Dollar and Sins
Nearly two months into the 2010 Gulf of Mexico oil spill, Tony Hayward made a curious promise. BP’s quintessential British CEO wasn’t enjoying his stint in the South’s sweltering summer sun, and in the middle of June took some time to visit Washington D.C. to testify before congress.
“How damaging is the spill to the environment?” Hayward asked legislators.
He didn’t know the answer. No one did. Still don’t.
The day before, Hayward had received a solid reaming from President Barack Obama, who was none too happy about having to make a trip south to survey the spill and eat a snow cone with Mississippi Gov. Haley Barbour.
Following a White House meeting, BP’s CEO was sent to testify to Congress with his tail between his legs. He used his testimony to stress the company’s commitment to the Gulf region.
“I’ve been to the Gulf Coast,” Hayward told lawmakers. “I’ve met with fishermen, business owners and families. I understand what they’re going through, and I promise them, as I’m promising you, that we will make this right.”
But what did he mean? It’s so vague—‘make this right’—almost theological. What is going to be made right? And how?
AN EYE FOR AN EYE, A BOAT RAMP FOR A DOLPHIN
It’s early January and the University of West Florida Conference Center is set up like a trade show. Booths are brimming with information about hope and despair.
Half of the stations at this trade show are geared toward the oil spill, while the others highlight possible restoration projects. Collectively, the trade show tables are an outline for penance.
“This is a first step,” said Escambia County Commissioner Grover Robinson, leaning against the wall after listening to the evening’s presentations.
The night is the second meeting in a run of Gulf Coast community forums held to discuss the Deepwater Horizon Draft Phase I Early Restoration Plan and Environmental Assessment. It is the first glimpse at what Hayward’s “make this right” might entail.
After the 1989 Exxon Valdez oil spill in Alaska, the Oil Pollution Act became law. It allows for trustees—made up of relevant federal and state governments—to determine damages and recoup losses. It legally mandates that they “make this right.”
“If you feel so inclined,” encouraged Brian Spears, restoration program manager for the U.S. Department of the Interior, “the Oil Pollution Act itself is exciting reading.”
If not exciting, the act is at least important. Following an oil spill, an assessment is made in regards to its effects. The Natural Resource Damage Assessment will lay out exactly what the at-fault party will ultimately be responsible for.
“In the United States, the natural resources are a public commodity,” explained Spears. “They belong to all of us.”
Through the NRDA process, trustees will determine the extent of damages and the degree of liability. No one knows how long this will take or how steep a price tag it might carry.
“In this case, we don’t know the effect,” said Florida Department of Environmental Protection Secretary Mimi Drew. “At the end there’s going to be a giant sum.”
Drew is another one of Florida’s trustees. She lapped the trade show’s collection of tables before heading out toward her seat on the night’s panel.
Across the room, at a station labeled ‘Injury Assessment,’ Kevin Kirsch elaborated.
“Normally, NRDAs can take years,” he said. “This is obviously on a fast-paced track.”
Kirsch works with data management. He’s with the National Oceanic and Atmospheric Administration.
“Right now, we’re fully in the injury assessment process,” Kirsch said, stepping out in front of his table.
Normally, damage is assessed, penalties levied and restitution made. In that order. Restoration work in response to the Gulf oil spill will begin while any notion of closure in the assessment process floats, undefined, marked only on a far-off calendar hung on a wall in the room of a house that hasn’t yet been built.
Kirsch attributes the early start on restoration to the spill’s “scale and magnitude.” Also, there’s already money on the table. BP has put up $1 billion to go toward early restoration projects.
“To a degree,” Kirsch explained, “that’s what triggered the early restoration.”
In April 2011, a year after the explosion that unleashed the spill, BP entered into the Framework Agreement—a deal that allows restoration work to begin while the damage assessment continues. The work will be funded from the $1 billion.
“We don’t talk in terms of money,” Kirsch clarified, explaining that damages are discussed along the parameters of—“acres, services lost, time. It’s more than just how much is damaged, it’s how much is damaged, plus the time it would take for it to come back.”
Spears later explained it another way.
“In simplest terms, if somebody spills oil and kills a bird or a dolphin,” he said, “they owe us a bird or a dolphin.”
While the Department of Interior program manager breaks it down to biblical basics, it’s not always that simple.
“We can’t go out and buy more dolphins and whales,” Kirsch had noted, explaining that restoration work may not correspond directly with damages.
And while the trustees prefer to think about restoration in acres and time and long-term calculations, BP tends to think about it another way. They do talk about it in terms of money. One billion dollars, for starters—the eventual final sum will correspond with the eventually assessed damages.
