Gov. Robert Bentley says BP settlement won’t fix state budget
Alabama will receive about $2.3 billion in a settlement with BP over the 2010 Gulf of Mexico oil spill, Gov. Robert Bentley said Thursday. About $1 billion of that is for economic damages and will go to the state’s General Fund in payments during an 18-year period. Information about whether the money will come in equal annual amounts was not available Thursday, and it’s not known yet when the first payment will arrive. At a press conference Thursday, Bentley talked about the environmental and economic effects of the spill and said both were significant hardships for the state. Bentley said the announcement, shared Thursday by other coastal states, does not resolve the looming shortfall in the state’s 2016 General Fund budget. He said a Special Session to address the $200 million hole in the budget is still needed. “It will not factor into the special session,” Bentley said. Divided by 18 years, the $1 billion settlement equals about $55 million a year. Jere Beasley, head of the Beasley Allen Law Firm in Montgomery that assisted the state in the litigation and calculated damages, said the settlement amount was fair. “In fact, based on everything we had, information from all department heads, all the projections and actual losses that we could prove, it’s a very good settlement,” said Beasley, a former Alabama lieutenant governor. “In fact, it was more, quite honestly, than I thought they’d pay.” Republican Rep. Ed Henry of Hartselle said Thursday that he would like to see the money put aside in a separate trust. “Historically, the Legislature and the governor have taken these one-time moneys and used them to shore up state government,” Henry said. “If we are going to be fiscally responsible, we should take this settlement money, put it into a trust, and only use that interest to fund government.” Henry was supportive earlier this year of legislation that would put all state settlement money into a trust. Most of the interest generated would flow toward the General Fund. That bill didn’t get much traction, but Henry said it will be brought back next year. In total, the principal settlement among BP and other states after the 2010 oil spill is $18.7 billion. The agreements were signed Wednesday and still need court approval. Beasley said that should happen very soon. About $1.3 billion will go toward coastal restoration in Mobile and Baldwin counties. Alabama Attorney General Luther Strange said this case may be the largest economic damages case ever handled by the attorney general’s office. Asked how much money will go toward attorney fees, Bentley said that will be up to the court but won’t come from the settlement. Beasley said that his firm has put in more than 22,000 man hours and fronted about $1.5 million in costs for the state. Thursday’s settlement announcement comes as a federal judge was preparing to rule on how much BP owed in federal Clean Water Act penalties after well over 125 million gallons of oil spewed into the Gulf. BP PLC Chairman Carl-Henric Svanberg said the settlement reflected the company’s commitment to restoring the Gulf of Mexico economically and environmentally, and provided the company with closure going forward. “It resolves the company’s largest remaining legal exposures, provides clarity on costs and creates certainty of payment for all parties involved,” Svanberg said. The company had been facing an additional about $13.7 billion in possible Clean Water Act penalties alone, with possibly billions more resulting from other legal cases. BP has said its spill-related costs already exceed $42 billion, even without the Clean Water Act fine. It’s also unclear how much BP will end up paying under a 2012 settlement with individuals and businesses claiming spill-related losses. The spill resulted from the April 20, 2010, explosion of the Deepwater Horizon rig, which killed 11 workers. Republished with permission of The Associated Press.
Midnight deadline approaches for oil spill settlement claims
With a midnight Monday deadline approaching to file claims under a 2012 settlement over the BP Gulf of Mexico oil spill, the claims administrator said he expected a last-minute rush of filers. “There’s always a rush, for myriad reasons,” Patrick Juneau said in a telephone interview last week. Juneau said more than 328,000 claims had been filed as of the middle of last week. More than 20,000 of those were filed last month. Juneau said there has been an uptick in the number of filings as the deadline approaches. He announced last week that claims centers in Florida, Mississippi, Alabama, Louisiana and Texas would be open until midnight Monday to handle claims. As of mid-April, more than $5 billion in claims had been paid out, according to Juneau’s office. The spill began when the Deepwater Horizon offshore drilling rig exploded in flames April 20, 2010, killing 11 workers and spewing oil from the sea floor for 87 days. The 2012 settlement agreement was hailed by all involved when it was signed, but soon became the subject of contention over its interpretation by the district court in New Orleans and by Juneau, the court-appointed claims administrator. BP said payments were being made to some entities whose losses weren’t caused by the spill. Courts rejected that argument. In 2012, BP estimated it would pay about $7.8 billion to resolve claims under the settlement. BP later said it couldn’t give a reliable estimate for the deal’s total cost. In its first-quarter earnings report for 2015, BP said it could estimate at least a $10.3 billion cost. But it stressed that there was no way of knowing how many claims would be filed by the deadline and that the total cost would likely be significantly higher. Claims may be filed in person, by phone or online. Juneau’s office will likely have a preliminary figure on the number of claims filed by the deadline sometime on Tuesday. That number won’t be final, however, because mailed claims will be accepted if they are postmarked June 8. 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.
