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Gulf oil spill claims czar under fire for rosy recovery estimates

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Kenneth_Feinberg_horiz.jpgBP oil spill paymaster Kenneth Feinberg released a draft plan this week for deciding payments on final claims for damages for the disaster, and it's drawing fire for being too optimistic about the pace of recovery.

Feinberg released the proposed methodology on Feb. 2 and said he would accept public comments through Feb. 16, though he's now being urged to extend that comment period. (To read the comments submitted, click here and scroll to the bottom of the page.)

Along with the draft compensation plan, Feinberg released a report [pdf] he commissioned estimating the recovery period for Gulf seafood to help him work out the payment program. The report was prepared by John Tunnell Jr. at the Harte Research Institute for Gulf of Mexico Studies at Texas A&M University.

The report estimates that -- with the exception of oysters -- the Gulf will be fully recovered from the oil spill by the end of 2012. Based on that assumption, Feinberg plans to pay most claimants twice their estimated 2010 losses for final claims, deducting any payments already received. Oyster harvesters would receive four times their 2010 losses.

But those estimates are not sitting well with some in the Gulf.

"What Feinberg would like to do and BP would like to do is wrap everything in a nice little bow and call it finished, and put a timeline on it, and we never have to look at the gulf again," Mobile (Ala.) Baykeeper Executive Director Casi Callaway told WKRG TV.

David Newman at the Natural Resources Defense Council points out that Tunnell came up with his recovery estimates through a literature review rather than an empirical analysis of baseline studies. While government studies are now underway to assess the region's natural resources, Newman observed that it will take several years to figure out how quickly the Gulf can be brought back to pre-spill conditions.

So why the hurry to come up with the recovery estimates now? Newman writes:

The simple, but unacceptable answer, according to the report: "the [Claims] Facility needs to move as expediently as possible in settling these claims."

Instead, NRDC is calling on BP to provide short-term relief to Gulf residents and businesses affected by the spill. To protect residents over the longer term, the group wants a formal public peer-review of the Tunnell report and the inclusion of "reopener provisions" in settlements allowing claimants to pursue future compensation for unanticipated harm. NRDC also urged the claims facility to extend the public comment period from two weeks to two months.

The controversy over the proposed methodology used to administer the $20 billion fund came as Feinberg found himself in hot water over how he's been portraying his role with the fund to the public.

This week a U.S. District Court judge in Louisiana who's presiding over oil spill litigation ordered Feinberg and the Gulf Coast Claims Fund to stop representing themselves as independent from BP. The ruling came in response to a motion filed by plaintiff attorneys concerned that Feinberg "seems indistinguishable from a defense attorney attempting to settle cases on behalf of BP."

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re: Gulf oil spill claims czar under fire for rosy recovery esti

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 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.

re: Gulf oil spill claims czar under fire for rosy recovery esti

Feinberg + GCCF = BP Agents.

Here is a site with constant updates and media:

http://bpandfeinbergbankruptedus.com/

re: Gulf oil spill claims czar under fire for rosy recovery esti

Feinberg is a pompass jerk with very little knowdledge of the Gulfcoast. He is working for BP and making $850,000 per month but this jerk wants to pitch pennies to those that are truly affected by this spill. The worst part to this problem is the fact that Mr. Obama is just sitting back and allowing this to take place. We are hurting and losing our way of life and this moron is laughing all the way to the bank while we continue to lose out. What will it take for Obama and Washington to hold BP and Feinberg accountable?