Additional $280M issued in BP oil spill restoration grants
Gulf states are getting an additional $280 million in restoration grants from the BP oil spill of 2010. The National Fish and Wildlife Foundation says Monday that Louisiana is getting $161 million to restore three barrier islands. Florida is receiving $53 million, including $16 million to protect coastal forest and wetlands along the Lower Suwanee River and Big Bend coast. Nearly $49 million will go to Alabama, including $22.5 million for artificial reefs. Texas will get $19 million, including $6 million to protect 575 acres of coastal habitat. The foundation is getting $2.5 billion over five years for restoration projects. The money’s coming from criminal damages paid by BP PLC and drilling company Transocean Deepwater Inc. Monday’s grants bring the total so far to $1.3 billion. Republished with permission from the Associated Press.
Steve Flowers: BP oil spill money, a missed opportunity for Alabama’s natural resources
We have unbelievable natural resources in Alabama starting with the Tennessee Valley and transcending to the beautiful white sands at Gulf Shores. Many of our natural resources have been exploited over the years. The prime example would be the exploitation of our rich vaults of iron ore discovered in Jefferson County in the early 20th Century. It created the city of Birmingham, the Steel City of the South. U.S. Steel swept in and bought the entire region and used cheap labor in the mines and steel mills and kept poor whites and blacks in poverty wages and shantytowns. They owed their soul to the company store. Finally, they organized into labor unions. The United Steel Workers Union Local in Birmingham became the largest in the nation. Alabama also became the most unionized state in the south. The TVA workers and Reynolds Aluminum workers in the Tennessee Valley were all unionized. The tire workers in Gadsden, Opelika, and Tuscaloosa were unionized. The federal workers around Ft. Rucker in the Wiregrass were union. The largest employer in Mobile was the docks. The dockworkers were unionized. When you combine these locales with the steelworkers in Birmingham, we were a pretty unionized state. In the course of our recent history, we have been more prudent with our natural resources. The prime example of that would be during the late 1970s when we sold the oil rights in Mobile Bay to Exxon Mobil. We got a fair price, and we put the entire corpus aside and preserved the money into a trust called the Heritage Trust Fund. Governor Fob James deserves credit for this accomplishment. It is the crowning achievement of his two terms as governor. It is quite a legacy. Not all governors leave a legacy. Ole Fob has one. Not as much can be said for our most recent governors. Don Siegelman, Bob Riley, and Robert Bentley cannot point to any accomplishment that will distinguish their time as governor. Jim Folsom Jr., who only served two years as governor, can lay claim to having lured and landed Mercedes, which has been the crucible that has catapulted us into the second leading automaker in the nation. Governor Bentley was given a golden opportunity to garner a place in history with the one-time BP oil spill money. Granted, it was not as much money as the Exxon Mobil oil rights nor did we get as good a settlement as could have been garnered. We will only see $693 million of the $1 billion settlement because we bailed out and sold out to get our money up front. Compared to Louisiana and Florida, it was not a good settlement. Essentially this one-time windfall will be squandered. The BP money was appropriated in a special session last September. The Legislature spent the entire BP oil settlement proceeds with a compromise bill that divided the money between state debt repayments, roads for Baldwin and Mobile counties and Medicaid. The allocation was $400 million for paying off state debts, $120 million for highway projects in Baldwin and Mobile counties, and a total of $120 million to Medicaid over the next two years. There had been a contentious battle over the funds for Baldwin and Mobile going back to last year’s regular session. Lawmakers from the coastal counties fought diligently for the road money because their counties received the brunt of the 2010 oil spill. Lawmakers from North Alabama felt that the BP settlement should compensate all Alabamians equally. Sen. Arthur Orr (R-Decatur), who chairs the Education Budget Committee in the Senate, led the fight for North Alabama and Sen. Trip Pittman (R-Baldwin), who chairs the Senate General Fund Committee, spearheaded the battle for Baldwin/Mobile. Senators compromised the final day of the special session. The money from BP is spent. The only thing to show for it will be some highway to the beach. They ought to at least name it the BP Expressway. It would be the only legacy from the windfall. See you next week. ___ Steve Flowers is Alabama’s leading political columnist. His weekly column appears in over 60 Alabama newspapers. He served 16 years in the state legislature. Steve may be reached at www.steveflowers.us.
