BP and Natural Resource Trustees Enter Billion Dollar Agreement to Restore Gulf

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SandBar 10.3, July, 2011 Recommended citation: April Kilcreas, BP and Natural Resource Trustees Enter Billion Dollar Agreement to Restore Gulf, 10:3 SandBar 4 (2011). BP and Natural Resource Trustees Enter Billion Dollar Agreement to Restore Gulf April Killcreas , 2012 J.D. Candidate, University of Mississippi School of Law On April 21, the Natural Resource Trustees for the Deepwater Horizon oil spill announced that BP would provide one billion dollars to fund early efforts to restore the Gulf of Mexico in the wake of injuries resulting from last year’s oil spill. This early restoration agreement is, at present, the largest of its kind that has ever been reached and will allow the affected Gulf States to accelerate the implementation of restoration projects throughout the Gulf.1 The goal of the early restoration agreement is to provide a significant means by which BP and the Trustees, including the states of Alabama, Florida, Louisiana, Mississippi, and Texas, as well as the National Oceanic Atmospheric Administration (NOAA) and the Department of Interior (DOI), may cooperate to select restoration projects to begin as early as the end of 2011.2 The Early Restoration Agreement The $1 billion dollars offered by BP is to be divided among the Trustees to jump-start restoration efforts throughout the Gulf of Mexico. For instance, Alabama, Florida, Louisiana, Mississippi, and Texas will each be allowed to use $100 million of the early restoration fund to implement projects within their borders, and NOAA and DOI also may each use $100 million to pursue selected restoration efforts. NOAA and DOI will allocate the fund’s remaining $300 million to proposed projects submitted by the affected state trustees.3 This voluntary agreement between BP and the Trustees does not limit the liability of any party responsible for natural resource damages due to the Deepwater Horizon oil spill. To the contrary, the Trustees will continue to evaluate the extent of the damage resulting from the oil spill as part of a complete natural resource damage assessment. Once the assessment process is complete, the Trustees will deduct any benefits that the early restoration projects have had in the Gulf, and BP and other responsible parties will provide funding to cover the remaining damages and ultimately restore the Gulf to its pre-spill condition.4 Before a project may be funded under BP’s early restoration agreement, the Trustees must agree on the Natural Resource Damage Offsets, which are the benefits that will result from the project. These offsets will be measured and calculated by the natural resources and services restored and replaced by the project, and the offsets provided by early restoration projects will reduce the amount that BP will have to later fund to cover the total injury resulting from the oil spill.5 Though the initial funding provided by BP under this agreement will reduce the amount that BP later owes to fund additional restoration projects to fully restore the Gulf, this early agreement was entirely voluntary on BP’s part and simply serves as a means by which the Trustees may more quickly implement and complete the restoration of the Gulf. The agreement establishes criteria that each restoration project must meet prior to being financed by the early restoration fund. Trustees may select projects for early restoration provided that the project: 1) restores, rehabilitates, replaces, or acquires equivalent natural resources or services injured by the oil spill or response efforts; 2) addresses specific injuries to natural resources or services associated with the spill; 3) restores natural resources or habitats of the same type, quality, and value of those lost due to the spill; 4) is consistent with long-term restoration needs and the final restoration plan; and, 5) is feasible and cost-effective.6 Both BP and the Trustees may propose potential restoration projects under this agreement, with the Trustees having the responsibility of generating official proposals to receive funding for specific projects. Conclusion Each of the Trustee States has recognized the benefit that BP’s early restoration agreement will have in accelerating the restoration of the damaged coastline and replenishing lost wetlands and wildlife in the wake of the oil spill. As noted by Alabama Governor Robert Bentley, repairing ecosystems damaged by the spill will be significant “to the economic vitality of the Alabama Gulf Coast.”7 Securing funds to restore the Gulf’s natural resources will play a vital role in both economic growth and ecosystem revitalization. As a result of the early funding of these projects by BP, Gulf States will be able to initiate plans for the area’s restoration much sooner than originally anticipated. Endnotes 1. Press Release, NRDA Trustees Announce $1 Billion Agreement to Fund Early Gulf Coast Restoration Projects, Apr. 21, 2011, available at http://www.restorethegulf.gov/release/2011/ 04/21/nrda-trustees-announce-1-billion-agreement-fund-early-gulf-coast-restoration-proj. 2. Framework for Early Restoration Addressing Injuries Resulting from the Deepwater Horizon Oil Spill, Apr. 20, 2011, available at http://www. restorethegulf.gov/sites/default/files/documents/pdf/framework-for-early-restoration-04212011.pdf. 3. Press Release, supra note 1. 4. Id. 5. Framework for Early Restoration, supra note 2. 6. Id. 7. Press Release, supra note 1.
Phone (662) 915-7775 • Fax (662) 915-5267 • 256 Kinard Hall, Wing E, University, MS 38677-1848

SandBar 10.3, July, 2011
Recommended citation: April Kilcreas, BP and Natural Resource Trustees Enter Billion Dollar Agreement to Restore Gulf, 10:3 SandBar 4 (2011).

