Sunday, July 4, 2010

Gulf Oil Update: Day 76

Is BP rejecting skimmers to save money on Gulf oil cleanup?

By Anita Lee
Biloxi Sun-Herald
Friday, July 2, 2010

BILOXI, Miss. — From Washington to the Gulf, politicians and residents wonder why so few skimming vessels have been put to work soaking up oil from the Deepwater Horizon catastrophe.

Investment banker Fred D. McCallister of Dallas believes he has the answer. McCallister, vice president of Allegiance Capital Corp. in Dallas, has been trying since June 5 to offer a dozen Greek skimming vessels from a client for the cleanup.

“By sinking and dispersing the oil, BP can amortize the cost of the cleanup over the next 15 years or so, as tar balls continue to roll up on the beaches, rather than dealing with the issue now by removing the oil from the water with the proper equipment,” McCallister testified earlier this week before the U.S. Senate Committee on Commerce, Science and Transportation. “As a financial adviser, I understand financial engineering and BP’s desire to stretch out its costs of remediating the oil spill in the Gulf. By managing the cleanup over a period of many years, BP is able to minimize the financial damage as opposed to a huge expenditure in a period of a few years.”

A BP spokesman from Houston, Daren Beaudo, denied the allegation emphatically. He said, “Our goal throughout has been to minimize the amount of oil entering the environment and impacting the shoreline.”

A report released Thursday by the U.S. House Committee on Oversight and Government Reform included a photo depicting “a massive swath of oil” in the Gulf with no skimming equipment in sight. The report concluded: “The lack of equipment at the scene of the spill is shocking, and appears to reflect what some describe as a strategy of cleaning up oil once it comes ashore versus containing the spill and cleaning it up in the ocean.”McCallister’s experience in trying to win approval for the Greek vessels, along with the frustrations others have expressed in offering specialized equipment, contradicts the official pronouncements from BP and the federal government about the approval process. For foreign vessels, that process is complicated by a 1920 maritime law known as the Jones Act.

Coast Guard Rear Adm. James Watson, who oversees the Unified Command catastrophe response in New Orleans, determined in mid-June an insufficient number of U.S. skimming vessels is available to clean up oil, essentially exempting from the federal Jones Act foreign vessels that could be used in the response, said Capt. Ron LaBrec, a spokesman at Coast Guard headquarters in Washington.

The Jones Act allows only vessels that are U.S. flagged and owned to carry goods between U.S. ports.To further clarify, Coast Guard Adm. Thad Allen, the national incident commander, promised expedited Jones Act waivers for any essential spill-response activities. “Should any waivers be needed,” Allen said at the time, “we are prepared to process them as quickly as possible to allow vital spill response activities being undertaken by foreign-flagged vessels to continue without delay.”

LaBrec said 24 foreign vessels, two of them skimming vessels, have operated around the catastrophe site, in federal waters with no need for Jones Act waivers. He also said Watson has the authority to approve operation of foreign-flagged vessels near shore, where the Jones Act comes into play because of the port restrictions.

Fred D. McCallister, Vice President, Allegiance Capital Corporation

“If the unified area commander (Watson) decides that it’s a piece of equipment he needs, either BP would contract for it or he can do that himself,” LaBrec said. "If it’s something he decides is absolutely needed, he can get it in here without BP approval."

“The equipment that has been offered — the foreign equipment that has been offered that is useful for the response — has either been accepted or is in the group of offers that is currently in the process of being accepted. That has been occurring since early in the response and will continue to occur.”

Dealing with BP

McCallister said none of his dealings have been with the Coast Guard. He submitted requests for Jones Act waivers to Unified Command, but said questions about the skimming vessels have come from BP.

BP spokesman Beaudo said McCallister was notified his offer of skimming vessels has been declined because the vessels will not pick up heavy oil near shore. Beaudo said he did not know when McCallister was informed. McCallister said he received communications from BP on Thursday that indicated his proposal was still under review. In fact, he sent supplemental material Thursday, which was accepted, to show the skimming vessels will pick up heavy oil like that bombarding Mississippi’s coastline. The 60-foot vessels, he said, can skim high-density crude up to 20 miles offshore. Equipment on board separates the oil from water.

Desperate for skimmers

All the Gulf states dealing with oil have pleaded for more skimming vessels. The Deepwater Horizon Web site indicates 550 “skimmers” were at work before bad weather suspended operations.

Mississippi Gov. Haley Barbour’s office has ordered private shipyards to build skimming vessels because so few have been working in state waters. George Malvaney, who heads the Mississippi Coast cleanup effort for BP subcontractor U.S. Environmental Services, said offers of skimming vessels and other equipment take time to review. He believes Mississippi will have a “substantial skimming effort” by late next week.

“Just because it’s a skimmer doesn’t mean it’s effective,” Malvaney said. “There’s a lot of people out there saying, ‘We’ve got skimmers.’ Some are effective, some are not. That’s what we’re trying to wade through right now.”

More than meets the eye?

As the catastrophe reaches Day 73, McCallister, who grew up in Mississippi and has family on the Coast, believes there is just more to it.

