$4.4-Billion in Oil-Spill Fines Flows to Nonprofit Projects on the Gulf Coast

Portions of the $4.4-billion in criminal fines stemming from the 2010 Deep Horizon oil spill have started to hit the books of nonprofit organizations, setting in motion some restoration and research projects along the Gulf Coast.

The payouts, forced by criminal charges brought by the U.S. Department of Justice, come even as billions in other oil-spill money remains caught up in litigation, including a case brought by the energy company BP to rescind some damage claims awarded to small nonprofits.

The National Academy of Sciences has in hand $29-million of the $500-million it will receive as part of settlements finalized in early 2013. The sum includes $350-million from BP and $150-million from Transocean Ltd., which owned and operated the Deepwater Horizon oil rig. The money will be paid in increments through 2018, although all $500-million was accounted for in NAS’s 2013 Form 990, giving it a nearly 1,000 percent, one-year increase in private support and launching it to No. 27 on The Chronicle’s Philanthropy 400 list.

The money directed to NAS will fund a 30-year Gulf Research Program, the mission of which is to improve safety in the offshore oil and gas industry, explore relationships between the environment and human health, and advance understanding of the region.

Planning the Mission

Chris Elfring, executive director of the program, said an advisory group spent months studying the gulf, meeting with stakeholders, and planning how the program can best fulfill its mission. Some of the work involved communicating the history of the NAS, which is a private nonprofit but is sometimes mistaken for a government agency. (NAS does receive about 85 percent of its funding from government contracts.)

Ms. Elfring doesn’t think of the oil-spill money and related research as a silver lining, citing the victims and the long-term damage of the 2010 disaster, but she said it could add energy to a region that some would describe as overlooked.

“It is an opportunity to do some work that is future-oriented,” Ms. Elfring said. “How do you use the best science and technology to create a more-resilient gulf for the future? I think that is a tremendous opportunity for everybody, and a little bit of a scary obligation.”

Later this fall, the Gulf Research Program will begin accepting applications for exploratory grants in areas that include the education and training of workers in the offshore oil and gas industry, Ms. Elfring said. The first round of grants will be about $100,000 each, and will likely go to university-based researchers, although recipients could include nonprofits with good research arms.

$2.5-Billion Payout

As part of the criminal settlements, the National Fish and Wildlife Foundation will receive $2.3-billion over five years from BP and $150-million over two years from Transocean for its Gulf Environmental Benefit Fund. The $2.5-billion will eclipse the total funding the foundation has received since it was chartered by Congress in 1984.

The foundation made The Chronicle’s Philanthropy 400 list for the first time this year at No. 248. It’s unclear to what extent oil-related money may be responsible for the 160-percent increase in its private support, but it appears likely the foundation will continue to climb in the rankings of the nation’s largest charities because of the settlements.

Half of the money is to be spent on barrier-island and river-diversion projects in Louisiana, with the balance going to projects in the other four gulf states. In April, the foundation announced $144.5-million in funding to restore beach and dune habitat at Caminada Headland Beach in Louisiana.

Cyn Sarthou, executive director of the Gulf Restoration Network, a New Orleans-based nonprofit that has been closely tracking the spill, its impact, and the restitution process, said the National Fish and Wildlife Foundation has been tremendously cautious in spending the money, identifying projects with state agencies. One result is that smaller restoration groups and land trusts are mostly being left out, she says.

“It is ending up being big national groups who are essentially inside the process, and it doesn’t mean those projects aren’t going to be good,” Ms. Sarthou says. “But there are smaller, more-discreet projects that communities may be more supportive of that may get excluded.”

Julia Weaver, co-coordinator of the Partnership for Gulf Coast Land Conservation, an organization of 30 land trusts in the five Gulf Coast states, said that the states have a lot of leeway in selecting the projects that will be funded with money from the Gulf Environmental Benefit Fund and the participating partners.

“We hope that as these projects roll out over the next four years, there will be opportunities for nonprofits and land-conservation organizations of all sizes,” Ms. Weaver said.

More Legal Action

While payouts stemming from criminal charges brought by the Department of Justice are starting to flow, those active in the restitution process point out that billions more remains caught up in legal proceedings.

In September, a federal judge ruled that BP was “grossly negligent” in its role in the oil spill, setting the stage for as much as $18-billion in additional fines under the federal Clean Water Act. BP is appealing the decision in the civil case, which could drag on for years.

Environmentalists in Alabama are trying to fight plans there to use $58-million in oil-spill money from another $1-billion pot, known as the Natural Resource Damage Assessment, to build a convention center.

And in recent months, BP sought return payment on some damage claims awarded to nonprofit organizations that the company says did not suffer losses as a result of the 2010 spill, according to new reports.

“I think what philanthropists need to understand is that there is this impression that there is a lot of money flowing in the gulf,” Ms. Sarthou says. “There is, in fact, not a lot of money flowing in the gulf. The fisheries are still in trouble. The fishermen are hurting. We are still fighting this battle to get people to do what they need to do.”