BP Wants Unspent Spill Recovery Money Back

After watching a $5 million grant to Gov. Rick Perry’s office go unspent nearly four years after it was presented in the wake of the April 2010 Deepwater Horizon explosion and oil spill in the Gulf of Mexico, BP is asking Texas for its money back.

The funds were given to Texas in September 2010 to help with oil spill recovery, but few of the state and local officials who work on such projects were aware of the grant until a legislative hearing in May. Lawmakers at the hearing were angered and said the money should have been given to agencies with the expertise to spend it. BP was frustrated as early as last winter about the unspent funds and asked Perry to return the money, according to correspondence obtained by The Texas Tribune through an open records request.

“The State has allowed the funds to sit in its General Revenue account, earning $20,871.63 in interest over the past three years,” a BP attorney wrote in a letter to Perry last November. “As such, BP respectfully requests that the State of Texas return the unused and unneeded $5 million grant to BP.”

In January, Perry’s office responded, "respectfully" denying the company's request for a return of the money and arguing that “the State cannot accept an arbitrary deadline to expend the funds.” The letter went on to say that the money would be used for a “website and grant programs.” 

Six months later, only $51,000 has been spent and no functioning website has materialized — although the state has purchased the domain name restorethetexascoast.org. Meanwhile, attorneys, environmental advocates and local officials say Texas is lagging far behind four other Gulf states in recovery efforts after the disaster.

Asked why the funds remain largely unspent, Perry spokeswoman Lucy Nashed did not directly respond.

"As you can imagine, the costs for an incident of this magnitude are ongoing, and we continue to work with agencies to determine where use of these funds is appropriate," Nashed said in an emailed statement.

Jan Fox, a lawyer who represents Harris County and the City of Houston in lawsuits against BP relating to the spill, said it was frustrating to see other states that are more advanced in the recovery process. For instance, Mississippi already has a website related to spill recovery funds that lists the sources of money and allows the public to submit project proposals. 

“As a Texan, you’d like be be up front,” Fox said.

The Texas Commission on Environmental Quality had demanded a share of the $5 million in December 2012. TCEQ commissioner Toby Baker sent a pointed letter to Perry, emphasizing that Texas agencies had been funding oil spill restoration efforts without any outside help.

“Administrative funds are desperately needed to continue this work,” he wrote. In September 2013 — about nine months after Baker's letter — Perry’s office transferred $1 million to the TCEQ. About $51,000 of that has been spent, largely on administrative costs, according to the agency.

Nonprofit environmental groups and local governments said state officials promised for years that they would create a website that would be similar to the one Mississippi has launched. They had hoped for a site that would serve as a "one-stop shop" and show where oil recovery funds were coming from, what they were being spent on and allow the public to submit proposals.  

But the TCEQ recently told groups informally that the “one-stop shop” idea is more of a “long-term vision” for the site. For now, whenever the site launches, it will only include information about recovery funds. The site will not allow proposals from the public.

“What people really want is to say what projects they want. They don’t want to just make comments to a draft plan,” said Amanda Fuller, a Texas policy specialist for the National Wildlife Federation. “They want to actually interact in this process.” The agency said it expects that soon after the site launches, a "project submission form" will be accessible to the public, but did not specify when. 

The $5 million grant is not the only spill-related money that is in limbo. It is a tiny fraction of the amount of money that will eventually become available to Texas, and TCEQ spokesman Terry Clawson said that delays in allocating the rest of the funds have meant that building the website and deciding how to administer the recovery money has taken longer than expected.

Several million dollars in criminal penalties paid by BP have already been awarded to research institutions in Texas for damage assessment and restoration work. But the rest of the money — hundreds of millions of dollars — is tied up in legal and other disputes. The federal government has been slow to release rules for allocating money that BP will have to pay in civil penalties, and the company is also arguing over the amount of those penalties.

State officials are also holding up the process for receiving another source of funding that should have been available by now — about $18 million in “early restoration” funds that would go toward artificial reef projects and redeveloping some Galveston beaches.

The state has been tight-lipped about why it will not sign off on receiving the funds, which are part of a $1 billion payment BP made to the five Gulf states. The money was supposed to help jump-start restoration efforts while the rest of the funds remain tied up in litigation.

“It’s just a little too early to say at this point what’s going to happen,” said Tom Harvey, a spokesman for the Texas Parks and Wildlife Department, one of several agencies involved in negotiations over the early restoration money. 

As the negotiations and litigation continue, local officials and organizations eager to do restoration work on the Texas coast are waiting for funds to become available, watching as other states spend millions of dollars.

Dan Alonso, executive director of the nonprofit San Antonio Bay Foundation, said he has grant proposals ready to go to study the impacts of the spill on shorebirds and fishing populations in San Antonio Bay.

“We’re all eyes and ears … really wanting to know, when is the state going to get this effort launched?” Alonso said.

Disclosure: BP America and BP Corporation North America Inc. have been corporate sponsors of The Texas Tribune. A complete list of Texas Tribune donors and sponsors can be viewed here.