skip to main content

→ Top Stories:
Fracking
Safe Chemicals
Defending the Clean Air Act

David Newman’s Blog

Oil Spill Victims Must Not be Short-Changed by Uncertain Estimate of Recovery

David Newman

Posted February 3, 2011 in Environmental Justice, Moving Beyond Oil, Reviving the World's Oceans

Tags:
, , ,
Share | | |

The Gulf Coast Claims Facility, the fund established by BP in the wake of the Gulf oil spill, proposed a methodology yesterday for calculating economic damages to Gulf residents and businesses.  The methodology, based on a report by biologist Dr. John W. Tunnell Jr. that was commissioned by the Claims Facility, offers to pay two times documented losses for 2010 to most claimants and four times 2010 losses to those whose livelihoods depend on oyster harvesting.  Preliminary payments to date would be subtracted from final settlement payments.

The calculus of this damage formula is based on Dr. Tunnell’s “expert opinion” that the Gulf ecosystem will recover to pre-spill harvest levels of shrimp, crabs and fish in two years and to pre-spill harvests of oysters in four years.  The analysis contained in the brief report is based on a review of the literature rather than an empirical analysis of baseline studies.  Applying Dr. Tunnell’s vision of ecological recovery to calculate long-term economic damages is problematic on a number of levels. 

At this time, scientific understanding of the spill’s long-term impacts is highly uncertain.  As discussed below, the Tunnell Report repeatedly acknowledges this reality.  Indeed, it is currently impossible to accurately predict ecological recovery in the Gulf until a comprehensive natural resource assessment is completed.  These studies are underway as part of the Government’s natural resource damage assessment (NRDA) process.  It will take several years to understand the impacts on the Gulf ecosystem and to determine how quickly the Gulf can be restored to pre-spill conditions, including for commercially important species.

Here are some excerpts from the Tunnell Report which acknowledge the current uncertainty:

“The above complexities of oil spilled in the environment and the subsequent fate and effects clearly reveal the difficulty in assessing damages from a spill and the near impossibility in accurately predicting the environmental impact or time of recovery.”  Page 14.

“…it is very difficult to quantify the effects from an oil spill, or to establish when recovery from such a pollution event is complete.”  Page 15

“…determining recovery to a certain endpoint may be ill-conceived, if the larger scale trend is unknown or is not factored into the recovery equation or model.”  Page 15.

“Changes in feeding behavior or reproductive behavior could affect populations for years from re-oiling of submerged or hidden oil that was not removed.  The unprecedented and unexpected crash in the herring fishery five years after the Exxon Valdez oil spill is a classic example of the unknown that can surprisingly appear years later (Peterson et al. 2003).”  Page 15.

“In addition to the obvious and direct death of biota or habitats that can occur during an oil spill, there are many possible sublethal effects which can occur, and they can be quite insidious and are very difficult to detect or measure.  These effects might include reduced reproductive capacity, or sizes of individual organisms might be smaller as a result of exposure to oil components, or a result of reduced amounts of food or habitat.  The effects of oil on plankton (food for larvae of fish and invertebrates) are currently unknown, and may never be known.  The effects of oil on trophic cascades and ecological interactions are also unknown (T. Shirley, pers. comm.).”  Page 22.

“Realistically, the true loss to the ecosystem and fisheries may not be accurately known for years, or even decades…”  Page 37.

“Assessing recovery after a major pollution event is perhaps even more challenging and difficult than assessing the initial damage (NRC 2003), as has been reported in this present document.”  Page 37.

Given all of this uncertainty and lack of knowledge regarding recovery, it is hard to see how Dr. Tunnell can conclude that complete recovery will occur in the next two to four years.  What is the reason for this rush to judgment?  The simple, but unacceptable answer, according to the report: “the [Claims] Facility needs to move as expediently as possible in settling these claims.”  It is important to note that the Claims Facility and its administrator, Kenneth Feinberg, are not independent actors, but rather agents of BP, as a Federal judge made clear yesterday.   

