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  • Businesses Hurt by Drilling Moratorium Left in Dark by BP, Feinberg

    As businesses along the Gulf Coast patiently await the expiration of President Obama’s offshore drilling moratorium, they’re faced with a new hardship: Neither BP nor the Gulf Coast Claims Facility will pay for lost income resulting from the ban.

    Last week BP announced it was deferring all moratorium-related claims to Ken Feinberg, the Obama-appointed administrator of the $20 billion claims fund. That news came as a surprise to Feinberg, however. He maintains the moratorium claims are BP’s responsibility.

    “Those claims are not under Feinberg’s jurisdiction with the GCCF,” spokeswoman Amy Weiss told me. She referred questions to BP.

    But a spokesman for BP said the company is planning to transfer all outstanding claims to Feinberg, including those from businesses that cite the drilling ban.

    “There are claims in the system that are moratorium-related,” BP spokesman John Curry said. “The entire database will transition to the Gulf Coast Claims Facility when Feinberg gets it up and running.”

    The uncertainty — and apparent unwillingness of either BP or Feinberg to take responsibility — leaves businesses in the dark about their moratorium-related claims. Those businesses could be mom-and-pop stores that rely on the steady flow of customers working on rigs or suppliers of oilfield equipment. Each is affected by the moratorium in its own unique ways.

    So far BP hasn’t rejected any claims, but many of the 147,194 remain unresolved. The company has made 116,063 payments, totalling more than $340 million. It does not have a breakdown of how many claims are related to the moratorium.

    Obama’s drilling ban creates a tricky situation for BP and Feinberg. At the president’s request, BP pledged $100 million for oil rig workers affected by the moratorium. But those grants are limited to the estimated 9,000 people who worked on the 33 deep-water rigs when the federal moratorium began on May 6. Workers have a 30-day period to apply beginning on Sept. 1.

    Because the Gulf Coast states are so reliant on the energy industry, the moratorium is having a widespread impact beyond the 33 rigs that were idled when Interior Secretary Ken Salazar first instituted the drilling ban. Two of those rigs have already left the Gulf for Egypt and Congo.

    A study commissioned by the American Energy Alliance with Louisiana State University estimated the six-month moratorium could cost more than 17,000 jobs and $1.2 billion in economic growth. The impact is also felt beyond the Gulf Coast region for businesses that supply parts and support the deep-water rigs.

    Loss of income is the most frequent factor cited in claims to BP, which has made the statistics publicly available. Despite the transparency, critics have complained about delays, particularly for businesses. During a series of town-hall meetings last month, Feinberg admitted BP had done a poor job handling claims related to businesses.

    Last week BP implemented a new fast-track process for businesses, but it also announced that all moratorium-related claims would be deferred to Feinberg, who plans to make the transition on Aug. 23. BP also deferred decisions on restaurants or tourism businesses not located near an oiled beach or marsh and seafood processors outside the Gulf Coast states.

    In recent days, the Obama administration has faced renewed pressure to end the moratorium. Even the president’s own Oil Spill Commission asked Obama to lift the ban on certain rigs — a major reversal for a group that didn’t even plan to study the impact of the moratorium.

    Yesterday a federal judge in New Orleans heard arguments on the drilling moratorium. Hornbeck Offshore Services, which successfully challenged the first drilling ban, argued that the Obama administration simply repackaged the first moratorium when Salazar hastily announced the new moratorium on July 12. The case hinges on whether it’s new policy or the same policy Judge Martin Feldman struck down on June 22.

    Carol Browner, the top White House aide on energy and climate change, confirmed as much Sunday on NBC’s “Meet the Press.” She acknowledged the administration did not complete an economic analysis of the moratorium in advance of Salazar’s July 12 decree.

    Meanwhile, businesses affected by the drilling ban continue to take a wait-and-see approach. Thomas and Melissa Clements of Broussard, La., were in Washington, D.C., last week to protest the moratorium. They said the impact on their business, Oilfield CNC Machining, has been devastating.

    Posted in Ongoing Priorities, Scribe [slideshow_deploy]

    7 Responses to Businesses Hurt by Drilling Moratorium Left in Dark by BP, Feinberg

    1. BJ Ft. Myers Fl says:

      Gee, this sounds familiar, blame the other guy! I guess the courts don't have any jurisdiction when it comes to this admistration. I personally don't see why BP should be responsible for the illegal moratorium imposed by this administration. These constant delays by this administration only adds fuel to the fire. I am glad that some of local governments are going ahead with the clean up anyways.

    2. Perry, OK says:

      Ok, now our president is using our own laws against us just like every other country! WOW!

      Is there a limit to how much power we give to one person? A judge who claims 58 percent of CA is biased and don't know what there doing is not that far off from a president who just doesn't know what or how to do what needs to be done. So let everyone in america wait.

      Jobs don't matter when you have a vacation whenever you want. Let's stimulate the economy by taking another taxpayer trip. Oh by the way we will teach those people in AL,MS,LA to vote for me or they can't produce any oil.

      Oh what a beautiful change we are having. I have to let 2 more people go this week. Do not plan on hiring till this admin is gone.

    3. Lynn Bryant DeSpain says:

      Why wouldn't Obama hurt American business and American working men and women? After-all, he hates America, does he not. He seems to prove this on a daily basis.

    4. Billie says:

      What legitimate reasons does this moratorium exist? The government is in the way of productivity to the people. The people know best and for the sake of their livelihoods have to go above the ignorance and inactions of this life threatening leadership. Eventually he'll lift it. Anytime between now and right closer to election day.

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    6. Mike, Wichita Falls says:

      We frequently hear, most recently from our newest Supreme Court justice, how the courts are the last refuge for justice, yet the courts have been cut out of the claims process with the establishment of this $20 billion escrow account and its czar, Ken Feinberg. The wheels of justice may be slower in the courts than these claimants want, but justice is surer here than anywhere else. What happened to the concept of separate, co-equal branches?

    7. Rick says:

      This administration shuts down the oil industry and then expects BP to pay the laid-off workers?

      What colossal chutzpah!

      Hope and change? I hope the laid-off oil workers vote and cause the necessary change to get them employed again.

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