Judge: BP not to pay oil industry losses from moratorium
A federal judge ruled that BP does not have to pay for economic losses other businesses suffered when the federal government shut down deep-water drilling in the wake of BP’s catastrophic 2010 oil spill in the Gulf of Mexico. U.S. District Judge Carl Barbier in New Orleans issued his ruling late Thursday. The Obama administration imposed a six-month drilling ban in the Gulf to prevent another disaster. The offshore industry called the moratorium a costly mistake. Barbier’s ruling came in a lawsuit brought by six companies involved in offshore drilling, but plaintiffs’ lawyers said thousands of similar claims worth billions of dollars would be affected by the ruling. The case centered on whether BP was liable under the Oil Pollution Act for the loss of business caused by the moratorium. Barbier sided with BP and said the law relates only to damages caused by the spill. The judge said Congress never intended for the Oil Pollution Act “to go so far” as to hold a polluter liable for government steps, like a moratorium, “aimed at preventing similar tragedies in the future and which broadly affect an entire industry.” The Oil Pollution Act was passed in 1990 after the disastrous Exxon Valdez oil spill in Alaska and it is the principal law covering oil spills. At issue was whether BP should be made to pay for damages that were “not a direct result of an oil discharge,” Barbier wrote. Barbier said “there can be no doubt” the moratorium was imposed because the blowout occurred, but the judge said the shutdown was designed to deal with “the risk of possible future blowouts and oil spills from wells other than Macondo and was motivated by perceived weaknesses of industry-wide safety measures.” BP declined to comment Friday on the ruling. The spill has cost the company $55.5 billion, according to a recent BP regulatory filing. Brent Coon, a Texas plaintiffs’ lawyer who represents clients with moratorium claims, said in a statement Friday that the ruling was a setback. Coon’s statement said the ruling “bodes poorly for yet another massive block of claims that have been waiting for years” for compensation. In April 2010, a well being drilled by BP and its contractors blew out and led to the sinking of the offshore rig Deepwater Horizon, killing 11 workers. The blowout caused more than 130 million gallons of oil to leak into the Gulf. In 2012, BP entered into a settlement with businesses and individuals claiming losses from the spill expected to cost BP over $10 billion. Last year, BP reached an $18.7 billion agreement with governments in the five Gulf Coast states affected by the spill. Republished with permission of the Associated Press.
Landmark settlement with BP over 2010 Gulf oil spill finalized
The Justice Department and five states have finalized a settlement worth more than $20 billion arising from the 2010 Deepwater Horizon oil spill in the Gulf of Mexico, federal officials announced Monday. The deal resolves all civil claims against BP and ends five years of legal fighting over the nearly 134 million-gallon spill. It requires the company to commit to a widespread cleanup project in the Gulf Coast area aimed at restoring wildlife, habitat, water quality and recreation. “BP is receiving the punishment it deserves, while also providing critical compensation for the injuries that it caused to the environment and the economy of the Gulf region,” Attorney General Loretta Lynch said at a Justice Department news conference. “The steep penalty should inspire BP and its peers to take every measure necessary to ensure that nothing like this can ever happen again,” Lynch said. The settlement filed in federal court finalizes an agreement first announced in July. The next step is a 60-day public comment period. Among other requirements, BP will be forced to pay $5.5 billion in Clean Water Act penalties and nearly $5 billion to five Gulf states: Alabama, Florida, Louisiana, Mississippi and Texas. It also requires the company to pay $8.1 billion in natural resource damages, with funds going toward Gulf restoration projects such as support for coastal wetland and fish and birds. The spill followed the April 2010 explosion on an offshore rig that killed 11 workers. BP earlier settled with people and businesses harmed by the spill, a deal that’s so far resulted in $5.84 billion in payouts. Republished with permission of the Associated Press.