Robin Bullock, BP’s NRDA Director, called the beginning of the restoration process an “important milestone.” She had hosted a conference call from Houston earlier in the day to cheerlead the release of the trustee’s Draft Phase I, and the related Gulf Coast community powwows.
“We believe it’s the right thing to do,” Bullock said.
BP has been in restoration mode since last November. That’s when the U.S. Coast Guard, Florida, Alabama, Mississippi and Texas signed off on the clean-up phase. In ushering in the restoration phase, it was agreed upon that any future oil would need to be positively linked to the Deepwater Horizon well in order to hold BP responsible.
Louisiana balked at the deal. The state’s Coastal Protection and Restoration Authority Chairman Garret Graves, a top aide to Gov. Bobby Jindal, argued that it was too early to turn attention away from clean-up efforts. He fired off a letter to the Coast Guard.
“We said, we have 23 miles of shoreline where there’s still oil being found and millions of barrels of BP oil in the Gulf that’s unaccounted for,” Graves relayed to New Orleans’ Times-Picayune in November. “We still have sporadic re-oilings, and you can’t tell us where the oil is.”
Louisiana’s foot stamping did little good. Though it didn’t sign-on to the plan, the frontline state was included in the agreement anyway. The feds didn’t need Louisiana’s approval.
At the time, Mike Utsler, chief operating officer of BP’s Gulf Coast Restoration Organization, noted the completion of the clean-up phase and also heralded the restoration phase as an “important milestone.”
“After the spill, BP promised to clean up the oil and pay all legitimate claims,” Utsler said in a statement. “We are making good on that commitment, but our work is not done. With the shoreline clean-up completion plan in place, restoration work for the long-term benefit of the region can now begin.”
But, Louisiana wasn’t the only one eyeing the transition with suspicion. Ending the clean-up phase didn’t sit particularly well in Escambia County either, where weekly tarball estimates were still ranging between 200 and 500 pounds a week.
Commissioner Robinson was alarmed at the notion BP would not be responsible for oil found following the new agreement.
“No, no, no, that would be an issue,” the county commissioner said at the time. “If things are still popping up, they have to be there.”
The clean-up-vs.-restoration argument cropped up again during Bullock’s conference call. It was distracting. She’d much rather have been talking about a “great start” or “the right thing.”
“Apparently, there are still tarballs washing up on the barrier islands,” pressed a reporter from Mississippi.
“Some of those tarballs have been there since before the incident began,” Bullock cautioned, later feeling the need to clarify the position: “We’re finding that many of the tarballs now washing up on the beach are not fingerprinting back to the wellhead.”
BP’s NRDA head seemed relieved when the questions circled back around to the restoration projects. She gulped out a pitch for gathering public comment like she was catching her breath after narrowly outrunning a herd of feral cats left to populate on an abandoned drilling rig.
“I think that this is a big part of these public meetings,” Bullock said. “They will absolutely be able to comment on these projects. They can be changed.”
THE LONG WALK TOWARD RESTORATION ABSOLUTION
After an evening pouring over the early restoration draft plan, Commissioner Robinson—Escambia County’s spill liaison—musters a weary grin. A boat-load of money is primed to pour into the county and the local politician is proportionally pleased—encouraged but not impressed.
“It’s a beginning point,” Robinson says. “By no means are these the only projects.”
It’s a message that is repeated by everyone. The projects laid out in this initial plan should be considered the beginning to a much broader journey.
“This is a first step of a many, many layered process,” Doc Kokol, of the Florida Fish and Wildlife Conservation Commission, had said as he surveyed the evening’s information stations. “I think that’s really the point we’re trying to get out here—this is just the beginning.”
The point is an undeniable theme for the evening. A repeated chorus sung in a round by the folks manning the stations, the position was stressed again during the night’s more formal presentations.
“Keep in mind,” assured Nick Wiley, executive director of the FWCC and one of Florida’s Deepwater Horizon trustees. “They’ll be more projects down the line.”
This is, everyone made a point of saying more than once, only the beginning of the restoration process.
“I think this is a good first step,” said Robert Turpin, of the Escambia County Marine Resource Division. “And we look forward to completing the journey.”
But to kick things off, there are eight different projects to explore. Together, the projects total less than $60 million, and barely begin to nibble on the $1 billion BP set aside for early restoration projects.
Of the $1 billion, $200 million goes to federal trustees and $300 million is to be used at the federal trustees’ discretion to fund state-proposed projects. The remaining $500 million is split equally between the five Gulf States.
