As BP claims success in capping well: Gulf economy in ruins

by Tom Eley
Published: Jul.17, 2010 – WSWS

After 86 days of oil gushing into the Gulf of Mexico, BP on Tuesday claimed initial success in temporarily capping the Macondo well about 50 miles off the coast from Venice, Louisiana.

Whether or not the latest effort to stave off the gusher will succeed is not yet clear. This depends on whether damage to the well casing beneath the ocean’s oifloor has taken place. If so, it will indicate that the disaster is far worse than understood even now, raising the possibility that the well cannot be stopped until pressure from its multibillion-gallon undersea reservoir subsides—a catastrophe, in other words, that could carry on for years.

Yet even should this nightmare situation be averted, the BP Gulf disaster is already the worst oil spill and among the worst ecological catastrophes in world history. Since the April 20 explosion on the Deepwater Horizon oil rig, which killed 11 workers, somewhere between 150 million and 357 million gallons have been dumped into the Gulf of Mexico, according to a range of BP, government, and scientific estimates. The vast majority of this oil is still in the Gulf, either in a noncontiguous and constantly altering slick that stretches nearly 600 miles, or in massive plumes of underwater hydrocarbons moved by the Gulf’s currents and eddies.

If the well is successfully capped, one can be certain that the US media will drop the story, “concerned” politicians will wind down their investigations, and BP and the oil industry as a whole will go back to raking in enormous profits on reckless drilling operations.

But what will be left of the Gulf?

The region faces a social, economic, and ecological catastrophe from which it will never recover under the current political set-up, dominated by two big-business parties and a government that at every level does the bidding of the financial and corporate elite. This basic fact has been amply demonstrated by the response to the spill itself, which from the beginning took as its overriding concerns the financial preservation of BP and the demands of the oil industry.

Even were it to be fully funded, the $20 billion escrow established by BP and overseen by ruling class “fixer” Kenneth Feinberg would only represent a drop in the bucket when measured against the catastrophe in the Gulf and even against the assets and revenue of BP, which before the disaster was one of the five largest corporations in the world. The fund, to be established over four years, represents “neither a cap nor a limit” on BP’s damages, according to the White House, and is very likely to be made up for by the company’s disaster-related tax write-offs.

The escrow in fact aims to preserve BP’s financial wellbeing, a fact well known in Washington and financial circles and made clear enough by Feinberg. Obama’s appointed “claims czar” has already spelled out, if not in so many words, that the vast majority of Gulf residents will not see a dime from BP. Excluded from compensation, according to Feinberg, will be those “indirectly” affected by the “perception” of the spill such as retailers and homeowners who have lost their businesses or seen their home values plummet, but who cannot demonstrate physical contact with an oil slick.

Also shut out will be fishermen who operated on a cash basis, perhaps the majority of Louisiana’s fishing industry, most of which has already been shut down due to the likelihood of contamination of fisheries. Among those in both the commercial and sport fishing industries who depended upon cash exchanges are hourly workers, a number of Native American tribes along the coast, and the large Vietnamese immigrant population in southern Louisiana.

Speaking Thursday in Louisiana on a tour of the Gulf Coast, Feinberg also revealed that he would not reimburse local and state governments that have mobilized resources to fight the spill.

“The leak has taxed parish resources that have already undergone more than a year of belt-tightening in a faltering economy, [Jefferson Parish President Steve] Theriot said,” according to one local press account. “His administration and the Sheriff’s Office have spent roughly $1.5 million on top of the $1 million BP already gave. Overtime for public employees and sheriff’s deputies accounts for the bulk of the spending, which is likely to continue for the foreseeable future.”

The devastation in the Gulf comes in the midst of the greatest economic crisis since the Great Depression and in a region that never recovered from the damage caused by Hurricane Katrina in 2005.

How many jobs have been lost? How many businesses have failed? What will happen to tax revenue in Louisiana, Mississippi, Alabama, Florida, and Texas—states that are already taking the axe to social spending and government jobs?

Even before the oil spill, in the first quarter of 2010, these five states saw declines in tax revenues, according to the Rockefeller Institute of Government. And the Center for Budget and Policy Priorities forecasts major 2011 deficits for each of the Gulf States, according to a Reuters analysis. “The projected fiscal 2011 budget gaps for Gulf states total at least $11 billion, including ones for Florida of $4.7 billion, Texas of $4.6 billion, and Louisiana at $1 billion,” it reports.

Counties and cities, whose tax receipts are heavily based on property evaluations, will also suffer. Reuters notes that Escambia County, on Florida’s Panhandle, had already seen property tax revenue plummet due to the housing collapse, which has hit Florida particularly hard. This forced a $24 million reduction in spending.

Yet as catastrophic as the immediate impact has been, it will likely pale in comparison to the long-term economic consequences.

“Right now tax revenues are a secondary issue to the economic growth over the long term,” commented Mark McMullen of Moody’s “What’s scary is: when will it bounce back? And what will be the lasting damage to the economy and government coffers?”

