BP should fund Gulf restoration, says report

President Barack Obama’s pointman on restoring the Gulf coast in the wake of the oil spill disaster recommended Tuesday the effort be funded in part by penalties levied against BP, which may reach into the billions of dollars.

The report presented by Navy Secretary Ray Mabus seeks to dedicate a portion of “any obtained Clean Water Act civil penalties directly to the Gulf states,” in a bid to secure a stable channel of funds to finance their recovery.

Mabus, tasked by Obama in June to create a plan to restore the region, set to last years if not decades, also urged the US Congress to create a Gulf Coast Recovery Council to oversee the funds in coordination with state governments and tribal organizations.

Fines faced by BP under the present law range from 1,100 dollars per barrel spilled to as high as 4,300 dollars per barrel spilled, if negligence is proven.

That means the British-based energy giant could face penalties of up to 17.6 billion dollars, for the 4.1 million barrels that gushed into the Gulf.

The presidential oil spill commission meeting in Washington meanwhile heard praise for Mabus’ recommendations, including from Louisiana Senator Mary Landrieu, who has brought legislation calling for at least 80 percent of penalties against BP to go toward a recovery fund.

Landrieu, who told the investigating panel that she was “thrilled” about the Mabus report, said her state and the entire Gulf region was in dire need of a “dedicated and robust stream of revenue” to finance recovery efforts.

Neither Mabus nor members of the commission commented on what percentage of the fines should go toward the restoration fund.

After the April 20 explosion aboard the BP-leased Deepwater Horizon oil rig, some 205 million gallons of oil flowed into the Gulf, impacting the crucial fishing and tourism industries and destroying hundreds of miles of the region’s fragile coastal ecosystems.

“The effects of the oil spill may reverberate in the region and across the country for years to come,” warned Mabus, whose report describes the Gulf coast as a “national treasure” and noted its key oil and gas and fishing industries.

About one third of the seafood harvested in the continental United States comes from the Gulf, which also produces some 30 percent of America’s oil and 13 percent of its natural gas.

The Gulf is “central to the nation’s economy,” Mabus wrote in a statement as part of the 130-page report.

“America needs the Gulf. America needs the Gulf to be clean. America needs the Gulf to be healthy.”

Mabus said Obama will create by executive order an interim Gulf Coast Ecosystem Restoration Task Force, headed by Environmental Protection Agency Administrator Lisa Jackson, to immediately begin coordinating the region’s recovery.

The body would be dissolved or modified after Congress creates a new Recovery Council, he said.

Mark Tercek, head of non-profit group Nature Conservancy, told the oil spill commission in testimony Tuesday that his organization “strongly supports” the Mabus report.

The largest maritime oil spill in history “has refocused the nation’s attention on one of the most important and productive ecosystems on Earth,” Tercek said, adding that while “the full impact of the spill will not be known for some time, we can start recovery now with dedicated investment.”

Earlier, commission co-chair Bob Graham, a former Florida senator, urged authorities to catch up with drilling companies that have located their operations further off the continental shelf without proper measures to prevent the catastrophic blow-out that prompted the disastrous Gulf spill.

“It’s clear the move to deep water represents an enormous change in the US energy exploration,” Graham said. “Unfortunately our government and industry did not undergo a similar transformation in its regulatory, safety and response focus.”

In 1990, wells being drilled at more than 1,000 feet accounted for four percent of the Gulf of Mexico’s oil production. By 2009 that figure had soared to 80 percent, he noted.

In the past five years the number of ultra-deep wells — more than 5000 feet — climbed from one percent to 32 percent.

Describing policy failures that reached back decades and across both Democrat and Republican administrations, Graham urged better regulation to catch up with deep water drilling technology. “We need such a change,” he said.

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