In the wake of the Gulf oil spill, rig operator BP has produced apologies, jobs for local fishermen to aid in the recovery efforts, and a promise to pay for all cleanup costs.
But what it hasn’t yet produced are answers to why the explosion happened and how exactly it plans to compensate local fishermen – unanswered questions that, three weeks after the explosion, are frustrating all those affected by the disaster, including leaders of gulf coast states and fishing operators.
“All these fishermen here are really uncertain of what the future holds,” says Lance Nacio, who operates a four-person shrimping operation in Dulac, La. “What I would like to hear is some kind of contingency plan for lost revenue compensated for damages now and into the future.”
As expected in disasters of this magnitude, lawsuits seeking damages are being filed daily. At last count, 50 complaints against BP and involved parties such as Halliburton Energy Services, which was in charge of the underwater well cap, seek millions of dollars for lost revenue.
A temporary fishing ban on the Mississippi River’s fertile east waters could not only devastate local charter companies and seafood operators, it has the potential to hurt local restaurateurs and hotels as well as municipalities that depend on tax revenue.
What about lost business revenue?
But while BP CEO Tony Hayward has made repeated public statements about paying for cleanup efforts, the company has been vague regarding whether the promise extends to covering lost business revenue by these ancillary parties.
Attempts to address the needs of fishermen have been mixed.
Recovery jobs were first seen as a goodwill gesture but soon turned into a public relations nightmare when it was learned that BP was not promising to cover potential liability damages to local boats or crews. On Thursday, when the US Small Business Association announced a program to give local businesses low interest loans, it was perceived as another way BP was getting off the hook regarding damages.
“We don’t need loans, we need to go out and work. We have enough bills, we don’t need more bills,” says Mr. Nacio.
The demand for BP to announce an action plan increased Wednesday when a coalition of commercial fishing organizations and environmental groups from Texas to Florida went to federal court seeking injunctions against BP and Halliburton.
The demands don’t seek money but transparency. The coalition wants both companies to release data relating to the explosion and rig capsize so independent experts can determine its cause. The filings also want to know the chemical compounds in the dispersants used to mitigate the oil in order to find out its possible effect on public health and the environment.
“Clearly not enough information is being released to adequately allow the public and their attorneys to independently analyze what happened and what the potential public health and environmental consequences are going to be,” says Stuart Smith, a New Orleans-based attorney who is the lead counsel for the coalition. As for damages, Mr. Smith says for now they’re secondary to information that might provide insight into the explosion.
Peter Jacques, a political science professor at the University of Central Florida in Orlando who studies the politics of oil spills, says BP’s behavior is not unlike what happened after the 1989 Exxon Valdez disaster. Exxon first blamed the mishap on a drunken ship captain until it was learned it was one of several reasons related to broken protocol and safety mishaps. Establishing a narrative is essential for oil companies in the aftermath of a spill, Mr. Jacques says, because it can affect the scope of government regulation and the amount of awarded damages that follow.
'There's a problem with transparency'
“If history tells us anything it’s that the folks who have something to lose on the liability front … play a shell game with it for a little while which is why I’m not surprised there’s a problem with transparency,” says Mr. Jacques.
Government officials are already stepping up the pressure on BP. On Thursdays Reuters reported a six-member board of US Coast Guard and Minerals Management Service officials will launch an investigation into the cause of the explosion next week.
This week, attorneys general in Texas, Louisiana, Mississippi, Alabama, and Florida sent a letter to BP insisting that it take all liability claims seriously. A $75 million liability cap was established following the Exxon Valdez spill. On Wednesday, White House press secretary Robert Gibbs said the Obama administration is considering “significantly lifting” that amount, which Senate Majority Leader Harry Reid suggested could jump as high as $10 billion.
“BP’s going to get a bill for the recovery, the cleanup, and the damages caused,” Mr. Gibbs said.