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Tuesday, Dec 18, 2018
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BP settlement over oil spill to net Florida $3.25 billion

TAMPA — BP will pay Florida $3.25 billion over the next several years as part of a landmark settlement over the 2010 Deepwater Horizon spill that scarred the Gulf of Mexico and scared tourists away from beaches from Texas to Key West.

The agreement is part of an $18.7 billion settlement reached between the five Gulf Coast states and the British-based oil giant. The deal is the largest environmental settlement in U.S. history.

Tampa also will receive money from BP to settle a lawsuit the city filed against the company. The $27.5 million settlement, minus attorney’s fees and defense expenses, will be paid within 90 days and go into yet-to-be-determined “legacy projects,” city officials said. Tampa is not on the coast, but the city argued in its suit that it lost money after the spill because of canceled conventions and fewer tourists.

The mega settlement was announced Thursday morning by Florida Attorney General Pam Bondi inside Terminal 2 of Port Tampa Bay, where cruise ships come and go every week.

“Five years ago, the BP oil spill threatened the states that depend on the Gulf of Mexico,” Bondi said. “It put thousands of businesses on the line and those businesses were looking for a lifeline.”

She said a “litigation black hole” threatened to last for decades, were it not for the settlement reached this week. She said litigation continues 26 years after the Exxon Valdez oil spill along Alaska’s Prince William Sound.

“Five years later,” she said of the BP oil spill in the Gulf, “an ecological and economic tsunami has been avoided.”

The agreement in principle was reached between Gulf Coast states and BP Exploration and Production in a London courtroom.

The settlement announcement — which includes Florida, Alabama, Mississippi, Louisiana and Texas — comes as a federal judge was preparing to rule on how much BP owed in federal Clean Water Act penalties after more than 125 million gallons of oil spewed into the Gulf.

Bondi said that of the $3.25 billion heading Florida’s way, $1.25 billion will to go toward environmental work to restore the Gulf Coast ecology now and in the future. Those projects, which could include beach maintenance, construction of piers and research into marine life, will be administered through the federal government.

She said $2 billion of the settlement will go into economic reparations for projects to be decided by the Florida Legislature.

“Florida is a tourism state,” she said, and the spill left “hotels empty and businesses that went out of business. This will help our state recover and move on.”

Even though tar balls and oily water never reached the Riverwalk or Tampa Convention Center docks, Tampa was economically hurt by the spill, and joined other municipalities in filing its own complaint against BP.

“This is a great example of the judicial system in America. There is accountability,” said Tampa Mayor Bob Buckhorn in a news conference called on the heels of Bondi’s announcement.

The $27.5 million Tampa will receive is the largest amount given to any city in Florida, the mayor said.

He said the city had asked for $50 million, the amount believed to be lost from canceled conventions, empty hotel rooms and restaurants and the unpaid taxes on those services.

Buckhorn said the city documented the lost revenue and presented it to the court through attorney Steve Yerrid, whose fee totaled about a quarter of the city’s total settlement amount.

“The economic damages here were very, very real and we were very thorough in our analysis,” Buckhorn said. “This was an egregious spill. This was a spill that affected all of Florida for generations to come. BP and the judge saw the wisdom of our claims.”

The mayor, who was persuaded by Yerrid last year to join the long line of state, local and municipal lawsuits pending against BP, said the windfall will be tucked away and be used for “legacy projects that will have a lasting impact for generations to come.”

He said he does not yet know what the money will be spent on but said it won’t be put in the general operating fund and won’t be part of the 2015-2016 budget, which is being finalized over the next few weeks, he said.

“That money will be put to good use,” Buckhorn said, “not necessarily to fix potholes. I want this settlement to have generational impact.”

By way of comparison, the city’s Riverwalk project cost $33 million. Construction of the new Water Works Park was $7.4 million. The windfall would equate to only a down payment on a baseball stadium for the Tampa Bay Rays, which if ever approved, could cost more than $600 million.

Yerrid, who was special council to former Gov. Charlie Crist when the spill occurred in 2010, said evidence of environmental damage cropped up not only in Panhandle beaches, but also along the Pinellas shoreline with traces of oil and a dispersant used by BP to break up globs of oil.

He said the $27.5 million pays reparations to the city for lost revenue over the past five years and any lost revenue in the future. Buckhorn said he was satisfied with the settlement.

“I’m sure (BP) is very sorry,” he said. “But I’m glad they’re paying the bill.”

Other coastal counties and municipalities will receive awards, said Tampa attorney Tom Young, who represents some governmental agencies along the Florida Gulf Coast in complaints against BP, including a few in Pinellas County.

Young said the court has entered a confidentiality order and he could not talk about those cases. He couldn’t explain why Tampa announced its settlement Thursday.

Reaction to the settlement generally was positive.

Gov. Rick Scott issued a statement thanking Bondi and her legal team.

“This agreement will help Florida implement key projects and invest in environmental priorities to keep our state beautiful,” Scott said.

U.S. Sen. Bill Nelson said this in a statement:

“Considering this was the worst environmental disaster in history and it was caused by gross negligence, the amount of penalties specifically for violations of the Clean Water Act could be — and, I think, should be — much larger. Five years after the spill, we’re still learning more about its environmental and economic impacts. And it could be another five years or more before we know the full toll the spill has taken on the Gulf.”

Carol Dover, president of the Florida Restaurant and Lodging Association, released a statement saying the extent of the damage to the Gulf still is not known but that, “This is a first step in making our industry whole.”

Environmentalists applauded the settlement but cautioned that offshore drilling in the Gulf is an ever-present threat to the ecology.

“No monetary award can ever undo the destruction of the Deepwater Horizon disaster,” said Fred Krupp, president of the Environmental Defense Fund in a statement released Thursday. “Today’s agreement, the largest environmental settlement in American history, represents a significant step toward justice for the Gulf coast ecosystems, economies and communities that were damaged by the disaster. Drilling in deep water carries significant risks. It is essential that companies operate with extreme caution in this environment — and face severe consequences when they don’t.”

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