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Transocean Settlement Means $20 Million More for General Fund

By Brandon Moseley
Alabama Political Reporter

Thursday, October 22 Alabama Governor Robert Bentley (R) announced that Alabama has agreed to a settlement with Transocean Offshore Deepwater Drilling, Inc., which owned the Deepwater Horizon. Alabama will receive $20 million which is all being directed to the state general fund (SGF).

Governor Bentley said, “The State of Alabama suffered tremendous environmental and economic losses because of the BP/Deepwater Horizon oil spill in April 2010.  I appreciate the entire Alabama team for working to ensure Alabama is fairly compensated. This agreement with Transocean is another positive step forward as we continue to recover from the effects of such a significant environmental and economic disaster.”

Alabama Attorney General Luther Strange (R) said in a statement, “I’m pleased to announce that Transocean has paid $20 million into the State’s General Fund to settle the State’s remaining claims against the company for its role in the disastrous 2010 Gulf oil spill.  Alabama’s recovery is due to the hard work of my staff in pursuing our case against Transocean, while they simultaneously litigated the State’s case against BP.”

On April 20, 2010, the Deepwater Horizon floating drilling rig owned by Transocean and used by BP exploded, killing 11 people, and releasing over 3 million barrels of oil into the Gulf of Mexico.  The Alabama’s Gulf Coast and neighboring coastal states were inundated with oil just a couple of weeks into the busiest time of the tourist season.  The shrimp and oyster fleets were effectively shut down for the year and the area with arguably the most robust economy in the state endured a sudden economic downturn surpassing almost anything else within memory.

Earlier this year, an agreement in principle was reached with BP that resulted in an agreement to pay the State of Alabama $2.3 billion, with $1.3 billion going directly to the Gulf Coast region in federally approved coastal restoration projects and $1 billion to be paid to the state.  $50 million of that money has been earmarked for Governor Bentley’s controversial Hotel and Conference Center by the beach.  The legislature refused to borrow $50 million for the expensive project at Gulf State Park, but Bentley went around the legislature and negotiated the money into the BP settlement.

All the money that is going to the SGF is supposed to go to pay back the Alabama Trust Fund which has been raided twice by the state legislature by over $547 million and to pay back the federal government which has been improperly overbilled by Alabama Medicaid.  The $billion from BP is payable over a seventeen year window so it could be well over a decade before the Alabama Trust Fund is restored.

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Not everyone is happy with using the gulf disaster settlement money to satisfy the state’s past overspending problems.

State Auditor Jim Zeigler (R) says the settlement is, “grossly unfair to the people and businesses in Baldwin and Mobile counties.”  “How much oil spilled in Montgomery? None. But all the money is spilling in Montgomery,” Zeigler said in a response early Friday morning.

Congressman Bradley Byrne (R from Montrose) said: “Here we go again. The state has reached another settlement related to the Deepwater Horizon oil spill, and yet again the money is heading to politicians in Montgomery instead of to citizens in Alabama’s coastal counties. These settlements are a grave injustice to the thousands of Alabamians who live and work on the Gulf and saw their way of life changed by the oil spill. I applaud the efforts of our local state legislators who are fighting to ensure money from the General Fund is directed back to the Gulf – where it belongs.”

State Rep. Margie Wilcox (R from Mobile) and other Gulf Coast legislators are preparing legislation for the 2016 regular legislative session to direct $500 million of those funds back to the Alabama Gulfcoast.

Rep. Wilcox said in a statement on Facebook, “Mobile and Baldwin County suffered the losses from BP Oil Spill. Once again I will introduce legislation to make sure funds are spent on our coast. No one has explained to me yet why Mobile and Baldwin Counties should not get AT LEAST HALF of these settlement dollars. Please Contact the Governor and help me with this effort.”

Gov. Bentley has stated his opposition to the diversion of funds.

Zeigler said, “This deal should have been first presented as only a proposed settlement instead of a done deal. That way Alabama citizens and leaders outside Montgomery would have had the chance for input into the settlement terms and where the money is going.”

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Zeigler said, “I fear that the money will be wasted propping up political programs not related to the oil spill damage. Three years from now, we would have nothing to show for this $20 million. It could be gone with the wind.”


(Original reporting by the Alabama Media Group’s John Sharp contributed to this report.)


Brandon Moseley is a former reporter at the Alabama Political Reporter.

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