Deepwater Horizon Oil Spill: Gulf Coast Restoration Efforts

Deepwater Horizon Oil Spill: Gulf Coast Restoration Efforts

Updated July 17, 2017
Deepwater Horizon Oil Spill: Gulf Coast Restoration Efforts
The explosion of the Deepwater Horizon offshore drilling
spill are to be deposited in the fund and made available
rig on April 20, 2010, which took place 41 miles southeast
without further appropriation. The act divided this funding
of the Louisiana coast, resulted in an unprecedented
among the following components:
discharge of oil into U.S. waters. An estimated 4.1 million
barrels of oil discharged into the Gulf of Mexico over 84
 35%—Direct Component, divided evenly among the
days. The spill resulted in the oiling of more than 1,100
five Gulf Coast states for ecosystem/economic projects
miles of shoreline and caused damage to fish and wildlife
and administered by the U.S. Treasury Department
species in Florida, Alabama, Mississippi, Louisiana, and
(Treasury);
Texas. As a result of the spill, private parties have agreed to
pay more than $16 billion for recovery efforts and related
 30%—Comprehensive Plan Component, with projects
restoration projects.
selected by the Gulf Coast Ecosystem Restoration
Council (which is also established in the act and
Oil Spill Restoration Funding
composed of six federal members and five Gulf state
In the wake of the oil spill, several settlement agreements
representatives);
between the federal government and parties responsible for
the oil spill (e.g., BP, Transocean) provided funding to
 30%—Spill Impact Component, distributed by the
mitigate and recover from damages associated with the
council based on a proportional formula established in
Deepwater Horizon spill. These efforts have been in
regulation and to be used for specified activities (limited
addition to preexisting, ongoing federal, state, local, and
to 25% infrastructure);
nongovernmental efforts to restore the Gulf of Mexico
ecosystem.
 2.5%—Gulf Coast Ecosystem Restoration Science
Program, administered by the National Oceanic and
The distribution and use of funds under three of these
Atmospheric Administration (NOAA) and focused on
settlements in particular are expected to have a major effect
science, research, and monitoring; and
on restoration work in the Gulf: (1) civil penalties paid by
responsible parties under the Clean Water Act (CWA) to
 2.5%—Centers of Excellence Grants, divided evenly
support efforts outlined under the Resources and
among the five Gulf states and administered by
Ecosystems, Sustainability, Tourist Opportunities, and
Treasury.
Revived Economies (RESTORE) Act of 2012 (Subtitle F of
P.L. 112-141); (2) criminal penalties under the CWA paid
Approximately $0.8 billion is scheduled to be made
by responsible parties to the nonprofit National Fish and
available in the trust fund pursuant to a 2013 settlement
Wildlife Foundation (NFWF) and other entities; and (3)
with Transocean. The April 2016 settlement with BP stated
natural resource damages paid to a fund (administered by
that BP would pay $5.5 billion to resolve CWA claims,
the federal government), assessed under the Natural
80% ($4.4 billion) of which is to be distributed to the trust
Resource Damage Assessment (NRDA) process, governed
fund according to the RESTORE Act. Together with the
by the Oil Pollution Act of 1990 (P.L. 101-380).
Transocean settlement, total funding would be $5.2 billion.
Although funding available for some of these efforts was
Components of the RESTORE Act are being implemented
provided as early as 2012-2013, the majority of the funding
separately. For the Direct Component and Centers of
designated to settle outstanding claims against BP (in
Excellence Grants, Treasury has finalized regulations and is
particular CWA civil penalties and OPA natural resource
awarding funds on a rolling basis. For the Comprehensive
damages) was finalized by the Department of Justice in an
Plan Component, the Initial Comprehensive Plan was
$18.7 billion settlement on April 4, 2016. As a result of this
published in August 2013 and updated in 2016. Ten
and previous settlements, more than $16 billion is expected
proposals for initial funding priorities were selected for
to eventually be provided for ecosystem restoration and
funding in April 2016 (other projects are expected to be
related projects in Gulf states under the RESTORE Act,
selected as funding from the BP settlement becomes
NFWF, and NRDA processes (remaining funds are
available). The 2016 Comprehensive Plan Update also
designated for other uses).
includes a 10-year funding strategy, as required under the
RESTORE Act. A regulation allowing for the release of 5%
RESTORE Act
of Spill Impact Component funds for planning purposes
