Another View of the BP Settlement Monies
The BP oil settlement does not make ANY proposed project a “done deal”, the road is still long until we should even hope to see any funding. That doesn’t mean we need to throw up our hands in despair, it just means we need to work a little harder now that our voices can make a difference.
In the meantime, columnist, Lynn Ashby waded in with his thoughts on the BP settlement in Friday, July 10, 2015 Opinion page of The Facts (page 5A). They are recounted below with his permission.
LYNN ASHBY: Don't count your chickens on BP payout
As expected, I found you here, checking out the 2016 Lamborghinis. I am thinking the same, or maybe a round-the-world cruise. The kids can pay off their own student loans. I am discussing, of course, the very large fortune that is coming our way — our share of the $18.7 billion that BP is going to pay out for its big oil dump in the Gulf off the Louisiana coast. Of that pile of cash, Texas is going to receive $788 million. There are currently about 27 million Texans, so that breaks down to, uh, 29 something for each of us. Maybe it’s $29,000 or $290,000. Or perhaps $29.
Before you pick the color of your Aventador — at $548,800 a steal — let’s discuss a few points. First, it is not really $788 million in cash BP is shoving across the table. The money is to be distributed over the next 15 to 18 years. Can anyone remember any politician’s or businessman’s promise from then? By 2028, the Deepwater Horizon disaster will be only an oil slime covering some forgotten pelicans. Also, some of this BP money has already been spent. BP being a British company and formerly British Petroleum, we’ll probably be paid in euros or pounds or quid.
However, congratulations to our Texas lawyers for getting all that loot considering our Gulf shores didn’t really suffer that much harm from oil scum. We had a few tar balls wash up close to Louisiana, some fishermen were inconvenienced, maybe even hurt financially, but in no way did Texas suffer $788 million in damages.
Where to spend the money? Some of it has already been earmarked: $70 million for conservation, more for campsites, boardwalks and showers, plus research projects at Texas A&M-Corpus Christi and UH. Almost half of these particular funds, $34.5 million, are being spent to buy a ranch. It’s the 17,351-acres Powderhorn Ranch along the coast between Port O’Connor and Port Lavaca, untouched by the spill. Just how one rationalizes spending money for oil spill damages into funds for classrooms and showers eludes me. Maybe the showers are for oil-soaked dolphins. The rest of that $788 million is up for grabs.
Fortunately, in this feeding frenzy for unexpected loot, we have a precedent, which we can learn from: The Big Tobacco Windfall of 1998. Under the agreement between the tobacco industry and most of the states, they would receive more than $206 billion over the next 25 years. Texas’s share was $15.3 billion — later increased to $17.3 billion — only behind California and New York. The money to the states was to be spent on health issues, anti-smoking messages, mostly for teenagers, and associated causes.
In Alaska, $3.5 million in settlement money was spent on shipping docks. In Niagara County, N.Y., $700,000 went for a public golf course’s sprinkler system, and $24 million for a county jail and an office building. Colorado has spent tens of millions of its share to support a literacy program. And in North Carolina, in the ultimate irony, $42 million of the settlement funds actually went to tobacco farmers for modernization and marketing. Here in Texas, the state says it is spending the tobacco money as it is supposed to, but I haven’t seen any anti-tobacco ads, maybe because I’m not a smoking teenager. Anyway, keep your eye out for new golf course’s sprinkler systems.
When it comes to legal fees, Texas is Numero Uno. With the tobacco settlement finally done, the lawyers descended, demanding fees which in some cases were ridiculous, others were only outrageous. By judge-shopping, attorneys received such generous payouts that some states sued to reduce them. Atlantic Monthly noted that the Massachusetts lawyers in that state’s tobacco case had already been awarded $775 million, an average of more than $7,700 an hour. Texas scored the highest per capita legal fees award with $3.3 billion being divided among five lawyers plus two out-of-state attorneys, but at the end Texas lawyers were suing one another for a bigger chunk of the pie.
Then there is Katrina, which we shall be hearing about for years, mainly over lawsuits. My application for $5 million in yacht repairs was turned down because the judge said my rowboat had been deemed “unfit even for dry land” by the Coast Guard. Like they know anything about boats. So don’t order that Lamborghini just yet. You probably need the advice of a good lawyer.