Today, the federal government and the five Gulf Coast states have reached an $18.7 billion settlement agreement with BP plc for the 2010 Deepwater Horizon oil spill that released almost 5 million barrels of oil into the Gulf of Mexico.
As states and the federal government look to fund projects with resources from the settlements, the federal Resources and Ecosystems Sustainability, Tourist Opportunities and Revived Economies of the Gulf Coast States Act (RESTORE Act) or the Natural Resource Damage Assessment (NRDA) process, we urge decision-makers to consider the following questions for each project:
- Does the project provide public benefit? RESTORE Act funds should be used to provide public goods: products and services like infrastructure that are used by most or all people and for which use by one person doesn’t preclude use by others.
- Is there a direct connection to areas impacted by the spill? The RESTORE Act was passed to direct funds for economic and environmental projects in areas affected by the Deepwater Horizon oil spill.
- Does the project confer economic benefit by reducing the impact of future natural or man-made environmental disasters? RESTORE Act funds provide a tremendous opportunity for projects that prepare coastal regions for costly events such as hurricanes and floods, which carry significant economic consequences.
- Does the project reduce future environmental harm or ameliorate current damage? Projects should mitigate future environmental harm by restoring wetlands and barrier islands or ameliorating current environmental harms.
- Does the project require future funding once RESTORE Act funds are exhausted? The RESTORE Act should not create ongoing financial burdens for state and local governments or develop projects with uncertain future costs.
- Does the project offer a positive benefit-cost ratio, based on sound accounting and economic projections? The measure here should be the value created for citizens and taxpayers, not the number of jobs created.
- Are there measurable impacts and accountability metrics for the project? To preserve public faith in the RESTORE Act’s implementation process, decisions about project funding, and all expenditures made utilizing RESTORE Act money, should be completely transparent, measurable and accountable.
The fines and penalties related to the oil spill have the potential to provide both economic and environmental benefits. Healthy, clean coasts are critical to the economies of the Gulf Coast states. In Louisiana alone, the commercial saltwater fishing industry alone is worth $3.1 billion and supports 34,000 jobs. Tourism in Alabama, Mississippi and Louisiana results in more than $23 billion in annual spending and supports 382,000 jobs. If spent appropriately, these resources have the potential to benefit the coastal environment not merely for its own sake, but also for the benefit of hunters, fishers and commerce.