Two projects in each state made their way into the draft plan. Both of Florida’s initial projects are slated for Escambia County, and total a little over $5 million.
The projects were culled from suggestions collected over the past year. Federal and state officials solicited ideas from local governments and citizens attending community meetings.
“Then we put those through the strainer,” said Secretary Drew, explaining that the projects had to meet certain criteria.
Once the Deepwater Horizon trustees—consisting of representatives from various Gulf State agencies, as well as the Department of the Interior and NOAA—had whittled the list of potential projects down, they took it to BP for approval.
“BP didn’t just write a check and give it to us,” Drew said.
Over at the information station detailing the proposed projects, Dave Mills, of Stratus Consulting, described BP’s billion dollars as a “down payment” and said the company was interested in the return.
“They want to know what they’re receiving,” Mills said.
Efforts toward restoration have tangible and translatable values. Most are figured using some fairly fancy calculations, and BP is keeping track of the math. Whatever they pay toward restoration now will be lopped off the total when their final tab is eventually tallied.
This pre-assessment penance will come off “the backend” and is referred to as “offsets.” It’s not clean math—$4 million in boat ramps proposed for Escambia would net BP about $10 million on the backend—and difficult to wrap your head around without a calculator and an NRDA decoder ring.
Rebecca Wintering, an environmental specialist with the Florida DEP, did her best to explain it.
“Total Injury is the pie. An offset is how much—or the slice of the pie—we have been compensated for. The slice of the pie—” she stopped and shelved the math lesson for another day. “It’s going to take years.”
The current task at hand is deciding how BP’s penance money will be spent. The eight plans listed in the draft plan are the projects that the trustees and BP have agreed upon.
The first plan proposed for Florida is a dune restoration project for a 4 mile stretch of Pensacola Beach. The Florida Dune Restoration Project would aim to directly restore primary vegetated dune habitat injured by the spill and response efforts. The measures would help prevent erosion of the shoreline, at an estimated cost of $585,898.
The larger project proposed for Florida—again, in Escambia County—is the construction of two boat ramps, the repair of another and the repair and expansion of one more.
The project calls for constructing the Mahogany Mill Public Boat Ramp in Pensacola Bay, as well as the new Perdido Public Boat Ramp in Perdido Bay. The plan also calls for making repairs to Navy Point Park Public Boat Ramp in Pensacola Bay and Galvez Landing Public Boat Ramp in Perdido Bay.
Escambia’s boat ramp projects could be realized for an estimated $4,406,309. Escambia County will cover the $2-plus million cost to purchase the required properties, and BP will be responsible for upkeep of the facilities for 15 years.
The boat ramps are an applicable project because they meet the criteria, which includes loss of human-use. Most of the other projects up for comment are more ecological in nature. Escambia’s $4.4 boat ramp endeavor would be the only early restoration project aiming to repay for loss of use of the Gulf during and following the spill.
“I’m surprised the first phase wasn’t about our environment,” said Heather Reed, a biologist who works for the city of Gulf Breeze and also conducts independent research on the spill, during the UWF meeting’s public comment period. “Not that I’m knocking a boat ramp.”
In Alabama, they’re wanting to create and protect salt marshes. Louisiana is hoping to focus on its oysters, with 850 acres of cultch placement and improvements to an existing hatchery. A 100-foot long nearshore artificial reef is slated for Mississippi.
“There’s obviously more than just the human-use,” Commissioner Robinson told the panel at the draft-plan meeting. “There’s also environmental restoration.”
There’s a long list of Florida projects—and other Gulf projects—that have a chance at making the next round of prospective projects. Some local candidates include a fish hatchery, storm water improvements and oyster bed restoration.
After the meeting, Robinson rallies some enthusiasm for his county’s proposed projects—“Florida suffered more loss of use than anywhere.”—but didn’t look thrilled. He sounded hopeful about the list of projects eligible for future rounds of restoration plans. This was, as the plan’s title implied, only the Early Restoration.
“A lot of it was what we could get approved by the trustees,” Robinson shrugs.
A man full of late-in-the-day energy approaches Robinson. The animation in his voice embraces the commissioner with an aggressively-friendly, full-body bear hug.
“Where’s the outrage?” the man demands. “Why aren’t you as mad as hell?”
Throughout the oil spill saga, Robinson has not been known to shy away from BP or the federal government when it comes to expressing the county’s concerns. Earlier in the meeting, a DEP representative had referenced his initial “rocky meeting” with the commissioner.
“There’s a lot of outrage, trust me,” Robinson assures the man. “But, you know, we’re learning to work through the process.”