What the BP criminal settlement means for Gulf Coast restoration
By Whit Remer, Policy Analyst, Environmental Defense Fund
Just in time for the holidays, the U.S. Department of Justice (DOJ) delivered welcomed and unexpected good news for Gulf Coast restoration efforts. On November 15, DOJ announced they had reached a settlement with BP on all criminal charges related to the 2010 Deepwater Horizon oil spill. But what was expected to be a simple press conference outlining the details of the criminal plea agreement turned out to be a huge $2.4 billion win for Gulf Coast restoration.
For the last two years, the Department of Justice has been working to bring criminal and civil charges against BP for its involvement in the deadly rig explosion and nation’s largest environmental disaster. On the criminal side, DOJ claimed BP broke a number of securities violations and environmental laws. Environmental laws often contain provisions that allow the government to pursue criminal charges when the party is suspected of acting negligently during the incident. Criminal charges can carry hefty fines, require probation and may lead to the imprisonment of company officials. BP plead guilty to all criminal charges brought by DOJ and agreed to pay $4 billion in fines.
Deepwater Horizon offshore drilling unit on fire (April 20, 2010). Source: U.S. Coast Guard
Criminal fines are separate from the civil fines the company will pay for violations under the Clean Water Act and Oil Pollution Act in a forthcoming settlement or trial. The RESTORE Act, passed by Congress in June of this year, will direct 80 percent of civil fines to Gulf Coast restoration. The RESTORE Act does not capture criminal fines, which generally flow to the U.S. Treasury, or natural resource damage money assessed under the Oil Pollution Act.
The agreement reached by DOJ and BP is unprecedented for two reasons. One, the criminal fines assessed by DOJ, and agreed to by BP, are the largest ever levied against a corporation. If the criminal fine is any indication of the seriousness to which DOJ is pursuing civil charges under the Clean Water Act, then those fines could reach the $21 billion mark that some analysts have predicted. Whatever the amount, 80 percent will be returned to the Gulf Coast for restoration under the RESTORE Act.
The second reason the agreement reached by DOJ is unprecedented is the fact that the agency allocated more than half of the fine money – $2.4 billion – for Gulf Coast environmental restoration. Neither the gulf states nor coastal restoration planners expected DOJ to unilaterally direct money to environmental restoration.
What’s even more exciting is that $1.2 billion of this money is reserved to advance sediment diversions and barrier island restoration projects in the rapidly-disappearing Mississippi River Delta. Sediment diversions reconnect the Mississippi River, which is full of vital freshwater, sediment, and nutrients, with adjacent dying wetlands that have been cut off from the river by manmade levees.
Dedicating this much money towards restoration of the Gulf Coast signals that the Administration recognizes the importance of the gulf to the nation, and perhaps more pointedly, the importance of the Mississippi River Delta to the gulf. With its recently passed 2012 Coastal Master Plan, Louisiana is well-situated to devote money from the BP oil spill to critical restoration projects in the delta. We applaud the Department of Justice for their recognition of this important issue and encourage them to pursue civil Clean Water Act and Oil Pollution Act penalties with the same vindication, so the Gulf Coast and Mississippi River Delta can be restored and revitalized.