Wealth from $687M in settlements flows inland

Clusters of landlocked municipalities more than 160 kilometres from the Gulf Coast have secured millions of dollars in BP money through settlements designed to compensate local governments for lost tourism dollars and other economic damage from the company’s 2010 oil spill, according to records obtained by The Associated Press.

This week, BP finished making about US$687.4 million in settlement payments to 383 local government entities in the five Gulf states. Nearly US$8 million of that money went to 32 government entities that are more than 160 kilometres from the coast, in places like the Mississippi Delta and suburbs of central Alabama, the records show.

BP’s well blowout off Louisiana’s coast triggered a deadly explosion that killed 11 rig workers and spewed millions of gallons of oil into the Gulf of Mexico, staining beaches, killing wildlife and scaring away tourists.

The company agreed last month to pay up to US$1 billion to resolve economic claims by local governments, but the settlement payouts have fallen well short of that maximum amount. The records obtained by The Associated Press provide the most comprehensive accounting of where the money went and what types of government entities received shares.

Minimum distances from the centre point of each city or town to the coastline were analyzed to determine which locations were more than 160 kilometres from the coast.

Jackson, Miss., about 280 kilometres from the coast, received US$1.3 million. Birmingham, Ala., more than 320 kilometres from the coast, received US$1 million.

Among the smaller cities receiving money is Ruleville, a Mississippi Delta city that landed US$40,748. Ruleville, which is nearly 480 kilometres from the coast and has about 3,000 residents, said it lost revenue from sales taxes and other sources due to a drop in tourist travel after the spill. The city, perhaps best known as the hometown of civil-rights activist Fannie Lou Hamer, is in an area that is a popular destination for blues music fans.

“Everybody in Mississippi suffered to varying degrees,” said Danny Griffith, Ruleville’s city attorney.

Irondale Mayor Tommy Joe Alexander — whose city in the Birmingham suburbs received a US$57,225 settlement award — said a seafood shortage after BP’s spill led to a decrease in sales tax generated by local restaurants.

“We’re very fortunate that we did get something,” he said. “There was an impact on the whole state.”

BP’s settlements with local governments are part of its broader US$18.7billion agreement with the five Gulf Coast states and the federal government. Larger portions of settlement money are dedicated to coastal restoration work. BP already has paid billions of dollars in compensation to Gulf Coast businesses and residents who claim the spill cost them money.