especially encouraged that the settlement will put special emphasis on restoring health to the Mississippi River Delta and its coastal wetlands.”
But Oceana Vice President Jacqueline Savitz called the pact “a disappointment to those who believe that the company should pay the full cost of the damages it caused.”
The path to a settlement hadn’t been an easy road, but it has ended faster than many people expected.
“The background on this over the last five years are movie worthy,” said U.S. Rep. Garret Graves. Although he wouldn’t elaborate, his previous job as leader of the state’s coastal work meant he was closely involved in discussions over the amount of damage done to the coast.
During that time, frustration over the process was evident during state Coastal Protection and Restoration Authority meetings, although officials weren’t allowed to talk publicly about the negotiations.
“What’s important is that Louisiana stuck to their guns,” Graves said. “It’s because we had the science to establish the case. The reason this disaster was so huge for us is because our culture and economy is based upon the coast.”
The $5 billion of the proposed settlement money will go to Louisiana through the Natural Resource Damage Assessment process, the result of five years of work by federal and state trustees to assess and put a value on actual damage to natural resources from the oil spill.
In 2011, BP agreed to a $1 billion down payment for all the Gulf Coast states. Louisiana’s share of $368 million has been used for coastal projects including barrier island restoration work.
The next step in the NRDA process will be for a Damage Assessment and Restoration Plan to be finalized by early 2016, laying out how the restoration work will move forward.
The $787 million in Clean Water Act penalties will go through the five funding mechanisms of the RESTORE Act process. Through this federal act passed in 2012, 80 percent of the Clean Water Act fines would go back to the Gulf States.
In the breakdown, 30 percent is allocated by the Gulf Coast Ecosystem Restoration Council, 30 percent is divided among the states using an impact formula, 35 percent is divided equally, 2.5 percent goes to fisheries monitoring and 2.5 percent is to establish research centers in each state.
“Today is a day that presents an opportunity,” Kline said. “We must be responsible and make wise decisions on how this money is used.”
Follow Amy Wold on Twitter, @awold10.