BP Spill Settlement Is $2.4 Billion Windfall for Wildlife

Oil was still gushing from BP Plc (BP/)’s Macondo well in 2010 when a little-known non-profit rushed to establish a new resting area for more than 1 billion migratory birds that stop each year at the Gulf of Mexico.

The National Fish and Wildlife Foundation, a government- chartered charity, realized it could pay rice farmers in adjacent areas of Louisiana and Texas to flood their lands, creating instant, faux wetlands for the birds to rest and feed. All in all it spent more than $22 million on that and similar Gulf projects, much of funded by the sale of BP’s recovered oil.

Now it has a mission 100 times greater: administering projects to restore the Gulf with $2.4 billion from the settlement last week between BP and the Department of Justice. The group, which typically operates out of the spotlight, now takes a primary role as it gets the largest share of the $4.5 billion criminal settlement.

“When something breaks and somebody needs to pay for it, you’ll normally see that we’re the fiduciary,” Jeff Trandahl, the Washington-based foundation’s president, said in an interview, referring to environmental crimes.

The foundation was formed in 1984 as Republican senators wanted to counter President Ronald Reagan’s funding cuts for conservation with a way to augment private contributions, Trandahl said. The foundation doesn’t do the conservation work itself; it administers grants to national non-profits such as the National Audubon Society or Ducks Unlimited or to local conservation groups.

Court Settlements

It also gets funds from companies as part of court settlements or as government-mandated offset requirements as part of the permitting process.

“I’ve never heard anything bad about NFWF,” Cynthia Sarthou, executive director of the Gulf Restoration Network, said in an interview. “They tend to be conservative in their investments, which I can understand,” given the nature of funding, she said.

Since it was formed, the foundation got $618 million in federal funds and, which combined with other contributions, resulted in more than $2 billion in conservation efforts. The group distributed $46 million from federal sources and $16 million from private funds in 2011, according to its annual report. It has a professional staff of about 100 people. And it has taken on a variety of corporate partners.

Corporate Partners

Since 2005 the foundation has administered the Acres for America fund for Wal-Mart Stores Inc. (WMT), the world’s largest retailer. The program has preserved more than 700,000 acres nationwide, more than offseting its total development of stores and parking lots, Trandahl said.

Southern Co. (SO), which owns the coal-fired power plants with the greatest greenhouse-gas emissions in the U.S., gave more than $11 million to the foundation for protection of pine forests, which can help bird populations and capture carbon- dioxide.

And FedEx Corp. (FDX), the world’s largest air-freight carrier, chipped in after the BP spill, using specially outfitted trucks to carry delicate sea-turtle eggs in Florida from the Gulf Coast, where they faced certain death, to Cape Canaveral on the Atlantic coast, providing them a chance of survival.

The April 2010 Macondo well blowout and explosion set off the worst offshore oil spill in U.S. history. The government estimated that more than 4 million barrels of oil spilled.

The record settlement announced last week ended all criminal charges against BP, Europe’s second-biggest oil company, and settled Securities and Exchange Commission claims.

BP Settlement

BP agreed to plead guilty to 14 criminal counts including 11 for felony manslaughter for the 11 people who died when the Deepwater Horizon drilling rig exploded and sank. The company still faces civil claims.

Of the $4.5 billion, $2.4 billion will go to NFWF, in installments over five years.

The settlement includes details on how the group must spend that money. About half of it will go to Louisiana, to help the state government restore barrier islands or for river diversion projects. The other half will be divvied up among projects in Texas, Alabama, Florida and Mississippi.

In each case the states will identify projects they want funded, and the foundation will issue requests for proposals or similar processes to figure out which groups can best do the work.

“These funds are going to go to the agencies, or NGOs or whomever is doing the work,” Thomas Kelsch, the group’s vice president for conservation, said in an interview.

To contact the reporter on this story: Mark Drajem in Washington at mdrajem@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net

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