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BP to pay US$1 bln for early gulf coast restoration

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BP has agreed to provide $1 billion toward early restoration projects in the Gulf of Mexico to address injuries to natural resources caused by latest year's oil spill, the largest in U.S. history.

Oiled pelican on Queen Bess Island off Grand Isle, Louisiana, July 19, 2010. [USFWS]

The unprecedented agreement announced today by Natural Resource Trustees for the Deepwater Horizon oil spill and the company, will speed financial resources to five Gulf coastal states before completion of the damage assessment process.

BP is providing the early restoration funds voluntarily, and is not required by the Oil Pollution Act to do so at this stage of the damage assessment process.

The Trustees involved are: Alabama, Florida, Louisiana, Mississippi, Texas, the Department of the Interior, and the National Oceanic and Atmospheric Administration. The Department of Justice assisted the parties in reaching the agreement.

"One year after the largest oil spill in our history, we take a major step forward in the recovery of the Gulf of Mexico, for the environment and the people who depend on it for their livelihood and enjoyment," said NOAA Administrator Jane Lubchenco. "Today's agreement is a down payment on our promise to protect and restore the Gulf."

On April 20, 2010, aboard the Deepwater Horizon oil rig the company had leased from Transocean, BP had finished drilling, but not capping, a test well in the Gulf of Mexico 40 miles southeast of Louisiana when the well blew out. The rig burned until it sank on April 22, leaving a broken wellhead a mile below the surface from which gushed 4.9 million barrels of crude oil over the next three months.

This early restoration agreement, the largest of its kind ever reached, represents a first step toward fulfilling BP's obligation to fund the complete restoration of injured public resources, including the loss of use of those resources by the people living, working and visiting the area.

"BP believes early restoration will result in identified improvements to wildlife, habitat and related recreational uses in the Gulf, and our voluntary commitment to that process is the best way to get restoration projects moving as soon as possible," said Lamar McKay, chairman and president, BP America Inc.

"Our voluntary agreement to accelerate restoration projects builds upon the cooperative approach BP has taken toward working with Gulf communities and regulators since the accident, and in assessing the potential injury to natural resources," said McKay. "We hope to work in partnership with the Trustee Council to address injured resources in the Gulf as soon as possible."

Dark oil along the shoreline is visible from the air over the South Pass area of Louisiana, March 20, 2011.[Greenpeace]

The Trustees will use the money to fund projects such as the rebuilding of coastal marshes, replenishment of damaged beaches, conservation of sensitive areas for ocean habitat for injured wildlife, and restoration of barrier islands and wetlands that provide natural protection from storms.

The agreement in no way affects the ultimate liability of BP or any other entity for natural resource damages or other liabilities, but provides an opportunity to help restoration get started sooner.

"This milestone agreement will allow us to jump-start restoration projects that will bring Gulf Coast marshes, wetlands, and wildlife habitat back to health after the damage they suffered as a result of the Deepwater Horizon spill," said Secretary of the Interior Ken Salazar.

"This agreement accelerates our work on Gulf Coast restoration and in no way limits the ability of all the Natural Resource Trustees from seeking full damages from those who are responsible as the natural resource damage assessment process moves forward."

The selection of early restoration projects will follow a public process overseen by the Trustees.

Each state will select and implement $100 million in projects. The Federal Resource Trustees, NOAA and DOI, each will select and implement $100 million in projects.

The remaining $300 million will be used for projects selected by NOAA and DOI from proposals submitted by the State Trustees.

"This agreement is a great first step toward restoring our natural resources destroyed by the BP oil spill," said Louisiana Governor Bobby Jindal, whose state was hardest hit by the spill. "We are eager to continue working with public, state and federal co-trustees and BP to quickly convert this downpayment into projects to restore our damaged coast and replace our lost wildlife. We encourage BP to continue to address the damages from this spill through early restoration efforts."

"Alabama's natural resources are environmentally diverse and an economic engine for our state and nation. Ecosystem restoration is vital to the economic vitality of the Alabama Gulf Coast," said Alabama Governor Robert Bentley. "Obtaining funding for these restoration projects is a major step forward in addressing the oil spill's damage to our precious natural resources. I have the utmost confidence that the Alabama trustees will consider and identify projects and use these funds toward restoring our natural resources."

The full natural resource damage assessment process will continue until the Trustees have determined the full extent of damages caused by the Deepwater Horizon oil spill. At the end of the damage assessment process, the Trustees will take into account any benefits that were realized from these early restoration projects.

In addition to funding early restoration projects, BP will continue to fund the damage assessment and, together with the other responsible parties, will ultimately be obligated to compensate the public for the entire injury.

"Since the day of the oil spill, our goals have been to make Mississippi whole and to assure that our coastal areas completely recover," said Trudy Fisher, Mississippi Trustee and executive director, Mississippi Department of Environmental Quality. Our goals have not changed. We will remain actively engaged in these and other projects until the Gulf is restored and our state is made whole."

Florida Department of Environmental Protection Secretary Herschel Vinyard said, "Because we have worked diligently to assess the environmental damage resulting from the spill, we are well positioned to be able to quickly begin performing important restoration projects and use Florida's share of the early restoration funds to assist our coastal communities with their continued recovery from the spill."

"While the Texas coast was not as visibly impacted by this spill, our wetlands, bays, beaches and coastal waters were affected, and it makes sense to invest in places that can help jumpstart and maximize recovery of the entire Gulf," said Carter Smith, executive director of the Texas Parks and Wildlife Department.

"There will be a public process in Texas and throughout the Gulf," he said, "to consider and identify projects that make the best use of these funds for our coastal habitats and the fish, wildlife and people who depend upon them."