The Need to Restore Consumer Confidence

The Need to Restore Consumer Confidence

As described in Chapter 6, images of spewing oil and oiled beaches in newspapers and on television set the stage for public concern regarding the safety of Gulf seafood. Additional factors contributed to the lingering impression that the public could not trust government assurances that the seafood was safe: the unprecedented volumes of dispersants used, confusion over the flow rate and fate of the oil, frustration about the government's relationship with BP in spill cleanup, and lawsuits filed by fishermen contesting the government's assurance of seafood safety. The economic blow to the Gulf region associated with this loss of consumer confidence is sizable. BP gave Louisiana and Florida $68 million

¶for seafood testing and marketing, as well as money to assess impacts on tourism and fund promotional activities. As of early December, BP was considering a similar request from Alabama.

¶In future spills, however, there is no guarantee that a responsible party will have the means or the inclination to compensate such losses. Such indirect financial harms are currently not compensable under the Oil Pollution Act. Nevertheless, losses in consumer confidence are real and Congress, federal agencies, and responsible parties should consider ways to restore consumer confidence in the aftermath of a Spill of National Significance.

¶Recommendation E4: Congress, federal agencies, and responsible parties should take steps to restore consumer confidence in the aftermath of a Spill of National Significance.

5. The Need for a Long-Term Restoration Effort that Is Well Funded, Scientifically Grounded, and Responsive to Regional Needs and Public Input As described in Chapter 7, a lack of sustained and predictable funding, together with failed project coordination and long-term planning, have resulted in incomplete and often ineffective efforts to restore the Gulf 's natural environment. Currently, no funding source exists to support regional restoration efforts. Estimates of the cost of Gulf restoration vary widely, but according to testimony before the Commission, fully restoring the Gulf will require $15 billion–$20 billion, or a minimum of $500 million per year, over 30 years. While a number of different sources currently provide funding to individual states for restoration, none of these sources provides funds for Gulf-wide coastal and marine restoration and none is sufficient to support the sustained effort required. Most policymakers agree that without a reliable source of long-term funding, it will be impossible to achieve restoration in the Gulf.

¶Several Gulf States and the federal government have filed or are expected to file suit against BP and other companies involved in the spill, which will likely create opportunities to direct new restoration funds to the region. In some cases, congressional action will be required to ensure that funds are directed to this purpose. Meanwhile, Congress has already begun considering other potential funding sources, including a higher per-barrel tax on oil production, increased royalties or fees, and direct appropriations for Gulf-wide restoration through the normal federal budget process. Although many of these proposals face political hurdles, the fact remains that resources are needed if progress on coastal restoration is to continue. Inaction is a prescription for further degradation: since many Gulf ecosystems were already fragile and deteriorating before the spill, maintaining the status quo amounts to accepting their continued decline, with the longer-term risks and vulnerabilities this entails.

¶In order for funding to be most efficiently directed at long-term restoration, a decisionmaking body is needed that has authority to set binding priorities and criteria for project funding. The Gulf Coast Ecosystem Restoration Task Force is now in place; it was recommended by a September 2010 report on restoration from Secretary of the Navy Ray

Mabus to the President and subsequently established by Presidential Executive Order.29 According to the language of the Executive Order, the job of the Task Force is to begin coordinating the different restoration projects being undertaken by various jurisdictions in the Gulf, coordinating related science activities, and engaging stakeholders. However, as many in Congress and the Administration have suggested, the Task Force lacks some features necessary to effectively direct long-term restoration efforts in the Gulf—most importantly the ability to set binding goals and priorities. A number of critical issues remain to be addressed, including how to allocate funding in a way that addresses the relative restoration needs of individual states; how to balance the roles and interests of the state and federal governments; how to ensure that decisions are made efficiently and quickly; how to incorporate good science without unduly slowing valuable projects; and how to incorporate meaningful public input.

Recommendations E5: Congress should dedicate 80 percent of the Clean Water Act penalties to long-term restoration of the Gulf of Mexico.

E6: Congress and federal and state agencies should build the organizational, financial, scientific, and public outreach capacities needed to put the restoration effort on a strong footing.

The Commission's recommendations share much common ground with those outlined in Secretary Mabus's report this past September. For instance, the Commission recommends that Congress—recognizing that dedicated, sustained funding is necessary to accomplish long-term Gulf of Mexico ecosystem restoration—should direct 80 percent of Clean Water Act penalties to support implementation of a region-wide restoration strategy. Directing such payments to the Gulf could, for the next 10 years, provide significant funding. If litigation arising from the spill results in civil or criminal penalties, a global settlement of litigation should include supplemental environmental projects* and community service projects that direct payments to the Gulf. Should Clean Water Act penalties not be redirected toward Gulf ecosystem restoration, Congress should consider other mechanisms for a dedicated funding stream not subject to annual appropriations.

The Commission recommends that Congress establish a joint state-federal Gulf Coast Ecosystem Restoration Council. The structure of the Exxon Valdez Oil Spill Trustee Council should inform the structure of the Gulf Coast Council on the question of the relative representation of the federal and state governments on the council. The Gulf Coast Council should implement a restoration strategy for the region that is compatible with existing state restoration goals. This strategy should set short- and long-term goals with criteria for selecting projects for funding. Key criteria should include (1) national significance; (2) contribution to achieving ecosystem resilience; and (3) the extent to which national policies such as related to flood control, oil and gas development, agriculture, and navigation directly contributed to the environmental problem.

• "Supplemental environmental projects" are projects that a defendant agrees to undertake as part of a settlement with government of an enforcement action and that are above and beyond those necessary to comply with applicable legal requirements.

¶Experience in major restoration endeavors, including those in the Gulf, has shown that, absent binding goals to drive the process, restoration projects are insufficiently funded, focused, or coordinated. Establishing a region-wide council to coordinate agency activities represents a necessary first step, but without authority to set priorities and resolve conflicts, such a council will be hampered in its ability to achieve environmental goals. The Commission recommends that a region-wide council for the Gulf be given authority to set priorities that will govern the expenditure of funds and resolve any conflicts regarding eligibility of projects. The council should further define specific categories of projects that could meet each of the three criteria listed above. Projects could be categorized in a number of ways—for example, by habitat (key estuaries, sea grass, wetlands, coral reefs); by goal (biological productivity and ecosystem function, improving resilience, restoring fisheries); or by specific project type (river diversion, beach nourishment).

¶The Commission believes that having a comprehensive, binding strategy to guide the restoration effort is critical to success. By elaborating on the goals set by the governing entity and by providing specific milestones and restoration objectives, such a strategy would focus the overall effort and help ensure that projects are not duplicative. The strategy could also include a map that ties projects to specific places and provide a useful mechanism for public involvement. Congress should also ensure that the priorities and decisions of the Gulf Coast Council are informed by input from a Citizens Advisory Council that represents diverse stakeholders.

¶Finally, but essentially, restoration decisions must be rooted in science. An approach that draws heavily on information and advice from scientists will result in project selection and funding allocations that are more likely to lead to an effective region-wide restoration strategy. It will also advance transparency in decision-making and enhance credibility with the public. The Commission accordingly recommends the establishment of a Gulf Coast Ecosystem Restoration Science and Technology Program that would address these issues in three ways: 1) by creating a scientific research and analysis program, supported by the restoration fund, that is designed to support the design of scientifically sound restoration projects; 2) by creating a science panel to evaluate individual projects for technical effectiveness and consistency with the comprehensive strategy; and 3) by supporting adaptive management plans based on monitoring of outcomes scaled both to the strategy itself and to the individual projects or categories of projects included in it.