Judge says BP spill damage payouts to local entities to start soon
A federal judge says BP will begin paying up to $1 billion in settlements to compensate local governments across the Gulf Coast for lost tax revenue and other economic damages they blame on the company’s 2010 oil spill. An order issued Monday by U.S. District Judge Carl Barbier said all of the payments to local governments must be made within 30 days. BP’s Macondo well blew out on April 20, 2010, leading to deadly explosions aboard the Deepwater Horizon drilling rig and the nation’s largest offshore oil spill. The federal government used a team of scientists to calculate that about 172 million gallons spilled into the Gulf. BP put the number much lower, closer to 100 million gallons. July 15 was the deadline for about 500 local governments in five states to decide whether to accept BP’s settlement offers as part of a broader $18.7 billion agreement with the five Gulf states and the federal government over damage from the spill. Barbier’s order says BP says most local government entities have accepted the settlement. A handful of local governments have not accepted to settle and are continuing to fight for more money. Among those not taking the settlement are Plaquemines Parish in Louisiana and Orange Beach in Alabama. Both locations were heavily oiled by the spill. Plaquemines, for instance, says that the compensation offered for heavy oiling of its marshland isn’t sufficient. The parish says that about 10,000 acres of parish land was heavily oiled and that in all about 40,000 acres of coastal area was damaged by the spill. Government entities are expected to receive varying amounts in compensation according to how much damage they suffered. Jefferson Parish is expected to receive about $53 million for damage it suffered, the highest expected payout so far. Coastal areas in the parish, in particular Barataria Bay, sustained a lot of damage. Republished with permission of The Associated Press.
Jim Zeigler calls for restoration of PACT scholarship funds using BP settlement
State Auditor Jim Zeigler has issued a call to lawmakers to include the restoration of a popular prepaid college tuition program to full funding in light of the recent $2.3 billion settlement between the state and British oil giant BP over the 2011 Deepwater Horizon spill that ravaged the Gulf of Mexico along Alabama’s coastline. As legislators gather again in Montgomery for a Special Session, Zeigler has added grievances by parents who were shortchanged by recent budget cuts to the list of Alabamians who may be made whole following the recent BP windfall. Meanwhile, lawmakers will attempt to sort out the ongoing state budget clash between statehouse leaders and Gov. Robert Bentley, who vetoed their first attempt at a plan to fund the state government for FY 2016-2017, Parents who prepaid for four-year college tuition plans under the state’s PACT — or Prepaid Affordable College Tuition — plan were abruptly told by state officials in 2009 that their purchases would no longer cover costs above what was covered the following year after the fund became insolvent. Zeigler has taken up their cause, arguing that their prepaid agreements with the state were not investments subject to loss, but pre-arranged contracts to be fulfilled by the state “at a sum certain.” Therefore said Zeigler, a retired lawyer, parents who purchased the plans but were denied coverage increases after 2010 are owed the differences they were forced to pay out-of-pocket despite earlier assurances to the contrary. With legislators such as Sen. Arthur Orr and Rep. Steve Clous already lining up to dedicate the bulk of the settlement to repay state debts, Zeigler said he isn’t asking for a special earmark, but simply for the state to pay what it had promised. “This is a wrong that needs to be righted. The BP money may be the last chance to provide the full tuition that these families paid for and based their planning on,” Zeigler said Monday evening.
