Coast still waiting for oil spill recovery money

WASHINGTON – Five years after the massive BP Deepwater Horizon oil spill, Gulf Coast communities are still waiting for the billions promised to help them recover from the nation's worst environmental disaster.

Local officials and environmentalists from the five affected states — Alabama, Florida, Louisiana, Mississippi and Texas — have taken steps to identify which projects would be financed with fine money paid by BP.

But those funds are on hold until a federal court in New Orleans decides exactly what the company should pay.

"It's disappointing that this money has not flowed yet," said Brian Moore, legislative director for the National Audubon Society. "It's absolutely irresponsible for this company to reap massive, massive profits, have the largest environmental disaster in the United States history and not say, 'it's our fault. We're going to fix it.' "

When the money does come, it will be largely thanks to a law Congress passed nearly three years ago: the RESTORE (Resources and Ecosystems Sustainability, Tourism Opportunities and Revived Economies) Act.

"It's just (been) a waiting game" for communities, said Republican Rep. Steven Palazzo of Mississippi, a co-sponsor of the bill, whose 4th district includes coastal communities. "I don't think they can wait much longer."

The bipartisan law, approved after months of behind-the-scenes negotiations, requires that states and communities most affected by the oil spill get 80 percent of the civil fine money levied under the Clean Water Act. BP could face fines as high as $13.7 billion.

Gulf Coast lawmakers, local officials and environmentalists cited devastating damage to marine life, the fishing industry and regional tourism in arguing for passage of the RESTORE Act.

The oil spill began after the BP-owned Deepwater Horizon rig operated by Transocean exploded and sank on April 20, 2010, killing 11 people. Nearly 5 million barrels of oil flowed into the Gulf over a period of 87 days until the underwater well was capped.

Images of tarballs washing up on white-sand beaches in Alabama and Florida torpedoed tourism, even in areas that never saw oil. In Louisiana and Mississippi, the spill devastated the seafood industry.

Some communities are still recovering.

"They lost a whole tourist season," said Florida Democratic Sen. Bill Nelson, a chief co-sponsor of the RESTORE Act. "The tourists didn't come because they thought there was oil on the beach."

Under RESTORE, 80 percent of the fine money will flow into the Gulf Coast Restoration Trust Fund. The remaining 20 percent will go directly to the Oil Spill Liability Trust Fund, which has no geographic restrictions.

Such fine money usually goes to the U.S. Treasury, where it can be used for general purposes.

The trust fund will divide the money into five pots. Ninety-five percent of the money will be divided among three of those pots, with 35 percent going in equal shares to the five states for ecological and economic restoration, 30 percent going to the five states proportionately (based on how badly they were affected by the spill) and 30 percent going to the Gulf Coast Ecosystem Restoration Council. The council is made up of representatives of the five states and six federal agencies with jurisdiction.

The process has been slow. The Treasury Department didn't issue rules until August 2014 on how the money would be distributed. Some specific allocation amounts for states and communities came out only last month.

"We expressed concerns during the bill's development that it was going to create a bureaucracy that was going to inject politics and slow down the investments of dollars," said Rep. Garret Graves, R-Louisiana, former director of Louisiana's Coastal Protection and Restoration Authority. "To some degree, I think you're seeing it manifest."

About $1 billion already has been collected from a settlement with Transocean. Under RESTORE, about $804 million can now be distributed to states and affected communities.

Palazzo said he's disappointed in the delay "but something this big doesn't materialize overnight."

Palazzo said he expected it would take a while to vet projects and identify where resources should go. It was also important for local communities to provide input.

"We don't need bureaucrats in D.C. telling Mississippians how to spend their money," he said.

The Gulf Coast Ecosystem Restoration Council, which has been processing proposals from states and federal agencies, said Wednesday that it expects to choose projects to fund later this year.

It's also taken time for states to develop their own ground rules. The 23-county consortium in Florida that will determine how to spend the state's share is still putting together its proposal on how to set such rules.

"There will inevitably be delays because this is a detailed process that's involving every layer of government," said Cragin Mosteller with the Florida Association of Counties. "And so it's going to take a long time to slowly develop a system that ensures that these dollars are invested judiciously and transparently."

Congress has held numerous hearings on RESTORE and related issues since the spill. Lawmakers said they expect money to flow soon.

"We're probably at a period of a quantum leap in terms of funds actually coming down," said Republican Sen. Roger Wicker of Mississippi. "The states had to be involved, the regulations had to be done. And also the amount of the penalties had to be assessed. That's a judicial process that can't be forced by our branch of government."

Contact Deborah Barfield Berry at dberry@gannett.com. Follow @dberrygannett on Twitter. Contact Ledyard King at lsrking@gannett.com. Follow @ledgeking on Twitter.

DIVIDING UP THE POT

•35 percent will go to five Gulf Coast states, in equal shares, to aid ecological and economic restoration.

•30 percent will go to the Gulf Coast Ecosystem Restoration Council for environmental uses. The council is comprised of five governors (or designees) and six federal agencies.

•30 percent will go to five states proportionately based on spill impact (shoreline that was damaged by oil, distance from the Deepwater Horizon rig, etc.).

•2.5 percent will go to the Gulf Ecosystem Restoration Science Program to support efforts by the National Oceanic and Atmospheric Administration to restore habitats for fish and other species.

•2.5 percent will go to Research Centers of Excellence in each of the five Gulf states to conduct studies in five disciplines, including coastal sustainability, fisheries and wildlife ecosystems, and safe offshore energy development.