Compensating the Harm

The Deepwater Horizon spill caused substantial damage to natural resources and habitats across the Gulf coast and in the deepwater offshore environment. Damages to natural resources are formally assessed subject to regulations established under the Natural Resource Damage Assessment provisions of the Oil Pollution Act. The Act requires that the public be compensated for injury to and lost use of public resources. The Deepwater Horizon spill is unprecedented in that five Gulf States were affected, each with its own restoration agenda, even though most of the damage occurred in Louisiana.

Restoration decisions must be transparent, appropriate, and apolitical. An independent scientific auditor should be appointed to ensure that projects are authorized on the basis of their ability to mitigate actual damages caused by the spill, with special care taken to assess and compensate poorly understood marine impacts. Further, any potential settlement agreement between the responsible party and the Trustees should provide for long-term monitoring of affected resources for a period of at least three to five years.

Additionally, the economic blow to the Gulf region associated with the 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.

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 take steps to restore consumer confidence in the aftermath of a Spill of National Significance.