Louisiana Slated to Receive Largest Portion of BP Oil Spill Fines After Compromise

Posted in Alabama Maritime News,BP British Petroleum,Environment,Florida Maritime News,Government,Gulf Coast,Maritime Accidents,Texas Maritime News on July 25, 2011

WASHINGTON — Louisiana appears to be the frontrunner in a senate compromise proposal of the plan to distribute Clean Water Act fine money and is likely to get the biggest chunk of remaining money, which is largely reserved for environmental restoration.

Mary Landrieu, D-Senator from Louisiana, announces compromise on oil spill fine legislation.

Negotiations, which have stalled over the past several months on how to distribute billions of dollars in expected oil spill fine revenue largely over a fight among the states in order to get as much money as possible, appears to have reached a conclusion.

AI.com reports:

It’s too soon to say for sure, but Louisiana has a significant lead and doesn’t look likely to lose it.

Alabama sits in second place, just slightly ahead of Florida and Mississippi, with Texas bringing up the rear, according to information from the offices of Sens. Richard Shelby, R-Tuscaloosa, and Roger Wicker, R-Tupelo.

The plan to distribute Clean Water Act fine money, which Congress has yet to pass into law, only specifies how two-thirds of the fine revenue destined for the Gulf Coast would be divided among the states.

But Louisiana, already the frontrunner, also appears likely to get the biggest chunk of remaining money, which is largely reserved for environmental restoration, an aide to Shelby acknowledged.

Still, the aide, who asked not to be named to discuss the matter, called Thursday’s compromise “a great deal for Alabama.”

“We’re thrilled,” the aide said. “This bill came out much better than I thought we’d ever have when we started this.”

BP PLC and other parties responsible for the massive Gulf gusher could be on the hook for between $5.4 billion and $21.1 billion in Clean Water Act penalties. But current federal law would send that money to a trust fund for the cleanup of future oil spills and to the U.S. treasury — not to the areas impacted by the spill.

Lawmakers worked behind closed doors for much of the past year trying to come to an agreement on redirecting oil spill fines to the Gulf Coast.

An accord was finally announced Thursday, with the support of nine of the 10 Gulf Coast senators. The bill directs 80 percent of the fine money to the Gulf Coast.

The Gulf Coast portion of the fines would be distributed as follows:

Divided equally among the five states: 35 percent. The money could be spent for either environmental or economic recovery projects.

Divided among the states based on severity of oil impact: 30 percent. This money could also be spent for either environmental or economic recovery projects.

Reserved for environmental recovery: 30 percent. A committee composed of federal and state officials would decide what projects the money would fund, without strict limitations on how much each state benefits.

Reserved for Gulf science and fisheries programs: 5 percent. The National Oceanic and Atmospheric Administration would be responsible for disbursing the money. Each state would get some funds, but the federal organization would have leeway in determining how much goes where.

The second category of funds, disbursed to states based on the impact of the spill, is calculated using a complex, weighted formula. This takes into account the number of miles of oiled shoreline, the proximity to the blown oil well and the average coastal population.

Shelby’s office calculated this formula using information from the National Oceanic and Atmospheric Administration, the 2010 U.S. Census and geographic coordinates.

They indicated that Louisiana would receive the largest share of the 30 percent total: 10.7 percent. Alabama would get 5.9 percent, Florida and Mississippi 5.8 percent and Texas 1.8 percent.

Source: AI.com: Read Full Story

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