in the Gulf of Mexico escalated Wednesday as BP's stock plummeted to a
14-year low and fishermen, businesses and property owners who have
filed damage claims with the company angrily complained of delays,
excessive paperwork and skimpy payments that have put them on the
verge of going under.
The oil company captured an ever larger-share of the crude gushing
from the bottom of the sea and began bringing in more heavy equipment
to help in the effort, including a production ship and a tanker from
the North Sea that will allow the system to process larger quantities
of oil and better withstand tropical storms.
The containment efforts played out as investors deserted BP amid fears
that the company might be forced to suspend dividends, end up in
bankruptcy and find itself overwhelmed by the cleanup costs,
penalties, damage claims and lawsuits generated by the biggest oil
spill in U.S. history.
Shrimpers, oystermen, seafood businesses, out-of-work drilling crews
and the tourism industry all are lining up to get paid back the
billions of dollars washed away by the disaster, and tempers have
flared as locals direct outrage at BP over what they see as a tangle
of red tape.
"Every day we call the adjuster eight or 10 times. There's no answer,
no answering machine," said Regina Shipp, who has filed $33,000 in
claims for lost business at her restaurant in Alabama. "If BP doesn't
pay us within two months, we'll be out of business. We've got two
kids."
An Alabama property owner who has lost vast sums of rental income
angrily confronted a BP executive at a town meeting. The owner of a
Mississippi seafood restaurant said she is desperately waiting for a
check to come through because fewer customers come by for shrimp
po-boys and oyster sandwiches.
Some locals see dark parallels to what happened after Hurricane
Katrina, when they had to wait years to get reimbursed for losses.
"It really feels like we are getting a double whammy here. When does
it end?" said Mark Glago, a New Orleans lawyer who is representing a
fishing boat captain in a claim against BP.
BP spokesman Mark Proegler disputed any notion that the claims process
is slow or that the company is dragging its feet.
Proegler said BP has cut the time to process claims and issue a check
from 45 days to as little as 48 hours, provided the necessary
documentation has been supplied. BP officials acknowledged that while
no claims have been denied, thousands and thousands of claims had not
been paid by late last week because the company required more
documentation.
At the bottom of the sea, the containment cap on the ruptured well is
capturing 630,000 gallons a day and pumping it to a ship at the
surface, and the amount could nearly double by next week to roughly
1.17 million gallons, said Coast Guard Adm. Thad Allen, who is
overseeing the crisis for the government.
A second drilling vessel that will arrive within days is expected to
greatly boost capacity. BP also plans to bring in the tanker from the
North Sea on Monday to help transport oil and an incinerator to burn
off some of the crude. The tanker is currently used to shuttle oil
from North Sea rigs to the shores of Scotland, and its deployment in
the Gulf has been part of the broader plan to expand the amount of
crude brought to the surface once a new and improved
cap-and-collection system is installed over the leaking well.
The government has estimated 600,000 to 1.2 million gallons are
leaking per day, but a scientist on a task force studying the flow
said the actual rate may be between 798,000 gallons and 1.8 million.
Crews working at the site toiled under oppressive conditions as the
heat index soared to 110 degrees and toxic vapors emanated from the
depths. Fireboats were on hand to pour water on the surface to ease
the fumes.
Allen also confronted BP over the complaints about the claims process,
warning the company in a letter: "We need complete, ongoing
transparency into BP's claims process including detailed information
on how claims are being evaluated, how payment amounts are being
calculated and how quickly claims are being processed."
The admiral this week created a team including officials from the
Federal Emergency Management Agency to help with the damage claims. It
will send workers into Gulf communities to provide information about
the process. He also planned to discuss the complaints with BP
officials Wednesday.
Under federal law, BP is required to pay for a range of damage,
including property losses and lost earnings. Residents and businesses
can call a telephone line to report losses, file a claim online and
seek help at one of 25 claims offices around the Gulf. Deckhands and
other fishermen generally need to show a photo ID and documentation
such as a pay stub showing how much money they typically earn.
To jump-start the process, BP was initially offering an immediate
$2,500 to deckhands and $5,000 to fishing boat owners. Workers can
receive additional compensation once their paperwork and larger claims
are approved. BP said it has paid 18,000 claims so far and has hired
600 adjusters and operators to handle the cases.
The oil giant said it expects to spend $84 million through June alone
to compensate people for lost wages and profits. That number could
grow as new claims are received. When it is all over, BP could be
looking at total liabilities in the billions, perhaps tens of
billions, according to analysts.
BP stock dropped $5.45, or 16 percent, Wednesday - easily its worst
day since the April 20 rig explosion that set off the spill. In the
seven weeks since then, the company has lost half its market value.
The latest slide came after Interior Secretary Ken Salazar promised a
Senate energy panel to ask BP to compensate energy companies for
losses if they have to lay off workers or suffer economically because
of the Obama administration's six-month moratorium on deepwater
drilling.
Calculating what is owed to victims of the spill has proved challenging.
David Walter owns an Alabama company that makes artificial reefs that
anglers buy and drop in the Gulf to attract fish, but state regulators
stopped issuing permits for the reefs on May 4 because of the oil
spill - effectively killing off $350,000 in expected business.
When Walter called a claims adjuster working for BP, he was told to
provide four years of invoices for May, June and July along with tax
returns for those years. Walter said he sent the forms by overnight
mail, but the adjuster assigned to his case changed offices and could
not be found. The documents were lost.
After making more inquiries, Walter said, he was instructed to gather
the same documents and this time go to a claims office. There, an
adjuster told Walter he would be eligible for only a $5,000 payment
since his tax returns showed a technical business loss when
depreciation was factored in.
"I said that's not fair because if you say that, then I have to go out
of business and I lose everything," Walter said. He is now working
with an accounting firm to calculate his losses.
Not everyone had complaints about the claims process.
Bart Harrison of Clay, Ala., filed his first claim on Wednesday
morning for lost rental income on his coastal property and expected to
have a check for $1,010 within a few hours. The only documentation
required was tax returns and rental histories for his units, which
were both easy to provide.
"The guy I talked to was knowledgeable and respectful. It seemed like
he really wanted to write a check and please me since it was my first
time in," Harrison said.
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