Oil spill claims a second disaster

Published 9:19am Wednesday, December 1, 2010

Eight months after the blowout of the Deepwater Horizon well, which unleashed five million barrels of oil in the northern Gulf of Mexico, the toll of this nightmarish disaster is still being felt along our coast. In fact, the damage has shifted from being a direct threat to the regional environment to an assault on local jobs, businesses and our way of life.

Just as the BP oil well rupture highlighted the shortcomings of our government and the responsible oil company parties in protecting our environment from the massive spill, the follow-on damage claims process is proving to be a comparable failure.

Ironically, much of America assumes that life along the Gulf Coast has returned to normal since the oil well was effectively sealed in July. Recent news reports have focused on cleaned beaches and the reopening of Gulf fishing. We are thankful for these developments, but they’re not the full picture. Hidden from view is the second wave of this ongoing catastrophe – a very real tragedy striking thousands of coastal Alabama small businesses and their workers head-on, placing at risk the short-term and long-term economy of our region.

On June 15, President Obama – fresh from visiting south Mobile and Baldwin counties – addressed the nation from the Oval Office. The president committed to doing “whatever’s necessary to help the Gulf Coast and its people recover from this tragedy.” He also announced the creation of an account through which damage claims could be paid by “an independent third party.” The president appointed Kenneth Feinberg as administrator of this new claims system. In hindsight, Mr. Feinberg’s administration of a wrecked claims process reminds me of BP chief executive Tony Hayward’s incompetence in responding to this preventable disaster.

Since Mr. Feinberg took command of the Gulf Coast Claims Facility, badly-needed small business claims payments are only trickling out. A survey by my office of south Baldwin County business claims indicated about half had gotten nothing from Mr. Feinberg’s claim center – either denied outright, or placed on hold with no indication of an outcome. Of those businesses which have received some form of claims payment, many report only being paid 25 to 50 percent of their loss.

In any location at any time, a business’s loss of roughly a half year’s income would be enormously damaging. But when you consider that these losses occurred during the height of the summer tourist season – a season that never materialized – the impact is closer to loss of a full year’s income for many businesses. As you know, tourism is the engine of our coastal economy – no matter what business you are in, the whole area is affected. In fact, 20 percent of the state of Alabama’s annual general fund revenue comes from our coastal economic activity.

According to a University of Alabama analysis, the oil spill’s toll could reach $3.3 billion in lost economic output and nearly $1 billion in lost earnings in Alabama. This survey only took into account the impact of the oil spill through September. Meanwhile, many South Alabama businesses are fighting to stay open as Mr. Feinberg’s claims system arbitrarily awards payments to a lucky few businesses while slamming the door in the face of many others who have submitted nearly identical paperwork.

Of all the coastal states, it is my belief that Alabama’s economy suffered the greatest loss of tourist revenue from the oil spill, since our beaches were at ground zero. Despite having the resources of a $20 billion claims fund provided by BP, Mr. Feinberg has, thus far, turned a cold, blind eye to South Alabama business claims, paying out only $233 million as of November 22.

I have called on President Obama and the Justice Department to exercise greater federal oversight of the claims process to ensure that our local businesses receive fair and just consideration of their damage claims. Anything less is absolutely unacceptable.

My staff and I work for you.  If we can ever be of service, do not hesitate to call my office toll free at 1-800-288-8721 or visit my Web site at http://bonner.house.gov.

Congressman Jo Bonner is a guest columnist.

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