Chris John: Dedicating BP settlement funds to restoration sends message

I hope the Fourth of July was filled with family, friends and fun. It is always nice to take time to slow down and count our blessings of being an American and a Louisianan. Living in this state allows us to witness every day how resilient and hardworking the citizens are and how unique our environment is.

Recently, this was on display when it was announced that BP had reached agreements in principle for $18.7 billion to settle all federal and state claims arising from the Deepwater Horizon incident. This includes Louisiana, Mississippi, Alabama, Florida, Texas and settlements of claims made by more than 400 local government entities. As I said in these pages on the day following the announcement, “The settlement brings clarity and closure on a lot of litigation that has been going on for five years. Now we can move forward. The parties sat down and agreed on this settlement.”

So how will this actually work? BP will pay the United States a civil penalty of $5.5 billion under the Clean Water Act provisions over 15 years. BP will pay $7.1 billion to the United States and the five Gulf states over 15 years for natural resource damages (NRD). This is in addition to the $1 billion already committed for early restoration. BP will also set aside an additional amount of $232 million to be added to the NRD interest payment at the end of the payment period to cover any further natural resource damages that are unknown at the time of the agreement. Additionally, a total of $4.9 billion will be paid over 18 years to settle economic and other claims made by the five Gulf Coast states.

And finally, up to $1 billion will be paid to resolve claims made by more than 400 local government entities. Although not all affected Louisiana parishes have agreed to the settlement, I commend those that have stepped forward in recognizing the need to restore the coast as soon as possible.

As any honest reader will observe, the BP settlement is fair to all parties and their focus on doing this in an expedited fashion is to be commended. And finally, the delivery of their promise to “make it right” has never failed them.

But it also sends a clear message to industry onlookers. With the funds being dedicated to coastal restoration, there is now a clear understanding that we can do it all in Louisiana. With the latest technological advancements now in play, we can explore and produce in the deepest waters in the world and protect the environment at the same time. And for a state like Louisiana that has such a model working relationship with industry, this fact is a blessing worth counting.

— Chris John, former congressman, is president of the Louisiana Mid-Continent Oil & Gas Association.