On the 100th day since the BP oil spill disaster started, a coalition of leading environmental groups is asking the giant oil company to make a "down payment" of $5 billion to help pay for environmental damages caused by the deadly April 20 explosion and sinking of the Deepwater Horizon rig.
BP (BP), which yesterday reported a record loss and named American Robert Dudley as its new CEO, has already agreed to put $20 billion into an independently managed escrow account, but additional money for environmental damages is needed because the $20 billion is for economic damages only, says Courtney Taylor, federal policy lead for the Environmental Defense Fund (EDF), which is part of the coalition. The environment can't afford to wait for the resolution of damage claims through litigation, which could take years, she says.
The request for the $5 billion is included in a report issued today by the EDF, the National Audubon Society and the National Wildlife Federation called "Common Ground: A Shared Vision for Restoring the Mississippi River Delta." It takes the Obama administration up on its promise to restore the Gulf to better than it was before the accident. Under the group's proposal, BP would pay for what it "will ultimately be assessed for natural resource damages from the spill and create a separate escrow account for that money."
Sowing Seeds for Future Disasters
Cleaning up the spill is a huge challenge. For one thing, it happened thousands of feet underwater, and much of the damage may be visible only through remote-controlled submarines. The pollution that does reach the surface is spread over thousands of square miles. For instance, the Mississippi River Delta, which makes up much of southern Louisiana, is the largest wetland complex in the contiguous U.S. In comparison, the Exxon Valdez spill was easier to tackle because it happened in a smaller geographic area close to the shoreline.
The vast complexities of cleaning up the Gulf is why the environmental groups say restoration needs to start immediately.
"The loss of coastal wetlands to oil contamination may speed up today's alarming land loss, leaving an already-weakened ecosystem even more vulnerable to storms and other man-made assaults," says the report. "Without restoration, every disaster will sow the seeds of a more devastating disaster down the line, and the region will continue on a path to eventual destruction. These actions will make the entire area more resilient, protecting the people who live there, the industries critical to our national economy, and the wildlife that call the area home."
BP, which has accepted legal responsibility for the spill, has already sold some assets and has announced that it'll sell more in the coming year to pay for the massive expenses it's incurring. The company did not respond to requests for comment about the coalition's $5 billion down payment request.
Investing in Real Estate
Learn the basics of investing in real estate.View Course »