Tough Choice Looms for Gulf Small Businesses

Here’s a tough choice small businesses and individuals hammered by the BP Gulf of Mexico oil disaster will have to face.

Do you take the money and run, giving up the right to sue not only BP, but also other companies like Halliburton that may have had a hand in the gusher, or do you hang on and see what happens in court?

But that’s exactly the choice that thousands of small businesses along the Gulf Coast will face, according to claims forms obtained by the New York Times. The Times reports that lawyers led by Kenneth Feinberg who are charged with administering a $20 billion fund set up by BP to compensate victims of the oil disaster are formulating rules that would limit the right to sue.

If you take money from the fund, not only would you give up the right to sue BP, but also oilfield-services company Halliburton, and Transocean, the owner of the Deepwater Horizon rig BP was leasing and that was destroyed in the April blowout in the Gulf that killed 11 workers and led to the worst oil spill in the nation’s history, according to claims forms.

Those conditions could be a tough sell to the thousands of small businesses ranging from commercial fishermen and recreational fishing guides to restaurateurs, oil-services companies, and hoteliers from Louisiana to Florida who have in some way been damaged by the Gulf disaster. Or, another example, how much should a firm that shuttles food, workers, and supplies to deepwater Gulf rigs be compensated for the decision by the U.S. government in the wake of the Deepwater Horizon disaster to slap a moratorium on deepwater drilling?

The claims forms obtained by the Times also show that those closest to the disaster, on beach fronts or marshlands in Louisiana, stand the best chance of being compensated. But that doesn’t necessarily take into account a hotel in Florida where business fell because of customers canceling reservations or choosing another vacation spot for fear their vacation would be spoiled by oil.

BP already faces some 300 lawsuits over the spill, which have been consolidated and will be heard in New Orleans. Halliburton and Transocean also face lawsuits over the disaster.

BP has set aside $32.2 billion to pay the cost of the spill and legal claims, and that may be only the beginning for the oil giant. Oppenheimer & Co. oil analyst Fadel Gheit has estimated damage from the disaster could reach $49 billion.

But no one can really say for certain how much damage the spill has caused.

The decision for Gulf residents and businesses to take the money now or wait for a potentially more lucrative remedy through the courts will be made doubly difficult by the fact that though the well has not spewed any oil into the Gulf in weeks, scientists still don’t have a clear idea just how much damage has been done to the Gulf ecosystem on which so many businesses depend for their livelihoods.

There isn’t even agreement between government scientists and others about how much oil is left in the Gulf from the spill, where that oil is, or how much damage it could cause to, for instance, Gulf fisheries.

While the government and BP have touted the dissipation of much of the oil from the biggest spill in history, independent scientists are saying not so fast.

Richard Camilli of the Woods Hole Oceanagraphic Institute, the lead scientist on the study to be published in the journal Science Friday, said samples taken in June show a plume deep under the Gulf that would not dissipate quickly.

“It’s going to persist for quite a while before it finally dissipates or dilutes away,” he told the Times.

What remains as maddeningly unclear today as it was back in April, when the crisis began, is how much the spill will affect one of the richest fisheries in the world, and the people who make their living from it.

"We don't know what's going to happen. Nobody can tell us what's going to happen in the future. Look, this is the largest oil spill in history. We had little spills in the area it took eight to 10 months just clean up the top they never sunk it. So with all this oil, NOAA says 75 percent gone, come on now, it's gone all right. It's out of sight out of mind," Louisiana shrimper Acy Cooper told NPR.

With that kind of uncertainty hanging over the Gulf, Feinberg and his colleagues may have a tough sell getting businesses to take what they can now, rather than waiting to see what the real damage is—and what the courts decide it is.

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Kent Bernhard Jr. is News Editor of Portfolio.com