Post-Gulf Spill: The more things change, the more slippery they get

A trio of news stories out of the Gulf remind that the more things change in the region — whether natural disaster (hurricanes), manmade screw up (oil rig explosions) or government intervention (drilling bans) — the more they stay the same.

Within weeks after the Deepwater Horizon rig exploded and sank nearly one year ago the Obama Administration banned all new deepwater drilling. The ban lasted until October 12. This week the Department of Interior announced it had approved its first new permit to drill deep in the Gulf of Mexico since the spill.

Noble Energy, a Houston-based operator, is the prizewinner, which the new Bureau of Ocean Energy, Regulation and Enforcement – the reorganized Minerals Management Service, the federal office that had cozied up to the oil industry for years — says it thoroughly vetted. Noble had begun drilling to 13,858 feet when it was halted by the spill.

The announcement was welcomed by the oil industry as its shares jumped on Wall Street. “We expect further deepwater permits to be approved in coming weeks and months based on the same process that led to the approval of this permit,” said the agency’s director Michael Bromwich.

For Louisiana Governor Bobby Jindal the permit was a “good first step.” The first-term governor – who faces election this November — wants more permits granted faster. “We must quickly get to a level of issuing permits that represents a critical mass so thousands of oil and gas industry workers can get back to work fueling America again.”

It’s no surprise of course that’s Jindal’s take. As the Times pointed out this week he’s long been “cozy” with the oil industry, relationships complicated – or greased, dependent on your view — by a foundation set up by his wife the month after he was elected in 2007, the Supriva Jindal Foundation for Louisiana’s Children.

Among the biggest donors – all legal under Louisiana law – are Marathon Oil ($250,000), Israeli oil company Alon USA ($250,00), Dow Chemical ($100,000), Northrop Grumman, AT&T as well as other oil companies, insurers and construction companies.

While campaign donations are limited, donations to Mrs. Jindal’s Foundation are not.
What’s in it for the corporations, above and beyond supporting the foundation’s goal of delivering much-needed hi-tech equipment to schools in the poorest neighborhoods of Louisiana? AT&T hopes the governor will sign a law allowing it to sell cable TV rights without negotiating directly with individual parishes; Marathon was granted approval a year ago to expand the amount of oil it can refine at its Louisiana plant; Alon is seeking permit to dump more pollutants at its Krotz Spring refinery. And on and on.

Politicians using do-good foundations to (vaguely) mask corporate bribery is hardly a new tactic. PACs and political interest groups on both sides of the fence have been doing it for decades.
But in Louisiana, where corruption is a long-practiced fine art, the Jindals’ mutual interests aren’t masked at all. A picture of the governor with his wife graces the foundation’s website, his chief fundraiser is the charity’s treasurer and an employee of the governor’s office, working as an aide to Mrs. Jindal, is the contact for the foundation’s books.

While corporations continue to get their way in Louisiana, it appears many of those whose lives were impacted by last April’s oil spill will have to wait a bit longer for re-compensation.
Citing “lack of adequate documentation,” Ken Feinberg – appointed by Obama to dole out up to $20 billion of BP’s money to those whose livelihoods were affected by the spill – admitted that more than 100,000 claims currently on file might never be paid.

“Roughly 80 percent of the claims that we now have in the queue lack proof,” Feinberg said last week in Washington, admitting it was “a huge number.”

To-date his office has paid out nearly $3.6 billion, to 168,000 individuals and businesses across the Gulf, mostly emergency payments of a few thousand dollars.

Feinberg’s denials angered state governments in Louisiana, Mississippi, Alabama and Florida, the White House … and a boatload of individuals in the region who’ve either already lost businesses or need money to jump start them. The states are appealing to the courts for redress, which means the lack of payments will certainly go on for months. Individuals are largely left holding the bag.

From its perspective, BP feels Feinberg has been “overly generous.” Any of the $20 billion not paid out goes back to BP. Meanwhile the oil company is paying Feinberg’s law firm $850,000 a month to administer the fund, which is currently being renegotiated – upwards. The lawyers are most likely happy to see the payment process drag on … and on.

[flickr photo via DVIDSHUB]