The RESTORE Act established the Gulf Coast Restoration
was approved in December 2015, and the final spill impact
Trust Fund and the Gulf Coast Ecosystem Restoration
formula was approved in December 2015. Finally, the
Council, among other things. Under the legislation, 80% of
NOAA Science Program has established long-term research
administrative and civil CWA penalties paid by responsible
priorities and began awarding funding in December 2014.
parties in connection with the 2010 Deepwater Horizon oil
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Deepwater Horizon Oil Spill: Gulf Coast Restoration Efforts
NFWF Restoration
Timeline of Spill/Restoration Activities
Pursuant to criminal settlements with BP and Transocean,
NFWF is to receive and distribute $2.54 billion in a newly
April 20-July 15, 2010: Deepwater Horizon spill.
created fund, the Gulf Environmental Benefit Fund, over
the 2013-2018 time period. More than half the funding is
September 2010: Initial Oil Spill Commission Report (also
expected to be distributed to the fund in 2017 and 2018. Of
known as the Mabus Report) published.
the amounts going to NFWF, Louisiana is expected to
receive approximately $1.27 billion and the other states are
October 2010: Gulf Coast Restoration Task Force
expected to receive the remaining funds. The funds are to
established.
be used for barrier island and river diversion projects in
Louisiana and to remedy harm to natural resources in other
December 2011: Gulf Coast Restoration Task Force
affected states. NFWF reports that it is working with state
strategy published.
natural resource agencies, the Fish and Wildlife Service,
and NOAA, among others, to coordinate restoration
April 2012: Phase I NRDA early restoration
activities. As of July 2017, NFWF reported that it had
projects announced.
funded 101 projects costing approximately $0.880 billion.
July 2012: RESTORE Act becomes law.
NRDA Process and Early Restoration
Enacted after the Exxon Valdez oil spill of 1989, the Oil
December 2012: Phase II NRDA early restoration
Pollution Act allows state, federal, and tribal governments
projects announced.
to act as “trustees” to recover damages to natural resources
in the public trust from the parties responsible for an oil
January 2013: Criminal settlement/NFWF funds finalized.
spill. Under OPA, responsible parties are liable for damages
to natural resources, including the following:
August 2013: RESTORE Act Initial Comprehensive
Plan published.
 the cost of restoring, rehabilitating, replacing, or
acquiring the equivalent of the damaged natural
November 2013: First NFWF projects announced.
resources;
August 2014: Initial Comprehensive Plan projects solicited.
 the diminution in value of those natural resources
pending restoration; and
October 2014: RESTORE Act Direct Component Rule;
Phase III NRDA early restoration projects approved.
 the reasonable cost of assessing those damages.
December 2014: NOAA Science Program funds available.
The trustees’ work occurs in three steps: a pre-assessment
phase, the restoration planning phase, and the restoration
January 2015: Spill Impact Component planning
implementation phase. The Deepwater Horizon NRDA
grants available.
process is in the restoration implementation phase, which
includes development of project-specific restoration and
September 2015: Phase IV NRDA early restoration
implementation plans.
projects announced.
On April 21, 2011, the trustees for the Deepwater Horizon
December 2015: Final spill impact formula approved.
oil spill announced an agreement with BP to provide $1
billion toward early restoration projects in the Gulf of
February 2016: Final NRDA Damage Assessment and
Mexico to address injuries to natural resources caused by
Restoration Plan published.
the spill. As of July 2017, the trustees reported approval of
65 early restoration projects, with a combined cost of
April 2016: $18.732 billion settlement with BP finalized;
$0.866 billion. Further, in early 2016, NOAA released a
first 10 Comprehensive Plan projects announced.
final damage assessment and restoration plan, which
outlines plans to fund a total of $8.8 billion in natural
December 2016: Updated Comprehensive Plan approved.
resource damages that were approved under the 2016
settlement with BP (this amount includes the
Charles V. Stern, Specialist in Natural Resources Policy
aforementioned amount for early restoration projects).
Pervaze A. Sheikh, Specialist in Natural Resources Policy
Harold F. Upton, Analyst in Natural Resources Policy
Jonathan L. Ramseur, Specialist in Environmental Policy
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Deepwater Horizon Oil Spill: Gulf Coast Restoration Efforts

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