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BP Calls Gulf Recovered and Looks To Quit Payments to Businesses Over Economic Losses

| July 9, 2011

BP wants to cut off the greener spigot.

After paying more than $4.6 billion to private citizens and businesses since the Deepwater Horizon spill, BP officials have told federal overseers that the Gulf coast economy is mostly back on its feet and therefore the company should not have to pay for most new losses going forward.

In a letter to the Gulf Coast Claims Facility, which has been set up to reimburse people and businesses for spill related costs, BP says that future claims should be limited to the small minority of applicants whose businesses have not rebounded.

“Multiple lines of evidence show that, to the extent certain portions of the Gulf economy were impacted by the Deepwater Horizon oil spill, the Gulf economy experienced a robust recovery in the fall of 2010, and that economic performance remains strong in 2011,” the company wrote in a letter to the GCCF dated Thursday.

“The current economic data do not suggest that individual and business claimants face a material risk of future loss caused by the Deepwater Horizon oil spill,” the company concludes.

Further, the company says that some of the payments already made go outside the boundaries for which it is required to pay under the federal Oil Pollution Act that governs the industry.

Florida’s cities and counties have collected more than $31 million from BP for efforts to respond to and clean up the worst oil spill in U.S. history, according to the latest figures tracked by the company, which has set aside $20 billion to pay for the damage.

Late Thursday, the company released its latest round of government payouts that indicates it may also be winding up its payments to cities, counties and the state. Thursday’s figures were identical to those released on June 23, and just $1.4 million higher than they were on June 9.

Escambia County led the state with $9.7 million in payments for removal costs, public services expenses and lost revenue. Nearby Bay County has so far collected $9 million from the company for damages incurred. The company has paid for damages as far south as the Keys, with Monroe County, Marathon and Key West combining for $81,075 in costs. Miami-Dade collected $28,000 for costs associated with the spill.

The payments, made by the oil company to reimburse governments for recovery costs and loss of revenue brought on by the April 20, 2010 explosion and fire aboard the rig that led to the biggest oil spill in U.S. history, come in addition to the payments made by the company to private residents and businesses for lost revenue related to the spill.

Those payments are separate from civil liabilities, criminal fines and restitution BP will have to pay the federal government and states when Clean Water Act penalties and claims from the Natural Resources Damage Assessment process are tallied. Those payments could add up to billions or tens of billions of dollars. BP’s Clean Water Act penalties could range between from $5.4 billion to $1 billion, according to The New York Times. BP is not the only company that will be facing such penalties.

Private companies making claims are required to go though the Gulf Coast Claims Facility, which as of Thursday had distributed more than $4.6 billion on 196,524 claims. Overall, the facility has received 502,177 claims. The private sector payout is running more slowly than the government paybacks, a lag likely caused by the sheer number of claims and the lack, in many cases, of corroborating documentation.

Many Florida Panhandle applicants, for example, have complained that much of their business was done on a cash basis, an informal and often unaudited system for which few records exist. Of the nearly half a million claims, about 47,000 are being handled through attorneys.

U.S. Sen. Marco Rubio, R-Fla., will be in Pensacola on Monday as part of hearings held by the U.S Senate Committee on Small Business and Entrepreneurship to get updates a year after the spill.

The discussion will include Florida Agriculture Commissioner Adam Putnam, Capt. Bob Zales, president of the National Association of Charterboat Operators and Collier Merrill, chairman of the Pensacola Area Chamber of Commerce.

–Michael Peltier, News Service of Florida, and FlaglerLive

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3 Responses for “BP Calls Gulf Recovered and Looks To Quit Payments to Businesses Over Economic Losses”

  1. NortonSmitty says:

    Really? This has been up all day and not one comment? Are we so accustomed to getting screwed that even this travesty doesn’t piss anybody off? Oh yea, that’s right. It doesn’t concern Casey Anthony or Unions. We’re so screwed.

  2. Rob says:

    How does this effect Florida? Has anyone heard from our state and federal politicians?

    Marco Rubio, Bill Nelson, John Mica (Big Oil beneficiary) all must have lock jaw.

    They must be too busy negotiating (getting paid) to protect the wealthy and corporate tax benefits under the proposed new budget.

  3. Liana G says:


    Norton I’m burned out. Bt I did write to Senator Nelson protesting off shore drilling specifically off the coast of Florida. He responded that he was against it too and is working on pusing through legislation to see it doesn’t happen.

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