Six months after the spill, BP’s money is changing the gulf as much as its oil


IN VENICE, LA. – The oil has mostly disappeared. And in southern Louisiana, things are finally looking normal – improbably, blessedly normal – six months after the largest oil spill in U.S. history.

But on a truly normal evening, Acy Cooper Jr. would be out shrimping. Instead, one recent night, he was staying home, as he has done more often these days.

“Why? It don’t pay me to do that when they’re going to pay my claim anyway,” said Cooper, vice president of the state’s shrimpers association.

Today, it is BP’s money, not its oil, that is most visibly altering the Gulf Coast. The company has been trying – on federal orders – to protect not just the water but the way of life there. But BP’s waterfall of cash has changed people’s lives profoundly.

The oil company has already paid out $965 million and set aside $20 billion in a separate compensation fund. The money has been welcomed as a lifeline. But it has made the coast feel like an open-air economic experiment: Some hardworking fishermen think it’s in their best interest to be idle, losing market share they will need next year. And those who haven’t been paid are looking for legal and illegal ways to work the system.

Kenneth R. Feinberg, whom President Obama chose as compensation czar, says fishermen such as Cooper are wrong to believe he will pay them not to shrimp. They will be compensated for the time they couldn’t fish, but “if a shrimper has the ability to earn a livelihood, there is no longer a need for an emergency payment,” he said.

Across the coast, Feinberg said, people are already seeing the limits of what money – even an oil company’s massive amount of money – can do to right an environmental wrong.

“I told 9/11 victims when they said, ‘Bring back my wife, or my son or my daughter’ – ‘I can’t do that,’ ” said Feinberg, who also oversaw compensation payouts to victims of the Sept. 11, 2001, terrorist attacks. “I can’t compensate you in the gulf for a way of life that goes back 100 years. I can only compensate you for financial damages.”

And keeping up with that process is proving more difficult by the day. A few weeks ago, Feinberg’s fund adopted new policies that paid claims faster and more generously. The result: The rate of new claims doubled, Feinberg said.

“People see that their next-door neighbor is getting paid,” he said. So they say, “Why don’t we submit a claim?”

A disaster’s impact

It has been half a year since April 20, when an explosion at the Deepwater Horizon rig killed 11 men. Two days later, the rig’s sinking set off a gray-brown geyser of crude oil, which eventually spewed 4.9 million barrels (205.8 million gallons), about 19 times more than the Exxon Valdez spill in 1989.

Scientists are still trying to measure the spill’s full impact on the gulf. Little oil remains on the water’s surface, and the toll of about 6,100 birds and 600 turtles was just a fraction of the animal deaths in the Alaska spill. There are continuing concerns about what’s happening on the seafloor. But it is already clear that this was not Valdez.

On land, though, BP’s payments have been, in their own way, as historic as the spill. In the past, Americans who lost lives or money to man-made disasters were often left to sue. But this time, the federal government directed BP to take action: replace an entire region’s economic losses, almost in real time.

“We’re just making it up as we’re going,” said David A. Logan, the dean of Roger Williams University School of Law in Bristol, R.I. He sees the work as, in some aspects, more complex than compensating families for deaths on Sept. 11, 2001. “How do you measure a disaster for someone’s life’s work? We have much more experience, it turns out, evaluating broken arms and dead bodies than we do shrimpers’ take.”

So far, BP has paid $569 million to locals who participated in the Vessels of Opportunity program, helping to spot, sop up and burn the oil.

It also gave out about $396 million to compensate fishermen, hotel owners and others who lost money during the spill, before handing the process over to Feinberg in August.

For those who played their cards right, BP’s money brought a summer of quiet windfall. Ted Melancon, a shrimper from Cut Off, La., worked for BP for 130 days.

“They sure helped us out, you know, they stepped up to the plate and helped us out. . . . It would have been a bad year,” said Melancon (pronounced “meh-lan-sahn”). He said he hasn’t counted his full take, but he made enough to buy new nets and new cable for his shrimp boat, as well as a new Ford F-150 pickup.

“Which I didn’t really need, but I had to buy. Because, you know, tax write-offs,” he said, meaning that the truck and other items could be written off as business expenses. On top of that, he’s expecting to get another BP payout, compensation for the shrimping he couldn’t do this summer while large areas of the gulf were closed.

