One year after the worst offshore oil spill in American History BP CEO Tony Hayward--the man who told reporters that he "wanted his life back" after 11 men were killed in the explosion of the Deepwater Horizon rig, he got more than his life. He got the life of Riley with an annual pension of for life of over $930,000 a year.
There’s a chance, however, that Hayward and other company managers may be charged with manslaughter by federal investigators in connection with last year’s spill disaster. In recent weeks, reports surfaced that investigators were looking at Hayward’s testimony before Congress last year. At the end of March, shares of BP sank more than 2 percent after the stock was downgraded and news of the possible charges surfaced. As of noon today, the company’s stock was trading at $46 a share, down from a high of $59.52 on the eve of the accident.
The Cost to Americans in the Gulf
The BP oil spill spewed more than 200 million gallons of oil into the Gulf of Mexico – costing BP billions of dollars in cleanup and compensation costs. Thousands of people in Louisiana, Mississippi, Alabama and Florida are still waiting for the Gulf Coast Claims Facility, managed by Kenneth R. Feinberg, to compensate them for their losses from BP’s $20 billion fund for coastal businesses and residents. Feinberg has said that many of those who filed claims did not have the appropriate evidence or the right papers to be approved for payment. BP says that as of April 14, the total amount it’s paid or approved for payment is nearly $5.7 billion.
Drilling activity in the deep water of the Gulf remains far below pre-disaster levels after a moratorium on deep-water drilling lasting for five months was followed by an array of new regulations. “In some ways, nobody’s really happy right now,” says Peter Ricchiuti, assistant dean of the A.B. Freeman School of Business at Tulane University in New Orleans. “The environmentalists aren’t happy that not much has been done to make these oil rigs safer. The oil industry thinks that the moratorium lasted too long, and even after it was lifted, the government’s been very, very slow to issue new permits.” There were 34 deepwater rigs operating at the time of the Deepwater Horizon explosion, says Ricchiuti. “Now there’s seven.” He expects that number to grow to roughly 15-20 rigs in the Gulf by the end of this year.
Keep in mind, says Carl Safina, a noted oceanographer and author of a new book about the BP oil spill, A Sea in Flames, that “the screw-ups [from the disaster] go around to all the major companies involved.”That would include Halliburton “whose cement was put down the well to close it out, even though [that cement] kept failing tests, and Transocean [owner of the drilling rig], which put material down into the well to try to save disposal costs, which then clogged up a pressure gauge that implied to the people on the rig that was no oil and gas getting into the well.” The buildup of pressure was ignored, “and somebody from Transocean tried to explain it away, was completely wrong, and paid for that mistake with his life—he was one of those who died,” says Safina.
On Tuesday Moody’s Investors Service said that Halliburton and Cameron International, both of which provided cement work and equipment in the Gulf of Mexico spill incident, are less likely to face fines than other companies, while BP, Transocean and others may face “severe monetary penalties.”. It also said that BP has allotted $41 billion for the spill and has yet to receive payment from its partners for the clean-up costs.
While Gulf Coast beaches have hosted spring-break visitors in recent weeks, a spokesman for the National Oceanic and Atmospheric Agency (NOAA) said that there was “no basis to conclude that the Gulf recovery will be complete by 2012.” Congress has also not acted to raise the oil companies’ spill liability cap of $75 million. On Monday, White House Press Secretary Jay Carney said that the Obama administration has been “focused on making sure that [when] we have begun issuing permits for deepwater, it only does so if an industry demonstrates a capacity to deal with these kinds of spills, so that what happened in the Gulf last year does not happen again.”
To understand some of the lasting economic impact of the spill on a variety of people along the Gulf Coast, The Fiscal Times reached out to individuals and small business owners. Here’s what we found:
Dawn Duplantis, Grand Isle, Louisiana
Dawn Duplantis’s husband, Sean, works in a boat building shop that serves the oil industry. His hours have been cut since the spill. But while she estimates that her family, which includes one son, Sean Jr., age 9, has lost out on as much as $15,000 in hourly wages, they have not filed any claims against BP.
“We lost money because there just hasn’t been as much work since the spill, but I think BP is doing all they can,” she said. “We don’t think all the blame should be put on them.”She said they don’t feel it’s right to hold only BP accountable, while other companies had unsafe practices or were even, like Transocean, partially to blame for the spill.
Spill legacy: Her husband’s hours have been cut
Cost: $15,000 in hourly wages, or about 15 percent of his annual pa
Jim Fell, Building Engineering Consultants, Destin, Florida
Fell’s company builds, repairs and maintains condos on the Gulf Coast shore. When oil started washing up on the pristine beaches last year, the market took a dive and still hasn’t recovered, Fell said. He estimates the spill and subsequent beachfront real estate crash, cost the company $100,000 worth of business, or about 20 percent of the company’s annual activity. “With the market the way it is, the condo owners won't spend a dime unless the concrete is falling and hitting them on the head,” he said.
Spill legacy: Decline in property values along the Gulf Coast shore
Cost: About $100,000, or a 20 percent decline in business
Siriporn Hall, crabber in Bayou La Batre, Alabama
Hall, 59, runs her own business supplying Gulf Coast seafood processing plants with fresh catch and soft-shell crabs. She filed her first damage claim against BP in April. But while the company paid her $2,500 a month to cover lost income until she could get back into the water, Hall says the money didn’t make her whole.
BP has not paid her back for the 200 crab traps that she and her partner set out the day before the catastrophe, she says, and which she couldn’t retrieve because of the oily boom surrounding them. Last month, her boat hit a stray BP anchor, which damaged a filter on its engine. “I called BP and said, ‘Your anchor is out there and it damaged my boat.’ I told them where to pick it up. It’s still out there,” Hall said. She has submitted a claim for reimbursement on repair costs.
Spill Legacy: 200 lost crab traps Cost: $7,000
Sean Cummings, owner of International House Hotel, New Orleans, Louisiana
Cummings runs a prominent boutique hotel in downtown New Orleans. He says his businesses had begun to rebound from a post-Katrina decline in tourism when the oil spewing from the Gulf stopped the progress in its tracks.
“The hospitality industry has been bouncing back from Katrina woes. The year 2010 was still better than 2009, even with the BP spill, but if you look at January, February and March before the spill, and even months prior in 2009, revenue was up 30 percent over the current year. If you look at the next six months after the spill, revenue was up only 12 percent. The food and food culture is such a draw and after the spill, people didn’t trust it. So fewer folks came to New Orleans.”
Spill Legacy: Fewer tourists
Cost: An 18 percent decline in bookings
Ariella Cohen in New Orleans contributed to this article.
