Louisiana spends billions of dollars in settlement and fine money associated with the 2010 Gulf oil spill

Louisiana spends billions in settlement, fine money associated with 2010 Gulf oil spill

(WVUE) - The largest coastal project in Louisiana history was completed weeks ago, ironically with an infusion of cash stemming from the state's worst environmental disaster.

Restoration of the $251 million Caminada Headland began several years ago. The state lacked the money to complete the project until it received an infusion of cash from fines and settlements associated with the 2010 blowout of BP's Macondo oil well 50 miles to the south.

Over a 15-year period, Louisiana will collect at least $8.2 billion from BP and partners for the blowout of the Deepwater Horizon rig. Of that, $7.2 billion is slated for environmental restoration with the remaining $1 billion for economic development.

"We have the opportunity to plan our future with a guaranteed income flow to do the work," said Steve Cochran, Campaign Director of the group Restore The Mississippi Delta and Associate Vice President of the Environmental Defense Fund.

The $7.2 billion figure includes money BP paid as a sort of down payment for "early restoration" projects.  They include:

  • $13,200,000 for the Lake Hermitage Marsh Creation Project, a 104-acre area of brackish marsh in Plaquemines Parish.
  • 680 acres of barrier island habitat, including beach and wetlands on Shell Island in Plaquemines Parish.
  • 500 acres of barrier island habitat on Chenier Ronquille.
  • 300 acres of barrier island habitat projected to be constructed on Breton Island.
  • 1,000 acres of wetland and habitat on Whiskey Island in Terrebonne Parish, where construction recently began. (Barrier Island projects total $318,000,000).
  • $13,200,000 for the placement of oyster cultch onto approximately 1,420 acres of public oyster seed grounds.

Counting some "early restoration" dollars BP put up as a sort of down payment on the anticipated fines, the state has already spent or dedicated roughly $1.1 billion, leaving a balance of $6.2 billion over the next 14 years.

"The bulk of it has to be spent on ecosystem restoration," said Megan Terrell, an attorney for the Governor's Office of Coastal Activities. Terrell said the aim is "putting us back at where we were pre-oil spill and restoring us for those injuries from the oil spill."

The next round of money is planned for a half-dozen projects, including repairing bird habitat on Queen Bess Island in Jefferson Parish and Rabbit Island, the westernmost brown pelican rookery in Louisiana.

Other projects will restore marsh in St. Bernard Parish, protect shoreline in the Jean Lafitte National Park and build ridges and marsh in Terrebonne Parish and Plaquemines Parish.

One pot of money requires approval of a state and federal task force, another the U.S. Fish and Wildlife Foundation.

As Louisiana made it case for spending the first round of money, state officials say they enjoyed one key advantage over the other states.

The already had at their disposal a five-year blueprint for coastal restoration, the Louisiana Coastal Master Plan.

"Louisiana was really ahead of the game compared to the other states and even some of the federal agencies," Terrell said. "That master plan really did serve us well."

By far the most ambitious - and most controversial - part of the master plan involves the state's effort to mimic the Mississippi River's land-building power.

Planners hope to use $2 billion of the BP dollars to build the first two sediment diversions, punching holes in the levee and channeling river water into bays and marsh on a scale that dwarfs existing fresh water diversions at Caernarvon and Davis Pond.

Coastal activists such as Foster Creppel see huge potential in reconnecting the river to delta it built centuries ago.

Creppel, the owner of the Woodland Plantation in Plaquemines Parish, points to siphons near his home that send river water over the levee, under Highway 23 and down a canal into the marsh.

"It filled in some canals that I used to be able to get to in a flat boat," Creppel said. "Now, that canal is completely filled in and there's grass growing in it."

The state has dedicated roughly $200 million to plan, engineer and design the first two diversions, Mid-Barataria on the west bank of Plaquemines Parish and Mid-Breton on the east bank.

Fishermen and others in the seafood industry are in full-scale panic at the notion of sending that much fresh water their way.

"Yeah the diversions might work if you didn't have bulkheads up all the way past St. Louis, Missouri," said Dean Blanchard, a Grand Isle seafood company owner. "In the old days, everything used to go in the river.  they called it the "Muddy Mississippi.  Now, people don't let their land erode in the river no more."

Critics argue the modern, polluted Mississippi carries a fraction of its historic sediment load, requiring too much time to build land.

"We're gonna all be dead," Blanchard said.  "Who's going to be there to tell them it didn't work?"

Some local officials in coastal parishes also voice concerns about how the diversions will be operated and their effects on local communities and the seafood industry.

"Ninety years ago, when the complete leveeing (sic) off of the river was done, there wasn't a lot of consulting of the local people," said Plaquemines Parish President Amos Cormier III.

State planners point out they are using the best science available to pick strategic spots for the diversions, maximizing the benefits of the sediment. They must navigate a complicated approval process that has nothing to do with the oil spill, involving everything from the effects on navigation to the fate of hundreds of bottle nose dolphins that live in Barataria Bay.

The U.S. Army Corps of Engineers will not promise a decision on a permit for several years.

In the meantime, work will continue on other restoration projects, including those in the next round of funding:

  • Bayou Terrebonne Marsh Creation Project, including 126 acres of earthen ridge and 1,370 acres of intertidal marsh habitat in western Terrebonne Parish at a total cost of $123 million.
  • Barataria Basin Marsh Creation Project, projected to create 1,548 acres of marsh at a total cost of $124,500,000.
  • Lake Borgne Marsh Creation Project, expected to create 1,548 acres of marsh at total cost of $127,000,000.
  • Queen Bess Island Restoration, one of the largest nesting sites for bird species, including brown pelicans. The project is designed to restore nesting habitat at a total cost of $17,500,000.
  • Rabbit Island Restoration, the westernmost nesting ground for brown pelicans in the state. The project is designed to restore the island’s elevation at a total cost of $27,000,000.
  • Shoreline Protection at Jean Lafitte National Historical Park and Preserve, implemented by the National Park Service to construct breakwaters along the shorelines of Lake Cataouatche, Lake Salvador and Bayou Bardeaux and raise elevation of existing land at total cost of $41,423,600.

While Gulf Coast states from Texas to Florida will share to varying degrees in the money, the largest individual pot of money stems from NRDA or Natural Resources Damage Assessment fines. Louisiana will derive $5 billion from that pot of money over the 15-year period.

Under the RESTORE Act that Congress passed in the wake of the spill, Gulf Coast states will also split 80% of a $6.6 billion pot of money for Clean Water Act Fines.

35% of the RESTORE funds will be split evenly among the four states. However, another 30% involves a competitive process in which the states will vie for dollars

Assuming the diversion projects meet the roughly $2 billion budget, that will leave a balance of $4.9 billion over the next 14 years.

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