A year after BP disaster: Payouts low, fears high

By Frank Brandmaier Apr 20, 2011, 8:52 GMT

Grand Isle, Louisiana - At first sight, everything looks back to normal on the Gulf of Mexico a year after the worst oil disaster in US history. But fear and uncertainty persist.

Gone are the angry banners - 'BP, we want our beach back!' - that vented the fury of the people of Grand Isle and nearby holiday and fishermen's islands in Louisiana's far south.

But one only has to scratch the surface to find the anger again.

BP Plc's leased Deepwater Horizon drilling rig exploded on April 20, 2010, killing 11 workers. The wellhead safety valve failed to contain the disaster, and crude oil gushed for three months into the Gulf waters and fragile coastline just 80 km away.

The leak was finally sealed in July, and in September was declared formally sealed by the US government.

Some 780 million litres of crude oil - 4.9 million barrels - had poured onto the Gulf. The reddish-brown fluid lapped onto more than 1,000 kilometres of fragile coastline, killing thousands of fish, pelicans, tortoises, whales and dolphins.

Officials closed beaches and fishing grounds. Tourism and the fishing industry, major keys to the local economy, collapsed.

Damage compensation payouts have been slow, despite the 20- billion-dollar fund that BP set up after some arm-twisting from US President Barack Obama. The Gulf Coast Claims Facility (GCCF) said this week it has paid out 3.8 billion dollars - a small drop of available money - representing 300,000 claims.

On a return visit to Grand Isle recently, the bright red booms that captured the surface slick were gone. Pelicans dropped arrow- like into the sea, fishing.

Yet few people venture onto the beach these days, and parts of it are still closed.

Dean Blanchard, 52, sits at his office on Grand Isle and despairs - over the future of his fish and seafood wholesale business, after 30 years in the building; over his island; over the next generation of island dwellers.

'There's not a night you don't wake up thinking about oil, and you go to sleep and you're thinking about oil. It's always on your mind,' Blanchard told the German Press Agency dpa.

His seafood business largely collapsed.

'We're sitting here losing money and watching BP making billions,' Blanchard said.

In fact, despite footing the 20-billion-dollar fund and expenses of 11 billion dollars to contain the spill, BP was back in the black with quarterly profits of 1.85 billion dollars by November 2010.

BP and eight other companies linked to the oil spill are being sued by the US government for violating environmental laws and a criminal investigation is also underway. A special presidential commission found that 'a significant failure of management' led to the disaster.

Blanchard charges that BP should have collected more of the oil instead of using chemical dispersants to sink it - substances which he fears are killing sea life.

Blanchard says he has lost 3 million dollars, but has only been offered 900,000 dollars from the GCCF - an amount the administrator believes he will lose in the course of two years.

For its part, the GCCF Monday complained that many claims 'are out of proportion to the damages actually substantiated by the claimants.'

A day's drive away, in Venice, Louisiana, boat captain Owen Langridge, better known as 'Big O,' also worries about the environmental recovery.

He says most of the fish he catches are too large to have grown over the past year. He fears that the oil may have killed most of the 2010 fish spawn. Worse impacts could come down the road. For example, Alaska's herring fishery only collapsed three years after the 1989 Alaska Valdez spill. Other impacts took a decade to unfold.

'There's still a big question mark as to whether or not we will be able to run our business successfully over the next two or three years. We don't know,' says Big O.

At the height of the oil disaster, the small fishing port tripled its number of boats due to demand for the clean-up effort. 'Big O' rented out his boat and labour to BP for good money, and until the end of last summer, he had nothing but praise for BP's efforts.

'I really thought they'd do everything right - and they haven't,' says Langridge. 'The media spotlight left soon after the oil well was capped. At that time, the total attitude from people working for BP started changing.'

His charter boat business should be getting underway at this time of year, but only one-third of the clients from previous years have turned up. Some captains even talk of a 90-per-cent drop.

Mike Ballay, harbor master of the Cypress Grove Marina, shrugs his shoulders in the April sunshine.

'The oil disaster was the economic stimulus plan for southern Louisiana,' he says.

As BP pumped huge sums of money into the Gulf coast, the Marina underwent 500,000 dollars of improvements. The hourly rate for odd jobs more than doubled. Some charter boat captains made 300,000 dollars in the months of the oil disaster - more than their total lifetime earnings, Ballay said.