Bradley Byrne: BP settlement a missed opportunity
Whether you are from Brewton, Frisco City, or Robertsdale, you probably remember the summer of 2010 and the BP oil spill. The scenes on our Alabama beaches were heartbreaking as oil glistened in the water and tarballs washed ashore. From the waitress at the restaurant in Atmore to the gas station owner in Loxley, families and small businesses from throughout Southwest Alabama were negatively impacted by the lack of tourism. Many parts of our area are still dealing with economic and environmental challenges brought on by the oil spill. That’s why I was cautiously optimistic when I learned the Department of Justice and the five Gulf States had reached a settlement agreement with BP to cover penalties and damages associated with the oil spill. The total settlement was worth $18.7 billion, making it the largest settlement ever between the United States and a single company. Unfortunately, as my staff and I began to look into the details of the settlement, we realized that Alabama’s coastal communities were getting a bad deal. Only around $1.8 billion of the total settlement would be directly spent in Alabama. Even worse, over half of the money is slated to go directly into the state’s General Fund instead of flowing to our coastal areas. Now I understand that the State of Alabama is currently in the midst of a budget crunch, but I do not believe money from a natural disaster on the Gulf Coast should be used to fix a man-made “disaster” in Montgomery. That money should be allocated for projects which meet the needs of Coastal Alabama. Just as bad, too much of the total settlement money is going to be under the control of federal regulators in Washington, like NOAA – the same federal agency that is responsible for our drastically shortened Red Snapper season. I certainly don’t trust NOAA and other agencies from the Obama administration with the settlement money. Here’s why this is so frustrating. In 2012, Congress, led by Gulf Coast congressmen like Alabama’s own Jo Bonner, passed the RESTORE Act. This landmark legislation created a clear framework to ensure that money from any BP settlement would flow directly to communities on the Gulf Coast. The RESTORE Act specifically guaranteed local decision makers would control how the money was spent. The bill created the RESTORE Act Council, including local officials from Baldwin and Mobile counties, which would allocate the funds toward projects of particular need. Sadly, instead of directing money toward the RESTORE Act process, the settlement puts money toward the Natural Resources Damages Assessment (NRDA) program. This program is governed by a board of trustees that includes too much influence from the federal government and not enough input from the people on the Gulf Coast who were actually living this nightmare. I am also very frustrated by the level of secrecy surrounding the settlement. BP, the Justice Department, and the Gulf states all agreed to put the settlement under a confidentiality order, which prevents the details of the settlement from being made public. A document meant to remedy the needs of the public should be available in its entirety for the public to consume and debate. At the end of the day, communities on the Gulf Coast are the ones who were directly hit by the oil spill, and it is a mistake to hand control of the settlement money over to the state and federal governments instead of to our local coastal communities. This settlement was a major opportunity to bring some much needed closure to our area, but sadly it seems like that opportunity was missed. The families and small businesses in Southwest Alabama deserve better. Bradley Byrne is a member of the U.S. Congress representing Alabama’s 1st Congressional District.
Alabama business roundup: Headlines from across the state
Here’s a roundup of some of the top business headlines from across the state this week: AL.com: BP paying Pelham $106,760 to settle claims in Deepwater Horizon litigation BP’s landmark $18.7 billion settlement agreement involving litigation surrounding the 2010 Deepwater Horizon oil spill in the Gulf of Mexico is resulting in a $106,760 payment to the City of Pelham to resolve any claims. The Pelham City Council tonight held a special meeting to approve a resolution concerning the settlement terms and releasing BP and other parties in the case from any claims. Under terms of the settlement for Pelham, the city will receive a payment from BP Exploration and Production Inc. for $106,760, minus 15 percent for attorney’s fees paid to Gulas Law Firm as well as up to $1,000 for the out-of-pocket expenses incurred by the firm. After the 15 percent and other payment to the Birmingham-based Gulas Law Firm, the city’s share will be roughly $90,000. The settlement money will go into the city’s general fund. Council President Rick Hayes said during tonight’s special meeting the city had until July 15 to approve the release agreement and settlement terms. Hayes would not discuss any further details of the action, citing a confidentiality order in the case. Before the council’s vote, Hayes said the “judge’s order said we have to be very confidential about everything.” He declined to answer any questions about the matter after the meeting. Gov. Robert Bentley and Attorney General Luther Strange on July 2 announced that Alabama will receive $2.3 billion