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DOJ reaches settlement with Transocean for oil spill

7th January 2013   ·   0 Comments

By Michael Patrick Welch
Contributing Writer

The Department of Justice has reached a $1.4 billion settlement with Transocean for its role in BP’s 2010 Deepwater Horizon spill, which polluted the Gulf of Mexico with upwards of 4.9 million barrels of oil in 2010.

“What’s important to understand,” says the Environmental Defense Fund’s Elizabeth Skree, “is that this settlement represents the first significant funding specifically alloted for Gulf Coast restoration.”

The $1.4 billion will be paid under the Clean Water Act, with a portion of those funds being used to restore the Gulf, as directed by the RESTORE Act, passed on July 6, 2012, by President Barack Obama. Thursday’s Transocean settlement will direct 80 percent of Trans­ocean’s civil and criminal penalties to the Gulf Coast.

“By sending the vast majority of the $1.4 billion in fines to the areas damaged by the oil, we will rebuild and protect one of the most important ecosystems in the country,” said U.S. Rep. Cedric Richmond in a statement issued to the press. “This settlement is extremely important because 80 percent of the Clean Water Act fines will be sent directly to the states hardest hit by the oil spill pursuant to the RESTORE Act.”

“This is a great day for the Gulf environment and the communities that rely on a healthy ecosystem for their livelihoods,” read a joint statement issued by Greater New Orleans Inc., National Wildlife Federation, National Audubon Society, The Nature Conservancy, Oxfam America and Ocean Conservancy. “We thank the Department of Justice for [its] leadership in holding Transocean accountable,” the coalition added, “and [we] look forward to full resolution of the case with other responsible parties, which will allow restoration efforts in the Gulf to get fully underway.”

In November, BP agreed to pay $4.5 billion after pleading guilty to 14 criminal charges. “Yesterday’s settlement resolved both civil and criminal litigation with Trans­ocean,” said National Audubon Society’s Media Relations Director David Ringer. “Once BP settles for civil fines—which will also be distributed through the Clean Water Act—the whole thing will represent the largest single investment in environmental restoration in our nation’s history.”


The RESTORE Act designates 80 percent of all penalties resulting from the Deepwater Horizon oil spill to a Gulf Coast Restoration Trust Fund, to be spent in the Gulf Coast where the damage occurred.

“With this settlement,” said Senator Mary Landrieu in her own statement yesterday, “the Gulf Coast Ecosystem Restoration Council finally has some funding to begin implementing a comprehensive plan for ecosystem restoration that will rebuild the environment of the Gulf and the communities that rely upon it.”

Money for the Gulf Coast States

According to Landrieu’s statement, 35 percent of the Clean Water Act civil penalties in the Gulf Coast Restoration Trust Fund will be allocated directly and equally to the five Gulf Coast states for ecological and economic recovery along the coast.

The Gulf Coast Ecosystem Restoration Council, established in the RESTORE Act (and comprised of both federal agency and state representatives) will develop and fund a comprehensive plan for the ecological recovery of the Gulf Coast. Thirty percent of the funds in the Gulf Coast Restoration Trust Fund will be allocated to the Federal-State Council to implement the comprehensive plan.

Another 30 percent of the funds in the Gulf Coast Restoration Trust Fund will be allocated to the states based on actual impact, to implement state plans, which must be approved by the Federal-State Council.

In Louisiana, 30 percent of the state’s portion of that money will be allocated directly to its 20 coastal zone parishes. The funding allocated to said parishes will be based on a formula that considers shoreline miles oiled, population and land mass.

Landrieu’s statement also warns that, “Eligible parishes will have a comprehensive land use plan in place prior to receiving funds.”

Funding New Programs

The Louisiana legislature unanimously approved the 2012 Coastal Master Plan on May 22, 2012. The Transocean settlement will go a long way toward funding that Master Plan. “The RESTORE Act will provide the significant downpayment needed to jumpstart the restoration and protection projects included in the plan.”

Two and a half percent of the funds in the Gulf Coast Rest­oration Trust Fund will be allocated for the establishment of a Gulf Coast fisheries monitoring program. Another 2.5 percent will reportedly be allocated to the five Gulf Coast states for the establishment of a Gulf Coast Center of Excellence in each state.

According to Landrieu’s statement, the Clean Water Act also allows the collection of $1,100 per barrel of oil spilled, or $4,300 per barrel if there is a finding of gross negligence, from any party found responsible for an oil spill in federal waters. Based on the estimated 4.9 million barrels of oil spilled in the Gulf of Mexico, BP could face fines between $5.4 billion and $21.1 billion.

“By putting in place new safety measures,” Richmond says, “I’m pleased that this agreement will make deepwater energy exploration safer and prevent a disaster of this magnitude from ever happening again.”

For a more detailed breakdown of where the money is going, visit the Dept of Justice’s statement:

This article was originally published in the January 7, 2013 print edition of The Louisiana Weekly newspaper

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