April Killcreas , 2012 J.D. Candidate, University of Mississippi School of Law

On April 21, the Natural Resource Trustees for the Deepwater Horizon oil spill announced that BP would provide one billion dollars to fund early efforts to restore the Gulf of Mexico in the wake of injuries resulting from last year’s oil spill. This early restoration agreement is, at present, the largest of its kind that has ever been reached and will allow the affected Gulf States to accelerate the implementation of restoration projects throughout the Gulf.1 The goal of the early restoration agreement is to provide a significant means by which BP and the Trustees, including the states of Alabama, Florida, Louisiana, Mississippi, and Texas, as well as the National Oceanic Atmospheric Administration (NOAA) and the Department of Interior (DOI), may cooperate to select restoration projects to begin as early as the end of 2011.2

The Early Restoration Agreement
The $1 billion dollars offered by BP is to be divided among the Trustees to jump-start restoration efforts throughout the Gulf of Mexico. For instance, Alabama, Florida, Louisiana, Mississippi, and Texas will each be allowed to use $100 million of the early restoration fund to implement projects within their borders, and NOAA and DOI also may each use $100 million to pursue selected restoration efforts. NOAA and DOI will allocate the fund’s remaining $300 million to proposed projects submitted by the affected state trustees.3
      This voluntary agreement between BP and the Trustees does not limit the liability of any party responsible for natural resource damages due to the Deepwater Horizon oil spill. To the contrary, the Trustees will continue to evaluate the extent of the damage resulting from the oil spill as part of a complete natural resource damage assessment. Once the assessment process is complete, the Trustees will deduct any benefits that the early restoration projects have had in the Gulf, and BP and other responsible parties will provide funding to cover the remaining damages and ultimately restore the Gulf to its pre-spill condition.4
      Before a project may be funded under BP’s early restoration agreement, the Trustees must agree on the Natural Resource Damage Offsets, which are the benefits that will result from the project. These offsets will be measured and calculated by the natural resources and services restored and replaced by the project, and the offsets provided by early restoration projects will reduce the amount that BP will have to later fund to cover the total injury resulting from the oil spill.5 Though the initial funding provided by BP under this agreement will reduce the amount that BP later owes to fund additional restoration projects to fully restore the Gulf, this early agreement was entirely voluntary on BP’s part and simply serves as a means by which the Trustees may more quickly implement and complete the restoration of the Gulf.
      The agreement establishes criteria that each restoration project must meet prior to being financed by the early restoration fund. Trustees may select projects for early restoration provided that the project: 1) restores, rehabilitates, replaces, or acquires equivalent natural resources or services injured by the oil spill or response efforts; 2) addresses specific injuries to natural resources or services associated with the spill; 3) restores natural resources or habitats of the same type, quality, and value of those lost due to the spill; 4) is consistent with long-term restoration needs and the final restoration plan; and, 5) is feasible and cost-effective.6 Both BP and the Trustees may propose potential restoration projects under this agreement, with the Trustees having the responsibility of generating official proposals to receive funding for specific projects.

Conclusion
Each of the Trustee States has recognized the benefit that BP’s early restoration agreement will have in accelerating the restoration of the damaged coastline and replenishing lost wetlands and wildlife in the wake of the oil spill. As noted by Alabama Governor Robert Bentley, repairing ecosystems damaged by the spill will be significant “to the economic vitality of the Alabama Gulf Coast.”7 Securing funds to restore the Gulf’s natural resources will play a vital role in both economic growth and ecosystem revitalization. As a result of the early funding of these projects by BP, Gulf States will be able to initiate plans for the area’s restoration much sooner than originally anticipated.

Endnotes
1. Press Release, NRDA Trustees Announce $1 Billion Agreement to Fund Early Gulf Coast Restoration Projects, Apr. 21, 2011, available at http://www.restorethegulf.gov/release/2011/ 04/21/nrda-trustees-announce-1-billion-agreement-fund-early-gulf-coast-restoration-proj.
2. Framework for Early Restoration Addressing Injuries Resulting from the Deepwater Horizon Oil Spill, Apr. 20, 2011, available at http://www. restorethegulf.gov/sites/default/files/documents/pdf/framework-for-early-restoration-04212011.pdf.
3. Press Release, supra note 1.
4. Id.
5. Framework for Early Restoration, supra note 2.
6. Id.
7. Press Release, supra note 1.