University of Florida economist Sean Snaith has estimated that Florida’s tourist economy will lose up to 39,000 jobs and at least $2.2 billion in business due to the spill. While President Obama has encouraged Americans to visit Gulf Coast beaches, pronouncing them “safe and clean,” in point of fact the level of toxicity in the water may change from day to day with the movement of slicks and plumes. Few will book vacations under such conditions.

On top of the damage to state and local revenues as well as the fishing, tourism, shipping, oil, and housing industries, there is a potential for a public health care crisis, according to a new report from the Center for American Progress.

The report lists a number of public health risks. Co-author Lesley Russell points to early warning signs: cleanup workers and residents who have inhaled fumes or come into contact with dispersants and oil have reported becoming sick. Due to a BP gag order backed by the White House, it is unknown how many cleanup workers who have fallen ill and what their symptoms are.

Residents of the Gulf will likely see increased instances of long-term and chronic conditions such as endocrine and fertility problems, respiratory sicknesses, post-traumatic stress syndrome, sickness resulting from toxic seafood, and cancer, according to the study.

Separately, Lawrence Palinkas, a University of Southern California anthropologist who studies the mental health impact of the Exxon Valdez oil spill of 1989, warned that the traumatic affects of the Gulf oil disaster will last for years. Palinkas found that in affected Alaskan communities, the incidents of Post Traumatic Stress Disorder (PTSD) and other psychiatric problems were 360 percent higher than in the general population one year after the spill.

“The major issue that we may be addressing for years to come is not just the physical health effects of the oil spill, but the mental health impacts,” Palinkas warned at a meeting at the Tulane University Medical School in New Orleans on Thursday. Even worse was the psychological suffering among cleanup workers, he said.

Louisiana and Mississippi have each requested $10 million from BP to deal with mental health consequences of the catastrophe. BP has yet to respond.




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British Petroleum’s oil spill is latest crime in a criminal history

VIDEO – Requiem for the Gulf

VIDEO SERIES: The human toll of the BP blowout

5 Comments on “As BP claims success in capping well: Gulf economy in ruins”

  1. Dwight Baker says:

    BP BS has grown to new heights where common language does not work any longer and gone far below into the abyss in actions done absent of intellect with intent to deceive.
    By Dwight Baker
    7/17/2010 2:08 AM

    Amid the growing disparity in our Rich and Abundant Gulf the dim glowing embers of a people totally forgotten is getting worse by the minute — each time the clock ticks. Yet our own people have bought into the BP BS insanity now most are being quoted as using BP BS rhetoric as some kind or sort truth filled report. And to state it simply no one has got a clue of what the hell is really going on except for a few of us who do.

    Many have forgotten the Gulf oil belongs to We the People. BP pays us royalties to produce our oil. How much and when and are those numbers real or fraudulent and who ends up with the pile of money our properties produce WHO KNOWS. I am sure some under the control of our President could read those numbers to us, if they were demanded to do so. But there is another rub under our saddles for those that know ain’t telling.

    So just using common horse sense about what is what and what is not we must asks one another who has the slightest clue of what that is being said is the TRUTH. Maybe in America the number might be about ten or maybe twenty.

    I have known the truth all along and I paid the price of study to get there. I did not accept any BP BS when I had heard enough lies that told me not too. BP has been running rough shod over us for some time, notably the Thunder Horse sitting dead in the water for months on end while the BP SPIN MASTERS keep it out of the news. To many things that have gone wrong that cast a doubt on the honesty of BP for me but maybe not you.

    And even with the seemed good reports of BP holding tight all the gas and oil coming out of the Macondo well I still believe there are lies behind those stories. Too much at stake politically for President Obama for the total truth to come out.

    Now with all the mum boo jumbo of the pressures going up and down and could there be a break in the well casing or such be the reason for it. I put no stock in those BP BS LIES.

    Let us just imagine that BP LIES! Then lets imagine that some of the giant ships sitting around have huge storage tanks aboard that can pump up some oil and gas and store. Would that be a good reason we see the pressure go up and down? Then to go on just in an intelligent way to problem solve as good detectives should do, would BP be better off to know for a fact how much pressure their connection on the bottom of their stack attack and the BOP take before leaking. Then in some devious way bleed off the excess pressure to the holding tanks of ships to once again deceive We the Public that they finally got it right?

    Now how can a thesis like that be proved to be right or wrong? Forget about it. BP HOLDS ALL THE KEYS TO THEIR LITTLE IMPERVIOUS KINGDOMS OF DECEIT. Our own Coast Guard as the law of the land and sea enforces all the BP rules and regulations.

    Some and maybe many might say OH GOSH could that be true? Then a good come back would be WAKE UP AMERICAN PEOPLE WE HAVE THE PREEMINENT MOBSTERS MONSTERS AND MOST DEVIOUS OIL PRODUCER IN OUR BACKYARD KILLING OUR GULF. And they are protected from the top to the bottom by our own elected ones governing.

