Morgan City, La. — Last Friday, the Fifth Circuit Court of Appeals reined in BP’s efforts to curb payouts for what the oil company called “absurd” and “fictitious” claims related to the 2010 Gulf Coast Deepwater Horizon oil spill. Two out of three judges on the panel affirmed a federal judge’s approval of the massive 2012 settlement. So, if this decision stands, BP will continue to dispense cash to Gulf Coast residents and businesses that can show they were harmed by the spill.
Separately, the Gulf Coast state and local governments are gearing up for an influx of Clean Water Act fines stemming from the spill, which Congress has steered out of Washington and toward the states. And one public official in Louisiana, Garret Graves, knows exactly how his state could spend this money.
But neither that nor his other title, chairman of Louisiana’s Coastal Protection and Restoration Authority, really does him justice. The truth is, Graves is perhaps the most powerful unelected public official in Louisiana, whose leadership will shape the southern half of the state for generations to come.
For the last six years, Graves has been Governor Bobby Jindal’s point man on rebuilding the rapidly decaying coastal areas of the state, which lose about a football field’s worth of wetlands every hour. Coastal erosion, ground subsidence or sinking, and rising sea levels have made Louisianans as far inland as New Orleans increasingly vulnerable to hurricanes, floods, and storms.
Graves is determined to address the situation — and in the process, recast Louisiana as a state that can solve big problems. By his reckoning, the planning, coastal restoration, and infrastructure building that Louisiana is undertaking now can teach lessons to the other 34 coastal states and territories, and indeed to countries around the world.
That would be no mean feat for a state still reeling from generations of corruption and malfeasance, as well as the lingering effects of Hurricane Katrina.
In August 2005, Graves was working as a professional Republican staffer for the U.S. Senate Commerce, Science, and Transportation Committee; previously, he had worked for Louisiana representative Billy Tauzin, for Senator John Breaux, and for the House Energy and Commerce Committee. But when Katrina hit, Graves got sucked into home-state issues dealing with the storm — which were inseparable from the problem of the state’s deteriorating coastline.
Graves studied engineering in college, but he had no specific expertise on coastal issues. “Being from Baton Rouge, I knew we had a coast,” Graves admits. “But I didn’t have an intimate understanding” of its ecology. What Graves did understand and felt passionately about, though, was the outdoors. During college, Graves taught outdoor education during summers, and while in D.C., he spent weekends out in West Virginia working as a river guide.
Shortly after Katrina, Governor Kathleen Blanco created the Coastal Protection and Restoration Authority (CPRA), which was tasked with weaving together the various flood-control and wetlands-restoration efforts along Louisiana’s coastline into something resembling a cohesive vision. In 2007, the agency produced the state’s first coastal master plan, an effort Graves calls “under the conditions, really impressive.”
In 2008, newly elected governor Bobby Jindal tapped Graves to head up the CPRA. Graves returned to Baton Rouge and started to dig into the mishmash of agencies, programs, and boards charged with restoring the coast. His team found over two dozen different levee districts and five state agencies with a stake in the coast. Including federal, state, local, and private sources for coastal rebuilding, there were almost 40 funding streams to turn into a rational overall approach.
“If we were going to be prepared for another Katrina-like situation,” Graves decided, “we were going to have to have a more streamlined approach to how this mission is carried out.”
That meant moving beyond logrolling and sheer political muscle in determining which coastal infrastructure projects the state should fund and instead using cost-benefit analysis, a systems approach, and a transparent and open process for thinking about projects to undertake.
But 2010 crystalized the sense of urgency — and catapulted the CPRA and Graves into higher political prominence. On April 20, a BP-operated oil rig exploded 50 miles off the Louisiana coast, killing eleven men and spewing million of barrels of oil into the Gulf of Mexico over the coming months.
Louisiana’s coastline was by far the hardest hit in the five Gulf states, accounting for about half of the total oiled coastline. Governor Jindal’s office claims that when discounting “trace oiling” (places where only trivial amounts of oil were found), Louisiana’s shoreline suffered 99 percent of the burden. (Needless to say, other states disagree with Louisiana’s assessment.)
So Graves’s team stepped up their work of translating the previous master plan into realistic projects and policies. The first issue confronting them was that the previous outline wasn’t a plan so much as a wish list: By their estimation, it contained about $300 billion in potential projects. So they had to narrow it down to a more manageable $50 billion over 50 years.
