Oil Spill: BP Caps the Leak (For Now)—But the Hard Part is Just Beginning

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When I heard that BP has successfully close all the valves on its new containment cap Thursday afternoon—effectively stopping the flow of oil for the first time in nearly three months as it began its well integrity tests—I was at a town meeting in Port Sulphur in Louisiana’s Plaquemines parish, ground zero for the oil spill. Kenneth Feinberg, the head of the $20 billion Gulf Coast Escrow Fund, was in town to talk about how the claims system would work once he’d taken over from BP.

Billy Nungesser, the parish president and a near constant presence on CNN since the spill began, addressed the crowd. “I’ve got very good news,” he told the assembled group of fishermen and other residents, anxious about the future. “I just heard from BP that the well’s been capped.” A cheer went up—this was the first solid piece of good news many of them had heard since the Deepwater Horizon rig sunk back on April 20.

But just because BP has capped the well—and only temporarily, with a stopgap process that could end at any time—doesn’t mean the crisis is over, as Nungesser told me later. Far from it. “This is a great first step, but this is just beginning,” he said. “The people here”—he motioned toward the crowd—”they’re going to need help for a long, long time.”

That help will have to come from Feinberg, the veteran lawyer who will be taking over the claims process in a few weeks. In preparation, he’s been visiting towns along the Gulf coast, holding public meetings where he tells residents—as he told the people of Port Sulphur—”what I can do and what I can’t do.” And it turns out that there’s a lot of both.

In a booming Boston accent, Feinberg explained that while he believed that BP had been doing as good as they could paying claims to thousands of people whose income had been impacted by the spill, he would do better and he would be faster. Instead of the month-by-month checks that BP had been handing out—far too little money for people in the fishing industry who had seen their entire livelihoods wrecked by the spill—he would authorize emergency payments worth six months of lost compensation. All a claimant had to do was come to one of the offices BP had already established around the Gulf coast states—Feinberg will take them over—show some proof of income, and Feinberg promised that they would get a check within 48 hours. “You don’t have to waive any other rights,” Feinberg said. “I’m working for you. I want to make this so easy that everyone will file a claim.”

Residents could apply for those emergency payments up to 90 days after the oil stopped. (Feinberg himself would determine when that would be, but at this point it seems impossible to declare the spill finished until the relief wells have been drilled.) That’s just the first step. Ultimately, residents will have the option of accepting a lump-sum payment—based on an estimation of their future losses due to the spill. So if the oil ends up negatively impacting the shrimp or crab business for several years forward—which is what happened after the Exxon Valdez spill in Alaska—residents will be able to get compensation to match that damage. “You can’t ask an oyster fisherman to take a lump-sum payment when the oil is still flowing,” Feinberg said. “But when the oil stops we can figure out fairly quickly what a fair payment would be.”

But there will be catches. While anyone can take a six-month emergency claim, if residents accept a lump-sum payment it’s akin to settling out of court—they’ll have to waive their right to sue BP for any reason. That’s the deal—but given the amount of anger directed towards BP in Louisiana, it may not go down easily.

And residents—especially those with large fishing businesses—aren’t so sure that it will be easy to project how the spill will affect the industry in three, five, or even seven years. The spill happened at the worst time for the fishing industry, at the moment in the spring when crab, oysters and shrimp are spawning. If an entire generation might have been wiped out, those ramifications may not be obvious immediately, but they will be felt for years. Feinberg promised that his fund would stay active in the Gulf for three years—and that residents could choose to wait as long as they wanted before negotiating a lump payment, to give them as much time as possible to figure out how they’ve been affected. But the people of the Gulf, struggling to make ends meet now, are under their own clock. “We don’t have time to wait,” said Clint Guidry, president of the Louisiana Shrimp Association. “We have people going under now.”

And to many residents in the Gulf, those who have lived all their lives by the water, who followed in the footsteps of their fathers and grandfathers and expected to pass that life onto their children and grandchildren, something more than a check is needed to make things right. That was the message from Darla Rooks, a 47-year-old shrimper from Port Sulphur, who stood up at the end of the meeting to challenge Feinberg. “We’ve heard this could hurt us for seven generations,” she said, her voice quivering with rage. “We’ve been fishing all our lives. We don’t know anything else. We can’t go and become computer operators. What are we going to do?”

Feinberg, standing and sweating at the lectern, could only shrug, having reached the limits of his powers. “There’s not enough money in the world to pay for seven generations,” he said. Then he pivoted, gesturing to the entire crowd. “The people of Louisiana are resilient,” he said. “Get a check and move on as soon as you can. I’ll do everything I can.” It wasn’t a great deal—even Feinberg probably knew that. But right now, he was the only one offering.