“Looking at it from a businessman’s perspective,” he said, “if I am BP, assuming I don’t have a conscience that would steer me otherwise, the best thing I can do for my shareholders, my pensioners, and everybody else, is to try to spread the cost of this remediation out as long as I can."

“I am concerned it is seen by BP as being the most pragmatic financial approach. But they’re playing Russian roulette with the Gulf, the marine life in the Gulf and the people in the Gulf region.”

Oil found in Gulf crabs raises new food chain fears

By Geoff Pender
Biloxi Sun Herald
Thursday, July 1, 2010

BILOXI, Miss. — University scientists have spotted the first indications oil is entering the Gulf seafood chain — in crab larvae — and one expert warns the effect on fisheries could last “years, probably not a matter of months” and affect many species.

Scientists with the University of Southern Mississippi and Tulane University in New Orleans have found droplets of oil in the larvae of blue crabs and fiddler crabs sampled from Louisiana to Pensacola, Fla. The news comes as blobs of oil and tar continue to wash ashore in Mississippi in patches, with crews in chartreuse vests out cleaning beaches all along the coast on Thursday, and as state and federal fisheries from Louisiana to Florida are closed by the BP oil disaster.

"I think we will see this enter the food chain in a lot of ways — for plankton feeders, like menhaden, they are going to just actively take it in," said Harriet Perry, director of the Center for Fisheries Research and Development at the Gulf Coast Research Laboratory. "Fish are going to feed on (crab larvae). We have also just started seeing it on the fins of small, larval fish — their fins were encased in oil. That limits their mobility, so that makes them easy prey for other species. The oil's going to get into the food chain in a lot of ways."

Perry said researchers have not yet linked the hydrocarbons found in the crab larvae to the BP disaster, but she has little doubt it's the source. She said she has never seen such contamination in her 42 years of studying blue crab.

Richard Gollott is Mississippi's Department of Marine Resources commissioner for the commercial seafood industry and a seafood processing-plant owner from a family that's been in the business for generations. He said closure of Gulf fisheries "appears to have been the right thing to do."

“We are taking a beating with this,” Gollott said. “But we would rather have our industry have a season closed down for a year or even two years rather than get a bad name. We have to take the long-term view. The worst thing in the world would be to take a short-term look at this and not be worried about the public, the consumers."

Gollott said he is still hopeful Gulf seafood can make a quick recovery, in “months instead of years,” and be safe and plentiful. He said right now the only Gulf seafood he’s supplying is coming from Texas, where fisheries are still clear and open.

“You've got to be optimistic to be a fisherman,” Gollott said. “As quick as we can get our scientific facts and ducks in order, get FDA to check everything from Florida to Texas and make sure it’s OK, I think we will get our market share back. But that will take some marketing and some work.”

DMR Director Bill Walker said Thursday he was unaware of the USM–Tulane findings. He said DMR biologists continue to test the meat of shrimp and other edible species and have “not gotten any positive hits” for oil.

“But we are just testing the edible tissue, for public health,” Walker said. “The more-academic research is looking at other parts of these critters. Sometimes materials will concentrate in the more oily tissue, but not make its way to the edible tissue.”

Perry said the oil found in the crab larvae appears to be trapped between the hard outer shell and the inner skin. Perry said, “Shrimp, crab and oysters have a tough time with hydrocarbon metabolism.” She said fish that eat these smaller species can metabolize the oil, but their bodies also accumulate it with continued exposure and they can suffer reproductive problems “added to a long list of other problems.”

BP-contracted crews cleaned tar balls and patches from mainland beaches on Thursday. Walker said there are reports of oil or tar on or near all the barrier islands, although still in relatively small, isolated patches — "small in the sense of up to several hundred yards at a stretch,” Walker said.

Harrison County Emergency Manager Rupert Lacy said storms the last few days “shook (tar pieces) up, shifted them around,” but cleanup workers “are doing what they need to do,” and getting beaches cleaned.

“Until they can get that well capped off and they get those big skimmers out there and really get into the skimming operations, we’re going to see the remnants of this,” Lacy said. “This is not a sprint; it’s a marathon.”
Perry said scientists are having to learn as they go along with the BP oil disaster.

“We can go to literature and get information on other spills,” Perry said. “But this is not the same oil, this is not the same spill, this is not the same area and these are not the same species. Plus, the use of dispersant in the amounts they’ve used is totally unprecedented. So this is taking scientists a while to get up to speed and realize the enormity of it.”

As not only a marine scientist but a longtime Coast resident, Perry said the enormity of the disaster gets to her personally sometimes.

“I had a sort of breakdown last week,” Perry said. “I’ve driven down the same road on East Beach in Ocean Springs for 42 years. As I was going to work, I saw the shrimp fleet going out, all going to try to work on the oil, and I realized the utter futility of that, and I just lost it for a minute and had to gather myself.

“When you think about it all, how this has changed everybody’s life and how life here revolves around the water and the beach and the seafood — just even going to get a shrimp po-boy — it’s just overwhelming. I think a hurricane is easy compared to this.

“Let’s just hope and pray first that they get the well capped, then secondly that they keep it from getting inshore into our marshes.”