Gulf of Mexico to Recover From BP's Spill by 2012

The Gulf of Mexico probably will fully recover from the BP Plc oil spill within two or three years, said Kenneth Feinberg, who administers a $20 billion claims fund.

The Gulf Coast Claims Facility, established by BP last year, will judge final payments to individuals and businesses seeking compensation for spill damages based on the estimates for recovery.

Most victims will get lump-sum payments equal to double the documented damage for 2010, Feinberg said today on a conference with reporters. Because oysters may require more time to recover than marine life such as shrimp or fish, the region’s oystermen will be paid four times their actual 2010 losses, he said.

“It appears reasonable to assume 2012 full recovery, but I would be the first one to say that the future, predicting it, is not an exact science and we don’t know for sure,” Feinberg said today in an interview on Bloomberg Television.

Victims, lawyers, Gulf Coast policymakers and businesses will have two weeks to comment before the facility starts issuing payments, Feinberg said.

Jeffrey Breit, a Norfolk, Virginia-based attorney and a member of a plaintiff’s steering committee representing spill victims, faulted the conclusion about the pace of recovery in the region.

“Trying to pretend that the oil pollution and the chemical dispersant pollution is just going to melt away is contrary to the vast majority of expert opinions to date,” Breit said in an e-mail.

‘Welcomed News’

The plan to begin making final payments on spill claims is “welcomed news,” said Representative Steve Scalise, a Louisiana Republican. He said Feinberg should release more information on why claims have been denied. Recipients of final payments from the fund must waive their rights to sue BP and the companies in the spill.

Feinberg hired a director at the Harte Research Institute for Gulf Studies at Texas A&M in Corpus Christi and Analysis Research Planning Corp. in New York to project the pace for recovery.

Wes Tunnel, associate director of the Harte Research Institute, said the Gulf is resilient and marine life such as shrimp, fish and blue crabs, which he described as a critical economic resource, would probably recover within two years.

Oysters, unable to swim free of the oil, may not recover for as long as 10 years, according to his report.

Florida Tourism

Thomas Vasquez, a New York-based analyst at Analysis Research, said tourism in Florida appears to have rebounded, and communities such as Naples made a “significant recovery” in the months after the well was capped in July.

Local businesses and state officials have said tourism waned because potential visitors avoided the region after assuming that oil had polluted area waters and beaches.

Casino-gambling revenue in Mississippi and Louisiana also rebounded after a summer decline, according to the report.

“We canvassed the universe in trying to get as much information as we can,” said Feinberg, picked to run the fund set up by BP after the April 20 rupture of its Macondo well.

The claims facility will begin making final and interim payments after two weeks of public comment on the proposal.

Claimants have been able to apply for final compensation through a quick-pay option Feinberg set up to deal with complaints that payments weren’t being made fast enough.

People can receive $5,000 and businesses $25,000 if they’ve received emergency payments and if they waive their right to pursue additional compensation in court.

Quick-Pay Option

More than 82,000 quick-pay checks have been sent, according to the claims facility. In total, the fund has paid about $3.4 billion to victims.

Claimants can also seek interim payments and maintain their legal rights. Those checks will be issued quarterly.

Gulf coast policymakers continue to raise complaints.

Mississippi Attorney General Jim Hood, a Democrat, and counterparts from Louisiana, Alabama and Florida have asked U.S. District Judge Carl Barbier to supervise Feinberg, who Hood said is not acting independently of BP.

Barbier is in charge of hundreds of economic and personal injury lawsuits seeking damages from the spill.

Feinberg declined to comment on Hood’s request. He has said his actions aren’t directed by BP.

To contact the reporter on this story: Jim Snyder in Washington at jsnyder24@bloomberg.net

To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net.

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