Beyond the Oil Spill, the Tragedy of an Ailing Gulf

Even in the worst days of the BP spill, coastal advocates were looking past the immediate emergency to what the president’s oil spill commission called “the central question from the recovery of the spill — can or should such a major pollution event steer political energy, human resources and funding into solutions for a continuing systemic tragedy?”

That tragedy is the ill and declining health of the Gulf of Mexico, including the enormous dead zone off the mouth of the Mississippi and the alarmingly rapid disappearance of Louisiana’s coastal wetlands, roughly 2,000 square miles smaller than they were 80 years ago. Few here would take issue with the commission’s question, but the answer to it is far from resolved.

Eclipsed by the spill’s uncertain environmental impact is the other fallout: the vast sums in penalties and fines BP will have to pay to the federal government. In addition to criminal fines and restitution, BP is facing civil liabilities that fall roughly into two categories: Clean Water Act penalties and claims from the Natural Resource Damage Assessment process, whereby state and federal agencies tally the damage caused by the spill and put a price tag on it. This could add up to billions, perhaps tens of billions, of dollars.

On Thursday morning, the Justice Department announced that an agreement had been announced between BP and the trustees who are part of the natural resources damage assessment for BP to provide a $1 billion down payment for early restoration projects, the largest of its kind ever reached. This would be taken out of any final settlement, but would allow any agreed upon projects to get under way.

BP is not the only company involved with the Deepwater Horizon accident that could be on the hook for these damages. In a sign of the bitter legal fight brewing among defendants, BP on Wednesday sued the maker of the blowout preventer, a valve on the oil rig that failed, and the owner of the oil rig, arguing that their negligence led to the spill.

But for people along the gulf, the issue of who pays the damages is less important than will they get paid.

Officials and coastal advocates all along the coast agree that the money could be an enormous boon for the gulf, as it would be impossible to obtain money like that through the normal political channels. But that is the only agreement.

Negotiations are under way among the area’s Congressional delegation on a bill that would follow the presidential commission’s recommendation in allocating four-fifths of BP’s Clean Water Act penalties — which could range from $5.4 billion to $21 billion — on the Gulf Coast. Without separate legislation, the money would go into the Oil Spill Liability Trust Fund to help pay to clean up future spills; once that fund reaches $2.7 billion, the rest would go into the Treasury.

But while such bills have been proposed in the House and Senate, gulfwide support of any one bill remains elusive. Disagreement remains among gulf state legislators over basics like how the money would be split and what it could be spent on. Among the concerns are how much leeway states would have to fund projects not related to ecosystem restoration — Alabama officials, for example, have broadcast a desire to build a convention center — and whether the money would be shared equally among the states or allocated based on the spill’s environmental impact, in which case Louisiana would get a much larger piece.

A deal among the gulf state delegation, of course, does not ensure the bill’s passage through Congress, particularly given the pall of austerity that has descended on Washington. Donald Boesch, a marine science professor at the University of Maryland who was on the presidential oil spill commission, said the political concessions necessary to a gulfwide agreement, like the flexibility to spend the money on economic projects, could deter lawmakers from other states, who would be hesitant to allow money to go to projects that are not directly tied to spill recovery.

Some lawmakers, Professor Boesch said, have also been given pause by the relentless criticism from Louisiana’s political leaders of the Obama administration’s post-spill regulations. Arguing that the new rules have jeopardized the state’s drilling-dependent economy, Louisiana lawmakers have recently championed bills in the House of Representatives that would speed up and possibly bypass federal reviews of offshore drilling leases.

“To many it seems what they’re asking for is to get back to the way they were operating before, without recognizing that things have changed,” Professor Boesch said in an interview. “You’re not willing to take steps to protect the environment, so why are you to be believed that you can take steps to restore the environment?”

If the political route fails, there is Plan B: the federal authorities could direct some money toward restoration as part of an eventual settlement.

“If no new legislation is passed,” David M. Uhlmann, an expert in environmental law at the University of Michigan, wrote in an e-mail message, “the Justice Department is likely to negotiate for a large natural resource damage claim, perhaps even at the expense of civil penalties, and may try to obtain additional funds for restoration efforts as part of any criminal plea agreement or civil consent decree.”

This could please environmentalists, as natural resource damage claims are required by law to be spent on restoration, and it could also make BP happier, as the payment of such claims have tax advantages and simply sound better than penalties.

Thursday's announcement that BP would be paying a large sum for early restoration could be a sign of this strategy.

But, Professor Uhlmann added, “far more would go to restoration if Congress takes action.”

Like all else in this spill, the natural resources damage assessment, while scientifically driven, is not untouched by politics. A plan of action requires some agreement among the various players, which has thus far been in short supply.

And if the money is worked out, said Oliver Houck, a professor at Tulane Law School who specializes in environmental law, there is still no consensus among scientists and officials on how best to fix the gulf’s most pressing problems.

“Even if all the other dominoes fall right, and none of them are falling right, you’re left with what to do with that big money,” he said. Speaking of Louisiana’s wetlands loss, he pointed out that the damage was more extensive and the solutions more limited than many acknowledge.

“We may be better off using this money to assist people to relocate people and move out,” Professor Houck said, “and let natural healing take place.”