September 27, 2010 / 3:31 PM / 9 years ago

Alabama expects billions from BP over oil spill

BIRMINGHAM, Alabama (Reuters) - Alabama expects to receive billions of dollars in penalties from BP Plc in the wake of the oil spill in the Gulf of Mexico, a state commission said on Monday.

Contract workers shovel oil from a beach impacted by the Deepwater Horizon oil spill in Gulf Shores, Alabama June 16, 2010. REUTERS/Lee Celano

BP and the White House will probably soon reach an agreement on how much money will be available to four Gulf states that have been affected by the spill, said the state Coastal Recovery Commission set up by Governor Bob Riley.

“While we don’t know the total or how it will be divided ... we have every reason to believe Alabama will suddenly have significant resources at its disposal, likely in the billions of dollars,” the statement said.

The commission is charged with examining the impacts of the spill and recommending proposals to protect and enhance the coastline, Riley said in a separate statement.

Alabama has to “make sure that the aftermath of this disaster is addressed and that we have a plan to fully recover what has been lost,” said Ricky Matthews, publisher of the Mobile Press-Register newspaper and chairman of the commission.

“We have to understand what the issues are and how to handle them,” he said in an interview. The commission is due to meet on Tuesday.

DISPUTE

Louisiana’s coastline bore the brunt of damage from the spill, which began on April 20 when a BP deepwater rig exploded and sank, unleashing millions of gallons of oil into the Gulf of Mexico.

Alabama, Mississippi and Florida also sustained damage. The spill ran until July 15, when the well was capped.

BP this month turned down Alabama’s claim for $148 million in lost government revenue because it said there was ongoing litigation over the issue.

The state’s attorney general, Troy King, accused the company of “playing games” with Alabama and other states on the Gulf of Mexico coast.

There is a growing dispute over how states, individuals and businesses should be compensated for losses suffered as a result of the spill.

BP has set up a $20 billion compensation fund administered by lawyer Kenneth Feinberg to handle claims but a plethora of lawsuits also have been filed against the company.

Alabama’s losses stem from diminished sales, lodging and fuel tax revenues as tourists avoided the state’s coast this summer because of the spill.

Writing by Matthew Bigg; editing by Carol Bishopric

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