Gulf health 5 years after BP spill: Resilient yet scarred
From above, five years after the BP well explosion, the Gulf of Mexico looks clean, green and whole again, teeming with life — a testament to the resilience of nature. But there’s more than surface shimmering blue and emerald to the aftermath of the Deepwater Horizon spill. And it’s not as pretty a picture — nor is it as clear. Federal data and numerous scientific studies show lingering problems. Splotches of oil still dot the seafloor and wads of tarry petroleum-smelling material hide in pockets in the marshes of Barataria Bay. Dolphin deaths have more than tripled. Nests of endangered Kemp’s Ridley sea turtles suddenly plummeted after the spill. Some fish have developed skin lesions along with oil in their internal organs. Deep sea coral are hurting. In some cases the connection to the BP spill is solid, in other cases it is harder to prove a direct causal link to the spill of millions of gallons of oil over 87 days. “Look, we put nature on a treadmill and I think it did very very well. We should consider ourselves lucky,” said Chris Reddy of the Woods Hole Oceanographic Institute. But then he said, “It’s the things that we don’t see that have been a concern.” To assess the health of the Gulf of Mexico, The Associated Press surveyed 26 marine scientists about two dozen aspects of the fragile ecosystem to see how the vital waterway has changed since before the April 2010 spill. On average, the researchers graded an 11 percent drop in the overall health of the Gulf of Mexico. The surveyed scientists on average said that before the spill, the Gulf was a 73 on a 0 to 100 scale. Now it’s a 65. In the survey, scientists report the biggest drops in rating the current health of oysters, dolphins, sea turtles, marshes, and the seafloor. The AP also interviewed more than two dozen other scientists. “The spill was — and continues to be — a disaster,” said Oregon State marine sciences professor Jane Lubchenco, who was the head of the National Oceanic and Atmospheric Administration during the spill. “The bottom line is that oil is nasty stuff. Yes, the Gulf is resilient, but it was hit pretty darn hard.” Lubchenco said some of her worst fears about dead zones or oil spreading farther didn’t materialize. But she added: “That’s not to say there is no impact.” BP put out a 40-page report in March, pronouncing the Gulf mostly recovered, noting that less than 2 percent of the water and seafloor sediment samples exceeded federal toxicity levels. “Data collected thus far shows that the environmental catastrophe that so many feared, perhaps understandably at the time, did not come to pass, and the Gulf is recovering faster than expected,” BP’s senior vice president and spokesman Geoff Morrell wrote in an email. “This is in large part due to the Gulf’s resilience, natural processes and the effectiveness of response and clean-up efforts mounted by BP under the direction of the federal government.” And in fact, there are experts who are surprised by how the Gulf has bounced back. Samantha Joye of the University of Georgia, who often paints a bleak picture of oil on the seafloor, recalled that in 2010 she dove in an area where the seafloor “was really hammered,” with no animals of any sort around. Then in 2014, she dove to the same place and it was quite different. “The fact that we saw living things on the bottom made me do a happy dance,” Joye said. “The system is absolutely resilient. Thank God for that. The biggest question is: Is it going back to the same point before the spill and that’s what we don’t know.” The federal government doesn’t think the Gulf is back. At least not yet. “Obviously the Gulf is not as healthy as it was,” NOAA chief scientist Richard Spinrad said. He ticks off how everything about the spill and its effects were large: the “massive kill-off” of coral, the dolphin deaths, the diseased fish, and problems with oil on the seafloor. There is no single, conclusive answer to how the Gulf of Mexico is doing, but there are many questions. Here are some of them: What happened to dolphins? Common bottlenose dolphins have been dying at a record rate in northern parts of the Gulf of Mexico since the BP spill, according to NOAA and other scientists who have published studies on the figures. From 2002 to 2009, the Gulf averaged 63 dolphin deaths a year. That rose to 125 in the seven months after the spill in 2010 and 335 in all of 2011, averaging more than 200 a year since April 2010. That’s the longest and largest dolphin die-off ever recorded in the Gulf. But the number of deaths has started to decline, said Stephanie Venn-Watson, a veterinary epidemiologist at the Marine Mammal Foundation and a lead author of studies on the dolphin mortality. She said there was a brief unrelated die-off in a different area of the Gulf before the spill, but afterward the dolphin deaths jumped in a way that “matched that of the timing, location and magnitude of the oil spill.” In its report on the Gulf five years after the spill, BP said necropsies of dolphins and “other information reveal there is no evidence to conclude that the Deepwater Horizon accident had an adverse impact on bottlenose dolphin populations.” What happened to turtles? The endangered Kemp’s Ridley sea turtle used to look like a success story for biologists. It was in deep trouble and on the endangered list, but a series of actions, such as the use of turtle excluder devices, had the population soaring and it was looking like the species soon would be upgraded to merely threatened, said Selina Saville Heppell, a professor at Oregon State University. Then, after the spill, the number of nests dropped 40 percent in one year in 2010. “We had never seen a drop that
