What to do with BP oil spill fines?

The Deepwater Horizon fire / VIA WIKIMEDIA COMMONS

Twenty-eight months after an explosion at a Gulf of Mexico oil rig led to the worst environmental disaster in American history, Sarasota County officials met to discuss how much money the area might receive from federal penalties imposed on BP, the company responsible for the spill.

The Deepwater Horizon explosion, which eventually caused 4.9 million barrels of oil to spill into the gulf, badly hurt the Sarasota area, even if no tar balls ever appeared on our beaches. That, at least, was the message delivered by Deputy County Administrator Bill Little to the County Commission Wednesday, Aug. 29. Little cited wildlife damage, as well as tourist cancellations and additional money spent to market the area as direct results of the spill — impacts that help make the county eligible to receive a chunk of the penalties being levied against BP.

In March, the U.S. Senate approved language that requires BP fines to be distributed to gulf states. The legislation, originally known as the RESTORE Actwas later added as an amendment to a broader transportation bill. “Today’s vote was a huge step toward making sure any fines against BP end up in the local communities harmed by the company’s oil spill,” said U.S. Sen. Bill Nelson, D-Fla., after the amendment passed. “Otherwise, the money would go into the federal treasury – and, there’s no telling where it might go from there.”

So the money is earmarked for the states, but who gets what? That’s what Little’s presentation addressed on Wednesday.

The legislation created a Gulf Coast Restoration Trust Fund, which will chop up the money into four chunks: 30% goes to a federal council comprising various agency heads, 30% goes to the states, 35% goes to county governments and 5% is set aside for research.

The actual money totals remain unknown. BP could be forced to pay anywhere between $5.39 billion and $21 billion total, according to Little. On Wednesday, Little said that Sarasota County should be eligible for between $5 million and $20 million from the county pot alone, but Sarasota might be able to access funds from the other pots as well. For example, the federal money is earmarked for competitive grants; Sarasota County, presumably, would be eligible to compete for some of that money.

The county might also be able to receive more money from the state pot, which will be doled out by a consortium required to be created by federal law. The Florida Association of Counties has suggested creating a board made up of state agencies and the 23 affected Florida counties. Those counties would be divvied up into “disproportionately impacted counties” — i.e. the ones in the panhandle affected by oil washing ashore — and “nondisproportionately impacted counties,” such as Sarasota, which saw less direct damage. Little said the state pot could add up to $480 million if the total BP fine is $10 billion.

The federal rules require that the money be used for a limited list of projects, such as natural resource restoration and protection, tourism promotion or even infrastructure work that benefits the economy or ecological resources.

Little action was taken by the commission, except to encourage staff to develop “guiding principles” for how to prioritize projects that could be funded with the money. The Florida Association of Counties hopes to have an interlocal agreement decided upon by late September, at which point the county would be able to join the consortium that would work to disburse money from the state pot. Little said he hoped a local task force would be formed this fall or winter to make recommendations on how best to spend the direct local funding.