As Louisiana coastal advocates lobbied Congress to have shares of BP fines and offshore mineral royalties dedicated to state’s coastal-preservation effort, they knew they had to play a balancing act with coastal parishes.
They would have to cut local governments in on the windfall to get their support. But they also wanted to make sure the tens of millions of dollars they were sending to coastal parishes facing tough economic times would go to the coast, not other projects. Ideally, the work would fit with the state’s Coastal Master Plan, its 50-year blueprint to save the sinking, crumbling coastal zone.
The final editions of the laws governing that money indicate they have largely accomplished both goals. But Mark Davis, director of the Tulane Institute on Water Resources Law and Policy, said advocates must remain vigilant for “creative” interpretations of those rules.
“There’s always some wiggle room in these things, and there are a few important questions that are not answered by the laws,” Davis said. “But overall, it looks like most of this money will have to go to the coast.”
A lot of money is coming: About $1.5 billion over the next four decades.
Next year, 19 parishes will begin a 37-year run of payments likely to top $39 million annually from the Gulf of Mexico Energy Security Act, or GOMESA, funded by offshore mineral royalties. The law is in effect through 2055.
And 20 parishes have already started qualifying for $92 million in grants from the RESTORE Act, funded by the Deepwater Horizon oil-spill settlements.
Although the RESTORE money comes wrapped in a blanket of federal regulations designed to send most of the money to coastal restoration, rules for spending the GOMESA money are looser. But state officials and coastal advocates hope to persuade parish leaders to undertake coastal projects by offering them even more money.
The payouts from this annual revenue-sharing system for coastal oil-producing states will fluctuate with the price of oil. State shares are based on a formula measuring the distance between a state’s coastline and the geographic center of the offshore leasing area involved. Parish shares are derived from a formula including their population size and miles of shoreline.
Next year’s payment, the first covering an expanded base of oil fields, will be about $35.7 million for 19 parishes. Though Ascension Parish is among the 20 parishes included in RESTORE funding, it didn’t become part of the state’s official coastal zone until 2010, four years after GOMESA became law.
Parish shares of $35.7 million in 2017 GOMESA money
|Cameron||$1,848,599||St. John the Baptist||$1,319,688|
The money can be used for:
- Protecting or restoring the coast, hurricane protection and repairing infrastructure directly affected by coastal wetland losses.
- Addressing damage to fish, wildlife, or natural resources.
- Carrying out a federally approved marine, coastal, or comprehensive conservation management plan.
- Lessening the impact of offshore drilling by financing onshore infrastructure projects that ease the effects of pipelines, dredging and other related activities.
The last category is what concerns coastal advocates. Although state law requires 90 percent of the state’s GOMESA checks to be used on coastal restoration, parishes don’t face such a restriction. And, as Tulane’s Davis pointed out, “onshore infrastructure projects” is open to wide interpretation.
The U.S. Interior Department determined the eligible uses, and it offered no further guidance on this point. Its Office of Natural Resources Revenue will monitor spending to make sure recipients follow the rules, the agency said.
In this early stage, parishes have generally been planning projects beneficial to the coastal restoration efforts, said Chip Kline, Gov. Jon Bel Edwards’ deputy director for coastal activities. To encourage continuing that cooperation, the state likely will offer matching grants for projects that fit the master plan.
Davis applauds that move.
“I think the matching program is really smart because no one likes to be told what they have to do, but the inducement will make sense,” he said.
“Making dollars go further and last longer is a pretty appealing prospect for any parish official.”
Feds will keep close eye on RESTORE money
The more modest, one-time-only RESTORE payout comes with many more restrictions for local governments.
The law dedicates 80 percent of BP’s Clean Water Act fines, which normally end up in the nation’s treasury, to the five Gulf Coast states. Coastal parishes will share $92.4 million.
Parish allocations were determined by a formula that considered the miles of their shoreline oiled, their population and their total land mass.
Parish shares of $92.4 million from RESTORE Act
|Cameron||$1,941,287||St. John the Baptist||$1,034,095|
Although GOMESA simply cuts annual checks, the RESTORE grant program requires parishes to pay for and complete the projects before being reimbursed by the U.S. Treasury. That agency has a long list of rules that assure almost every dollar goes to coastal projects, and it will oversee the parishes’ spending.
Each parish must get federal approval of a document detailing the projects it hopes to build, the costs involved and how it expects to get those project completed on time.
The Treasury Department requires that the projects restore and protect the natural resources or economy of the Gulf Coast. Further, they have to be based on “best available science” and broad-based public input, including individuals, businesses, Native American tribes and nonprofit organizations.
They must fit one or more of these 11 activities:
- Restoration and protection of the natural resources, ecosystems, fisheries, marine and wildlife habitats, beaches and coastal wetlands.
- Addressing damage to fish, wildlife, and natural resources.
- Executing a federally approved marine, coastal, or comprehensive conservation management plan, including fisheries monitoring.
- Workforce development and job creation.
- Improvements to state parks in coastal areas affected by the Deepwater Horizon oil spill.
- Infrastructure projects benefitting the economy or ecological resources, including port infrastructure.
- Coastal flood protection.
- Promoting tourism, including recreational fishing.
- Promoting Gulf Coast seafood.
- Planning assistance.
- Administrative costs.
As they’re planning to do with the GOMESA money, the state has already set aside about $81.6 million in for matching grants for parish projects that relate to the master plan.
Kline said the amount of a grant would depend on how closely a parish project tracked the state’s priorities.
“As you know, parish presidents are oftentimes a little upset that certain projects in their planning documents or within their parish priorities are not included in the master plan,” Kline said. “So we said, ‘Look, we will take a hard look at some of those projects that are complementary to or consistent with the master plan. But you are not going to be able to leverage a higher percentage as if you would if you put forward a master-plan project.’ ”
So far Treasury has approved six parishes’ implementation plans: Cameron, Plaquemines, St. Tammany, Tangipahoa, Livingston, and Lafourche.
Those plans have 13 approved projects, all but one of which addresses habitat or boat-access issues. The exception is Cameron Parish, which plans to build a bridge to improve access to a new liquid natural gas plant built on an island in the Calcasieu River.
A critical factor for approval is that the parish can show it has the money to complete the projects. That raises interesting questions that could bring these two funding programs together.
Can a parish use GOMESA money to build a RESTORE project? And if so, is the reimbursement money still subject to the GOMESA rules? Or does it go into a parish’s general fund, available for any purpose?
A spokesman for Interior Department said his agency had no answers yet.
Davis said coastal parishes facing tough budgetary times due to the collapse of oil prices could be tempted to convert millions from a GOMESA disbursement to relieve some of those problems.
“Our view would be those funds should still be dedicated to the purposes for which Congress intended when it passed GOMESA,” he said. “But right now there is no guidance in the law.
“And, as we know, smart lawyers can make persuasive arguments and find wiggle room in almost any law.
“So, while we’re generally happy with the rules governing these funds – and we’re happy they are coming – we think there are still a lot of question to be answered to make this work for the coast in the best possible way.”