While there is a pressing need for making people whole for the losses they have and continue to suffer, that cannot be the end of the story for the victims of this spill, especially if the near-term settlements turn out to underestimate the long-term ecological damage from the spill (to learn more about the spill’s impacts on people’s lives, check out NRDC’s Stories from the Gulf: Living With the BP Oil Disaster).  For example, what happens if the ecosystem appears recovered only to then have some sort of sudden, unexpected resource crash, like what occurred with the herring fishery five years after the Exxon Valdez spill? 

According to the proposed damage formula – nothing.

The Oil Pollution Act seeks to make whole the victims of a catastrophic oil spill.  Basing final settlement payments on premature and highly uncertain predictions of quick recovery does not accomplish this.  Providing near-term relief to the hundreds of thousands of Gulf residents and businesses harmed by the spill, while also protecting those people’s long-term interests, the Claims Facility should immediately adopt the following common-sense solutions:

  • Conduct a formal public peer-review of the Tunnell Report that solicits comments from leading experts in government, academia, research institutions, and other relevant non-governmental organizations.
  • Include reopener provisions in settlements for economic damages under the Claims Facility similar to the reopener provisions that are commonplace in the settlement of NRDA claims.  Such provisions should allow claimants to pursue future claims from unanticipated harm caused after the initial settlement. 
  • Extend the public comment period from two weeks to 60 days.

Please take a few minutes to comment on the proposed plan by email or regular mail: GCCF, P.O. Box 9658, Dublin OH 43017-4958.  You can view submitted comments here.

Share | | |

Comments

mary tiptonFeb 4 2011 05:27 PM

Dear Mr.Feinberg,
I know you are a very rich man. But how would you feel If a client of yours gave you the type of figures you gave for all the people of the Gulf Coast area to be paid? I really believe you would not take a 8 month year basis for you pay. I know you are a intelligent man to know 12 months are in a year. also to pay you two years for a job that was recorded in the past that will take five years to finish. You would not take the job. So please don’t insult the Gulf Coast people with this offer, even you would not take! We all know you work for BP. But that does not mean you have to degrade your intelligence or ours for them Oil spill around the world:
1989 American oil tanker Exxon Valdez caused the tourism industry immediately lost over 26,000 jobs and more than $2.4 billion in sales. By 2003, it had recovered somewhat. Passive use cost the state $2.8 billion, and it too has never fully recovered since vacationers still think of the area as contaminated. (Source:NOAA) Time of recovery 4 yrs.
Ixtoc Oil Spill In 1979, an oil rig exploded off the coast of the Yucatan, Mexico. The Ixtoc well poured 140 million gallons of oil into the Gulf of Mexico. Massive slicks reached the northern Mexican Gulf coast and Texas, where it would eventually coat almost 170 miles of U.S. beaches. The beaches were largely clear within three years. However, it was five years before all tar mats on Texas beaches disappeared. Time of recovery 5 yrs.
BP oil spill estimated range of impacts in terms of duration and scale for the current oil spill. This is based on current estimates of the length of time of cleanup as well as traveler uncertainty created by a misperception . On this basis, the Deepwater Horizon oil spill impact could reasonably extend to three years beyond the initial spill. (Source: Oxford Economics) Time of recovery 3 yrs.
http://msnbcmedia.msn.com/i/MSNBC/Sections/NEWS/z_Personal/AJohnson/Gulf_Oil_Spill_Analysis_Oxford_Economics_710.pdf
One Wall Street analyst has a very dire projection about the economic effects of the BP oil spill. David Kotok, the co-founder and chief investment officer of Cumberland advisories, a Sarasota, Florida-based investment advisory board , has projected that the spill will cost 1 million permanent jobs in the next five years. (Hat tip to Politico’s Morning Money.)( source: The Huffington post) Time of recovery 5 yrs.

The average time of recovery with the studies I have presented is 4.25 yrs.

Comments are closed for this post.

About

Switchboard is the staff blog of the Natural Resources Defense Council, the nation’s most effective environmental group. For more about our work, including in-depth policy documents, action alerts and ways you can contribute, visit NRDC.org.

Feeds: David Newman’s blog

Feeds: Stay Plugged In