in the settlement with BP for environmental and economic damages resulting from the Deepwater Horizon oil spill. For Alabama, the settlement amount includes economic damages at $1 billion paid over 18 years and environmental damages of $1.3 billion. Among the other financial aspects of the settlement that involves Alabama, Florida, Louisiana, Mississippi and Texas, up to $1 billion will be paid to resolve claims made by more than 400 local government entities. The Birmingham City Council this week approved a resolution accepting a settlement totaling more than $1 million for economic losses associated with the oil spill. Birmingham Business Journal: Blue Bell to conduct first trial production runs at Sylacauga plant Blue Bell has announced it will begin trial runs at its Sylacauga location, which will be the first plant to begin work since a listeria contamination halted production across the company’s footprint in April. The Brenham, Texas-based Blue Bell Creameries notified the U.S. Food and Drug Administration and Alabama state health officials that the company hopes to begin test production of ice cream products at its Sylacauga facilities in the next several weeks, according to a report from our sister publication the Houston Business Journal. The first instance of listeria was confirmed at the Sylacauga production facility in June. The plant then laid off a third of its workforce, with 48 Sylacauga workers being temporarily laid off. While the company is optimistic about test productions, no firm dates have been set for when trial operations will begin or when products will return to markets. “When production resumes at the Sylacauga plant, it will be on a limited basis as the company seeks to confirm that new procedures, facility enhancements and employee training have been effective,” said Blue Bell in a statement. “Ice cream produced will be closely monitored and tested. Upon completion of this trial period, Blue Bell will begin building inventory to return to the market.” Birmingham Business Journal: Intermark Group lands $6M Alabama Tourism Department contract Birmingham-based Intermark Group on Monday was announced as the new agency of record for the Alabama Tourism Department’s $6 million annual advertising contract by director Lee Sentell. The agency will succeed Luckie & Co. on the account, according to a release from the Alabama Tourism Department. “Luckie has created memorable and successful campaigns based on the themes our agency has suggested, including branding ‘Sweet Home Alabama.’ Most importantly, the amount of tourism expenditures in the state has increased by 80 percent to $11.8 billion during the 12 years that Luckie has handled the account,” said Sentell. Additionally, he said the tourism department has won numerous regional and national tourism awards, including a silver award last month from the Advertising Federation of America for the Alabama Civil Rights Trail. The two Birmingham-based agencies – who are also the largest agencies in the state – were the lowest bidders among 12 companies that submitted proposals State contracts are limited to two years before rebidding, and are awarded based on a combination of agency capabilities and cost, the release said. Intermark will be tasked with creating the 2016 “year of” marketing campaign, to be announced this fall. The agency will also handle the state’s bicentennial celebration from 2017 through 2019, Sentell said that Intermark’s psychology driven marketing approach, along with their deep experience in digital marketing, makes them a great choice to carry on a long tradition in the growth of tourism in Alabama. Intermark, with 117 full-time employees, has recent brand experience with Toyota, Mohawk, Krispy Kreme, BBVA Compass, Blue Cross Blue Shield of Alabama, the U.S. Space & Rocket Center and Talladega Superspeedway. Dothan Eagle: Peanut acreage up, cotton down due to Farm Bill, diversification options Local agriculture officials said good weather and potentially promising Farm Bill provisions have resulted in a productive peanut season so far. But lower market prices and fewer financial options for commodities like cotton might cause some farmers to reconsider what they plant in future years. The Alabama Peanut Producers Association reported an estimated 215,000 planted acres of peanuts statewide, with 212,000 of those acres expected to be harvested. That number is up from the 189,000 acres of peanuts harvested last year, which the Alabama Farmers Federation said resulted in 400 million pounds of peanuts valued at $118 million. The U.S. Department of Agriculture showed the F arm B ill, formally known as the Agriculture Act of 2014, allowed producers of peanuts and some other commodities to choose between Price Loss Coverage (PLC) or Agricultural Risk Coverage
$18.5 billion BP settlement reached
