Right now, a federal court in Louisiana is wrapping up the penalty phase of the trial against BP to determine the oil company’s negligence under the federal Clean Water Act for the 2010 Deepwater Horizon oil spill. The case is particularly noteworthy because, under the terms of the 2012 RESTORE Act, proceeds of the civil penalties assessed in the trial are to be divided up between the five Gulf Coast states.
Yet based on a recent ruling in the case, states may end up seeing a lot less money than they originally anticipated:
Two years ago, the Gulf states thought BP might pay as much as $21 billion in CWA penalties, based on a maximum $4,300 per barrel spewed in 2010. But on January 15, before this trial’s phase three began, Barbier ruled that 3.19 million barrels of oil were discharged into the Gulf, versus the feds’ 4.2 million estimate. That count makes BP’s highest possible CWA penalty $13.7 billion. An expected smaller fine affects Louisiana’s ability to fund its $50 billion, 50-year 2012 coastal master plan.
Whether or not this ruling ultimately stands, it’s a good reminder for states not to get ahead of themselves when it comes to allocating RESTORE Act funds. But that doesn’t mean states shouldn’t be prepared for when a final judgment is reached and the money starts to flow. If anything, the smaller pool of funds means states should be even more vigilant to ensure the money isn’t wasted on inappropriate or frivolous projects.
In Texas, the House Committee on Natural Resources has been studying this matter, and recently released a report highlighting the issues involved. The report, which quotes extensively from R Street’s research, focuses on the need for greater transparency in deciding who gets RESTORE Act funds.