For months, Graves’s team drove and flew around southern Louisiana, holding listening sessions and private meetings and encouraging Louisianans to think about the plan not only in terms of outcomes but also in terms of process. Citizens were encouraged to think beyond what they and their communities wanted immediately and instead understand the benefits of developing a comprehensive coastal plan that would that would have effects both today as well as far into the future. Graves and his colleagues tried to remain open to ideas, even those that were unlikely to pass the muster of cost-benefit analysis. It is important to realize, Graves says, that when people ask for pet projects, they’re not wrong. “But at the same time, you have to be rational,” he adds, “You can’t be emotional.”
The plan that Graves’s team developed contains 397 discrete projects, including 33 structural projects such as building and strengthening levees. The bulk of the plan is its 248 restoration projects, such as oyster-barrier-reef and wetland restoration, many of which will alleviate the impact of hurricanes and reduce flooding. In terms of cost, the master plan runs the gamut from a $1 million salinity-control weir in Vermilion Parish to almost $4 billion for 60 miles of levees, ten barge gates, and a lock complex as part of the Morganza-to-the-Gulf hurricane-protection system in Terrebonne and Lafourche Parishes.
Three vital characteristics make this qualify as a realistic plan, as opposed to a bureaucratic flight of fancy. First, the plan is comprehensive and systemic, and it considers the interactions between different projects. The CPRA developed a “Planning Tool” that generated terabytes of data to help model how different projects affect one another and how benefits to one area might harm others — and how those harms might be mitigated.
Second, the plan is constrained by budget considerations. It takes account not just of upfront costs but of maintenance and operations costs as well.
Third, and perhaps most important, despite making hard choices the plan has democratic legitimacy. In May 2012, the Louisiana legislature unanimously approved the master plan, ratifying the Graves team’s vision for the coast.
The plan got a big boost two months later, when Congress passed the RESTORE Act. Sponsored by Representative Steve Scalise in the House and Senator Mary Landrieu in the Senate, the Act sets aside 80 percent of the Clean Water Act fines paid by BP and rig owner Transocean for environmental and economic projects in the Gulf Coast states.
Currently, a federal judge in New Orleans is sorting through conflicting claims of fact and law to determine what fines BP must pay under the Clear Water Act. (Transocean already paid a $1 billion fine.) Total Clean Water Act fines could total as much as $18 billion, of which perhaps $6 billion could make its way to the Louisiana coastline.
Whatever the outcome of the case, Louisiana stands head and shoulders above the other coastal states in having a plan to spend the windfall. There’s widespread (though not unanimous) consensus in Louisiana that RESTORE Act funds should go to jump-starting the master plan.
Other Gulf Coast states are trying to make plans, but none have anything as concrete as Louisiana’s, and none have as much democratic and popular legitimacy. In many ways, the other states are today where Louisiana was in 2007: in a brainstorming phase. Louisiana’s budget-constrained, systematic approach to the coast took time to develop — and other states might do well to emulate it.
For Graves, the RESTORE Act isn’t just an opportunity to fund coastal-master-plan projects, it’s a chance to show how “principled infrastructure investments can yield exponential benefits.” While so much of the country — think of Virginia’s recent legislative brawl over a tax hike to pay for new roads — is embroiled in debating how much public money to spend, the debate on coastal restoration in Louisiana is more focused on how well the money can be spent.
By Graves’s reckoning, $8 billion invested before Katrina would have reduced property damage and loss of life by 80 to 90 percent across the state. “We need to have a balanced budget and spend responsibly,” Graves argues. “But if you make infrastructure spending decisions with the right criteria, you actually generate cost savings.”
RESTORE Act funds aren’t taxpayer money; they’re a civil fine that would have otherwise gone to the federally administered Oil Spill Liability Trust Fund. Instead, they’re going to the states — along with great leeway in deciding how to spend them. The question is whether they’ll be spent responsibly, or — like the tobacco-settlement funds from the ’90s — turn into a slush fund augmenting general revenue and growing government in the process.
What happens next is in the hands of the Gulf Coast states, and Louisiana is leading the pack in having thought through how to spend its windfall intelligently. Whether Louisiana and its neighbors end up turning the fallout from the oil spill into something beneficial will be a significant part of the legacy of the coast’s five Republican governors — and will have ramifications for decades to come.
— Daniel M. Rothschild is a senior fellow and director of state projects at the R Street Institute.