Governor Robert Bentley and Attorney General Luther Strange announced Thursday morning that they have settled the state’s ongoing lawsuit with BP. According to the Governor’s office the settlement “is designed to compensate the State for both environmental and economic damages as a result of the disaster.” Below are the statements from Bentley and Strange per a news release sent Thursday morning: “The BP/ Deepwater Horizon oil spill was the worst environmental disaster in United States history, and the impact to the Alabama Gulf Coast was detrimental,” Gov. Robert Bentley said. “We have reached an agreement in principle with BP to compensate the State for all of the environmental and economic damages suffered as a result of the oil spill. With the agreement announced today, we are taking a significant step forward in our State and will become a stronger, safer and more resilient state as a result of this terrible disaster.” “From the first day that Governor Bentley and I took office, we’ve worked together to secure justice for Alabama in the wake of the tragic BP oil spill,” Attorney General Luther Strange said. “That teamwork has led us to today’s record settlement and a positive legacy for the future.” “It is important to commend BP, our Federal partners and the other Gulf Coast states for their efforts to get this agreement accomplished,” Department of Conservation and Natural Resources Commissioner Gunter Guy said. “We look forward to working with Alabama’s coastal communities to identify, develop and implement appropriate projects to restore our resources and the services they provide.” The governor’s office said in a release, “The total value of the Agreement in Principle is approximately $18.5 Billion for all of the affected Gulf states economic losses, the natural resource damages and BP’s Clean Water Act penalties. Alabama’s share of this global agreement is over $2.0 Billion. On the economic side, $1 billion will be paid to the State over the next 18 years for economic damages suffered. On the environment side, Alabama will receive approximately $1.3 billion over the next 15 years that will be used to facilitate coastal restoration projects in Alabama.” They noted specifically that the “agreement announced today only relates to the State of Alabama’s claims against BP and it does not affect the claims of other people or companies.” According to an AP report, “Alabama would receive $2.3 billion. Gov. Robert Bentley said the settlement would steer $1.3 billion for coastal environmental restoration. He said some of the $1.3 billion has already been paid to the state. Another $1 billion for will go to the state’s general fund as compensation from economic damages from the spill. Bentley said that money, which equates to $55.5 million a year, will help the cash-strapped budget, but will not solve the state’s current fiscal crisis, with lawmakers facing a $200 million deficit next year.” On Thursday afternoon Sen. Richard Shelby chimed in with a statement of his own: “More than five years ago, the Gulf Coast witnessed one of the most devastating environmental and economic disasters after an explosion on the Deepwater Horizon oil rig. Following the spill, I worked with my colleagues in the Senate to pass the RESTORE Act, which gives unprecedented flexibility to coastal communities directly affected by the oil spill. Today’s announcement represents a long-awaited, positive step forward for the state of Alabama, and I will closely monitor the settlement to ensure that the fines assessed against BP are controlled directly by the communities impacted as outlined in the RESTORE Act.” We will have additional details on this breaking story throughout the day.
Once vilified, BP now getting credit for gulf tourism boom
With the Memorial Day holiday here, fallout from the oil spill that left Gulf Coast beaches smeared with gooey tar balls and scared away visitors in 2010 is being credited, oddly, with something no one imagined back then: an increase in tourism in the region. Five years after the BP disaster, the petroleum giant that was vilified during heated town hall meetings for killing a way of life is now being praised by some along the coast for spending more than $230 million to help lure visitors back to an area that some feared would die because of the spill. Questions remain about the long-term environmental effect of the BP disaster, with a report released just last week finding a definite link between the spill and a record die-off of the bottlenose dolphins that tourists love to spot along the northern Gulf Coast. Pockets of oil still blot the sea floor and spots along Louisiana’s coast. Meanwhile, many are still wrangling with BP over spill-related claims. Attorneys for businesses and individuals claiming damages from the spill announced a $211 million settlement last week with Transocean Ltd., owner of the failed Deepwater Horizon drilling rig. Yet, at the same time, parking lots are full outside the same coastal hotels and condominium towers that struggled for business and slashed prices while crude was pouring into the gulf off Louisiana’s coast in 2010. Visitors bob in surf where oil once washed in, and some restaurants have 90-minute waits for dinner on the weekend. Tourist business has doubled in Alabama’s largest beach towns since before the spill, officials say, and Pensacola Beach, Fla., is so clogged with visitors that traffic is a primary problem. Many attribute the change in large part to the millions of dollars that BP spent on tourism grants and advertising that promoted the Gulf Coast nationwide to people who previously didn’t even realize that Alabama and Mississippi had coastlines. “I’ve traveled as recently as the spring to California and there were people there who were saying, ‘Hey, I saw those commercials about Alabama,’” said coastal condominium developer Bill Brett. “I really think those commercials helped.” Brett is an owner of Brett/Robinson