(06/23/2011)

Paul Quinlan, E&E reporter

Gulf state senators are said to be nearing a deal on how to divvy up
the potentially $20 billion in penalties that could result from the
federal government’s litigation of companies responsible for the
Deepwater Horizon oil spill.

“We’re very close,” said Sen. Mary Landrieu (D-La.).

Legislation could be brought to the Senate Environment and Public Works
Committee soon for consideration, according to Sen. Barbara Boxer (D-
Calif.), the committee chairwoman who is leading negotiations among
senators from the region.

“We are going to be having a markup on that around a couple weeks from
now,” Boxer said today.

There is widespread consensus within Congress and the Obama
administration that Florida, Alabama, Mississippi, Louisiana and Texas
should receive the bulk of the money, since they bore the brunt of the
environmental and economic damage resulting from the April 2010 oil
spill in the Gulf of Mexico.

Capturing the money would require legislation to divert the funds
before they flow into a trust fund used to pay for future oil spill
cleanups or into the federal treasury.

That could prove difficult. Any such bill to divert billions of dollars
to the Gulf states would also get slapped with a multibillion-dollar
price tag by the Congressional Budget Office. That could be a tall
legislative hurdle, given the growing anxieties on Capitol Hill over
the federal deficit.

“We’re fairly close to agreements that will provide some money for
deficit reduction and some money to the Gulf Coast,” Landrieu said.

To succeed, Gulf state lawmakers agree they will have to unite behind a
single bill — something that is also easier said than done. There are
deep divisions among the region’s lawmakers about how a bill that would
capture the money should divide it up among the states.

“The bottom line is how to divide the money fairly between the Gulf
Coast states — that’s been the toughest, but we’re making progress,”
Landrieu said.

Florida Sen. Bill Nelson (D), for example, has called for allocating
the money, in part, based on a state’s total miles of shoreline, which
would give Florida an advantage.

Also being debated is how much money should be devoted to environmental
restoration, such as wetlands-rebuilding projects, versus economic
recovery, such as port dredging and construction of convention centers
or highway interchanges.

Louisiana Sens. Landrieu (D) and David Vitter (R) filed a bill that
would devote more money to the former, while Rep. Jo Bonner (R-Ala.)
put forward legislation that favors the latter.

“We’re working through all those issues, but we’re very close,”
Landrieu said.
Reporter Jeremy P. Jacobs contributed.

Special thanks to Richard Charter