The Next 50 Years: Funding features for the Louisiana Coastal Master Plan

By Cynthia Duet, Director of Governmental Relations, National Audubon Society

Louisiana’s recently passed 2012 Coastal Master Plan contains an ambitious mix of risk-reduction and restoration projects spread across the entire Louisiana coastal area. Such ambition does, however, come with a price — costing an estimated $50 billion over 50 years, and so the plan is also frank in its account of the uncertainties and complexities of funding and creating a sustainable coastal Louisiana ecosystem. To reverse generations of massive and ongoing land loss, encroaching sea level rise and a decade of natural and manmade disasters, the funding challenge must be met head on.

The state acknowledges the need to quickly begin the large-scale work laid out in the plan. At the same time, project implementation depends on funding from a myriad of sources. These projects will also be implemented by various actors — some projects by Louisiana’s Coastal Protection and Restoration Authority (CPRA), others by local or federal partners. Progress will be tracked through the Coastal Protection and Restoration Authority Annual Plan, which will identify specific projects, schedules and funding streams.

So now that the plan is passed, does the funding exist to implement the plan?

In recent years, and in brighter economic times, the Louisiana Legislature authorized a generous allocation of state surplus dollars — a total of $790 million between 2007 and 2009 — to accelerate implementation of priority projects for the coast. Additionally, the Coastal Impact Assistance Program (CIAP), established by the Energy Policy Act of 2005, provided nearly $500 million to the state of Louisiana and its coastal parishes, the bulk of which was obligated and spent on critical protection and restoration projects in fiscal years 2007-2010. These dollars, accompanied by the long-standing Coastal Wetlands Planning, Protection, and Restoration Act (CWPPRA) dollars (approximately $80 million per year to which the state matches 15%), the Louisiana Coastal Area Program (LCA) dollars and related federal funds through the Water Resources Development Act  of 2007 (WRDA), are the foundation upon which the coastal program has been funded to date.

On the horizon are revenues from the sale of mineral leases and royalty revenue from oil and gas exploration in the Gulf of Mexico that have been dedicated to the Coastal Protection and Restoration Trust fund through the Gulf of Mexico Energy Securities Act of 2006 (GOMESA). Though funding from this program has trickled through in modest increments since 2007, larger revenue streams from these royalties will be available in 2017 when “Phase II” of that program begins. Estimates of funding for Louisiana from this source have ranged up to $500 million annually on the high end, but the true figures are nearly impossible to pin down because they are tied to new leasing and drilling activities in the gulf.

As the state continues to ramp up its coastal efforts, bringing more and larger projects to construction, more money is required in the short term to fill the gap between now and 2017, when the GOMESA funding is realized. Some significant recent commitments to funding have come in the form of post-Deepwater Horizon oil spill commitments:

• BP announced an historic Early Restoration Framework Agreement on April 21, 2011, committing an unprecedented $1 billion for early restoration projects as a jump-start for the Natural Resources Damage Assessment (NRDA) process. Rather than waiting for up to a decade or more, the gulf states negotiated this down payment from BP to begin recovery and restoration of natural resources. The agreement allocated $100 million for projects in Louisiana, and a shared portion of $300 million to be allocated to states based on impacts.

• On July 6, 2012, the President signed into law the transportation funding bill which contains the RESTORE Act, a landmark piece of legislation that dedicates 80 percent of all Clean Water Act penalties and fines from the Deepwater Horizon oil spill to projects in the gulf states for environmental and economic recovery. The settlement has yet to be reached that will ultimately determine the exact value of those dollars to be directed to impacted gulf states, but the range is somewhere between $5 and $21 billion.

For planning purposes, the Coastal Master Plan was crafted using reasonable budget projections and a conservative view of what is likely to be received by the state in the coming decades — a range of between $20 and $50 billion (in present value dollars) over the next 50 years. This range was further defined and annualized, and an estimated $400 million to $1 billion per year was the result.

The Coastal Master Plan emphasizes that funds are not guaranteed and that funding levels are based on the state’s best “educated guess.” Funds will not arrive at once but will be spaced over the next 50 years; and much of the expected funding is tied to CWPPRA (about $80 million per year, requiring a reauthorization in 2019), GOMESA (about $110 million per year after 2017), LCA (about $150 milllion per year), the RESTORE Act and NRDA.

In summary, insufficient funding has been the Achilles’ heel of coastal work for decades. Though this will remain the case for years to come, as the implementation of the large and ambitious 2012 Coastal Master Plan begins to unfold, the necessary elements are finally beginning to come together for a hopeful future. Through continued efforts by the State of Louisiana, its delegation leaders, the U.S. Congress and a bit of urging by our own NGO partners, we can all work together to make the Coastal Master Plan’s vision a reality.