Real Estate, where he said business is up about 30 percent since the year before the spill. The company has developed 19 buildings with more than 3,200 condo units on the Alabama coast, including one that was finished with a $37 million settlement from BP after the spill. The tourism surge isn’t happening in a vacuum: Many U.S. attractions have seen big increases during the same period as the economy recovered following the 2008 financial crisis and Americans returned to the road. The theme parks of Orlando, Fla., helped draw a record 62 million visitors to the city last year, and the U.S. Travel Association expects Americans to spend about 5 percent more this Memorial Day than last. But back in 2010, there were questions and fears over whether the tourist economy of the northern Gulf Coast would ever recover from the spill. Residents feared that images of oil-soaked birds and blackened beaches would permanently change travel patterns and leave towns like Gulf Shores, and Destin, Fla., as the forgotten coast. Ted Scarritt, who offers tourist cruises in Orange Beach aboard his 53-foot catamaran “Wild Hearts,” remembers crying and praying while the spill was happening. Scarritt, who also owns a beach service company, purchased the sailboat only months before the spill and had to keep it out of the oil-marred waters that summer. Today all that seems like a bad, distant dream as he watches clear gulf waters slide past the hull during an afternoon of sailing off Alabama’s coast. “We’re just amazingly thankful,” Scarritt said. “I think our area has recovered profoundly. You can look at the water right now, you can look at the beach. We’re fine.” Picking up shells in the surf at Pensacola Beach, Autumn Ventling of Nashville, Tenn., didn’t realize the spill ever occurred; she was just 18 at the time. Today, she said the white-sand beach and emerald-colored water appear beautiful, just like so many other beaches on the Gulf Coast. “I can’t tell anything happened,” said Ventling, 23. Part of that is because of a massive cleanup program BP conducted on beaches after the spill. For months, big machines with metal sifters dug deep to remove remaining mats of tar from the sand, which was then spread back on the seashore. While the cleanup work was going on, BP was also shelling out cash to revive tourism. BP spokesman Jason Ryan said the company provided $179 million in tourism promotion grants to the gulf states of Alabama, Florida, Louisiana and Mississippi, and it aired commercials nationally touting the region as recently as early 2013. The company hasn’t disclosed the cost of the spots, he said. But under an agreement with plaintiff’s attorney who sued over the spill, BP provided another $57 million for private groups and government to promote tourism and seafood on the Gulf Coast. The rebound has been a relief to people like Jeanne Dailey, owner of Newman-Dailey Vacation Rentals in Destin. During the long summer of 2010, Dailey spent many sleepless nights fearing oil would wash ashore and kill the tourism business. The Destin area never got the heavy patches of oil that polluted Alabama beaches, Mississippi coastal islands and the boot of Louisiana, but the perception that the entire coast was coated in oil prompted hundreds of vacationers to cancel travel plans, she said. “Once I made peace with the fact that I might have to declare bankruptcy, things started to get better,” she said. BP’s ad campaign combined with sales incentives combined to lure people back to the area eventually led to a strong rebound, Dailey said. Five years later, her business is thriving and preparing to mark its 30th anniversary. Republished with permission of The Associated Press.
Drilling begins 3 miles from epicenter of BP oil spill
Just 3 miles from the catastrophic BP spill in the Gulf of Mexico, a Louisiana company is seeking to unlock the same oil and natural gas that turned into a deadly disaster. Drilling has begun in the closest work yet to the Macondo well, which blew wild on April 20, 2010, killing 11 people and fouling the Gulf with as much as 172 million gallons of crude in the nation’s worst oil spill. Federal regulators gave their blessing last month to LLOG Exploration Offshore LLC to drill the first new well in the same footprint where BP was digging before. The resumption of drilling at the former BP site comes as the oil industry pushes into ever deeper and riskier reservoirs in the Gulf. It reflects renewed industry confidence — even as critics say not enough has been done to ensure another disaster is avoided. “Now that five years have passed it seems that some of the emotions are less raw,” said Pavel Molchanov, an energy analyst with the investment firm Raymond James in Houston. If anything, drilling into BP’s Macondo reservoir may be safer now, he said. “Just because there was a spill there doesn’t mean it’s more dangerous,” he said. “It could make it less dangerous considering how much the seabed there has been studied.” Paul Bommer, a petroleum engineer at the University of Texas at Austin and a member of national panels investigating the BP disaster, said it was only a matter of time before drilling would resume there. There is just too much money at stake. Yet LLOG’s own exploration plans provide a window into the potential risks. In September exploration plans, LLOG estimated its worst-case scenario for an uncontrolled blowout