Billion Dollar Baby: After BP’s Big Damage Pledge, is More Money Needed to Restore the Gulf of Mexico?

A billion dollars can buy you a lot of things–an NFL team, a top-flight soccer club, even the obscenely large house of a globe-trotting tycoon.

One thing it can’t buy you is a healthy Gulf of Mexico, especially after a catastrophic event such as the BP oil disaster last year. That’s why my excitement about BP’s pledge earlier this spring to make $1 billion dollars in early environmental damage payments is balanced with the understanding that considerably more money will be needed to fully restore areas affected by the 206 million-gallon spill.

A Down Payment on Delta Restoration

BP, which reported $7.1 billion in net profit for the first three months of 2011, negotiated the proposed payout with two federal agencies (the National Oceanic and Atmospheric Administration (NOAA) and the Department of the Interior (DOI)) and the five states along the Gulf of Mexico (Alabama, Florida, Louisiana, Mississippi, and Texas). The agreement will allow BP to earn early action credits for addressing some of the environmental effects of last year’s spill. These payments could then reduce the company’s future obligations under the Natural Resource Damage Assessment (NRDA) process, which will likely take several years to complete.

The money won’t be enough to cover all the costs of the disaster (as I’ll explain later), but there’s no denying that the down payment from BP could provide an unprecedented opportunity for Louisiana, which was hit with much of the oil from the Macondo well, to kick off long-delayed restoration projects in its coastal marshes and swamps.

The Mississippi River Delta covers most of southeastern Louisiana, and it is a significant source of fresh water and nutrients for the Gulf of Mexico. This area also is an important habitat for dozens of marine species that spawn and grow near the southern coast of Louisiana. For these reasons, the state of the delta and its environs is a useful gauge for the health of the Gulf.

Unfortunately, the Mississippi River Delta is a system on life support. What’s more, efforts to save this region are not moving fast enough to slow the pace of land loss, leaving the weakened wetlands increasingly vulnerable to damage from hurricanes, oil spills, and other disasters.

For example, in the four years since Congress authorized wetland restoration work under the Water Resources Development Act (WRDA) of 2007, little progress has been made on completing the projects outlined in the Louisiana Coastal Area (LCA) Near-Term Plan, which serves as a roadmap for restoration and preservation initiatives in the Pelican State’s wetlands. While the de-authorization and closure of the Mississippi River Gulf Outlet (MRGO) was an important step towards reversing decades of marsh and cypress wetland loss in St. Bernard Parish and New Orleans, the roll-out of large-scale initiatives like the MRGO restoration (which would include the rehabilitation of the Central Wetlands Unit) has not yet occurred. In addition, priority projects like the Barataria Basin Barrier Shoreline Restoration and the Medium Diversion at White Ditch have barely moved past the planning phase.

If, as promised, $100 million of the $1 billion BP pledge is used for environmental restoration in the State of Louisiana, thousands of people could be put to work at LCA sites across the coastal zone. Additional funding from DOI and NOAA could provide necessary resources for the U.S. Army Corps of Engineers to expedite projects including the pulsing diversions and other heavy engineering projects aimed at reconnecting the Mississippi River to its sediment-starved delta. All of that would be great news.

Continued Need for CWA Penalties

However, we must not forget that the environmental losses stemming from the BP oil disaster were probably far higher than $1 billion. For instance, when a hull breach caused the Prestige to sink off northwestern Spain in 2002, tens of thousands of tons of oil were released into the North Atlantic. Local unemployment jumped as jobs disappeared in Galicia’s seafood sector, and the region’s tourism revenue fell in the wake of the ecological disaster, widely regarded as the worst in Spain’s history. The World Wildlife Fund estimated that the cost of the Prestige disaster, which was much smaller than the Gulf oil spill, ranged from $3.4-6.8 billion.

Aside from the significant economic effects of incidents such as the Deepwater Horizon disaster (which already are being felt in Louisiana), we must also consider the cultural costs of spills. For example, the Exxon Valdez disaster was linked to subsequent declines in area fish populations that were devastating for Cordova and other fishing communities near Prince William Sound. In southern Nigeria, the source of 40 percent of America’s oil imports, 50 years of incessant oil leaks and pipeline ruptures have resulted in the release of 1.5 million tons of petroleum in the Niger Delta and the Bight of Biafra. These spills have ruined farmland and important subsistence fisheries for local ethnic groups like the Ijaw and the Ogoni.

How does one put a price tag on such losses? How soon will we understand the ecological effects of the massive oil spill and the subsurface dispersant releases last year in the Gulf of Mexico? When, if ever, will the rhythm of life in the Gulf Coast’s fishing towns return to pre-spill normalcy? For an incident on the scale of the BP oil disaster, multiple billions of dollars–not just one–will be needed to revitalize the threatened ecosystem and the economies that depend upon it.

Everything must be done to ensure that the money from BP’s pledge goes towards two near-term goals–rehabilitation of the region’s environment and the creation of job opportunities for its residents. At the same time, we must also continue to fight for the lion’s share of Clean Water Act penalties leveled against BP and other responsible parties. Congress still is deliberating on what to do with the money, and we must let them know that despite this down payment by BP, the CWA money should still be sent to the region whose people and businesses need it most–the Gulf Coast.