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BP to inject $1 billion into Gulf restoration

BP money is expected to pay for restoration projects, which may include building new fishing piers and oyster reefs, or stabilizing bird sanctuaries with rock barriers

By Cain BurdeauAssociated Press / April 22, 2011

Wisner Properties Field Inspector Forrest Travirca walks in an area of dead marsh grass that was impacted by oil from the BP PLC oil spill on Fourchon Beach in Port Fourchon, La., Wednesday, April 20, 2011. Even as somber remembrances marked the first anniversary of the worst offshore oil spill in American history, there were reminders that lengthy legal battles lay ahead. BP filed a lawsuit alleging negligence by the maker of the device that failed to stop the spill, while the manufacturer of the blowout preventer and rig owner filed their own claims.

Patrick Semansky / AP


NEW ORLEANS (AP) — Energy giant BP agreed Thursday to spend $1 billion this year for an array of cleanup projects in the Gulf of Mexico, bidding to speed environmental recovery from last year's massive oil spill while paring down its own liability for the nation's largest offshore oil spill.

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The agreement between BP, the federal government and the five Gulf states oiled by the spill sets into motion years of work restoring natural resources. BP and the other companies involved in the 206-million-gallon spill face billions of dollars in fines for long-term restoration.

"This milestone agreement will allow us to jump-start restoration," Interior Secretary Ken Salazar said.

The Justice Department said the agreement does not affect the potential legal liability that BP and other companies may face from lawsuits for damages resulting from the spill, which began after the Deepwater Horizon rig off Louisiana exploded on April 20, 2010.

The money is expected to fund an array of restoration projects — which could be as diverse as building fishing piers, building new oyster reefs, or stabilizing bird sanctuaries with rock barriers — all to be chosen after public review. Those projects are to be selected by a trustee council, a federal-state body set up to safeguard the public's resources and oversee the oil spill restoration.

An upfront payment of this kind is not required under the Oil Pollution Act, the nation's oil spill law. Still, by paying such an amount for restoration now BP would be expected to pay less at a final settlement.

Lamar McKay, the chairman and president of BP America Inc., said the agreement "is the best way to get restoration projects moving as soon as possible."

Under the agreement, the five Gulf states get $100 million each and the federal government will get $200 million. The remaining $300 million will be divvied out to projects deemed the most urgent.

The $1 billion is a kind of ante on the eventual cleanup bill and helps all the parties control the cost of the spill.