  2. Dwight Baker says:

    Passion to resist is often not seen or heard
    For no need to
    Many run from what they perceive to be a lost cause.
    By Dwight Baker
    7/17/2010 6:29 AM

    I suggest for intelligent discussion and leading to personal discovery that BP has been lying all along about their new cap attack.
    I have been the very best advocate for our Gulf region than any other bar none.

    Case in Point: On May 13, 2010 I had worked through the solution of plugging the Macondo Well for good taking only 3 to 4 days to do. I sent that along to BP investor relations in Britain so that it could then be passed along to the BIG BP BRASS.

    My plan to cap then plug the well in one simple operation was and is the easiest and most efficient way to get it done.

    After over 400 hours of intense study reading over 100,000 words of engineering oil and gas information of the problems existing, maps of geologic formations, casing string runs, down hole drilling and production techniques used up to the time, I was dead set on the plan called Tame Nature with an overshot.

    Then with BP continuing to do stupid idiotic stuff and telling all that the relief wells would fix the problem, I resisted again because what they were telling was a bold face lie. [Essay to follow]

    The plans had been worked out between Boots and Coots owned by Halliburton and Halliburton pumping folks to pump in cross linked gelled [glue] particles to bond with the flowing up of oil and gas to cause a plug up above the entry point of the bit into the old hole. Thus plugging the well.

    Yet that was never to be done for the pump rate by Halliburton could not come close to over come the open flow rate of the oil and gas flowing from the over 1300 feet of open hole Wilcox permeable formation. [Essay to follow]

    Then up jumped out of the dark dredges of BP NON oil and gas engineering come this new twist to BP old game called deceit. Their new CAP ATTACK [my name because it befits their ignorance] was shown to be the cure in all ways to do very simple things that only they could do and oversee because of the suspected down hole problems.

    NOW STOP FOR A BIT AND RE-READ. There has never been a down hole problem except for one—- four high ranking BP employees did four bad things in a row and caused the well to blow out. Simple as one two three. But BP is still out to try to confuse those basic facts to run from the money issue liabilities that lay out against them for maybe a century of time or even more.

    Now to get back to WHY and how they are saying now the well has been shut down, better run from that one two. Remember BP LIES.

    It finally occurred to BP that they must try to PLAN A CAP ATTACK TO slow down the flow so that the cross-linked gelled particles could have a chance to set up in the flow to retard. The when doing Halliburton could begin pumping [whatever] into the 1300 foot of formation to plug. Might sound good to some but that is stupid too. Doug Suttles BP BOSS AT THIS TIME said on TV that the entire open hole formation would be cemented—- hello what a non-oil and gas engineer that clown is. Try to imagine pumping cement for four weeks!!!!!! Cement sets up regardless of what one does to retard. Suttles is an idiot and that is that. He like all the others we have seen and heard from BP is just goons put before the press to try to duck and deceive.

    So now lets go back to my original sure cure for the blown out well and lets see if BP tried to steal my innovations in products and process’s, my patents applied for at this time. My plan was to set on top of the BOP an overshot with rubber goods in the bottom to make the seal that BP is supposed to have now, with 7-inch casing from the Mother Ship loaded with heavy weight mud and loss circulation material weighing from 400 to 500 thousand pounds then after setting in place burst our pump out plugs in the bottom of the casing string and send the tame nature violent blast of that material down against the flowing oil and gas then follow up with pump pressures and volumes able to continue pushing the oil and gas back into the formation.

    After pumping pressure began to rise suitable to know that the process was well under control then pump 3,000 feet of cement to set up in the primary casing string below the BOP.

    Simple oil and gas engineering plan and beats the hell out of drilling relief well holes but BP in their magic of doing things the wrong way and out of sorts with common sense and reason shirked away and today they have solely caused to bear on our people and Gulf in total 65 days of gross negligence induced genocide that will only be seen in the up and coming generations and the deaths that follow due to the air borne toxins breathed in and the skin infections that now have gone inside blood streams to kill slowly , and in the end the final blow the ruination of our Gulf of Mexico.

    Public opinion around the world is ageist BP in all ways. And President Obama is right in the scope of the investigations too for he held in his hand as our CEO the ability to take out BP appoint good folks and he did not. Instead the ones sent to pier review just picked up their BP SCRIPT and stayed between the lines. And many of our big boss folks in DC flew over many times, no way were they going to get caught in all the muck and gooo in the air and floating in places that our own Coast Guard had put on a no visit zone by anyone. Go figure that.

    So what is in final storehouse for BP TO DO, to right the wrongs and get with the program —- get with me buy the Tame Nature Plan and finish the blown out well in 3 to 4 days.

  3. Annie Ladysmith says:

    This is what should happen:

    1) A war should be declared on the multinstional nation called BP.

    2) Their crap (rigs and what not) after being immediately secured by the US people, should then be blown to kingdom come.

    3) Every asset BP owns must be confiscated for the diaster in the Gulf, and BP rendered for slaughter, their throat slit, there carcass hoisted, and there belly and offal gutted for anything salvageable.

    If we don’t do this to them, they will be doing it to us, what makes the most sense??????? Unite and Conquer! The Corporate rule must come to an end, or we will all die.

  4. zad carlos says:

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