could unleash 252 million gallons of oil over the course of 109 days. By comparison, the BP spill lasted 87 days and resulted in as much as 172 million gallons of oil pouring into the Gulf. “Our commitment is to not allow such an event to occur again,” said Rick Fowler, vice president for deep-water projects at LLOG. Fowler said the shallow part of the well has been drilled and that the deeper section will be completed later this year. LLOG’s permit to drill a new well was approved April 13 by the Bureau of Safety and Environmental Enforcement, which oversees offshore oil and gas drilling operations. Lars Herbst, the agency’s regional director, said in a statement that LLOG had demonstrated it could be trusted. “In order to obtain a permit to drill LLOG had to meet new standards for well-design, casing, and cementing which include a professional engineer certification,” he said. But Liz Birnbaum, former director of the Minerals Management Service, the former agency that oversaw oil drilling at the time of the BP spill, said allowing drillers to go after that oil is cause for concern because regulations covering well-control are not in effect and years away from being mandatory. Five years ago, BP, its contractors and federal regulators struggled to contain the blowout and kill the out-of-control well. In all, the federal government calculated that about 172 million gallons spilled into the Gulf. BP put the number much lower, closer to 100 million gallons. Richard Charter, a senior fellow with the Ocean Foundation and a longtime industry watchdog, said drilling into that reservoir has proved very dangerous and highly technical, and it raises questions about whether LLOG has the financial means to respond to a blowout similar to BP’s. The shallow part of the well was dug by the Sevan Louisiana, a rig owned by Sevan Drilling ASA, a large international drilling company based in Oslo, Norway. Another rig, the Seadrill West Neptune, will complete the well. Since 2010, LLOG has drilled eight wells in the area in “analogous reservoirs at similar depths and pressures,” Fowler said. The company has drilled more than 50 deep-water wells in the Gulf since 2002, he said. The company already has drilled three wells in the vicinity that tap into the same reservoir BP was going after in 2010. He said those wells were drilled without problems. He said the company has studied the investigations into the Macondo disaster and “ensured the lessons from those reports are accounted for in our design and well procedures.” BP spokesman Brett Clanton said an area even closer to the well, owned by BP, is an “exclusion zone” where oil and gas operations are off-limits both “out of respect for the victims” and to allow BP “to perform any response activities related to the accident.” Republished with permission of The Associated Press.
Court opens door to BP settlement appeals
A federal appeals court has opened the door for BP to appeal some claims related to a settlement reached after the 2010 Gulf of Mexico oil spill. The 5th U.S. Circuit Court of Appeals in New Orleans ordered a lower court judge to change a procedure that effectively blocked appeals. And the appeals court told the judge to reconsider a rule barring BP from appeals regarding the calculation of a business’ losses. However, the court upheld the lower court’s ruling that barred appeals dealing with payments to nonprofit groups. And, it said the court could continue to prevent appeals arising from BP’s contention that something other than the oil spill caused some businesses’ losses — an issue the oil giant has fought unsuccessfully for years. The opinion released late Friday is the latest dealing with a 2012 settlement of oil spill economic loss litigation. The settlement agreement was hailed by all involved when it was signed but soon became the subject of contention over the way it was interpreted by the district court in New Orleans and the court-appointed claims administrator. BP eventually won a change in the way losses are calculated after arguing that administrator Patrick Juneau wasn’t correctly matching businesses’ revenue and expenses. The appeals court, noting that the methodology has changed and has been the subject of numerous developments that “muddy the waters,” told the district court, where U.S. District Judge Carl Barbier, is overseeing spill cases, to take another look at the issue, and to provide reasons if the bar is continued. In 2012, BP estimated it would pay about $7.8 billion to resolve claims under the settlement. A fourth-quarter earnings statement put the estimate at closer to $10 billion, while noting that there were various factors that could change that number. BP and lawyers pursuing claims both found something to like in Friday’s ruling. “We are pleased that the 5th Circuit upheld our right to appeal individual claims determinations,” company spokesman Geoff Morrell said in an emailed statement. The company did not estimate how the decision might affect the cost of claims. “With regard to ‘alternative causation,’ we’re pleased the 5th Circuit saw through BP’s latest attempt to re-fight an issue that it has lost on every level,” plaintiffs’ attorneys Steve Herman and Jim Roy said in an email. “We’re further pleased the court shut the door on BP’s effort to deny the claims of nonprofit organizations.” Republished with permission of The Associated Press.