“I’m done for the season,” Melancon said. “It don’t pay to go back to work.”

‘Life is scrambled’

But simply paying shrimpers doesn’t re-create the economy that was built around them. The new money, like a swollen river, is carving new channels and leaving old ones dry.

“They’re not coming back,” said J.P. “Skipper” Taylor, a seafood dealer who usually buys shrimp from Melancon and others. He used to unload 100 boats a week; now it’s three to five.

With his income cut, “I’m waiting for my BP check,” Taylor said, sitting on a dock alongside Bayou Carlin, wearing a golden shrimp pendant around his neck. The industry as a whole is worried: The fear is that restaurants are replacing the missing gulf shrimp with imports from Asia. So, when shrimpers such as Melancon return next year with fixed-up boats and new trucks, they may find that prices and demand are low.

Others have been left out of BP’s largesse. In Plaquemines Parish, La., sheriff’s deputies have been called to bars to respond to shoving matches, sparked because one man came out ahead this summer and the other didn’t.

” ‘How did you get on [the Vessels of Opportunity program]? Who did you know?’ That goes on every day,” said Maj. John Marie of the sheriff’s office. Asked whether the parish’s economy had been scrambled by the spill, he replied: “It is scrambled. Life is scrambled.”

Nearly 300 miles away, in Orange Beach, Ala., the same anxiety came from a dentist. John Brackett – “the Doc of the Bay” – had built a business catering partially to tourists who broke their teeth in swimming-pool accidents or on rogue bits of oyster shell in their dinners.

But the oil spill scared off the tourists and their teeth and left his local patients worried about saving money. Business dropped 32 percent, but Brackett said his compensation claim was denied. He turned, reluctantly, to salesmanship: passing out brochures, offering discounts, contacting patients who hadn’t been in for a checkup in a while.

“You’re trying to find a way to drag people in, almost,” Brackett said. “It’s very uncomfortable.”

He said he had sent in a new letter that he hoped would win reconsideration for his claim.

A tempting pot of cash

Feinberg, the spill’s compensation czar, said he has paid about 75,000 claims so far, totaling $1.5 billion of the $20 billion available. About 93 percent, he said, received the full amount they requested.

But some people appear to be trying to game the system. Some instances are laughable: One person asked for $10 million but provided evidence of only $800 in lost income. Another, Feinberg said, asked for all $20 billion in the fund and didn’t provide any documentation at all.

About 1,000 claims, he said, were “suspicious.” And about 75,000 claims, more than a third of the total of 210,000, lack enough documentation.

” ‘Mr. Feinberg, I’m a fisherman, I’ve been damaged $30,000. See the attached,’ ” Feinberg recalled one letter saying. “You go to the attached, it’s a fisherman’s license. No dollars!”

Down in Venice, La., an isolated town near the mouth of the Mississippi River, shrimper Acy Cooper Jr. said he understands the impulse to ask for more than you really lost. After all, he said, hadn’t BP promised that its rigs were safe? Hadn’t the federal government greatly underestimated the size of the spill in its early days?

“How in the hell can you expect us to be truthful, when they’re not?” Cooper said one recent evening, mending a shrimp net on his front lawn.

In Larose, La., a town strung along a tea-colored bayou, the good, bad and puzzling effects of BP’s money can literally be seen on people’s skin.

At Southern Sting Tattoo Parlor, one woman asked artist Bobby Pitre (“pea-tree”) for a design showing a phoenix rising from the gulf. For her, the spill had been a boon: She’d made enough on the cleanup to get her finances in order. A Coast Guardsman, wanting to memorialize his role in fighting the spill, asked for a tattoo of SpongeBob SquarePants, the cartoon character, standing knee-deep in oil.

But also, Pitre said, a lot of young men come in flush with BP cash, asking for “sleeve tattoos,” designs wrapping around their arm. But they often didn’t know what they wanted their tattoos to show.

“They have money, and they want these big . . . tattoos, and they want to be rock stars,” Pitre said. He sent them home, telling them to come back when they had something specific in mind.

Add comment

Stuart H. Smith is an attorney based in New Orleans fighting major oil companies and other polluters.
Cooper Law Firm

Follow Us

© Stuart H Smith, LLC
Share This