Gulf to Recover from BP Oil Spill by 2012, Says Claims Chief Feinberg

The Gulf of Mexico should recover from the massive BP oil spill by the end of 2012, the administrator of the $20 billion victims compensation fund said last week.

By that time, most of the harmful effect of the worst offshore oil spill in U.S. history will have dissipated and the economy should have picked up, said Kenneth Feinberg, independent administrator of the Gulf Coast Claims Facility (GCCF).

On the basis of the estimate, the fund plans to make final payments of twice the documented 2010 damages minus payments already made through the fund, Feinberg said.

“For every claimant who is eligible other than oyster harvesters, we believe at the GCCF that it is reasonable to conclude full recovery by the end of 2012. There will be gradual recovery over the next two years,” Feinberg said.

“Document any claims and we will double it minus the offset,” he told a news conference.

But for oyster fishermen the figure would be four times the amount of documented damages sustained in 2010 because of uncertainty over the rate of recovery of that industry.

Millions of gallons of oil poured into the Gulf between last April and July, damaging the fragile wetlands of Louisiana, washing ashore in Mississippi, Alabama and Florida and hitting coastal industries including fishing and tourism.

Many angry Gulf coast residents say the compensation fund has short-changed them and favored BP’s interests over their own. They also argue BP is attempting to wriggle out of its commitment to “make this right” for spill victims.

OYSTER FISHERMEN

The fund was set up in an agreement between the White House and BP to pay the thousands of businesses and individuals who suffered economic damage. It has so far disbursed around $3.5 billion, Feinberg said.

One difficulty it faces is to assess future economic losses given uncertainty about the pace of economic and environmental recovery on the coast.

To make the judgment involves wading into a series of scientific disputes and Feinberg said he “canvassed the universe” in terms of experts and used considerably a report by a marine biologist at Texas A&M University.

But he acknowledged a degree of uncertainty and encouraged dissatisfied potential claimants not to apply.

“If people feel that I have misread the available data or have underestimated the long term data don’t take the final payment,” he said.

One New Orleans attorney who has filed lawsuits stemming from the spill on behalf of condo owners and fishermen said Feinberg’s assessment appeared flawed.

“Feinberg is lumping together every possible industry affected along the Gulf Coast, with the oystermen exception, to arrive at an arbitrary figure backed by rushed scientific estimates,” said Jeffrey Berniard.

The GCCF was opening its draft proposal for a two-week period of consultation, in part to ensure transparency, but by Feb. 16 it would start making final payments, Feinberg said.

Under the rules governing the fund, anyone who receives a final payment can no longer sue BP.

(Additional reporting by Tom Hals in New York) (Editing by Tom Brown and Cynthia Osterman)